*3 FLAHERTY, C.J., ZAPPALA, Before JOHN P. CAPPY, CASTILLE, NIGRO, NEWMAN, SAYLOR, JJ.
OPINION NEWMAN, Justice. (herein- appeal multiple
This involves underinsured motorist *4 “UIM”) after claims in two independent plaintiffs cases. The against they commenced their claims their insurers after were unable obtain full recoveries from the entities injuries statutory that caused their of limits on damages the amount of that a or agency Commonwealth local may required pay pursuant be to Sections 8528 and 8549 of Code, §§ the Judicial 8528 and respectively. Pa.C.S in this Appellant-insurers’ policy The issue case is whether the exclusion of from vehicles the definition under- Financial motor vehicles violated the Motor Vehicle insured (hereinafter “MVFRL”), Law Responsibility §§ 1701-1799. AND HISTORY
FACTS PROCEDURAL issue, legal to a discussion of the we set turning Before cases, history of two procedural facts and forth the Insur- v. State Farm Mutual Automobile Kmonk-Sullivan Group. and Midili v. Erie Insurance Company Farm Mutual Kmonk-Sullivan State Insurance Company Automobile Kmonk-Sullivan, approximately fifty passengers In on a (hereinafter “PAT”) Authority County bus Allegheny Port injuries it with another PAT sustained when collided head-on subject and is agency bus. PAT is Commonwealth therefore immunity excep- and statutory provisions sovereign to the for immunity to the Code. sovereign pursuant tions to Judicial that, provides against in an action The Judicial Code from of action or arising Commonwealth the “same cause occurrence,” or the Commonwealth transaction $250,000.00 any no than for pay must are limited to more one 8528(b). $1,000,000.00. person or a total of interpleader an action in the PAT filed Common Allegheny County paid injured individuals Pleas of $1,000,000.00. Unfortunately, money once the was distributed individuals, injured only approximately satisfied among the it . damages. of their one-third
Thereafter, thirty-four injured of the individuals filed UIM (Appel- claims with their own automobile insurance carriers lant-insurers) portion dam- remaining to recover the of their ages. policy, explicitly Based on the which exclusions each of an governmental vehicles from the definition excluded vehicle, the claims. underinsured the insurers denied application declaratory an injured The individuals filed Allegheny County.. of Common judgment the Court Pleas Nisi on Adjudication trial court entered an Decree *5 that “a statuto finding in favor of the insureds stipulated facts preclude not a ry damage cap damages on the amount of does damages.” being legally claimant from entitled to recover Co., v. Farm Mutual Automotive Ins. Kmonk-Sullivan State 97-01115, (Allegheny at 5 of Commom slip. op. Co. Ct. GD 1997). 10, 1997, Pleas, trial court On December Oct. post-trial motions and entered a final then denied the insurers’ judgment. companies appeal Superior
The insurance filed an with the 3, 1998, a September three-judge panel Court. On reversed However, 1,1999, April on the trial court. Application Reargument. Supe for
granted the insureds’ trial court in rior Court en banc affirmed the decision of the government favor of the insureds concluded provisions impermissibly vehicle exclusions conflicted public policy. of the MVFRL and violated Kmonk-Sullivan Co., Automobile Insurance State Farm Mutual (Pa.Supcr.1999).
Midili v. Erie Insurance Group appeal, In in this Arnold Midili died in the second case W. by
an in a operated automobile accident which motor vehicle employee Allegheny County an struck the car he was dispute Mr. Midili driving. There is no the death of negligent county employee. resulted from the conduct of the Midili, wife, Allegheny County paid Sandra the decedent’s $500,000.00, single maximum amount a tort payable against pursuant claim a local unit to 42 Pa.C.S. 8553(b). Group a claim to Insurance Mrs. Midili then submitted Erie (hereinafter “Erie”) $300,000.00 attempt in an recover pursuant personal UIM benefits to the automobile insurance policy had issued to her and her decedent-husband. Erie Notwithstanding that Erie admitted that Mrs. Midili’s total $800,000.00, it the claim. pay exceed refused Erie it denied concluded policy in its precluded vehicle exclusion Mrs. Midili from benefits, recovering given that Mr. Midili was killed a negligence county an automobile accident caused employee operating government while vehicle. 20, 1997, of arbitrators in'favor of
On June board found *6 27, 1997, Washington County Erie. On October trial court decision, adopted and Midili’s the arbitrators’ refused Mrs. motion to vacate the award. appeal Superior
Mrs. Midili filed an to the On Court. 3, 1998, a September three-judge panel Superior of the Court upheld Superior Midili. the denial benefits Mrs. court en 1, 1999, granted reargument, April and on Court the Kmonk-Sullivan, banc in Midili supra argument heard at the same time. Kmonk-Sullivan, Superior
Consistent Court deter government- mined that exclusion violated the vehicle against public policy. terms of the MVFRL and was There fore, Superior judgement Court reversed the of the Court Washington County, of Common Pleas of which upheld had benefits, the denial of UIM and remanded with instructions to of Mrs. Midili. Midili v. Erie Insur enter in favor judgment ance Group, (Pa.Super.2000).
DISCUSSION Opinions Faced with the of the Court deter (insurers and Mid Kmonk-Sullivan mining Appellants that in “insurers”) ili (collectively, would required provide be cov erage despite express government their exclusion of vehicles review, policies. sought from their UIM Insurers this which granted. policies The insurers assert that the define way explicitly “Underinsured Motor Vehicle” such a as to and, thereby, exclude specifically vehicles fore recovery close of UIM benefits when the is a tortfeasor government entity.1 They reason that an underinsured vehi cle is as one for which ... defined “limits available self- insurance are insufficient” [75 1702] representative policy provided: 1. A any "underinsured motor vehicle” does not include vehicle: Owned by governmental agency.” unit or (Insurers’ 5.) Brief at may not be government’s limits of the self-insurance available Code. damages cap of the Judicial made insufficient they may permissibly Accordingly, insurers conclude coverage from government vehicles exclude does not include of underinsured vehicles MVFRL’s definition government vehicles. (collectively “in- and Midili
Insureds in Kmonk-Sullivan sureds”) language companies’ policy admit that the insurance however, they that it is not the terms unambiguous, assert dispute, but whether the terms policies that are of the argue Insureds of the MVFRL. provisions violate the enough is broad to include because the MVFRL vehicle[s],” motor in the definition of “underinsured vehicles from violates exclusion the vehicles the insurers’ the MVFRL. observed, have a when statutes
As we have often *7 case, begin by analyzing the on outcome of a we bearing Author Housing of statutes. express Philadelphia words Labor Relations Pennsylvania ity Commonwealth of (1985). Board, 576, 294, 499 A.2d 297 When the 508 Pa. clear, intent of go no further to discern the statute is we need 1921(b) Statutory legislature. of the Construction Section 1921(b). § involve the Act of 1 Pa.C.S. These cases MVFRL, of interplay its with the waiver interpretation to governmental regard immunities with vehicle sovereign and of whether the insurers’ exclu liability, and determination coverage vehicles from their sion of UIM requirement is with the policies insurance inconsistent coverage. § 75 Pa.C.S.A. 1731. insurers offer UIM See to requires of the MVFRL insurers offer Section 1731 1731(a) coverage. pro- their insureds underinsurance Section vides:
(a) Mandatory offering. liability insur- motor vehicle —No delivery for in this policy shall be delivered or issued regis- Commonwealth, respect any to motor vehicle Commonwealth, unless garaged or in this principally tered coverages motorist motorist and underinsured uninsured as supplemental or thereto amounts are offered therein 522
provided (relating request in section 1734 to for lower limits coverage). Purchase of uninsured motorist and underin- coverages optional. surance is 1731(a). insureds, § 75 provides Pa.C.S. UIM insurance who coverage, with a recovery select source of when a tortfeasor lacks compensate fully. sufficient resources to them designed “provide protection to for persons who injury arising suffer out of the maintenance or of a motor use vehicle, legally and are entitled to damages recover therefor operators from owners or of underinsured motor vehicles.” 75 1731(c). § Pa.C.S Section of the MVFRL an defines underinsured motor as “a vehicle motor vehicle for which the liability limits available insurance and self-insurance are to pay damages.” insufficient losses and § Pa.C.S. The other statutes to present relevant to matter relate (42 8521) sovereign immunity § Pa.C.S. and the extent (42 8522). which the Commonwealth has it § waived Pa.C.S. sovereign, As the Commonwealth determines whether and the parties may extent to which recover from it. Id. provides: Section
Except provided as otherwise subchapter [Subchap- this Against Parties], ter B Actions Commonwealth provision no of this shall sovereign title constitute waiver of immunity purposes § of 1 (relating sovereign waiver) reaffirmed; immunity specific or otherwise.2 imply Insurers that Insureds “legally are not entitled” -damages to recover they already have all received they are entitled to from the entities.3 Insurers’ *8 provides § 1 part: 2. Pa.C.S. 2310 in relevant reaffirmed; § Sovereign immunity specific waiver Pursuant nia, to section 11 of Article 1 Pennsylva- of the Constitution of hereby it is Assembly declared to be the intent of the General that Commonwealth, employees acting and its officials and within the duties, scope enjoy sovereign of their immunity shall continue to immunity official except and remain immune from suit as the Gener- Assembly specifically al immunity. shall waive the 8528(b) 3. Section damages sets forth the limits of the amount of regard recoverable from the Commonwealth with to a non-immune 8528(b) provides: claim. Section
523 appeal. not without some argument This at Brief 1731(c) protect shall provides Section or the maintenance injury arising out of who suffer “persons to recover entitled legally vehicle and are of a motor use 1731(c). added). In- § ....” 75 Pa.C.S. (emphasis damages of requirements satisfy fail that Insureds to surers assert 1731(c) to “legally not entitled” they § are 75 Pa.C.S. damages. recover immu-
However, sovereign § provides Pa.C.S. regard with to certain longer no be a defense nity shall claims, including involving Commonwealth those specified 8522(b)(1) provides pertinent part: in vehicle. Section (b) liability. may impose following Acts which —The may imposition in the by party result acts Commonwealth of sover- and the defense liability on the Commonwealth of to claims for immunity shall not be raised eign by: caused
(1) liability. any of motor vehi- operation Vehicles —The party. in or control of a Commonwealth possession cle governmental § Similarly, provides Pa.C.S.A. to certain immunity longer regard shall no be a defense with claims, involving agency an vehicle. specified including those 8542(b) part: provides pertinent Section (b) may liability. impose following Acts which —The may agency any employees a local or of its result acts liability agency: imposition on a local (1) any motor vehicle liability. operation Vehicle —The agency.... or control of local possession in the agency local waivers of As a result of the Commonwealth and regard operation any motor vehicle immunity, “the (42 party” ... a possession in the or control of Commonwealth (42 8542(b)), 8522(b)) § § agency or local Pa.C.S. Insureds, legally damages. Insureds’ were entitled recover arising or Damages the same cause of action or transaction from or transactions or occur- or series of causes of action occurrence $250,000 any plaintiff or not exceed in favor rences shall $1,000,000 aggregate. in the 8528(b). *9 524
therefore, 1731(c), requirement satisfied the of Section who, coverage provide protection people among other ” things, “legally are to damages.... entitled recover contention, however, main Insurers’ the statuto ry cap may not to be used make the “limits of ... available ... self-insurance insufficient” and that way make a vehicle They accurately underinsured. point out that in this case the statutory cap caused “limits of available .... self-insurance 75 [to be] § insufficient.” 1702. question Pa.C.S. for us is whether the reason for insufficiency is of importance. issue,
To resolve this we return to the words of the An MVFRL. underinsured vehicle is one for which the “limits ... available self-insurance are insufficient.” 75 Pa.C.S. Here, § 1702. it is that: clear the “limits of ... available self- insurance satisfy are insufficient” to of In- sureds; and, the statute does not limit the circumstances or why reasons may the available limits be made so. Conse- quently, damages cap where the causes available limits of insufficient, underinsurance to be requirements of 75 § 1702 Pa.C.S. are met.
Furthermore,
Code,
the Motor
§§
Vehicle
101—
vehicles)
which
1702 (defining
[of
Section
underinsured
and Section 1731 (mandating the offering of underinsurance
coverage)
part,] applies
government
are
to
vehicles. The
Superior
correctly
Court
legislature
observed that “the
ex-
pressly
applicable
made the MVFRL
to all motor vehicles
(75
required by
registered
1712)
state law to
§
be
Pa.C.S.
knowing that
agency
Commonwealth
required
vehicles are
to
registered by
be
§§
statute.
Pa.C.S.
1301 & 1302.”
Kmonk-Sullivan,
Therefore,
Finally,
as the
explained,
legisla
ture chose to exempt federally owned vehicles from the stat
ute, but
did not exclude all
as
vehicles
the insur
policies
purport
to do.
§
See 75
An
exception expressly provided in a
strong
statute is a
indication
Kmonk-Sullivan,
1120; Midili,
Insurers’
exclusion
to the MVFRL be-
attempts
it
to withdraw
that
coverage
legislature
cause
the
We, therefore,
required
agree
it to
majority
offer.6
the
Appellate
State
Courts that have considered this issue7 and
that
policy
conclude
the insurance
definition of underinsured
“
vehicle,
vehicles,
which
...
government
excludes
is an
coverage required by
unwarranted invasion of the broad
the
argue
permitting
sovereign
5.
Insurers
that
the limits on the amount of
liability
satisfy
requirement
require
the
of the MVFRL would
that
coverage apply
range
in a broad
of cases in which valid defenses
plaintiffs
against
prohibit
recovering
Appellants'
from
tortfeasors.
con-
however,
taken,
they
generally
are
cerns
well
will
be of no moment
where,
here,
coverage applies only
plaintiffs
"legal-
because UIM
as
are
ly
against
subject
entitled”
to recover
tortfeasor.
1731(c).
Company,
6.
Insurers also assert
that Hall v. Amica Mutual
Insurance
337,
(1994),
policy
538 Pa.
CONCLUSION Court, Superior affirm We the determinations Midili, which held the insurers’ Kmonk-Sullivan conflict with impermissibly vehicle exclusions provisions recognize of the MVFRL. We *11 also concluded the vehicle exclusion violated However, public policy. we that the have concluded MVFRL, of policy insurance exclusions violate the terms the invalid, public to are therefore we decline consider the policy argument. Saylor concurring opinion.
Justice files SAYLOR, Justice, concurring.
Applying principles statutory interpretation, settled in- cluding pertinent consideration of statutes and other the express understanding exceptions exclude others not 1921(c), 1924, expressed, majority §§ 1 see Pa.C.S. de- termines that the vehicle exclusion conflicts im- permissibly provisions with I agree the MVFRL. determination, fully only with that separately write to that, majority’s statutory analy- address the observation sufficient, public sis con- having proved policy need not be sidered. “public policy” may
The term be understood refer to laws, overarching arising long governmen concerns from the standards, tal practice, or obvious ethical or moral see Hall v. Co., 337, 347-48, 755, Pa. Amica Mut. Ins. 648 A.2d (1994) (citation omitted), determining and also to a means of (and, indeed, by) the statute. underlying declared the intent (enumerating statutory tools of construc- 1 See tion, under which a including reference to the circumstances remedied; enacted; object the mischief to be statute was attained; interpreta- consequence particular and the to be tion). Thus, agree majority’s I decision although policy analysis, expressly I would forego type the broader considerations, such as those identified public policy include Court, of the any analysis of the terms view, as pertinent In such considerations are as my MVFRL. statutory by majori- tools of construction utilized the other ty. See id.
Terry SCHREFFLER, APPEAL WORKERS’ COMPENSATION BOARD (KOCHER COMPANY), COAL Company. Appeal of Kocher Coal Pennsylvania. Supreme Court of 30, Argued April Decided Jan.