Generette v. Donegal Mutual Insurance

dedication, In the trial accept instant the does not the if the side alley concluded that the road boundary and were of is a the street in the deed for public land, never dedicated to use. We find abutting the owners of this abutting this conclusion parti- to error. The land title the take to center line of the lays tion plan alley. out the road and Rahn, 106 street. See A.2d at 464. The descriptions purparts include the unopened alley road and are named bound- alley road and for the as boundaries vari- parts Appellant’s aries for of assignor’s ous In parcels. subsequent the sale of properties. Consequently, she is entitled lots, alley these the road and were re- title to center legal line of the road as paths tained boundaries and of in- as and alley portions those of which her gress and egress. Clearly, the individuals alley. land the road and abuts purchased upon who their lots relied these ¶ 12 We reverse order denying unopened rights way for future of access pursue standing declaratory relief and circumstances, to their land. Under these entry direct the of the relief requested in alley we conclude that the road and were Appellant’s declaratory judgment action. public dedicated to use.

¶ 10 It is not disputed alley accepted by

road and were never Therefore,

municipality. public’s right

of was extinguished. use

However, public easement while or alleys of use in lanes such or is lost the result of passage such time Josephine GENERETTE, Appellant, use, lack purely and private rights of easement of individual property own- plan alley ers of lots to use

isway extinguished. DONEGAL MUTUAL INSURANCE COMPANY, Appellee. Binnie, 246, Riek v. Pa.Super. (1986). designation “The Superior Court Pennsylvania. boundary, conveyance as a street land, not, if it opened whether be on Argued March grantor, land of the is an covenant implied Filed Sept. grantor it open shall be for the grantee public way, as a use of and as conveyed.” to the means access land Philadelphia, Pa.Super.

Barnes v. (1905). 3546 *2 Appellant’s

1905 WL as

signor’s land is bounded the road and alley, therefore, Appellant’s as

signor currently possesses an easement for over

ingress egress the lots alley. Accordingly, road we

unopened standing Appellant

conclude had action.

bring this Furthermore, street where a has public public

been use and the dedicated York, appellant. P. Lang,

Thomas appel- Harrisburg, Kelly, E. Robert lee. HUDOCK, FORD

BEFORE: MELVIN, ELLIOTT, JOYCE, ORIE BOWES, KLEIN, BENDER, GANTMAN PANELLA, JJ. JOYCE, BY OPINION J.: Generette Appellant, Josephine 24, (“Generette”), the June appeals from by the of Common 2003 order issued Court summary County, granting of York Pleas judgment Appellee, favor (“Donegal”). Company Insurance Mutual review, After careful we affirm. of an 2 Before us is another instance a cov- auto insurance consumer who makes monetary results in erage decision that sues the carrier after savings, and then realizing that more being been available better would have cost-saving In this decision. absent instance, decision was motor- of underinsured (“UIM”) exchange for a ist premium reduction.

¶3 are not of this case facts stipulation dispute, as evidenced parties into on June entered between 28, stipulation, on According applied for Generette December insurance with automobile private in accor- Her issued Donegal. policy was Pennsylva- then-applicable dance with the Act Vehicle Insurance nia No-fault Motor (“No-fault Act”), §§ 1009.101- 40 P.S. 1009.701 (repealed).1 Although the No- the enactment of With Act 6 of 1990 (“Act 6”) July fault Act did certain require itself uninsured sections amended, of the MVFRL were including coverage (“UM”), motorist 1731, 1734, §§ result, As a was mandated the Uninsured Motorist could sureds coverages UM/UIM Act, 2000. policy P.S. Generette’s (§ 1731), completely elect limits of UM/ 6, 1982, issued on December included UM coverages in UIM amounts lower than BI $30,000 in the per amount of (§ 1734), limits and waive the to accident.2 (§ 1738). stack coverages For UM/UIM ¶ 1, 1984, 4 On October the No-fault Act existing policies, the Act amendments supplanted by was Pennsylvania the Motor to applied 1, the first after July renewal Generette, For Responsibility Vehicle Financial that first Law renewal 6, on place took 1990. At (“MVFRL”), December that §§ 75 Pa.C.S. 1701-1799.7. time, Generette and her husband elected that, required The MVFRL upon the first single non-stacked coverag- limit UM/UIM existing renewal of policy October after $35,000 es in per the amount of accident. 1, 1984, UM UIM coverages pro- policy Generette’s was renewed with the bodily vided to equal injury amounts the $35,000 non-stacked limits every UM/UIM (“BI”) limits, liability unless the insured six months from 1990 through December elected to reduce the coverages UM/UIM 29, 1997, April when she was to certain specified minimum amounts. automobile accident.3 ¶ MVFRL, 5 In accordance with the accident, Following Generette re- when policy Generette’s on renewed De- $25,000 covered the BI limits from the 1984, 6, cember it included cov- UM/UIM insuring party responsible $100,000 erages to BI equal her limits of accident. Pursuant 75 Pa.C.S. per coverages accident. The remained at 1733,4 presented she then a UIM claim 1985, level until December when Nationwide, carrier the owner of proper Generette executed a form the car which a passenger she was her requesting that limits be UM/UIM the time of the accident. Nationwide ten- $35,000 per reduced to accident. Gener- $50,000 dered its limits. UIM Generette premium ette received reduction for carrier, then her submitted claim to own electing limits. lower Donegal, asserting entitlement to the $35,000 original 1. At of the coverages the time issuance non-stacked on UM/UIM Josephine Ausby. Generette was She that vehicle as well. Effective December 23, 1988, August married Ervin Generette on poli- one vehicle was removed from the and her husband was added cy. as a named in- coverages Non-stacked UM/UIM simplicity, $35,000 sured at that time. For the sake of remaining continued in for the effect Generette, Appellant we shall refer as even vehicle. periods pre-dating in relation to time her marriage. 4.Section 1733 sets forth the of recov- ery policy ap- when more than one UM/UIM require 2. The 1733(a) Uninsured Motorist Act did not general plies. The rule in directs UIM, offer insurers amount of that the first claim for benefits be UM/UIM Donegal issued in 1982 did not policy covering made the vehicle provide to Generette. occupied by injured person at the time of accident, any subsequent and that claim discussion, Although not crucial to our we be made under a on a vehicle not respect note that Generette added a vehicle to in the second involved accident with to which 3, 1992, January injured person elected is an insured. (Second $35,000 pri- tionwide exceeded purchased in UIM ority) limits elected Generette under “non-stacked” was not en- Donegal policy, Generette claim, denied Generette’s benefits, in titled additional UIM recovery contending she barred from language of her non- with the accordance language contained virtue of for which she stacked UIM endorsement The UIM non-stacked endorsement. premium. a reduced received Donegal policy endorsement under that, “other clause cludes an insurance” declaratory pursued 10 Generette directs the consistent with first asking judgment against Donegal, action coverage applicable insured to the UIM Donegal’s the trial court to find “oth- occupied by the the vehicle insured the against was void as er insurance” clause (“First priority”). time of the accident was enti- public policy, and that Generette exhausted, coverage When that has been tled to UIM benefits the amount may recovery the under pursue insured BI $100,000, equal her lim- the amount to policy coverage the to the affording UIM a subsequently its.6 filed mo- Generette family as a named insured or summary judgment, tion which was for (“Second priority”). member In this motion Donegal then filed its for denied. did exhaust the limits of Generette the judgment, granted by which summary e., First i. priority the Nationwide 24, In the order on June 2003. entered policy covering the vehicle which she the Mi- accompanying opinion, Honorable passenger. pursued was a She then the noted that Generette chael J. Brillhart i.e., priority policy, sole her Second own “has elected to never denied she Donegal policy. stacking, challenged has waive nor she ¶ 9 Donegal policy The restricts recov- process by which she waived ery priority in the Second to the amount reject public policy we chal- [Generette’s] by recovery priority which the First nonstacking lenge policy.” to her Trial by greatest any exceeded limit for one 6/24/03,at Opinion, Court 12-13. any policy under vehicle one Second for recon 11 Generette filed motion priority.5 example, For had Generette’s sideration, she, single- as a asserting $300,000, she would been owner, inter-policy cannot waive vehicle up have been entitled to recover to Mutual Insur stacking under Nationwide $250,000 in Donegal, UIM benefits from Harris, ie., A.2d $300,000 Company ance v. Donegal’s less Nationwide’s $50,000. In re Liti (Pa.Super.2003), and But in this because the (First $50,000 by (Pa.Super.2000).7 priority) paid gation, limits Na- pursued that policy provides: 1997 accident date. She has not "[t]he maximum re- appeal. this issue in priori- covery policies all under the Second ty by shall not exceed the amount which the explained the Insurance Commission- 7.As highest one under limit for vehicle er, separate inter-policy "utilizes policy one in the Second exceeds the policy of benefits to as source applicable in the First limit injured person's combine priority.” scenario, policy. In cov- under his this [own] policies erage separate limits contained court, proceedings trial In the before the primary event for cumulation available challenged also reduction of Generette coverage is Leed insufficient.” Declaratory limits made from an Company, UM/UIM Mutual Insurance $100,000, Order, equal Opinion February BI at 6. amount limits of contrast, By intra-policy stacking involves limits in effect UM/UIM Following denial motion for each recon limits for motor as to vehicle sideration, appeal injured person filed an Generette is an insured. Court, raising one issue: (b) pro- Notwithstanding the Waiver.— (a), visions of Is subsection entitled named [Generette] underinsured sured providing

motorist benefits a named in- stacking of uninsured or sured with on her underinsured one vehicle can coverages in not waive which case the limits of inter-policy stacking of under- coverage available under the for insured motorist benefits? an insured shall be the stated limits ¶ 12 A panel Court reversed motor vehicle as to which the vote, that, 2-1 majority finding with the person is an insured. Pa.C.S. insured can- (c) More than vehicle.—Each inter-policy stacking not waive on a single- purchasing named insured uninsured or policy. Donegal sought reargu- vehicle underinsured motorist ment, which granted. we more than one vehicle under a ¶ 13 scope appeal Our review on shall provided opportunity grant summary from the judgment of is waive the limits of coverage stacked and Yet, plenary. reviewing grant of purchase coverage instead as described summary judgment, we should reverse the (b). premiums subsection The for an only trial court it is where established that insured who exercises such waiver shall the court an error committed of law or reflect be reduced to the different cost clearly abused Gutteridge its discretion. of such coverage. Services, Inc., A.P. Green (d) Forms.— (citations omitted), (Pa.Super.2002) ap (1) in- The named insured shall be denied,

peal 574 Pa. 829 A.2d 1158 may formed that he exercise the waiver (2003). of the limits of motor- stacked uninsured ¶ 14 Our of examination by signing following ist coverage begins issue before us a review of the rejection form: written applicable statutory provisions set forth UNINSURED COVERAGE LIMITS § 75 Pa.C.S. waiver, By I signing rejecting this am § of uninsured and stacked limits of uninsured motorist cov- option underinsured and benefits erage myself under the for and waive my members of household under which

(a)Limit coverage for each vehicle.—When the limits of available be more than one vehicle is insured under the sum of limits for each motor vehicle Instead, one or policies providing policy. more insured uninsured under coverage, coverage or underinsured of that I am purchasing motorist limits limit stated for uninsured or underin- shall be reduced to the limits stated apply voluntarily coverage separately policy. knowingly sured shall I and reject each vehicle The limits of I coverage. so insured. limits of the stacked coverages my premiums under this understand be subchap- available that will reject coverage. ter for an be the reduced if I insured shall sum of multiplying policy. cles insured limits under UM/UIM single under the number of vehi- policies. How- vehicle under their

single ever, with the interpretation conflicts 1738(b), that a which states language may stacking. insured Un- named 1738(b), is not restricted option der (2) in- named shall purchasing named insureds UM/UIM formed that he the waiver exercise one vehicle under coverages more than limits of stacked underinsured policy. coverage by signing motorist follow- one Allowing a named insured with ing rejection form: written con- option to waive is vehicle LIM- UNDERINSURED COVERAGE and language sistent with the ITS 1738(b) in particular, the statute waiver, By signing rejecting I am offering prohibit not an insurer from does stacked motorist limits underinsured However, an that waiver. affirmative of- policy myself is single-vehicle fer of waiver to a owner my members of household under which mandatory, it with a named in- as the limits of would be available multiple sured with vehicles insured the sum limits for each vehicle motor policy.8 Instead, policy. insured under the I limits am purchasing ¶ The presented issue this Court shall be reduced to the limits stated is entitled to stacked whether Generette voluntarily knowingly I asserts, because, benefits as she reject I the stacked limits of owner, she cannot waive single-vehicle my premiums will be understand contends ter-policy stacking. Generette reject reduced if I in inquiry answer is found that the 1738(d), §of the form language

the waiver adopted by Legislature. The 1738(d) form limits of directs “shall be reduced to the coverage available However, in policy.” limits stated (e) Signature and date.—The forms form, itself, by does language waiver (d) described in subsection must be necessary inquiry. not It is also end signed by the first named insured Donegal language to examine the Any rejection dated valid. form in the the “limits stated policy ascertain comply that does not this section insured, such when as Gener- policy” void. ette, on a stacking elects waiver ¶ argues pre- form Generette that the insuring single vehicle. policy 1738(d) by § in- scribed states that pertinent language The from Done- only the relinquishes sured to stack Coverage— Motorists gal’s “Underinsured multi-car In es- coverages on a (Non-Stacked)” endorse- Pennsylvania sence, waiver suggesting Generette is is: ment stacking option not an available insure, does, a policyholders who as she OTHER INSURANCE coverage purchase as described purchasing instead 8. "Each named 1738(c) (em- (b)." coverage vehicle for more than one 75 Pa.C.S. in subsection [UM/UIM] provided opportu- policy added). shall be phasis nity to waive the stacked limits of If applicable there is other age similar insur- from purchased Nationwide than she ance available under poli- more than one under her policy, own she then cy provision coverage: policy, turned to her which included the non-stacked she elected. following The priorities of recovery ap- ply: above, Donegal’s As set forth “other First applicable [UIM] to the ve- insurance” provides clause formula for hicle the “insured” “occupying” calculating UIM benefits when the insured the time of the accident. has under a policy recovered benefits in- policy Second The affording to suring [UIM] a non-owned vehicle. Because she the “insured” as a named insured- of in had benefits recovered UIM amount family member. greater than the level of purchased Donegal, from Generette was applicable When there is insur- any recovery entitled to additional

ance available under the priori- First from Donegal policy’s under her formula.9 ty: a. liability The limit of applicable 21 Having concluded that the

to the vehicle the “insured” was waiver form reduces UIM to the “occupying,” policy under the limits and that stated priority, the First shall first be limits stated in are cal- Generette’s exhausted; and culated in accordance with the “other in- language surance” in her non-stacked UIM b. The maximum recovery under endorsement, our inquiry returns to the policies all priori- the Second issue raised Generette: whether an in- ty shall not exceed the amount sured on a highest which the limit for suring single vehicle. A review of exist- one vehicle ing case law reveals while Second ex- issue has been discussed ceeds the limit applicable under years, several cases in it has recent been in the priority. First only addressing discussed dicta le- ¶ 19 In accordance with Donegal’s poli- gitimacy waiving inter-policy stacking. of cy, if Generette had injured been in her case law is following overview of of- vehicle, own simply pre- would have fered to substantiate assertion. Donegal sented a claim to for the in UIM benefits available policy. under her 22 The first case to discuss waiver of However, injured she was a passen- inter-policy while stacking Stacking was In re ger in a vehicle insured Nationwide. Litigation (“Stacking Litigation”), 754 Therefore, (en banc). accordance with 1733 (Pa.Super.2000) and A.2d 702 In the Donegal policy, case, she looked first to the the Stacking Litigation the issue was Nationwide policy, and collected the whether automobile insurance carriers $50,000 UIM limits available under that could charge “stacking” premium recovering After just more UIM cover- sureds who owned one vehicle.10 We Citing 9. reducing, Allwein v. Mutual reducing, Insurance "excess” relate to or not 364, Company, Pa.Super. 448 671 A.2d 744 the limits of available BI (1996), suggests Generette enforcing coverage. Donegal's set-off clause converts UIM cover- age “gap” into presented by Appellants rather than "excess” Seven issues were Appellant’s Reargument Substituted Brief Stacking Litigation in the case. The issue case, "Gap” at 8. We dismiss this contention. addressed in the instant whether a sin-

273 failing approval illusory trial for an benefit and noted with opportunity inform them of the the issue the Insurance referred Com- missioner, stacking.” pointed Id. at 709. then We charging who concluded fallacy “illusory out the benefit” premium stacking Quoting was lawful. single-vehicle Bauer, 596, argument by explaining that 608, Donnelly v. Pa. 720 553 elected, for, stacking and paid owners who 447, (1998), recognized A.2d 453 we that: potentially coverage with could stack their traditionally interpre- Courts accord through on another vehicle statutory provision by of a tation inter-policy stacking, thereby reaping a agency charged administrative with ad- payment their of “stacked” benefit from ministering that statute some deference. premiums. Id. at 709-10. However, the of a statute interpretation question is a law for the Court to Stacking Litigation In the we and when the is resolve Court convinced opinion also our that subsections offered regulation interpretative (c) (d) 1738, (b), togeth §of construed by the adopted agency administrative 1738(b) er, limit stacking waiver of clearly legis- erroneous or is violative option pur to those named insureds who intent, disregards lative Court coverages chase for more than UM/UIM agency’s interpretation. administrative However, Id. at 708. deter vehicle. validity mining of waiver of Litigation, Stacking 754 A.2d at 706. See not single-vehicle policy was neces Company also Allstate Insurance v. See Therefore, sary for the Court’s decision. lye, A.2d (Pa.Super.2004) Litiga pronouncement Winslow-Quattlebaum (citing Mary v. case, addressing tion the waiver of stack Group, land Ins. 561 Pa. 752 A.2d 878 ing, constitutes obiter dicta and not (2000) (finding that Depart the Insurance Bender, binding. Hunsberger See v. interpretation language ment’s (state (1962) 185, 188, Pa. MTVTRLshould be as valid accepted if not clearly opinion, ment in prior fraudulent, faith, clearly arbitrary, bad dicta, merely but “is not discretion)). decisional or an abuse us”).11 binding upon ¶ Having that the determined insur- ¶25 to the premium ance issue referred In McGovern Erie Insurance Com- Group, in the Stacking Litigation (Pa.Super.2002), missioner case 796 A.2d 343 peculiar exper- was one within area of Court discussed tise, In that interpretation we turned and but a different context. motorist, McGovern, application of the collected provisions driver, that BI from the Appellants’ negligent “[a]ll We noted causes limits premised coverage poli- their his own upon action were belief then UIM from motorcycle cy riding was Appellees’ covering conduct violates section he injured.12 then by charging Appellants premium a when was McGovern he gle-vehicle Legislature stacking stacking. waive owner could waive insured to coverages, among impose them. did not such restriction. was not UM/UIM motorcycle though stacking by 12. McGovern’s was Even waiver of discus- dicta, provided Stacking Progressive policy Litigation case sion in the was that, retrospect, UIM McGovern also we are constrained to note by TICO. No impose on the owned an automobile insured limitation 1738(b), paid by due to language were TICO which allows named benefits turned to Erie for UIM under a household exclusion the issue. was Never- mother, theless, to stated, issued his with whom he the Court “[t]his like McGovern, limits, paid lived. Erie its UIM but re- inter-poli- the issue of involves request fused to honor McGovern’s cy stacking, stacking § a form of However, stacked limits under the fact, specifically requires. In an insured the refusal was not on a based may not to inter-policy waive the fact, stacking. In both McGovern his stacking; only intra-policy stacking may mother had stacking elected of UM/UIM be waived.” Id. at 884. The Court did not coverages respective single- under their authority include a direct citation to for its Instead, policies. vehicle Erie’s refusal pronouncement inter-policy stacking try- was based the fact McGovern was However, may not be waived. there is ing apply Erie’s limits of to his held, notation that this Court motorcycle automobile, and his both of Litigation, supra, legislature “that the has separate policies were insured under circumscribed the class of named insureds by companies issued other than Erie. given to whom notice must be and who This Court affirmed the trial court’s deter- stacking therefore waive those who mination that could not McGovern use purchased coverage for more than one ve- 1738’s language to extend Id. single policy.” hicle under a at 883 Erie’s vehicles not insured Stacking Litigation, 754 A.2d at (citing Erie. 708). ¶26 In Nationwide Mutual Insurance previously, 28 As noted the issue Harris, (Pa.Su Company v. 826 A.2d 880 Stacking Litigation case was whether per.2003), this Court considered whether a charge stacking surance could carriers “household exclusion” clause could operate premiums to insureds who owned one vehi- preclude recovery of UIM In benefits. concerning cle. Statements limitations on injured Harris operat while stacking were dicta. time, ing her own vehicle. At the resided awith brother and her mother. 29 This next examined Court Harris BI first recovered the limits from Insurance State Farm Mutual Automobile insuring negligent driver. Rizzo, (Pa.Su Company v. next She recovered UIM benefits under per.2003). declaratory judgment In that her own Allstate as well as UIM action, parties presented stipulated benefits under Allstate issued to brought by appeal facts to this Court in an presented her brother. She then a claim insured, After Rizzo. recover Nationwide, her mother’s carrier. Na driver, ing negligent the BI limits from the tionwide denied based on its limits Rizzo received the UIM “household exclusion.”13 policy insuring the State Farm her own in the Harris case is vehicle. She then turned to the State opinion 27 The policy covering silent as to Farm the vehicle owned to whether Harris had elected father, Both benefits. with whom she resided. UM/UIM issue; validity stacking was not the of Rizzo father had waived Waiver and her application, unchallenged exclusionary occupying injuiy a motor vehi of suffered while McGovern, clause. A.2d at n. 1. by you owned or a relative but not insured cle coverage policy.” under Har [UIM] directed, alia, 13. Nationwide’s inter ris, 826 882. apply ''[b]odily that UIM did not benefits,” Rizzo concluded that received a this Court policies under their and had vehicle, father, just one premium doing discount so. each with and her of stacking inter-policy could not waive ¶ Farm under 30 State denied Rizzo, at 363-64. benefits. 835 A.2d its policy, claiming Rizzo’s father’s that because, agreed as State Farm had And cover- precluded “other insurance clause” “other clause stipulation, insurance” joint pre- age.14 stipulation In a of facts absent Rizzos’waivers apply not would the trial Farm’s sented to court State con- stacking, of and because the Court action, declaratory judgment parties Stacking dicta from the that Rizzo not entitled to cluded—based agreed Litigation could not under her father’s should case—that the Rizzos the court determine that the “other insur- “other stacking under waive ance” clause enforceable. facts apply clause did not to the insurance” Therefore, permit- of the case. Rizzo was trial in favor of 31 The court found her father’s pursue ted to under Farm, not on the basis of the “other State policy.15 clause,” but rather on Riz- based 1738. stacking pursuant zo’s waiver Rizzo opinion, In the Court issues, Rizzo appeal, On raised several stated: cluding whether the trial court erred Stacking Litigation court’s Applying failing presented to address the issue sole ie., find analysis to the facts of this we court, validity that of State and not waive clause; daughter that father could Farm’s “other and insurance” more stacking the trial because neither insured whether court erred determin- (intra- ing that a stacking than one vehicle under a preclude stacking fact, operates inter-policy stacking); pos neither vehicle, very UIM benefits. more than sessed one Stacking Litigation situation court, 32 This Court reversed the trial See Mut. Ins. Nationwide addressed. citing reversible error the trial based on Harris, 880, 883-884 Co. issue, analysis court’s the Stack (Pa.Super.2003) (interpreting noting recently Court had dis- ing Litigation § 1738 court’s cussed, Litigation, supra, concluding an insured single-vehicle whether a owner could waive stacking; inter-policy dicta from Quoting UM/UIM. may be only policy stacking intra Stacking Litigation, that “subsections (b), waived). Thus, fact (c) (d) despite the construed [of 1738] must be in apparently Farm reduced State together only such named insureds premiums purported for them sureds’ purchase coverage for more than one who elec stacking, to waive their policy may under a waive the “election” vehicle ab initio it con- stacking of uninsured or underinsured tion was void Having "other insurance” State Farm’s clause concluded that "other insurance” provid- policy provision, inapplicable mirrors the the Court clause was to the part: ing pertinent stated, "The maximum recov- "we need not determine whether ery policies priority under all in the Second might be en- circumstances it under what which the shall not exceed amount Rizzo, 835 A.2d or unenforceable.” forceable highest limit for one vehicle under at 365. policy in the exceeds the Second applicable First limit in the priority.” §of as accident caused provisions flicted with the uninsured driver. time, interpreted operating this court has it. At the she was a vehicle through that owned and insured State Id. at 364. Farm. Her husband Randall also owned a ¶ Again, the issue of the waiv separate policy vehicle insured under a stacking er of was not before this Court policies issued Farm. Both State Stacking Litigation case and was not stacking, as cluded waivers well as necessary to resolution of the issue exclusions. household ie., Court, facing the carriers whether ¶ declaratory 37 State Farm filed a charge premium stacking could action, judgment apparently having paid coverages single-vehicle poli on UM7UIM its UM limits under the issued to Compounding cies. the confusion here is Jayneann, Court, case, having but denied the claim the fact that this in the Harris statement, made for UM benefits under her husband’s ostensibly included the based policy. trial court found in favor of dicta, Stacking Litigation on “[i]n insured, holding stacking fact, may an insured not waive the waivers and the household exclusions vio- inter-policy stacking; only intra-policy public appeal, lated this Court Harris, policy. On stacking be waived.” reversed, Yet, stating that: A.2d at 884. the issue the Harris validity case was the of Nationwide’s agree that because these were two We exclusion, household not waiver of stack resulting “inter-poli- separate policies, result, ing. above-quoted pas As a not cy” stacking, waiver is sage purely from Harris the Rizzo case is However, law, recent case valid. Stacking Litigation dicta on dicta. based vehicle exclusion clause household repetition does not elevate obiter “[M]ere public policy does not violate and there- binding precedent.” dicta to the level only fore Farm State liable 5, 15, Singley, Commonwealth v. 582 Pa. Jayneann’s policy pay and need not un- (2005).16 der Randall’s essence, Craley, 844 A.2d at 573-74. 35 In what is found can through review cases best deciding 38 After the case based “stacking dicta.” described exclusion, Court, in dic- the household Clearly, prior opinion a statement in a ta, Stacking offered its dicta, merely including was dicta based on pro- Litigation progeny, case and its dicta, prior binding on us. Id. posed interpretation 1738 consis- opinion, concluding interplay between 1738 and tent with this 36 The 1738(b) permits waiver of both intra- the household exclusion was re-examined A inter-policy stacking. Fire and concur- by this Court State Farm dissenting opinion agreed Casualty Craley, ring 844 A.2d 573 Company Pa. on the issue of the (Pa.Super.2004), appeal granted, 580 the result reached (2004).17 exclusion, from Craley In the household but dissented 860 A.2d 490 dicta relat- Jayneann Craley killed in an what the author concluded was that, Company, Neilson v. Nationwide Insurance 16. We note even if the 1738 waiver issue were deemed central to the resolution of (Pa.Super.1999). A.2d 490 panel other decision the Rizzo decision, Litigation post-dating our Craley argued 17. The case was before banc, sitting we not bound as the court en Supreme May Court on opinion. Superior panel See to follow a Court continued, at 12. stacking. of Id. The Commissioner ing validity to of waivers the (Bender, J., concurring and dis- stating: Id. at 575 senting). (b) classes of poli- allows all Subsection presently the case Returning to be- stacked cyholders to waive UM/UIM Court, necessary to

fore this it is first However, As- coverage. the General validity of ascertain the the waiv- whether sembly separate pro- waiver reserved stacking single-vehicle policies er of under by vehicle owner multiple vision for the by has been addressed this Court squarely (c), creating entitled “More subsection any than as As is context other dicta. spe- This subsection than vehicle.” overview, apparent from the above it has cifically poli- that multivehicle requires origins not. From the of the discussion in opportunity cyholders provided be Stacking Litigation through waive stacked limits Sub- Craley most discussion in the recent (d) the form for this supplies section stacking single-vehicle waiver (d) (c) sep- waiver. Subsections an issue policies has not been essential by provisions multiple arate for waiver the resolution of case before policyholders vehicle stacked lim- Consequently, pro- Court. this Court’s its of described subsection on the nouncements issue date must be (a). categorized non-binding, non-prece- dential Kane v. dicta. See State Farm Evident the above from Casualty Company, Fire & and from the examination and 1048 (Pa.Super.2003). single approval policies of rates and

¶ 40 While the waiver of (i.e., inter-policy) stacking, is vehicle single-vehicle policies has not been ad single policy stacking is still vehicle dicta, by dressed other this Court than permissible after the Act 6 amendments it the Insurance discussed Commis Responsibility Financial Law. sioner in cases the consolidated that were may waived presented to in the Stacking this Court insured, named whether under multi- Litigation case. In Leed v. Donegal Mu or ple single vehicle tual Company, Declaratory Insurance Id. at 13. Order, 23, 1998, Opinion February Commissioner stated: recog- 41 To what this Court reiterate A option is allowed named waiver Stacking Litigation nized case: 1738(b) per- insureds in [§ ]. Waiver traditionally interpre- accord an Courts mits named insured to refuse “stack- statutory provision by tation of a 1738(b), ing.” In 75 Pa.C.S.A. charged with ad- agency administrative unmistakably requires “not- statute some ministering that statute deference. withstanding provisions of subsec- However, of a interpretation statute (a),” tion the named insured question is a of law for Court waive coverage provides for stack- resolve and the Court convinced when

ing of uninsured underinsured cover- regulation interpretative ages. as the creation of Just adopted agency administrative by the (a) does not utilize “inter- subsection clearly legis- erroneous or is violative policy stacking” “intra-policy stack- intent, disregards the lative the Court labels, ing” option is the neither interpretation. qualified agency’s administrative type stacking. as to Stacking BY Litigation, (quot- 754 A.2d at 706 DISSENTING OPINION FORD Bauer, 596, 608, ing Donnelly v. 553 Pa. ELLIOTT, J.: (1998)). 720 A.2d respectfully 1 I I do dissent. so for ¶ 42 find with the Insurance We First, disagree two reasons. while I conclusion, Commissioner’s inter- both majority’s revisiting principles ex and intra-policy permit pressed in In Re Insurance Stacking Liti ted under is neither erroneous nor gation (“Stacking Litigation”), 754 A.2d legislative violative of intent. also find We (Pa.Super.2000), appeal denied sub that Generette elected the waiver of stack Leed, nom. In re 565 Pa. ing of her UIM and received a (2001), I apply find no need to those premium reduced as a result. We further in principles stacking, conclude that this case because implemented waiver is through language the “other insurance” legislature our has defined term endorsement, Donegal’s UIM and that the statute, has no here. application Addition endorsement restricts re Generette’s UIM ally, within the context of the lan $50,000 covery coverage already guage Donegal policy in the that restricts paid to her under the Nationwide receipt of UIM benefits to the maxi accordance with 1733.18 recovery mum of UIM benefits available

¶ 43 applicable Because the standard of vehicle, including the vehicle in review this case is error of or law abuse which the passenger insured was discretion, the trial court accident, unequivocally time of the violates neither committed error of law nor abused legislature’s definition of an underin- by granting Donegal’s its discretion motion vehicle, sured motor set forth in 1702 of summary judgment, we affirm the or- the MVFRL. der of that court. ¶ 2 reaching my analysis Before of this ¶ 44 Order affirmed. case, express my dismay majori- I at the ELLIOTT, 45 FORD J. files a ty’s principles disavowal of the enunciated BENDER, joined by Dissenting Opinion, not Litigation, supra, because J., PANELLA, J., GANTMAN, J. only I cor- principles do find those to be separate Dissenting concurs with compelled by rect I also them law. but find Statement. Additionally, inter/intra-policy while the analysis may may GANTMAN, stacking waiver Dissenting J. files a necessary Statement. have been to the resolution of limits, $300,000 (her Although to re- less the Na- Generette is not entitled UIM limits). cover UIM benefits from Stated tionwide UIM anoth- case, the facts of this the waiver of way, assuming damages er warrant single- possibility does not foreclose the of a recovery, under circumstance will the in- no recovering vehicle owner UIM benefits from jured prevented individual ever be from re- his or her own when the owner is covering pur- at least the level of Employing in a non-owned vehicle. carrier, though chased from his or her even hypothetical previously the same set forth recovery part might be even all—of the —or opinion, policy provid- if the Nationwide paid by another insurer. In this Gener- $50,000, ed amount of actually greater ette UIM benefits recovered purchased and if Generette had non-stacked purchased, due to the fact that the than she $300,000, coverage in the amount of Gener- greater than the Nationwide UIM limits were up ette would been entitled to recover have Donegal. purchased from $250,000 in UIM benefits under her own (a) Limit for each vehicle.—When more Stacking Litigation reaching the than one vehicle is adopted applied unin- policies providing one or more in both State Mut. Auto decisions Farm motorist cov- Rizzo, sured underinsured mobile Ins. A.2d 359 Co. erage, the stated limit for uninsured denied, appeal Pa. (Pa.Super.2003), apply or underinsured shall 710, (2004); A.2d 363 Nationwide 853 separately vehicle so insured. each Harris, Mut. v. A.2d 880 Ins. Co. 826 coverages The limits of available un- denied, (Pa.Super.2003), appeal 577 Pa. an subchapter der this for insured (2004). Assuming, A.2d 1287 ar- 847 the limits shall be sum of the for guendo, analysis that the each motor as to which the vehicle Stacking in a Litigation, point dicta injured person is an insured. agree, which I do not now, nonetheless, added). precedent. valid As a 1738(a) § (emphasis 75 Pa.C.S.A. decisis, matter I of stare note that the provides following 5 The MVFRL supreme denied in allocatur both of an definition insured: Rizzo, Harris, as supra as well supra, Any following: of ‘Insured.’ the in Stacking Litigation, I supra. (1) An name individual identified as suggest majority’s therefore con of motor insured a vehi- cern relying perceives about what it liability cle insurance. be dicta in a Litigation is now (2) of residing If in the household moot point. named insured: ¶ Turning to the majority’s resolution (i) a relative of spouse other of disagree I am constrained to insured; named I not find because do that the facts of this (ii) custody a minor of either case implicate “stacking” legislature as our the named or relative of concept § has defined 1738 of the named insured. rather, proper analysis MVFRL: § 75 Pa.C.S.A. 1702. Definitions. issue in case falls squarely within the ¶ Thus, in Pennsylvania, concept parameters Priority recovery. of of motor stacking applies only of vehicles say This generic is not to term injured person which the is an as to in- “stacking” may not of describe the sured, where definition “insured” recovery under as the Insurance include passengers does not non-owned (Brief suggests. Commissioner on Rear- Widiss, 3 Alan I. vehicles. See Uninsured Koken, gument of Amicus Curiae M. Diane and Underinsured Motorist Insurance Pennsylvania Insurance Commissioner (revised 40.1, (“Widiss”), § at 344 2d (“Insurance 6) Brief’) at Commissioner’s ed.2000) there is (observing, “When (defining “Stacking” coverages as “noth- “stacking” of underin- question about ing coverages than a more cumulation coverages, motorist insurance it is sured injury. com- single Stacked factors, to consider several essential cov- bines the limits of available insurance (1) applicable legislation cluding: whether source.”). erages from more than one enacted in the relevant state has been ¶4 however, has, legislature delin- addressing questions “stacking”; Our about (2) specify- eated limited there concept provisions a more whether than Pennsylvania’s more one purposes ing MVFRL circumstances which underinsured motorist follows: (3) provides cally required strictly, there are construed coverage; whether ambiguities coverage pro- created MVFRL is to be accorded liberal con- ” Id., struction, in visions about an insured to “stack” favor of the insured.’ Troncelliti, quoting 576 Pa. coverages or whether individual Hoffman 504, 514-15, (2003), preclude “stacking” terms that are free of 1921(c). (4) ambiguities; applicable judi- citing Pa.C.S.A. (foot- precedents “stacking”.”) cial about majority 9 In this would ex- omitted).

note of an to in- pand the definition “insured” ¶ Addressing very much argument clude individuals who fall within the rubric like advances this case 1733(a)(1), provides: §of regarding our deference to the Insurance Priority recovery. Commissioner, panel an en banc of this (a) multiple poli- General rule.—Where opined court v. Donegal Allwein Mut. apply, payment cies shall be made Co., 364, Pa.Super. Ins. 448 671 A.2d 744 following priority: order (1996) (en banc), denied, appeal 546 Pa. (1) A a motor policy covering vehicle (1996): 660, 685 A.2d 541 injured occupied by person Furthermore, true, while it is as [Done- of the accident. time ... gal] argues, language that the its by majority, As suggested Id. approved the Insurance injured passenger is entitled to UIM Commissioner, we note that ‘[w]hen policy covering the mo- benefits under the question there ais about the effect—if tor at the time occupied vehicle he filing an poli- [of —such accident, injured person of the is an cy form with the Commissioner] has By logical policy. insured under that ex- adjudication an questions involving tension, therefore, majority find enforceability terms 1738, § applies only which to “the sum of an uninsured or underinsured motorist the limits for each motor vehicle as to coverage, invariably courts almost con- insured,” injured person which the is an filings clude that the do not constitute this, relevant in a case such as where the type regulation administrative has waived purportedly insured justifies judicial which deference within own agency.’ decision of an administrative has, however, legislature 10 The clear- Widiss, 753, 32.3, quoting Id. at at 21. “insured,” an ly defined who is as set forth ¶ Thus, despite the Insurance 8 Commis That supra. definition does include position, sioner’s I must nonetheless turn those individuals who fall under the first construction, statutory to the rules recovery of UIM benefits of a guide which review sections 1733(a), individuals who are Eschbach, 47, Pa. 53- statute. L.S. 583 they passengers while are vehicles as to 54, 1150, (2005), citing 1154 1 nor they obligation which have neither the § 1921. court Pa.C.S.A. As the Eschbach or, “ ability purchase observed, phrases and shall be ‘Words herein, pay for or significance of more according grammar rules of construed waive stacked UIM ap common and according and to them ” Eschbach, 55, supreme 11 Both our court proved usage[.]’ supra and banc, 1155, court, sitting 1 en have struck down quoting 874 A.2d at Pa.C.S.A. 1903(a). attempt to limit the definition of Continuing, supreme our court insurer’s decisions; “Moreover, Pru specifi- an insured in two recent opined, ‘unlike statutes 130, 552 520 Pa. Thompson, v. Col v. Property dential & Cas. Ins. Co. (2002); (1989).19 bert, 82, and 572 Pa. 813 A.2d 747 Property Richmond v. Prudential & Cas. grounded its court Broughton (en Co., (Pa.Super.2004) Ins. 856 A.2d 1260 supreme in our court’s delineation banc), denied, 664, appeal Pa. one, two, and three of class class class (2005). Colbert, supreme A.2d 1076 In in Utica Mut. Ins. Co. v. Contris insureds “ rule, general “stipula opined, ‘As (1984). ciane, Pa. 473 A.2d 1005 tions in a contract of insurance in conflict at 656. The Utica Broughton, 621 A.2d to, with, repugnant statutory provisions at issue in provided: Contrisciane to, consequently are applicable PERSONS COVERED contract, part of, yield form must un- following Each of the statute, invalid, since contracts ’” forth this insurance to the extent set der change existing statutory cannot laws.” below: Colbert, supra at 813 A.2d at Allwein,

quoting quoting 671 A.2d at (a) and any designat- the named insured Couch, George J. Couch on Insurance 2d and, while ed insured residents (Rev.ed) 13.7, (1984); at 827 accord household, spouse the same Richmond, A.2d at Based on either, relatives of foregoing, both the Colbert and Rich (b) any other person occupying while mond in provision courts invalidated vehicle; highway insured and limiting Prudential’s policy the definition (c) any person respect damages anof insured to individuals who were driv he is to recover entitled cars, vehicles, ing and limited not further bodily injury to which this specifically to cars insured applies by an insured un- sustained Colbert, supra at policy. Prudential (a) (b) der above. 88-89, 751; Richmond, 813 A.2d at 856 Contrisciane, 338, at at A.2d supra 473 A.2d at 1268. 1010, quoting Record at 101a. Reproduced ¶ recently, panel 12 Less an en banc continued, supreme court “These As the court, following supreme prece- court in most unin- classifications are contained dent, vehicle, held a passenger in a come to policies, motorist have sured specifically designated who is one’; two;’ described as ‘class ‘class covering in a of insurance coverage.” and ‘class three’ Id. See [sic] that vehicle and who has contractual no al., Ronca, Pennsylvania R. also James et relationship insurer, with the but whose Insurance, An Analysis Motor Vehicle solely “claim to be is predicated an insured 9.1, at Responsibility Financial Law vehicle[,]” occupancy of is on his the motor ed.2002) (2nd (setting three forth the 147 not a class insured. Farm Mut. State coverage the Contrisciane court classes of 423 Broughton, Automobile Ins. Co. v. adopted). (en 654, (1993) 519, Pa.Super. A.2d 621 656 Contrisciane, in banc), 638, 14 In this case as 631 appeal granted, Pa. predicated (1993), Ins. “entitlement citing A.2d 1009 Selected Risks supreme alloca majority Broughton on its While our denied 19. The relied reasoning Jeffrey Exchange, 423 granted v. Erie Ins. Jeffrey allocatur apparently tur in (en 483, (1993) Pa.Super. 621 A.2d 635 Broughton, Shepard's does not reflect banc), denied, 651, appeal Pa. activity Broughton refers to but further (1994), days by the decided four earlier Jeffrey case. as connected Broughton, A.2d at panel. same en banc when, occupation triggered only of the vehi that right having [Contrisciane’s] cle at the time of the accident: a ‘class exhausted the benefits available under Contrisciane, type coverage.” bodily injury liability two’ su the tortfeasor’s both (“BI 338, pra at at According policy”) 473 A.2d and the vehicle owner’s court, supreme “A claimant if coverage, any, having whose cov UIM and still not solely erage membership fully compensated injuries, a result of been for her paid premiums, class has not nor is he insured seeks benefits under her “(2) a specifically beneficiary intended A covering motor vehi- Thus, recognizable he has no con cle not involved the accident with re- insurer, tractual relationship spect injured person with the is an there is no upon basis which he can rea insured.” Id. sonably expect multiple coverage.” Id. recognize 17 I supreme both the 338-339, 473 A.2d at 1010-1011. aAs court and this court decided Contrisciane result, because Contrisciane’s entitlement law, progeny prior and its not under under the Utica “arose one, two, class MVFRL. The class temporary from his status as an occupant, remains, however, and class three rather than from being specifically his Pennsylvania. the law of See Bowdren v. beneficiary intended poli the insurance Aetna, Pa.Super. cy[,]” Contrisciane’s estate could not stack (1991) (citing 754-755 Contrisciane for the vehicles, coverages applicable to a fleet of proposition that a claimant’s to stack one of which was the vehicle Contrisciane uninsured under the dif- MVFRL occupied when he was killed an unin claimant, according fers to his as a status

sured driver. Id. 473 A.2d at 1011. setting forth the three classes of claim- however, denied, ants), 15 Contrisiciane an in- appeal was 529 Pa. (1992). beneficiary tended policy, another car- 855 ried his father and designating Contris- case, I that in recognize 18 also this ciane as a driver. Because Contrisciane Donegal not arguing may is that insured a class one insured as to that coverage not stack under the cover- supreme court held his estate could ing the vehicle occupying, she was as coverage stack under that and ex- Donegal did not insure that vehicle. The “the right coverages tended to stack to all however, analysis is, Contrisciane court’s persons category within the ‘class one’ of directly point limiting on in to class one ‘insureds’.” Id. at 473 A.2d at 1011. right coverage insureds the to stack on ¶ Applying foregoing analysis policies they 16 to as to which are class one herein, insured, insureds, and, extension, falling by logical the facts within passenger, right stacking only regard class two as a was not entitled to waive with to coverage policies. to stack under the cover those That is also direct- ing occupied, ly the vehicle she had a claim that in- Donegal’s but odds with right purposes to stack under her sured is an “insured” for Donegal, subject § with to waiver. The pursuant to her status as the occu- stack, vehicle; right accompanying right pant to with its of another’s the definition of to in to stacking, play waive comes to “insured” the MVFRL is identical 1733(a), therefore, § only when 75 Pa. court’s definition of a class Contrisciane 1733(a)(2) clearly § an triggers C.S.A. insured’s con one insured and does not include coverage. only tractual to insured UIM Under individual such as whose establishes, § recovery pursuant claim to insurance benefits 1733(a)(1) on as is status the UIM benefits based their status § based on her class one insureds. a occupant of motor vehicle. ¶21 al., Ronca, in the et observe As Furthermore, I realize in this coverage, an gap context of versus excess Richmond, case, Colbert, unlike and supra, be- only insured after Donegal limit its supra, seeks to insureds’ ing fully available informed coverage by expanding, rather than re- intelligently, and and affirma- knowingly, definition stricting, of who is an in- coverage. tively choosing to waive that is, however, the sured. The result same as 10.4, Ronca, al., § et 162. In this supra, Richmond; Donegal Colbert chose, for, paid UIM an such as insured in preclude individual waived, ostensibly did coverage. She paid premium who for UIM for, stacking. poli- in her pay Nothing not from coverage, bargain the benefit of her cy form she the waiver her by telling she cannot “stack” her own signed her that husband informed 1733(a)(2) coverage pursuant UIM waiving stacking, waiving she was the UIM benefits she pursu- received was, for which she at the 1733(a)(1) pursuant ant to to the policy time, higher paying premium.20 same happened vehicle which she to be however, not, seeking She is to stack UIM at the time riding of the accident. Rather, claiming she as a UIM benefits to which is entitled ¶ By permitting Donegal to redefine 1733(a)(2). pursuant class one insured insured,” majority thereby

“who is Thus, this is “another instance expand scope allows of an makes auto insurance consumer who beyond parameters our legisla in mone- coverage decision results ture established. supreme As our tary then carrier savings, and sues the Colbert, held supra, contract realizing after ... more or better provisions that conflict with or re coverage would have been available absent pugnant applicable statutory provisions cost-saving (Majority opin- decision.” yield to statutory provisions, must 267.) Rather, ion at another Colbert, part which form a of the contract. stance of auto insurance who consumer (citation at supra A.2d at 750 omit pays premium coverage a for she is higher ted). By in defining an “insured” of terms required by purchase, only to to law only, class one defining insureds deny that when have carrier stacking as “the the [UM sum of or UIM] give it is time the consumer the benefit to limits for each to motor vehicle as which bargain. of her insured,” injured person leg is an ¶23 clearly stacking, that islature intended the insured was In this and, by logical extension, passenger waiver of stack in a vehicle she neither owned nor, fortiori, apply only claimants could insure. Neither ing, seeking UM/ erage purchasing re- rejection I am shall be 20. The of stacked underinsured cov- erage applicable limits herein reads: stated I duced to the limits in waiver, By signing rejecting this I am voluntarily reject knowingly limits stacked of underinsured motorist cov- coverage. of I understand stacked limits erage policy myself under the and mem- reject be I my premium will reduced if my bers of household under which the lim- coverage. this would be sum its of available J, Stipulation with at Exhibit of Facts Exhibits limits each motor vehicle insured of for policy. added). (emphasis at R.R. 199a under the Instead the limits cov- $105,000. liability riding tortfeasor’s insurance nor for a total of Allwein was UIM insurance on the vehicle in bicycle which she his to work when tortfeasors fully him; therefore, riding compensated her for her struck estab- 1733(a) injuries. result, As a sought compen- apply lished in did not and All- pursuant sation from her insurance carrier only pursue wein’s estate could UIM bene- to her contract for pursuant parents’ policy. UIM benefits. Insured fits to AUwein’s was, therefore, liability BI policy paid entitled to UIM The tortfeasors’ its 1731(c) pursuant $15,000, of the the estate MVFRL limits of after which “(c) requires: $105,000 Relying which sought Underinsured motor- in benefits. coverage. Donegal ist motorist cov- on “gap” clause its —Underinsured erage provide protection $90,000, claiming shall persons agreed to pay only injury who suffer out arising payment of the main- to offset its allowed it estate tenance or use of a motor vehicle and are amount the UIM benefits Allwein, legally damages entitled to recover there- in BI benefits.21 recovered for from owners or operators of underin- A.2d at 745-746.

sured motor (emphasis vehicles.” Id. add- arbitration, Donegal ap- Following ed). to the trial pealed the arbitrators’ award “ ¶ 24 court, Because I reach the ‘whether the raising single result issue: insured’s is valid appli- language Donegal’s has no cited necessary cation this I find it Allwein an addi- Donegal or whether owes $15,000 pan- reach the issue the en banc bene- whether tional in underinsurance ” Allwein, 746, quoting supra, el’s decision invalidates fits.’ Allwein, the clause on “The trial Donegal deny which relied to trial court at 3. opinion, 7/25/94 provision insured ‘gap’ court found the so-called ... allowed Done- Donegal’s policy, which ¶ 25 majority is correct that benefits gal to the underinsurance offset court decided Allwein in the context of a liability pay- against payable to Allwein UIM claim where BI the tortfeasor’s cov- to the tortfeasors’ pursuant ments received erage fully compensate did not Allwein for public violative separate policy, injuries resulted his death. policy Pennsylvania.” Id. Allwein, parents who resided with his death, ap- the time of his was a four issues on class one raised court, all pursuant parents’ policy peal panel to his to the en banc Donegal, provided with contract and statuto- framing questions UIM bene- public poli- per ry interpretation pursuant fits of vehicle on each of the covered, cy.22 Donegal’s fourth is- Beginning three vehicles sue, benefits, opined: which allowed of those Allwein Allwein, (citation omitted). provided: 21. The clause 671 A.2d at 746 liability C. The limit of shall be reduced 22. paid ‘bodily all sums because of the A. the amendment to Sec- Whether injury' by persons or behalf of or 1731(a) Ve- [Motor of the MVFRL tion organizations legally who be re- Law], Responsibility hicle Financial sponsible. paid This includes all sums making cover- underinsured motorist attorney for an 'insured's' either direct- age optional, any argument eliminates ly part paid or as of the amount to the gap coverage underinsured violates 'insured.' It also includes all sums paid damages public policy. for the under Part same policy. A. of this deducted from policy underinsurance benefits are tortfeasor’s is ‘Excess’ only by damages limited victim’s the in- the amount under recoverable limits, whichever is smaller. policy sured’s The [underinsurance] court As the trial stated: recovery gap fills the be- insured’s policies to the total up tween the two party excess at coverage, Under [up liability damages amount of suffered or fault is underinsured his when limits, are less vic- policy limits than the insured whichever less. the] damages. tim’s total The tortfeasor’s Id., trial court at quoting opinion, 7/25/94 policy primary coverage, acts as Therefore, as court ex- 4. the Allwein victim’s as sec- policy the insured acts “ result, only ‘As a would plained, [Allwein] ondary victim recovers The to benefits in the amount of the be entitled to the policy up under the tortfeasor’s $15,000 un- ‘gap’ between limits and under then recovers $105,000 tortfeasors’ and the der the up his own limits or liability of limits of underinsurance under up damages, to the total amount of ” $90,000.’ Id., policy; namely, his own whichever is less. at quoting trial court opinion, 7/25/94 747, quoting opinion, Id. at court trial observed, Continuing, the en court banc As Allwein court contin- 7/25/94 “ insurance, ‘Furthermore, if gap “ therefore, ued, coverage, ‘Under excess liability coverage greater tortfeasor’s would be [Allwein] entitled to recover than the underinsurance carried $105,000 full of underinsurance benefits victim, by the the victim would be entitled par- under his available recovery, to zero underinsurance even ties agree that the total of his amount damages his or her are far excess where damages exceeds combined benefits Id., limits.’” liability of the tortfeasor’s available both tortfeasors’ at 4. quoting opinion, trial 7/25/94 [Allwein’s] limits and underinsurance bene- ” Allwein court the trial court’s offered Id., fits.’ quoting opinion, trial court of such illustration scenario: at 4. 7/25/94 ¶28 ease, Explaining the if concept gap example, For the instant surance, Allwein $150,000 court observed: had of liabil- tortfeasors carried $15,000, insurance, ity insurance instead of ‘gap’

Under on the other damages determined hand: were [Allwein’s] $500,000, would recover [Allwein] party fault is underinsured [T]he nothing from because Allwein’s liability [his her] when limits benefits ‘gap’ underinsurance a specified policy less than limit of the would be less than tortfea- insured victim. To determine the liability so that there coverage, amount insured’s underinsur- sors’ recovery, recovery gap from the be no to fill. ance vague public policy required ‘offer’ of under- B. Whether notions of D.Whether unambiguous can be used invalidate under Sec- insured motorist policy provisions. 1731(a) tion and the definition 'un- poli- C. Whether automobile insurance derinsured vehicle’ in Section motor cy's 'gap' motorist] UIM [underinsured prohibit gap underinsured motor- coverage express is consistent with the coverage ist under the MVFRL. coverage cost reduction and Allwein, at 746-747. balancing public policy goals of MVFRL.

Allwein, Liability,” quoting Stipulation, 671 A.2d at trial “Limit of R.R. at is the identical clause the opinion, at 338a-339a. This 7/25/94 Allwein court invalidated and belies the ¶ In Donegal ques- does not majority’s suggestion that would tion driving whether the tortfeasor was $35,000 of cov- have received the full UIM vehicle, underinsured motor which the receiving erage paid upon MVFRL defines as “A motor vehicle for in BI See coverage from the tortfeasor. liability which the limits of available insur- “In Majority accor- opinion (opining, at 11 ance and self-insurance are insufficient to if Donegal’s policy, [insured] dance with pay damages.” losses and 75 Pa.C.S.A. vehicle, she had been in her own Instead, Donegal argues, and the a claim to simply presented have majority agrees, that Allwein does not $35,000 Donegal for the UIM benefits govern gap provision Donegal’s In fairness policy.”). available under her coverage UIM endorsement because that the UIM en- Donegal, recognize I by not triggered exhaustion of the tortfea- at the time of insured’s dorsement effect sor’s BI coverage, trig- but was instead injury appears bear a April on gered only after both the tortfeasor’s BI therefore, pre- have may, 1996 date and coverage and the on UIM Allwein, was filed Feb- supra, dated exhausted, occupied vehicle insured were supreme ruary 1996 and for which having fully compensated without the in- 13, 1996. court denied allocatur November injuries. sured for her part herein is 32 The clause issue ¶ Thus, Donegal gap claims its clause section, which fol- the “Other Insurance” does not violate the clear mandate of section. That Liability” “Limit of lows the excess, requiring gap, than rather maximum recov- provides: clause “b. The fact, underinsured motorist insurance. In ery priori- in the Second policies under all obligated claims in it this case is by which ty shall not the amount exceed provide no based vehicle under highest limit for one very supra, scenario set forth with one priority ex- in the Second variation; it is the vehicle owner’s UIM poli- applicable ceeds limit coverage, coverage, not the tortfeasor’s BI cy priority.” (Stipulation of in the First greater than the insured’s UIM R, at Exhibit Underin- Facts with Exhibits Coverage Pennsylvania sured Motorists — (Non-Stacked) In- (“Stipulation”), “Other 31 I find it to set forth instructive 339a) added). surance,” (emphasis B R.R. paragraph Liability” of the “Limit of section relevant insured’s UIM compre- 33 To extent this clause Donegal policy: under the hensible, very contemplates the limita- it Allwein court invali- liability B. The limit of shall be re- tions on dated, foregoing paid all “For all of holding, duced sums reasons, clearly ex- ‘bodily injury’ on behalf of we find that persons organizations presses who of this Commonwealth ‘gap’ cover- legally responsible. This on the issue of ‘excess’ versus nor this court paid age. cludes all for an ‘in- Neither the insurer sums statutory attorney directly power sured’s’ either or has the to render Allwein, 671 A.2d nugatory.” amount to the enactment part paid 1702, defining an underin- ‘insured.’ It also includes all sums at 758. Section vehicle, A to this paid applicable under Part of this sured motor is as

287 “deductible,” $75,000 Allwein, of a to pur- advantage case it was to as insured under her pro- deny to insured benefits specifically chased UIM endorsement, $35,000 for which she in UIM tect in the event she was involved her form premium, the is to exalt paid with a vehicle “for which an extra accident liability insurance and substance and statute. limits of available over both pay are losses self-insurance insufficient to ¶ supreme very recently As our 36 § and 75 1702. damages.” Pa.C.S.A. legislative the intent behind allow- opined, ¶ have Interestingly, Donegal would 34 option purchasing, the or ing insureds to obligation us it to eliminate allow its tort, as full waiving, benefits such UM/ altogether under facts herein insured the to coverage, allow UIM insureds, obligation or to offset its to other pre- to their insurance individuals reduce priority recovery the set forth miums, thereby insurance rendering more 1733(a) § Donegal’s obligation in reduces Pennsylvania affordable so more driv- they occupying its insureds when maintain responsibility. ers would financial vehicle carrying another UIM Eschbach, 56-57, supra at 874 Allwein, As court observed in howev- majority’s holding ap- 1156. er: encourage very mischief pear to these always

[Underinsurance correct. options were intended to excess, secondary, coverage by or its First, expands purported it a stack- nature; very nothing pays insurer pursuant beyond any- §to ing waiver and until the cover- unless tortfeasor’s insured contem- thing either exhausted, and if age only then dam- plain language as the waiver plated, ages exceed the tortfeasor’s indicates, applies holds it put way, limits. To another underin- 1733(a). coverage always surance carries with it holding, majority eviscerates By so a of at ‘deductible’ least the amount of contract for benefits. insured’s UIM coverage required by financial a state’s Second, majority dismisses in- In responsibility Pennsylvania, law. in argument that the clause her sured’s responsibility’ MVFRL defines ‘financial underin- providing gap endorsement ability damages in respond as ‘[t]he by noting surance violates the MVFRL liability account of accidents aris- in holding inapplicable Allwein is ing out of the or use of a maintenance As pursuant to 1733. to endorsements motor vehicle the amount of result, despite explicit Allwein’s hold- injury person because of ’ regard majority §to ing with .... one accident Pa.C.S.A. Donegal to continue to underwrite allows result, insurer As underinsured Pennsylvania gap coverage case tort- pays nothing unless and until the as this. such has feasor’s insurer the tortfeasor $15,000. paid, minimally, Newman, agree I writ- Justice Allwein, A.2d at Eschbach, majority ing for the

¶35 Here, a manner paid expand the tortfeasor’s insurer Nationwide, contemplated nor $25,000; legislature neither insuring the vehicle very encourage the acci- is to mischief occupied time of condoned to correct. dent, $50,000; still was intended and insured was the MVFRL paid Pennsylvania’s expansion To compensated injuries. places fully Such they If position. in an already had drivers untenable Donegal, allow has purchase optional coverage elect to some she paid benefits for under the options agree but waive other order to be I further able with the dissent insurance, they may effectively to afford discover being Generette is denied they have lost the benefit of their of bargain, bar- the benefit her which renders gained-for purchases virtually when the insurer specific purchase hollow her claims, agree, and the courts the waiver injured UIM benefits. Generette was purchase. may, swallows the Drivers an automobile accident and com- opined, the Eschbach court therefore not pensated injuries. to the full extent purchase they insurance because cannot Under the facts and circumstances of this waiving options, afford it without some I think she should be entitled to UIM thereby resulting in more uninsured driv- Donegal policy. benefits under the Ac- Eschbach, 56-57, supra ers. I cordingly, dissent. Ronca, al., observed,

at 1156. As et

legislature enacted the MVFRL

spiraling Pennsylvania insurance costs “staggering”

resulted in a number unin- Pennsylvania’s highways.

sured drivers al.,

Ronca, et 1.2 at 11. supra

¶ Allowing deny insurers to insureds bargain, they the benefit of their for which ALDERSON, Appellee, A. William opted pay premium, have an increased purchase renders hollow the of UIM cover- age, leaving victims underinsured driv- NATIONWIDE MUTUAL INSURANCE uncompensated ers to the full extent of COMPANY, Appellant. injuries their their despite option, unless Superior Pennsylvania. Court they can willing litigate afford and are years.23 their claims for Argued April 2005. reasons, 41 For all of I foregoing Sept. Filed respectfully must dissent. BY

DISSENTING STATEMENT

GANTMAN, J.: respect, disagree all I With due In- majority’s disposition this case.

stead, I dissenting opinion concur

my colleague Judge esteemed Ford Elliott implicate

that the facts of this case do not

“stacking” legislature as the has defined concept. straight- I see this case as a contract the issue is

forward case which

whether Generette is entitled the UIM reducing According stacking, thereby her UIM Insured was in 1997. eight-year Donegal’s premiums period from$32 to a chart Personal Lines Auto Rate for that Q, (Stipulations, Specialist prepared, per $1 $24. Exhibit R.R. at File insured saved 335a.) period by electing year eight-year over an

Case Details

Case Name: Generette v. Donegal Mutual Insurance

Court Name: Superior Court of Pennsylvania

Date Published: Sep 9, 2005

Citation: 884 A.2d 266

Court Abbreviation: Pa. Super. Ct.