645 F. App'x 169
3rd Cir.2016Background
- In Sept. 2012 Stefan Freeth (employee of Road-Con) suffered serious injury from a traffic sign struck loose by an unidentified tractor-trailer; Road-Con’s business policy with Zurich provided uninsured/underinsured motorist (UM/UIM) coverage.
- Freeth sued for a declaration that UM coverage limit is $1,000,000 (equal to bodily injury liability limits under Pennsylvania law).
- Zurich contended Road-Con previously signed a broker-provided Uninsured/Underinsured Motorists Coverage Selection/Rejection Limits Summary Form that listed Pennsylvania UM limits of $35,000, so Zurich argued the reduced limit controlled.
- The Summary Form, and an accompanying cover letter, repeatedly warned that the Summary Form was not a substitute for state-specific selection/rejection forms and that the first-named insured must sign the Pennsylvania-specific form to reduce UM coverage.
- Road-Con did not sign a Pennsylvania-specific UM selection/rejection form (though it signed other PA forms); the district court granted summary judgment for Freeth, holding state law default UM limits ($1,000,000) applied. Zurich appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the signed Summary Form constituted a written request under 75 Pa. Cons. Stat. § 1734 to reduce UM limits to $35,000 | Freeth: The Summary Form’s warnings and absence of a signed PA-specific form mean there was no valid request to reduce UM limits; default equal-to-liability limits apply | Zurich: The signed Summary Form listed PA limits of $35,000 and thus manifested the insured’s request to reduce UM coverage | Held: The Summary Form did not constitute a valid § 1734 request because it expressly warned that a state-specific signed form was required for PA; therefore UM limits default to $1,000,000 |
Key Cases Cited
- Orsag v. Farmers New Century Ins., 15 A.3d 896 (Pa. 2011) (upholding a coverage reduction where insureds handwritten selected UM/UIM amounts on the application)
- Lewis v. Erie Ins. Exch., 793 A.2d 143 (Pa. 2002) (discussing requirements for valid rejection or reduction of UM coverage)
- Nationwide Mut. Ins. Co. v. Buffetta, 230 F.3d 634 (3d Cir. 2000) (addressing sufficiency of insurer communications for UM coverage reductions)
- Weilacher v. State Farm Mut. Auto. Ins. Co., 65 A.3d 976 (Pa. Super. Ct. 2013) (interpreting § 1734: written signed request must expressly designate requested amount to reduce UM/UIM coverage)