Lead Opinion
OPINION BY
Appellants Timothy and Debra Clarke appeal from the order entered in the Philadelphia Court of Common Pleas denying their motion for partial summary judgment and granting MMG Insurance Company’s (“MMG Insurance”) cross-motion for partial summary judgment.
On April 16, 2012, Plaintiff-Appellant Timothy Clarke suffered serious and permanent injuries in a motor vehicle accident. Mr. Clarke was driving his motorcycle when a car turned in front of him, causing a collision that threw him from his motorcycle. Mr. Clarke suffered multiple injuries and was placed on life support for eleven days at Paoli Memorial Hospital. He underwent multiple surgical procedures before his release.
At the time of the accident, Mr. Clarke had two motor vehicle insurance policies in effect. American Modern Select Insurance Company issued the first for the motorcycle, and MMG Insurance Company issued the second for Mr. Clarke’s two automobiles — not his motorcycle. Appellants had underinsured motorist (“UIM”) coverage for the motorcycle through the American Modern Select Insurance policy. Mr. Clarke received payments of $25,000 from American Modern Select Insurance Company for his motorcycle policy and $100,000 from the other driver’s insurance company. Those payments, however, proved insufficient to cover Mr. Clarke’s financial losses from the accident.
Appellants then sought coverage under their insurance policy issued by MMG Insurance Co. — specifically under the UIM coverage clause, which provided coverage in the amount of $300,000 per accident. MMG Insurance, however, denied the UIM claim, based on the “Household Exclusion” clause. MMG Insurance asserted that the Household Exclusion clause precluded coverage because the motorcycle involved in the accident was not a covered vehicle under the MMG Insurance policy, which only covered two automobiles owned by Appellants.
On October 24, 2012, Appellants filed their initial complaint and, on December 27, 2012, filed an amended complaint. Appellants’ amended complaint named MMG Insurance Company and F. Frederick Breuninger & Son Insurance, Inc. (“Breu-ninger Insurance”) as defendants. The
On March 5, 2018, Appellants filed a motion for partial summary judgment on their claim for declaratory relief against MMG Insurance. MMG Insurance opposed the motion and, on April 3, 2013, filed a cross-motion for partial summary judgment. On April 16, 2013, the trial court denied both parties’ motions. On April 25, 2013, Appellants filed a motion for reconsideration. On May 16, 2013, MMG Insurance opposed Appellant’s motion for reconsideration. On August 1, 2013, upon a second review,
The trial court denied Appellants’ motion on the grounds that “the policy language of the Household Exclusion clause clearly and unambiguously excludes the coverage sought by [Appellants], and because the Order is consistent with Pennsylvania public policy regarding Household Exclusion clauses.” Trial Court Opinion, 12/30/13, at 4.
On September 12, 2013, Appellants filed a praecipe to settle, discontinue, and end all remaining claims against MMG Insurance and Breuninger Insurance.
Appellants raise the following issues for our consideration:
1. Where the language of the policy agreement between Appellee MMG Insurance Company and Appellants clearly and unambiguously excludes underinsured motorist coverage only where the injury is sustained while occupying a vehicle that has no un-derinsured motorist coverage, did the [t]rial [c]ourt err as a matter of law when it concluded MMG Insurance Company did not owe the Appellants underinsured motorist coverage for injuries sustained while occupying a vehicle which had un-derinsured motorist coverage?
2. Where the terms of an underinsured motorist exclusion used by MMG Insurance Company excluded coverage only for injuries that occurred in a vehicle that was not covered for un-derinsured motorist coverage, was it error for the [t]rial [c]ourt, in determining the intent of the parties to the agreement, to ignore the different language used by the insurer in the exclusion for uninsured motorist coverage which, by its terms, excluded coverage if the injuries oc*275 curred in a vehicle which was not covered for uninsured motorist coverage under the MMG Insurance policy, and therefore the [cjourt erred in its determination that Ap-pellee MMG Insurance Company owed no underinsured motorist coverage to Appellants who were injured while occupying a vehicle which had underinsured motorist coverage?
3. In determining the intent of the policy agreement between Appellee MMG Insurance Company and Appellants, did the [tjrial [cjourt err in examining and relying upon public policy rather than the plain language of the policy agreement, and therefore err in its determination that Appellee MMG Insurance Company owed no underinsured motorist coverage to Appellants who were injured while occupying a vehicle which had underinsured motorist coverage?
4. In the alternative, did the [tjrial [cjourt err as a matter of law in denying Appellants’ Motion for Partial Summary Judgment and granting the Appellee MMG Insurance Company’s Cross-Motion for Partial Summary Judgment when it failed to construe the ambiguous language in the underinsured motorist coverage provision of the policy in favor of Appellants, which would entitle the Appellants to underinsured motorist coverage under their MMG Insurance Company policy?
Appellants’ Brief at 5-6.
The interpretation of an insurance contract is a question of law. United Services Auto. Assoc. v. Elitzky,
Appellants’ first two issues ask this Court to interpret the exclusionary language of the UIM Coverage provision in their insurance policy agreement with MMG Insurance. In their first issue on appeal, Appellants argue the language of the policy clearly and unambiguously covers Mr. Clarke’s injuries sustained from the underinsured motorcycle involved in the accident up to $300,000.00. In their second issue on appeal, Appellants assert that the trial court erred in its interpretation of the policy by failing to give effect to all of its language. Specifically, Appellants allege the trial court erred when it treated the different exclusionary language used by the insurer in the Uninsured Motorist (“UM”) coverage provision, which was not present in the UIM coverage provision, as surplusage. We agree.
When the language of a policy is clear and unambiguous, the court is bound to give effect to the policy and cannot interpret the policy to mean anything other than “what it says.” Nationwide Mut. Ins. Co. v. Cummings,
An insurance policy must be read as a whole, and not “in discrete units.” Luko v. Lloyd’s London,
“Our rules of construction do not permit words in a contract to be treated as surplusage ... if any reasonable meaning consistent with the other parts can be given to it.” Tenos v. State Farm, Ins. Co.,
Here, the trial court disregarded the clear and unambiguous language of the UIM exclusion in the policy agreement when read in the context of the agreement as a whole. It also did not apply well-developed and fundamental principles of contractual interpretation or rules of construction.
To ascertain the intent of the parties to the policy agreement, we must examine the language of the insurance policy agreement as a whole, which requires reading the UIM exclusion and the UM exclusion together, and construing the words according to their reasonable meaning within the policy. See Millers Capital Ins. Co.,
When the MMG Insurance policy, including the UM exclusion language, is examined as a whole, it becomes apparent that the decision to deny coverage was premised on a misreading of the terms of the UIM exclusion. The UIM exclusion provision relied upon by MMG Insurance
Any potential ambiguity implicated by the phrase “for this coverage” — specifically, whether it refers to UIM coverage through any insurer or UIM coverage under the particular policy — is resolved when viewed in light of the language of the UM exclusion in the same policy. The UM coverage clause excludes coverage for injuries sustained in vehicles “not insured for this coverage under this policy.”
Further, the missing language “under this policy” confirms that MMG Insurance understood how to exclude coverage for injuries occurring in vehicles not insured by MMG Insurance, and confirms that the policy intended to include UIM coverage as long as the Clarkes maintained first-tier UIM coverage through any insurer. Specifically, and in distinction to the UIM exclusions, the exclusions for UM coverage state that the policy only covered vehicles which were both “insured for this coverage” and when that coverage was “under this policy.”
The phrase “under this policy” is not mere surplusage. If the UIM and UM exclusions were intended to have the same meaning, they would have the same language. See Cohen v. Erie Indem. Co., 14 Pa. D. & C.3d 444, 448 affirmed,
Further, under the contractual interpretation maxim that the “mention of one thing implies the exclusion of another”, a court may not add language to a provision, particularly where the language was contained in a separate provision but excluded from the provision at hand. See Madison Constr. Co. v. The Harleysville Mut. Ins. Co., 144,
Not only is the UIM exclusion different from the UM exclusion, the UIM exclusion is also different from the language typically used in insurance policies to disclaim coverage for vehicles not listed in the policy. “It is important to distinguish [an insurer-defendant’s] exclusionary provision from [ ] exclusion provisions found in many other insurance policies.” Madison Constr. Co.,
In their third issue on appeal, Appellants allege the trial court erred in examining and relying upon public policy rather than the plain language of the policy agreement. We agree.
“[W]hen the question is one of contract interpretation, public policy arguments are irrelevant.” Municipality of Mt. Lebanon v. Reliance Ins. Co.,
In Prudential v. Colbert,
In their fourth issue on appeal, Appellants assert, in the alternative, that the language of the UIM exclusion creates ambiguity that requires the Court to construe the policy language against MMG Insurance. Because we find the exclusionary language of the UIM coverage provision clear and unambiguous, it is unnecessary to address this issue.
Order vacated. Case remanded. Jurisdiction relinquished.
Judge LAZARUS joins the Opinion.
Judge PANELLA files Dissenting Opinion.
Notes
. F. Frederick Breuninger & Son, Insurance, Inc. is not a party to this appeal.
. On June 20, 2013, the trial court marked Appellants' motion for reconsideration "moot.” After a case management conference with the trial court, the parties stipulated to vacate the June 20, 2013 order and place Appellants’ motion for reconsideration before the trial court for its determination again.
. The remaining claims were as follows: breach of contract (count II), negligence (count III), and breach of warranty (count IV) against both MMG Insurance and Breuninger Insurance.
.On October 18, 2013, the trial court ordered Appellants to file a statement of matters complained of on appeal within twenty-one days. On November 4, 2013, Appellants submitted their statement. On December 30, 2013, the trial court submitted its 1925(a) opinion.
. Appellants paid for UIM coverage under this policy. The policy included the following exclusion to UIM coverage:
EXCLUSIONS
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A. We do not provide Underinsured Motorists Coverage for "bodily injury” sustained:
1. By you while "occupying”, or when struck by, any motor vehicle you own which is not insured for this coverage. This includes a trailer of any type used with that vehicle.
2. By a "family member” who owns an auto, while "occupying", or when struck by, any motor vehicle owned by you or any "family member” which is not insured for this coverage. This includes a trailer of any type used with that vehicle.
Appellants' Brief at 15-16 (emphasis added in brief).
. When the MMG Insurance Co. policy is examined as a whole, and the UIM exclusion is compared to other exclusions — namely, the UM exclusion — the distinction is apparent. The UM exclusion explicitly states that coverage does not extend to vehicles covered for UM coverage "under this policy.”
EXCLUSIONS
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A. We do not provide Uninsured Motorist Coverage for "bodily injury” sustained:
1. By an "insured” while "occupying”, or when struck by, any motor vehicle owned by that "insured” which is not insured for this coverage under this policy.
By any "family member” while "occupying”, or when stuck by, any motor vehicle you own which is insured for this coverage on a primary basis under any other policy.
Appellants' Brief at 16-17 (emphasis added in brief).
Dissenting Opinion
DISSENTING OPINION BY
My esteemed colleagues in the Majority reverse the trial court’s grant of summary judgment, concluding that the clear and unambiguous policy language of the contract between the Appellants and MMG grants the Appellants UIM coverage. I disagree and respectfully dissent.
The Majority sets forth the appropriate standard and scope of review. Where I differ is the application of the standard of review to the record before us. In particular, I disagree that the language in the UIM Exclusions section of the policy unambiguously supports an interpretation that MMG was providing coverage for vehicles not otherwise referenced by the policy. The Majority focuses on the absence of the phrase “under this policy” in the UIM Exclusions and contrasts its use in-the UM Exclusions section of the policy. Conversely, I conclude that this policy uses the phrases “this coverage” and “this coverage under this policy” interchangeably.
For example, under “Part A-Liability Coverage,” the policy states that MMG’s duty to defend ends when the liability limits “for this coverage have been exhausted by payment of judgment for settlement.” Similarly, under “Part B-Medical Payments Coverage; Limits of Liability,” the policy provides that the “limit of liability shown in the Declaration for this coverage is our maximum limits of liability-”
The inappropriateness of the construction aid becomes apparent if we apply the Majority’s reasoning to the aforementioned passages that similarly lack the additional “under this policy” language. In
In light of the primary public policy concern for the increasing costs of automobile insurance, it is arduous to invalidate an otherwise valid insurance contract exclusion on account of that public policy. This public concern, however, will not validate any and every coverage exclusion; rather, it functions to protect insurers against forced underwriting of unknown risks that insureds have neither disclosed nor paid to insure. Thus, operationally, insureds are prevented from receiving gratis coverage, and insurers are not compelled to subsidize unknown and uncompensated risks by increasing insurance rates comprehensively.
Burstein v. Prudential Property & Cas. Ins. Co.,
A natural, reasonable interpretation following the plain language and meaning of the phrase “this coverage” requires no reference to other sections of the policy. Simply put, the very act of analogizing to similar, but not equivalent, language elsewhere in the document is an implicit finding that the term in question is ambiguous. There is no need to refer to different terms if the term under review is unambiguous. As noted, I find no ambiguity, but even if I did, I would reach the opposite conclusion: the only reasonable construction of the UIM clause is that reached by the trial court.
Furthermore, the Majority is correct to note that public policy concerns are always secondary to the “clear and unambiguous [terms of a] contract.” See Eichelman v. Nationwide Ins. Co.,
For all the aforementioned reasons, I respectfully dissent and would affirm the trial court’s grant of summary judgment.
. This phrase appears in the contract in the additional following clauses: Part B — Medical Payment Coverage, Limit of Liability Clause at 5; Part C — UM Coverage Exclusions Clause, at 6; Part-C UM Coverage, Limit of Liability Clause, at 7; UIM Endorsement, Limit of Liability Clause, at 7.