Safe Auto Insurance Co. v. Oriental-Guillermo
170 A.3d 1170
| Pa. Super. Ct. | 2017Background
- On April 29, 2013 Rachel Dixon (non-relative live-in partner) was driving a car owned by Policyholder Rene Oriental-Guillermo and was involved in a two-car accident; passenger Priscila Jimenez sued Dixon and others for personal injuries.
- The vehicle was insured by Safe Auto under a policy containing an "Unlisted Resident Driver Exclusion": residents of the insured’s household who are non-relatives are excluded from coverage unless listed as an additional driver.
- Dixon lived with the policyholder, was unrelated, and was not listed on the Safe Auto policy.
- Safe Auto filed a declaratory judgment action seeking a ruling that the exclusion was enforceable; trial court granted Safe Auto summary judgment, holding it had no duty to defend or indemnify Dixon.
- Appellants (Jimenez plaintiffs) appealed, arguing the exclusion is ambiguous, violates the MVFRL, and is against public policy.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Safe Auto had a duty to defend/indemnify Dixon under the policy | Exclusion is unenforceable/ambiguous; Dixon should be covered | Policy language is clear: unlisted, non-relative household residents are excluded | Court: exclusion unambiguous; no duty to defend/indemnify applies |
| Validity/enforceability of limiting coverage to named/listed drivers | Such limits improperly deny coverage to permissive users and injured victims | Insured must identify household drivers; insurer may limit coverage for unidentified resident non-relatives | Court: limiting provision valid and enforceable as written |
| Whether the exclusion violates the MVFRL (75 Pa.C.S. § 1701 et seq.) | MVFRL requires owners ensure drivers are insured; owner’s failure should not shift protection to insurer | MVFRL places burden on vehicle owner to ensure drivers have insurance; it does not mandate insurers cover unnamed resident non-relatives | Court: exclusion does not contravene MVFRL; burden rests with owner, not insurer |
| Whether the exclusion violates public policy (including goal of "maximum feasible restoration") | Exclusion undermines remedial aims of MVFRL and leaves victims uncompensated | Public policy favors insureds ensuring coverage; courts should not rewrite clear contracts absent dominant public policy | Court: public policy does not invalidate the exclusion; enforcement affirmed |
Key Cases Cited
- Kvaerner Metals Division of Kvaerner U.S., Inc. v. Commercial Union Ins. Co., 908 A.2d 888 (Pa. 2006) (scope of review in declaratory judgment actions is plenary)
- Wall Rose Mut. Ins. Co. v. Manross, 939 A.2d 958 (Pa. Super. 2007) (summary judgment standard)
- Generette v. Donegal Mut. Ins. Co., 957 A.2d 1180 (Pa. 2008) (policy interpretation is a question of law; unambiguous language enforced)
- Eichelman v. Nationwide Ins. Co., 711 A.2d 1006 (Pa. 1998) (courts should only refuse enforcement of contracts when clearly contrary to public policy)
- Hall v. Amica Mut. Ins. Co., 648 A.2d 755 (Pa. 1994) (public policy must be found in law and precedent before invalidating contracts)
- Williams v. GEICO Gov’t Employees Ins. Co., 32 A.3d 1195 (Pa. 2011) (discusses MVFRL policy goals; concurrences cautioned against relying solely on cost containment)
- Progressive Northern Ins. Co. v. Universal Underwriters Ins. Co., 898 A.2d 1116 (Pa. Super. 2006) (discussion of §1786(f) and owner responsibility to ensure financial responsibility)