Court Opinion

ID: 4962287
Source: CourtListenerOpinion
Date Created: 2021-09-24 15:16:11.149067+00
Date Added: 2024-06-11T08:15:53.519040
License: Public Domain

DISSENTING OPINION BY
ORIE MELVIN, J.:
¶ 1 I do not believe that when the Bloods decreased their liability limits an additional election of reduced UM/UIM coverage was required. Therefore, I disagree with the majority’s conclusion that in the absence of a new election form, the presumed UM/UIM coverage limit is the same as the liability coverage limit. Because I would affirm the order granting summary judgment in favor of Old Guard, I respectfully dissent.
¶ 2 When an applicant initially purchases an auto insurance policy, it is presumed that UM/UIM coverage will equal bodily injury limits unless the applicant signs a form electing to reject UM/UIM coverage or requests in writing to purchase lower UM/UIM coverage. See 75 Pa.C.S.A. §§ 1731,1734. However, after a rejection or reduction of UM/UIM coverage has been made, the MVFRL does not explicitly require a new UM/UIM sign down form each time a policyholder changes the liability limits. See 75 Pa. C.S.A. §§ 1731,1734, and 1791.
¶ 3 In this case, it is illogical for the majority to reason that the Bloods’ written request to reduce liability limits could operate to increase UM/UIM limits. Moreover, the record reflects that the Bloods, at the time of amendment, already had UM/UIM limits lower than the liability limits and that they made no request to increase or decrease the present UM/UIM limits. Contrary to the majority, I would not interpret the MVFRL to require an additional sign down form when a prior express reduction of UM/UIM coverage already exists.
¶ 4 In support of its holding, the majority relies in part on Smith v. The Hartford Insurance Company, 849 A.2d 277 (Pa.Super.2004), appeal denied, 581 Pa. 708, 867 A.2d 524 (2005), which is a UM/UIM rejection case. In Smith, Mr. Smith purchased automobile insurance which included UM/ UIM coverage in the amount of $300,000. Later that same year, Mr. Smith executed a waiver of underinsured motorist coverage. Four years later, Mr. Smith sought to increase liability coverage on the auto policy to $500,000. In 1999, Mr. Smith and his wife were involved in an accident with an alleged underinsured motorist. Mrs. Smith sought underinsured coverage from Hartford. One of the issues presented to the trial court was whether a new UM/ UIM waiver/rejection form was required when the liability limits changed. The trial court found that by increasing the policy limits the Smiths had purchased a new insurance policy which required Hartford to supply a new rejection form related to UM/UIM coverage. On appeal, we reversed and found the change in liability limits did not result in a new insurance contract but the modification of an existing contract. Id. at 280. Relying on the language contained in 75 Pa.C.S.A. § 1791, we found that once the applicant has purchased the policy and has been informed of the policies available, “no other notice or rejection shall be required.” Id. at 280-281. Thus, we concluded no new rejection form was required.
¶ 5 The majority specifically relies on a portion of Smith which treated the rejection of UM/UIM coverage differently than the reduction of UM/UIM coverage under § 1734. Concerning the reduction of UM/UIM limits, the majority, citing Smith, states that “when liability limits change[,] *800a new request for lower limits must also be submitted or the statutorily mandated equal limits will apply.” Smith, at 281 (citing Cebula v. Royal & SunAlliance Ins. Co., 158 F.Supp.2d 455 (M.D.Pa.2001)); Majority Opinion, at 797. I respectfully disagree with the majority’s reading of Smith. Upon review, I find this reasoning from Smith is dicta because reduction of UM/UIM coverage was not at issue there. Moreover, Cebula, upon which Smith referenced as authority, is clearly distinguishable. In Cebula, the district court reformed the auto insurance policy so that UM/UIM coverages were the equivalent of liability limits since the insured had never submitted a written request to have his UM/UIM coverage be lower than the bodily injury liability coverage. However, in the present case the Bloods signed a written request for reduction of UM/UIM coverage when they originally purchased the policy.
¶ 6 I believe that the Bloods’ reduction of liability limits was a modification to an existing policy. Smith, supra. However, I do not find that this modification required an additional election of reduced UM/UIM coverage. Instead, I would find their original election to reduce UM/UIM coverage remained in effect. Accordingly, I dissent.