Court Opinion

ID: 9770102
Source: CourtListenerOpinion
Date Created: 2023-08-29 15:43:32.05255+00
Date Added: 2024-06-11T07:31:13.690555
License: Public Domain

DISSENTING OPINION BY
Judge BROBSON.
This case is less about an agency’s interpretation of a statute and more about an interpretation of this Court’s precedent interpreting that statute. Because the Pennsylvania Insurance Commissioner (Commissioner) and the majority misread and thus misapply this Court’s precedent, I respectfully dissent.
At issue in this case is the propriety of the decision by Petitioner State Farm Mutual Automobile Insurance Company (State Farm) not to renew (or to nonre-new) the automobile insurance policy of John B. Farley (Farley). Pennsylvania has long had a regulatory scheme that prohibits automobile insurance companies from cancelling, refusing to write, or refusing to renew insurance policies for certain reasons. Currently, and since 1998, this scheme is set forth in Section 2003 of the Insurance Company Law of 1921 (Company Law).1 Prior to 1998, Section 3 of the Automobile Insurance Act (Act 78)2 set forth the applicable restrictions. The schemes, however, are virtually identical in substance. If the automobile insurer’s *576reason(s) for nonrenewal are not prohibited, then the nonrenewal decision does not violate the law. See Aetna Cas. & Surety Co. v. Commonwealth, Ins. Dep’t, 536 Pa. 105, 116-17, 638 A.2d 194, 199 (1994). As the Pennsylvania Supreme Court opined in Aetna:
Section 3 is a definitive, inclusive statement of the reasons forbidden to be used by an insurer to cancel or to refuse to write or renew an automobile insurance policy under Act 78.... Section 3 may be subject to expansion by the Legislature, but not by the Insurance Department or the judiciary.

Id.

3

One of the reasons an automobile insurer may choose to cancel, to refuse to write, or to nonrenew an insurance policy is adverse claims history. To protect the consumer in these circumstances, the General Assembly has placed restrictions on an insurer’s ability to use adverse claims history in its underwriting decisions. Specifically, automobile insurers are not allowed to cancel or nonrenew a policy based on only one (1) accident within the thirty-six (36) month period preceding the policy anniversary date. Section 2003(b) of the Company Law. In addition, when choosing to write, cancel, or nonrenew automobile insurance policies, insurers may not consider old accidents — ie., “accidents which occurred more than thirty-six (36) months prior to the later of the inception of the insurance policy or the upcoming anniversary date of the policy.” Section 2003(a)(ix) of the Company Law.4 Finally, the General Assembly included in the law a list of eight (8) accidents that automobile insurers may not consider when choosing to write, cancel, or nonrenew automobile insurance policies (Excepted Accidents). Section 2003(a)(i)-(viii) of the Company Law.
Both the Commissioner and the majority rely primarily on this Court’s decision in Musto to support their contention that the accident at issue in this case — Farley’s hitting an adjacent parked car with his car door while Farley’s car was “lawfully parked” — is an Excepted Accident that State Farm could not consider in its decision to nonrenew Farley’s policy. In Mus-to, Aetna chose to nonrenew the automobile insurance policy of Janice and Joseph Musto (Musto) because Musto “was involved in two or more accidents within a designated 36-month period.” Musto, 683 A.2d at 1326. Because Aetna demonstrated that the accidents occurred, the burden shifted to Musto “to demonstrate that either accident fell within one of [the] exclusions that prohibit an insurer from refusing to renew a policy based on certain types of accidents.” Id. The Commissioner concluded that Musto failed to establish that one of the accidents fell within the statutory exclusions. Thus, the Commissioner concluded that Aetna’s decision to nonrenew complied with the law.
On appeal to this Court, Musto raised two issues, only one of which is relevant here. Musto argued that one of the acci*577dents in question should not count toward nonrenewal because Musto was not at fault. In other words, Musto did not attempt to argue that his accident fell within the list of Excepted Accidents; rather, he attempted to argue that because he was not at fault for the accident, it should not be held against him from an underwriting perspective. We rejected this argument, explaining the statutory scheme:
This section makes no broad exception for accidents in which the insured was involved, but for which the insured believes he or she was not at fault. Even accidents in which blame could not be reasonably placed on the insured may be considered in the insurer’s decision not to renew. Accordingly, Aetna was permitted to consider both of the accidents cited in the notice of nonre-newal regardless of whether Musto was at fault.
Musto, 683 A.2d at 1326 (emphasis added).
Musto followed Komada v. Browne, 97 Pa.Cmwlth. 19, 508 A.2d 1284 (1986). In Komada, an insurer also attempted to argue that the accidents prompting her insurer’s nonrenewal decision should fall within the list of Excepted Accidents because the accidents were not her fault. As in Musto, the insurer in Komada attempted to argue in favor of a broad, general exception not expressly set forth in the law. And, as the Court did ten years later in Musto, we rejected the argument:
Petitioner argues that she should fall within Section 3(a)(13) because the accidents were not her “fault,” a term for which there is no definition in the Act. This argument misconstrues Section 3(a)(13) of the Act. Section 3(a)(13) sets forth a detailed list of specific types of accidents which cannot be used by an insurer to justify an automobile policy termination. While each of those accidents deals with a circumstance in which blame could not reasonably be placed upon an insured, this list does not establish a broad exception for all accidents that an insured might consider not his “fault.”
Komada, 508 A.2d at 1286 (emphasis added).
Unlike the insured in Musto and Komada, Farley does not argue that the accident that prompted State Farm to nonre-new his policy was not his fault and, thus, should be excepted from State Farm’s consideration under Section 2003 of the Company Law. Had he done so, we would be compelled to conclude, as we did in those cases, that there is “no broad exception” in the statute for accidents where the insured is not at fault.
Instead, Farley argues that his accident falls within the first category of Excepted Accidents — “automobile lawfully parked (if the parked vehicle rolls from the parked position, then any such accident is charged to the person who parked the automobile).” It is undisputed that Farley’s car was lawfully parked when the accident occurred. But it is also undisputed that the accident occurred when Farley opened up his car door, striking his coworker’s parked vehicle. Thus, Farley has some culpability (or fault) for the damage to his coworker’s car. The question before the Commissioner was whether that culpability precluded the accident from falling within the “automobile lawfully parked” exception.
The Commissioner ruled that it did not. In so doing, he misstated our holding in Musto as standing for the proposition that “an insured’s fault' with respect to accidents used for nonrenewal is immaterial.” (Adjudication and Order, February 16, 2010, at 6.) This Court held nothing of the sort in Musto. As noted above, the Court in Musto held only that there was “no broad exception” for accidents where the *578insured was not at fault. The Court did not rule, as the Commissioner and majority reason, that fault or culpability is irrelevant when considering whether an accident falls into one of the expressly stated exceptions in Section 2003. Indeed, such a leap in logic not only takes liberty with our decision in Musto, it conflicts with our holding in Komada, wherein we clearly held that each of the Excepted Accidents “deals with a circumstance in which blame could not reasonably be placed upon an insured.” Komada, 508 A.2d at 1286 (emphasis added).
Our interpretation of the Excepted Accidents in Komada is sound. Putting aside for a moment the “automobile lawfully parked” exception, each of the other Excepted Accidents presents a scenario in which “blame could not reasonably be placed upon an insured.” They involve such circumstances where (a) another vehicle was involved and there is indicia that the driver of the other vehicle was at fault (exceptions 13(ii)-(v)); (b) the damage resulted from contact with animals or fowl (exception (vi)); and (c) the damage was “limited to and caused by flying gravel, missiles or falling objects” (exception 13(vii)). There is also an exception for accidents that occur in the course of using a vehicle to respond to an emergency where, at the time, the operator of the vehicle was a paid or volunteer first responder. (Exception 13(viii).) The General Assembly made a policy decision that such accidents should not be charged to the first responder. If, however, the accident occurred “after the automobile ceases to be used in response to such emergency,” the exception no longer applies. Section 2003(a)(13)(ix) of the Company Law.
The exception at issue in this case excepts from an automobile insurer’s consideration an accident that occurs under the circumstances of an “automobile lawfully parked (if the parked vehicle rolls from the parked position, then any such accident is charged to the person who parked the automobile).” Section 2003(a)(13)(i) of the Company Law (emphasis added). The parenthetical is a clear indication by the General Assembly that this exception, like the others, is intended to deal with circumstances where the accident should not be charged to the operator who parked the vehicle. For example, where, at the end of the workday, the insured returns to her lawfully parked vehicle only to find that there is an unexplained dent in her vehicle door, this exception would bar her insurer from using that accident as a basis for nonrenewing her policy. But where she returns to her vehicle to find that it had rolled from the parked position and crashed into another vehicle, the exception would not prevent the insurer from considering the accident.
Thus, culpability (or fault), was clearly in the General Assembly’s mind when it created the list of Excepted Accidents in Act 78 and re-enacted the list as Section 2003(a)(13) of the Company Law. Indeed, it is difficult to fathom any reason why the General Assembly would choose to except from an automobile insurer’s underwriting criteria any accident where the insured is culpable and there are no extenuating circumstances or policy reasons to give the insured a pass. We thus should not read the “automobile lawfully parked” exception as giving an insured a pass where, while his vehicle is “lawfully parked,” he acts (negligently or intentionally) in such a fashion as to cause damage to another vehicle or even, by the Commissioner’s logic, another person.5
*579To summarize, the Commissioner misread and thus misapplied our ruling in Musto, and the majority makes the same error. As we noted in Komada, the Excepted Accidents set forth in Section 2003 of the Company Law are intended to address circumstances where fault cannot reasonably be placed on the insured. Here, the accident in question occurred when Farley opened up his vehicle door and struck a coworker’s vehicle, not when his vehicle was merely “lawfully parked.” Thus the “lawfully parked” exception does not apply, and State Farm’s decision to nonrenew based, in part, on the accident in question did not violate Section 2003 of the Company Law. I would, therefore, reverse the Commissioner’s Adjudication and Order in this case.
Judge McCULLOUGH joins in this Dissenting Opinion.

. Act of May 17, 1921, P.L. 682, added by the Act of June 17, 1998, P.L. 464, 40 P.S. § 991.2003 (Act 68).

. Act of June 5, 1968, P.L. 140, as amended, 40 P.S. §§ 1008.1-1008.11 (repealed). Act 68 repealed Act 78, but it also substantially reenacted the provisions of Act 78 as part of the Company Law.

. In Aetna Casualty, the Commissioner claimed that the automobile insurer's practice of nonrenewing policies for vehicles contained on a list of "high loss potential vehicles" violated Section 3 of Act 78. Our Supreme Court rejected this argument, noting that such a reason for nonrenewing automobile insurance policies was not expressly prohibited under Section 3 of Act 78.

. The combination of these two statutory restrictions prompted this Court to characterize imprecisely the restrictions as “permil[ting] an insurer to refuse to renew an automobile policy when the insured was involved in two or more accidents within a designated 36-month period." Musto v. Pa. Ins. Dep't, 683 A.2d 1325, 1326 (Pa.Cmwlth.1996) (emphasis added).

. Considering the other categories of Excepted Accidents and the analysis above, I respectfully submit that interpreting, as the Commissioner and the majority do, the "auto*579mobile lawfully parked” exception to exclude such accidents from an insurer’s consideration leads to an absurd and unreasonable result, which the General Assembly could not have intended. See 1 Pa.C.S. § 1922(1) (providing for presumption in statutory construction that General Assembly "does not intend a result that is absurd, impossible of execution or unreasonable”).