242 A.3d 915
Pa. Super. Ct.2020Background
- On Oct. 16, 2016, Scott Petrie was killed while riding his motorcycle by an underinsured driver. His wife, Janice Petrie (Executrix), and their children are claimants.
- The Petries had two UIM policies: a Foremost motorcycle policy (paid and provided $25,000 UIM, from which Petrie recovered) and an Erie auto policy covering four vehicles with $100,000/$300,000 UIM limits and a signed MVFRL waiver labeled for a single “policy.”
- Erie’s policy included a Section 1738-style written waiver form (signed by Decedent) and a household-vehicle exclusion that excludes UIM for injuries while occupying a vehicle owned by the insured or a relative but not insured under that policy.
- Erie denied Petrie’s UIM claim under its policy, asserting (1) the signed waiver validly bars inter-policy stacking and (2) the household exclusion also precludes coverage for the motorcycle accident.
- Erie filed for declaratory judgment; after pleadings closed the trial court granted judgment on the pleadings for Erie. The Superior Court reversed and remanded.
Issues
| Issue | Plaintiff's Argument (Petrie) | Defendant's Argument (Erie) | Held |
|---|---|---|---|
| Whether the Section 1738 waiver in Erie’s policy validly waives inter-policy stacking of UIM limits | Waiver language is ambiguous (uses singular “policy”); insureds could reasonably think the waiver only affected intra-policy stacking, so no knowing waiver of inter-policy stacking | Waiver complies with §1738 form language; it bars stacking between Erie and Foremost | Waiver insufficient to show a knowing waiver of inter-policy stacking under Craley; ambiguous waiver defeats inter-policy waiver — trial court reversed |
| Whether the household-vehicle exclusion bars stacking or otherwise precludes Erie UIM liability | Gallagher makes household exclusions that operate as de facto stacking waivers invalid where §1738 waiver formalities are not met; exclusion cannot defeat stacked coverage | Exclusion validly denies coverage because the motorcycle was not insured under Erie | Under Gallagher the household exclusion cannot be used to circumvent §1738’s written-waiver requirement; exclusion is not a lawful substitute for a statutorily-compliant waiver |
Key Cases Cited
- Craley v. State Farm Fire & Cas. Co., 895 A.2d 530 (Pa. 2006) (inter-policy stacking may be waived but §1738 requires a knowing written waiver; standard §1738 form may be inadequate in multi-policy contexts)
- Gallagher v. GEICO Indem. Co., 201 A.3d 131 (Pa. 2019) (household-vehicle exclusion cannot function as a de facto waiver of stacked UM/UIM coverage in contravention of §1738’s written-waiver scheme)
- McGovern v. Erie Ins. Grp., 796 A.2d 343 (Pa. Super. 2002) (describing intra- and inter-policy stacking concepts)
- Rupert v. Liberty Mut. Ins. Co., 781 A.2d 132 (Pa. 2001) (statutory purpose: ensure insureds receive clear notice before waiving stacked coverage)
- Forbes v. King Shooters Supply, 230 A.3d 1181 (Pa. Super. 2020) (standards for reviewing motions for judgment on the pleadings)