Kimball v. Cigna InsuranceKimball v. Cigna Insurance
Lead Opinion
This сase involves an appeal from the order (reduced to judgment
We affirm in a case of first impression.
The facts are not in dispute: In 1983, the plaintiff was listed as a driver under her father’s policy with Cigna Insurance Co. Even with the parents’ divorce in 1984, the plaintiffs status remained unchanged under the policy, save that her mother was the only “named insured.”
On December 6, 1990, the mother executed a “sign down” form reduсing the uninsured/underinsured limits of coverage from $300,000.00 to $100,000.00. With the plaintiffs purchase of a vehicle in 1991, the “endorsement” portion of the policy added the plaintiff as a “named insured.” However, at no time during the coverage period (which included two renewals of the policy) wаs the plaintiff informed by Cigna’s agent that the uninsured/underinsured (limits of $100,000.00) could be
On November 23, 1992, the plaintiff was injured by an uninsured motorist. When she attempted to recover under the uninsured provisions of her policy in an amount equal to the liability limits of $300,000.00, Cigna disputed her entitlement on the basis that the mother’s execution of the “sign down” form (as a “named insured”) bound the plaintiff to the same limits of coverage, i.e., $100,000.00 for uninsured claims.
After the submission of numerous pleadings, the parties agreed to have the case resolved by a judge upon stipulated facts. Argument and briefs were presented, after which the court held: 1) a single policy existed; 2) the plaintiffs mother was the “first” named insured with the plaintiffs name to follow; 3) the plaintiffs signature and use of the amended policy required, the court to assume that the plaintiff read and comprehended its terms; 4) Cigna’s agent did not conceal any pertinent information from the plaintiff precluding her from negotiating a separate policy in her name only; and 5) Pennsylvаnia law was satisfied when the “first” named insured [mother] executed a written sign-down. Accordingly, the court ruled that “the total amount of uninsured motorist coverage available to plaintiff ... from the policy issued by ... Cigna ... [wa]s $300,000.00.”
I. THE LOWER COURT ERRED IN DETERMINING THAT APPELLANT, A NAMED INSURED, WAS BOUND BY THE ELECTION OF REDUCED UNINSURED MOTORIST COVERAGE BY ANOTHER NAMED INSURED TO THE SAME POLICY, WHEN APPELLANT WAS ADDED TO THE POLICY AFTER SAID ELECTION, WAS NEVER INFORMED AS TO THE AMOUNT OF COVERAGE AVAILABLE ANDNEVER EXECUTED A WRITTEN REQUEST FOR LOWER COVERAGE AS IS REQUIRED BY 75 PA. C.S.A. § 1734.
In respоnding to the appellant’s contention, we begin with the observation that, in 1984, the No-Fault Act was repealed by the Motor Vehicle Financial Responsibility Law
Those cases which have had occasion to interpret the MVFRL are limited to common pleas and federal court cases. Nonetheless, we sеnse a course to pursue from their reading. For instance, in Liberty Mutual Fire Insurance Co. v. Lindsey, 3 D. & C.4th 659 (York Cty., 1989), the court was confronted with the issue of whether the election of lower uninsured/underinsured coverage by one named insured (husband) was binding on the other named insured (wife). The court held so on the following basis: 1) the lower uninsurеd/underinsured limits were paid from joint accounts, which evidenced wife’s actual knowledge, understanding and acceptance of benefits and limits selected; 2) insurer’s notice to the husband and wife complied with Section 1791, raising a statutory presumption that the wife was advised of the benefits and limits availablе; 3) wife confirmed and ratified the husband’s selection of lower limits by electing to stay covered and not seeking a separate policy — presumes that wife has knowledge of limits of liability; 4) no evidence that wife intended to accept higher limits other than lack of her signature on release form, which absence of “her signature was a
On the other hand, the District Court for the Eastern District of Pennsylvania in Groff v. Continental Ins. Co.,
The suit in Groff was instituted with the death оf Groffs son by an uninsured motorist. Both parents were listed as “named insured” on a policy carrying $1,000,000.00 of uninsured coverage. Thereafter, Mr. Groff elected uninsured coverage of $35,000,00 and paid premiums for the lower coverage for the entire policy period, which encоmpassed the accident. Ms. Groff did not sign a similar document, but the insurer’s representatives maintained that the wife was present when the husband executed the reduction form. Also, an amended policy was mailed to the Groffs residence and their account was credited for thе premiums paid.
The District Court concluded that Mr. Groff acted knowingly and intelligently in reducing his uninsured coverage.
First, for several years previously, the Groffs obtained the same level of uninsured motorist coverage, a single $35,000 limit, from other companies — Federal Kemper InsuranceCompany and Utica Mutual Insurance Company. Second, the Groffs only paid the premium for the lower amount of uninsured motorist coverage. In fact, they received a reduction in their premiums reflecting Raymond Groffs election of lower coverage. Third, the Groffs never questioned the level of their uninsured motorist coverage, after receiving the endorsement amending the policy and incorporating the Pennsylvania Supplemental Automobile Application signed by Raymond Groff into the policy by reference. Finally, when the Groffs added vehicles to their insurance during the police period, the forms they received from Continental also noted that the uninsured motorist coverage was a single $35,000 limit.
At bar, albeit the plaintiff was not listed as a “named insured” at the time her mother executed a “sign down” form to reduce uninsured/underinsured coverage, she was a “named insured” when the “endorsement” amending the policy and listing her as a “named insured” was received at the Kimball household. Specifically, the amendment indicated in clear language that the uninsured motorist coverage stood at $100,-000.00 and no higher. However, no action was taken by the plaintiff to rectify this level of coverage. She could have increased coveragе under her mother’s policy (with accompanying premium increases) or secured her own separate policy should her mother not be amenable to the increased coverage and additional cost associated therewith. The plaintiff took no action on either front.
Moreover, the policy limits remained in effect for two renewal periods without any effort on the plaintiffs part to increase coverage beyond the $100,000.00 limit for uninsured/underinsured insurance. Rather, the premiums (at the lower rate) continued to be pаid without question or complaint
Accordingly, if the plaintiff did not accept her mother’s election, upon receipt of the policy with the lower limit and lower premiums, she could have contacted the insurance company, informed them of the dissatisfaction with the amount of uninsured/underinsured coverage and requested it be corrected or obtained another policy on her own. Instead, the plaintiff accepted the policy with the lower limits without complaint and permitted payment of the lower premium without incident. To find that the plaintiff is not bound by her mother’s election and remaining silent on the issue of increased coverage, while reaping the benefits of reduced rates, would be to reward inaction. Here, the plаintiff had the means and opportunity to avoid any insurance shortfall, but she took no action to remedy the matter.
Therefore, we will not act in the plaintiffs stead and do what she could have done for herself once she received the endorsement sheet refleсting coverage below that which she now claims was never intended. Further, we will not amend a contract absent any evidence of fraud or mutual mistake of fact. Accordingly, under the particular facts of this case, we find no fault with the court’s order.
Judgment affirmed.
Notes
. The order became appealable with its entry into the judgment docket on praecipe by the plaintiff. See Pa.R.App.P. 302(a).
. The plaintiff sought $900,000.00 under the stacking provisions of the Motor Vehicle Financing Responsibility Law (75 Pa.C.S.A. § 1738 (Supp.1994)), given the 3 insured vehicles in the household by Cigna.
. 75 Pa.C.S.A. § 1701 et seq. (Supp.1994).
. The Groff Court stated, in dicta, that the wife’s right to select coverage could not be waived by the husband’s selection of lower coverage, each being a "named insured.” However, this position was predicated upon a common pleas court case since repudiated by the jurist that issued it. See Hepler v. Liberty Mutual Fire Ins. Co., 7 D. & C.4th 521, 526 (Cumbеrland Cty., 1990). Thus, we find unpersuasive that portion of Groff indicating that a named insured cannot waive another named insured’s level of coverage.
Dissenting Opinion
dissenting:
Despite my agreement with much of the majority’s analysis, I must respectfully dissent from the majority’s conclusion that a party added to a poliсy as a named insured after another
I agree with the majority that, where a first named insured has executed a valid sign-down under 75 Pa.C.S.A. § 1734, any other individuals who are named insureds at the time the sign-down is executed are bound by the terms of the sign-down. This analysis comports with the rule of statutory construction that requires us to construe sections of a statute so as not to promote or further an absurd result. Crosby by Crosby v. Sultz,
In addition, I am comfortable with the fiction that other parties to an insurance сontract (other named insureds) are presumed to have acquiesced in its terms, and even in additions or deletions to its terms, because they are presumed to have been aware of the terms at the time the contract was formed or altered. Nevertheless, it is noteworthy that in every case cited by the majority in which such a result was reached, the court based its determination that other named insureds were bound by the sign-down or waiver on the particular facts and circumstances of the case rather than upon a clear apрlication of the rules of statutory interpretation. See, for example, Liberty Mutual Fire Insurance Co. v. Lindsey, 3 D. & C.4th 659 (York Cty., 1989), affirmed,
The sections of the Motor Vehicle Financial Responsibility Act at issue place upon the insurer the burden of notifying an insured of his or her right to obtain an amount of uninsured motorist coverage equal to the liability insurance provided by the policy. Botsko v. Donegal Mutual Insurance Co.,