Lead Opinion
OPINION BY
Standard Fire Insurance Company (“Standard Fire”) appeals from the judgment entered April 11, 2014, in this declaratory judgment action. The trial court granted appellees’ motion for summary judgment after finding that they were entitled to stacking of underinsured motorist benefits. After careful review, we affirm.
The relevant facts and procedural history underlying this appeal are as follows. Appellees are husband and wife who reside in Worcester, Montgomery County. In the early 1990s, Appellees applied for personal automobile insurance with Standard Fire’s predecessor in interest, Aetna Insurance Company, through their insurance agent. (Action for Declaratory Judgment (“Complaint”), filed 12/17/10, at ¶4; Answer with New Matter, filed 4/28/11, at ¶¶ 34-35; Appellant’s Motion for Summary Judgment, filed 12/12/13 (“Motion”), at ¶ 2). On July 27, 1994, Appellees signed an Aetna Option Selection Form indicating that they chose non-stacked underin-sured motorist (“UIM”) coverage on policy number 020185337-101-1 (“20185337”). (Motion, Exhibit C).
On May 29, 1996, Peggy Pergolese signed a rejection of stacked UIM coverage form for this policy on behalf of Appellees with John Pergolese’s full knowledge and consent. (Motion at ¶ 3).*483 At that time, the insurance policy covered four (4) vehicles. (Id. at ¶ 4). Specifically, for the 1996 coverage year, the policy insured the following vehicles: 1989 Chevy Corvette, 1989 Mazda B-2200, 1988 Plymouth Voyager and 1993 Mazda MX-6. (Cross Motion for Summary Judgment, filed 1/13/14 (“Cross Motion”), at ¶¶7-8; Exhibits F and G). On August 5,1996, Appellees executed a form waiving stacked UIM coverage for the second policy, number 036766029-101-1 (“36766029”). (Cross Motion at ¶ 6; Exhibit E). The second policy provided coverage for one (1) vehicle.[Footnote 2]
On or about November 19, 1996, Appellees sought to remove the 1988 Plymouth Voyager from coverage on policy number 20185337 and replace it with a 1993 Nissan Pathfinder. (Cross Motion at ¶ 9; Auto Change Form, Exhibit H). The amended declaration sheet effective November 19, 1996 reflected coverage for the following vehicles: 1989 Chevy Corvette; 1989 Mazda B-2200, 1993 Nissan Pathfinder and 1993 Mazda MX-6. (Id. at ¶ 10; Exhibit I). Appellees renewed the policy every six (6) months and the declaration sheets showed non-stacked UIM benefits in the amount of $100,000.00. The declaration sheets on policy number 20185337 dated up to and including January 27, 1998, also reflected coverage for the same four (4) vehicles. (Id. at ¶ 11; Exhibits J, K and L).
On February 23, 1998, Appellees asked their insurance agent to remove the 1989 Mazda B-2200 from their policy. Unlike their request on November 19, 1996, Appellees did not add a replacement vehicle. (Cross Motion at ¶ 12; Auto Change Form, Exhibit M). The amended declarations page effective February 23, 1998, lists coverage for only three (3) vehicles and a decreased premium. (Id. at ¶ 13; Exhibit N).
On April 8, 1998, forty-four (44) days later, John Pergolese called Appellees’ insurance agent to request auto insurance coverage for an additional vehicle before he took possession. Mr. Pergolese requested that the agent fax a copy of the insurance card so that Mr. Pergolese would have proof of insurance before taking ownership of a 1990 Ford F-150. (Id. at ¶ 14; Auto Change Form, Exhibit O). As requested, the agent faxed a copy of the insurance card with an effective date of April 8, 1998, to the location where Mr. Pergolese was obtaining the tags and title. (Id. at ¶ 14-15; Exhibit P). The amended declarations page effective April 8, 1998, showed the premium increase and. listed four vehicles as follows: 1989 Chevy Corvette, 1993 Nissan Pathfinder, 1993 Mazda MX-6 and 1990 Ford F-150. (Id. at ¶ 16, 18; Exhibit Q).
Appellees’ Standard Fire Auto Policy provides in pertinent part as follows:
J. “Your covered auto” means:
1. Any vehicle shown in the Declarations.
2. Any of the following types of vehicles on the date you become the owner:
a. a private passenger auto; or
b. a pickup or van.
This provision (J.2.) applies only if:
*484 a. you acquire the vehicle during the policy period;
b. you ask us to insure it within 30 days after you become the owner; and
c. with respect to a pickup or van, no other insurance policy provides coverage for that vehicle.
If the vehicle you acquire replaces one shown in the Declarations, it will have the same coverage as the vehicle it replaced. You must ask us to insure a replacement vehicle within 30 days only if:
a. you wish to add or continue Damage to Your Auto Coverages; or
b. it is a pickup or van used in any “business” other than farming or ranching.
(Policy No. 20185337, Personal Auto Policy at 1; Exhibit A to both Motions for Summary Judgment) (emphasis added).
Appellant did not request a new waiver of stacked coverage from Appellees after the addition of the 1990 Ford F-150 to the three vehicle policy under 20185337. (Cross Motion at ¶ 23). Appel-lees continued to insure the same four vehicles under policy number 20185337 through July 27, 2001. (Id. at ¶ 24; Exhibit A). For the period of July 30, 2000, to July 30, 2001, Appellees insured one vehicle, a 1992 Toyota Pickup under policy number 36766029. (Id. at ¶ 25; Exhibit B).
On July 23, 2001, John Pergolese suffered severe injuries when a drunk driver rear ended his 1993 Mazda MX-6. (Motion at ¶ 15; Cross Motion at ¶ 26). Appellees timely submitted a claim for underinsured motorist benefits to Appellant upon receiving the liability policy limits from the tortfeasor and after receiving Appellant’s consent to settle and waiver of subrogation. (Complaint at ¶ 8; Answer at ¶ 8; Motion at ¶ 16). Appel-lees asserted that they were entitled to stack UIM benefits according to the number of vehicles on their two (2) policies up to a limit of $500,000.00. (Complaint at ¶ 27; Motion at ¶ 17). Appellant denied that Appellees were entitled to stack their policy benefits. (Motion at ¶ 18).
On December 17, 2010, Appellees filed an action for declaratory judgment. On April 28, 2011, Appellant filed its answer with new matter. Appellees replied to the new matter on June 28, 2011. The parties conducted discovery, including requests for admissions and depositions.
In particular, an underwriter for Travelers Insurance testified at deposition as follows:
Q. Well, my question to you was from your understanding of Travelers, the insurance, if someone owns four vehicles on a policy and they delete a car, so now there’s [sic] three cars on that policy, and a month and a half or two months later that insured buys a new car and asks for it to be added to the policy?
A. That would be an additional vehicle.
Q. Okay. That would be an addition, an additional vehicle; is that correct?
A. That’s correct.
Q. All right. That would not be considered a replacement vehicle?
A. Not if it was—if it was not replaced at that time.
Q. Okay. So, meaning that it’s your understanding at Travelers that dealing with replacement vehicles is when cars are added and deleted at the same time?
A. Correct.
* * * *
*485 Q. All right. I don’t want—so somebody has four cars and they delete a vehicle on that policy, all right? And in this case John Pergolese owned four cars on the policy, and one of the cars he deleted, okay, because it was junked or there was an issue. It didn’t run anymore.
A. Okay.
Q. And then a month and a half later he buys a car and adds a new car to that policy.
A. That would be an additional vehicle. Q. Okay. That would not be considered replacement because it wasn’t done at the same time, but that would [be] an additional vehicle?
A. That is correct.
Q. Because when they’re advising the agent of the new car, he’s purchasing coverage on that new car?
A. That is correct.
(N.T. Deposition of Cody D. Gilmore, 7/22/13 (“N.T. Gilmore Deposition”), at 54-56). Mr. Gilmore also agreed that the addition of the vehicle increased the premium as a policy change. (Id. at 68).
Mr. Gilmore explained that “the agents request the majority of changes, and they process them on [Travelers’] system within the office, their office.” (Id, at 19). The addition of a vehicle to a policy is never done by endorsement, the addition is considered a policy change. (Id. at 32-33). At Travelers “[a]n endorsement is a broadening or reduction or change in a coverage level.” (Id. at 33). Mr. Gilmore also testified as follows:
Q. Is it your understanding that the after-acquired clause that we just referenced is a provision in the policy that insures a new vehicle from the time that insured gets the vehicle until he calls somebody from Travelers to tell them that he just bought a new car and wants coverage?
A. This provides the coverage between the time that the vehicle—they own the vehicle and the time they contact the agent.
Q. Okay. So once—so, right, so the car is insured from the time that they buy it up until they call Travelers to tell—to tell them about it?
A. Right, that they have advised that they—once they have purchased and they are the owner of the vehicle, this is when this—that’s where they obtain their coverage automatically is once they own the vehicle. Q. All right. What does Travelers require, if you know, from the insured once they call to say I got a new car whatevér day it was and I want it insured?
A. The agent would inquire if there was a lienholder, the VIN number, and they would make the change to the policy to add it at that time.
Q. Okay. So, once they got—if there’s a lienholder, if there is the VIN, then that—then would it be—in this case, it was an agent that got the call. Then that agent would add the policy?
A. That’s correct. They would process the change.
(Id. at 44-45).
Appellant filed its Motion for summary judgment on December 12, 2013. Appellees responded in opposition on January 13, 2014, and filed their cross motion at the same time. Appellant replied to the cross motion on February 11, 2014. Upon review of the record, the issues presented to this court, the applicable law and after hearing argument, the undersigned denied Appellant’s Motion and granted Appellees’ cross motion by separate orders dated April 11, 2014.*486 Appellant filed a notice of appeal from the court’s order granting the cross motion on May 8, 2014. On May 9, 2014, Appellant filed a second notice of appeal from the court’s order denying their Motion. The undersigned issued an order on May 27, 2014, directing Appellant to file a Concise Statement of the Errors Complained of on Appeal (“concise statement”). Appellant filed two concise statements on June 6,2014.
Trial court opinion, 5/29/15 at 2-9.
Appellant, Standard Fire, has raised the following issues for this court’s review:
1. Did the trial court err in granting summary judgment in favor of Plaintiffs/Appellees and in denying Defendant’s/Appellant’s Motion for Summary Judgment, where vehicles were replaced under the continuous after-acquired vehicle provision of the Standard Fire Policy, and were not replaced by endorsement or through the purchase of new insurance, therefore not requiring the execution of new waivers rejecting stacked underinsured motorist benefits?
2. Even if this Court determines that the Ford F-150 constituted an additional vehicle under the Policy, did the trial court still err in granting summary judgment in favor of Plaintiffs/Appellees and in denying Defendant’s/Appellant’s Motion for Summary Judgment, where the after-acquired vehicle provision of the Standard Fire Policy provided for continuous coverage?
Appellant’s brief at 5.
We begin our analysis with our standard of review:
When reviewing a trial court’s decision to grant a motion for summary judgment, we adhere to the following standard and scope of review.
We view the record in the light most favorable to the nonmoving party, and all doubts as to the existence of a genuine issue of material fact must be resolved against the moving party. Only where there is no genuine issue as to any material fact and it is clear that the moving party is entitled to a judgment as a matter of law will summary judgment be entered. Our scope of review of a trial court’s order granting or denying summary judgment is plenary, and our standard of review is clear the trial court’s order will be reversed only where it is established that the court committed an error of law or abused its discretion.
Jones v. Unitrin Auto and Home Insurance Co.,40 A.3d 125 , 126-127 (Pa.Super. 2012), quoting Erie Insurance Exchange v. Larrimore,987 A.2d 732 , 736 (Pa.Super. 2009) (citation omitted). Jones further noted that “ordinary summary judgment procedures are applicable to declaratory judgment actions.” Id. at 127.
Shipp v. Phoenix Ins. Co.,
This case involves the interpretation of the following statute:
§ 1738. Stacking of uninsured and underinsured benefits and option to waive
(a) Limit for each vehicle.—When more than one vehicle is insured under one or more policies pro*487 viding uninsured or underin-sured motorist coverage, the stated limit for uninsured or un-derinsured coverage shall apply separately to each vehicle so insured. The limits of coverages available under this subchapter for an insured shall be the sum of the limits for each motor vehicle as to which the injured person is an insured.
(b) Waiver.—Notwithstanding the provisions of subsection (a), a named insured may waive coverage providing stacking of uninsured or underinsured coverages in which case the limits of coverage available under the policy for an insured shall be the stated limits for the motor vehicle as to which the injured person is an insured.
(c) More than one vehicle.—Each named insured purchasing uninsured or underinsured motorist coverage for more than one vehicle under a policy shall be provided the opportunity to waive the stacked limits of coverage and instead purchase coverage as described in subsection (b). The premiums for an insured who exercises such waiver shall be reduced to reflect the different cost of such coverage.
75 Pa.C.S.A. § 1738 (in pertinent part). Id. at 221-222.
As in Shipp,
This case particularly involves the interpretation of section 1738(c) and whether the addition and/or substitution of a new vehicle under the policy constitutes a purchase of additional UM/UIM coverage, requiring the insurer to present the insured with a new opportunity to waive stacked coverage. This question has been partially answered by our supreme court in two separate decisions involving the same parties.
In Sackett v. Nationwide Mutual Insurance Co.,591 Pa. 416 ,919 A.2d 194 (2007) (“Sackett I”), the insured acquired a policy for two vehicles and initially waived stacked UM/UIM coverage in the amount of $200,000 ($100,-000 unstacked). The insured later added a third vehicle to the policy, and the insurer did not provide the insured with the opportunity to again waive stacked coverage. Following an accident, the insured filed a declaratory judgment action seeking $300,000 in stacked coverage under section 1738 because the insurer failed to provide the insured with the opportunity to waive stacked UM/UIM coverage at the time the third vehicle was purchased and added to the policy.
The trial court ruled that when the same named insured simply adds a vehicle to an existing insurance policy, the insurer does not need to acquire a second waiver of stacked UM/UIM coverage. This court affirmed that decision. On appeal, however, the Sackett I court held that the addition of a new vehicle to an existing multi-vehicle policy constitutes a purchase under section 1738(c), such that the insurer was responsible for again acquiring a waiver to stacked coverage.
Following this decision, the supreme court granted re-argument to explore the impact of newly acquired vehicle clauses, almost universally contained in vehicle insurance policies, on its decision in Sackett I. In Sackett v. Nationwide Mutual Insurance Co.,596 Pa. 11 ,940 A.2d 329 (2007) (“Sackett II”), the court noted that there are two common forms used for newly acquired vehicle clauses. The first type provides automatic coverage upon acquisition of the additional*488 .new vehicle, but lapses after a specified, finite amount of time, requiring the insured to apply for new coverage thereafter. The second type provides continuing coverage, usually requiring the insured only to give notice that a new vehicle has been acquired. The Sackett II court held that the second type of newly acquired vehicle clause does not trigger an obligation by the insurer to obtain a second waiver of stacked coverage; however, where the newly acquired vehicle clause is of the lapsing, finite variety, Sackett I still applies and the insurer must again acquire a waiver of stacked coverage.[Footnote 1]
[Footnote 1] Ultimately, on remand to the trial court, the court conducted a non-jury trial and again ruled that the Sacketts could stack their coverage. On appeal, this court found that newly acquired vehicle provisions of Nationwide’s policy with the Sacketts was of the lapsing finite variety which the supreme court had held to require the re-obtaining of waiver by the insurer. As Nationwide had failed to re-obtain such waiver, this court ruled that the trial court properly permitted the coverage to be stacked. Sackett v. Nationwide Mutual Insurance Co.,4 A.3d 637 (Pa.Super. 2010) (“Sackett IIP), appeal denied,613 Pa. 653 ,34 A.3d 83 (2011).
Id. at 222.
In Bumbarger v. Peerless Indem. Ins. Co.,
In that case, Peerless issued Helen Bumbarger (“Helen”) a personal automo
On July 24, 2007, Helen purchased a third vehicle, a 1995 Ford F-150 pick-up truck. That same day, she notified her insurance agent of the purchase and requested that it be added to and insured under the Policy. The insurance agent notified Peerless about the third vehicle and the vehicle was added to the Policy through a validly executed endorsement, effective July 24, 2007. On October 2, 2009, Helen notified her insurance agent that she had purchased a fourth vehicle, a 1985 Ford Bronco; she requested that this vehicle also be added to and insured under the Policy. The agent notified Peerless and coverage of the fourth vehicle became effective as of the date of purchase; unlike the third vehicle, this fourth vehicle was not added by way of endorsement, but rather its addition was reflected by an amended declarations page.
On December 3, 2009, while driving the 1995 Ford pick-up (third vehicle) Helen was involved in a motor vehicle accident with an uninsured vehicle; she subsequently submitted a claim for UM benefits under the Policy. Helen claimed that she was entitled to stacked UM benefits; Peerless maintained that the original waiver of stacked UM/UIM benefits under the Policy, executed on May 17, 2007, remained in effect.
Id. at 873-874 (footnote omitted).
The trial court granted summary judgment for the Bumbargers, finding that because the third vehicle was added to the policy pursuant to an endorsement, the vehicle was effectively added to the policy’s declarations and was covered under the general terms of the policy and not the newly-acquired-vehicle clause. Id. at 874. Therefore, the trial court determined that Sackett I required Peerless to obtain a new stacking waiver from the Bumbargers when the third vehicle was added to the policy. Because Peerless failed to do so, the Bumbargers were entitled to stacked UM coverage as a matter of law. Id. Furthermore, since the Bumbargers were entitled to stacking under the general terms of the policy, the trial court did not determine the duration of any coverage under the policy’s newly-acquired-vehicle elause as discussed in Sackett II. Id. at n.6.
On appeal, this court affirmed, finding that because the Bumbargers added the third vehicle to the policy by way of endorsement, the newly-acquired-vehicle clause was never triggered:
[I]n both Sackett and this case, the vehicles were added to an existing policy; they were not added to replace a vehicle already covered under the policy. Moreover, although the policies in both Sackett and the instant case had after-acquired vehicle clauses, because the additional cars were added on pursuant to the policy’s endorsement provision immediately after being purchased and were placed on the policy’s declarations’ page, the after-acquired vehicle clauses became irrelevant.
Id. at 878. “Here, the third vehicle added to the Peerless policy in July 2007 was added by endorsement at the time of purchase onto the declarations page of the
Therefore, because the Bumbargers added their third vehicle to the Peerless Policy by way of an endorsement, the new vehicle was covered under the general terms of the Peerless policy and not its after-acquired vehicle clause. Sackett III, supra. Moreover, because this new vehicle was added to the Peerless Policy before the Bumbargers’ accident, Peerless was required, under Sackett I, to obtain a new waiver from the Bumbar-gers declining stacked coverage. Id.
Id. at 879.
As in Bumbarger, the policy in the instant case includes a newly-acquired-vehicle clause which does not apply to any vehicles shown in the Declarations. See Bumbarger,
We find appellant’s reliance upon Shipp, supra, and Toner, supra, to be misguided. In Shipp, the policy at issue had an identical after-acquired-vehicle clause as the policy in this case. Shipp,
Here, by contrast, the 1990 Ford F-150 was not a replacement vehicle. Rather, it was added to the policy 44 days after appellees removed the 1989 Mazda B-2200 from their policy. At that time, the amended declarations pages listed only three vehicles and a decreased premium. Forty-four days later, appellees notified their insurance agent of then’ intention to purchase the 1990 Ford F-150 and amended declarations pages were issued. The 1990
Appellant also cites Toner, in which it was determined that the insurer, Travelers, was not required to provide Toner with a new waiver of stacking form when she added cars to her single vehicle policy. However, in Toner, the after-acquired-vehicle clause was at issue. Toner,
Finally, appellant argues that the trial court should not have permitted inter-policy stacking where the stacking waiver applicable to the single-vehicle policy remained valid and in effect at the time of the accident. (Appellant’s brief at 36 n.5.) According to appellant, at most, appellees would be entitled to $400,000 of stacked UIM coverage, not $500,000. This issue was not raised in the court below or in appellant’s Pa.R.A.P. 1925(b) statement. Therefore, it is deemed waived. Pa.R.A.P. 1925(b)(4)(vii); Pa.R.A.P. 302(a).
Judgment affirmed.
Strassburger, J., files a Concurring Opinion.
Stabile, J., files a Dissenting Opinion.
Notes
note 2] The Travelers system does not allow the placement of more than four (4) personal vehicles on a policy at one time. (N.T. Deposition of Cody D. Gilmore, 7/22/13 (Cross Motion, Exhibit R) at 58-59[) ]; [therefore, policy holders wishing to insure more than four personal vehicles at a time are required to obtain a second policy. (Id.).
. On July 13, 2015, this court quashed the appeal at No. 1466 EDA 2014, taken from the April 11, 2014 order denying appellant's motion for summary judgment, as unnecessary and duplicative.
. Initially, an after-acquired-vehicle clause is essentially a contractual grace period, during which the insurer will automatically provide coverage for a newly acquired vehicle for a brief period, until either other insurance is purchased or the insurer is informed of the new vehicle and the insured asks to have the new vehicle put on the existing policy. This clause gives an insured the time to decide what insurance to ultimately purchase. Otherwise, an insured would be required to purchase insurance contemporaneously with the purchase of the car,[Footnote 5]
[Footnote 5] This might not be a hardship when purchasing a vehicle through a dealership, but might prove burdensome when buying a car through a person to person transaction.
Toner v. Travelers Home and Marine Ins. Co.,
. However, it is important to note that in Sackett II, “where coverage under an after-acquired-vehicle clause is expressly made finite by the terms of the policy, Sackett I controls and requires the execution of a new UM/UIM stacking waiver upon the expiration of the automatic coverage in order for the unstacked coverage option to continue in effect subsequent to such expiration.” Sackett II,
Dissenting Opinion
DISSENTING OPINION BY
Appellees possess two insurance policies, a multi-vehicle policy and a single-vehicle policy, under which they executed stacking waivers for uninsured and underinsured motorist coverage (“UM/UIM”). The issue in this case is whether Appellant, Standard Fire Insurance Company (“Standard Fire”), was required to secure a new stacking waiver from Appellees when they added a 1990 Ford F-150 vehicle to their multi-vehicle policy by amending the policy’s declaration pages at the time they assumed ownership of the vehicle. In Sackett v. Nationwide,
Appellees possess two insurance policies issued through Standard Fire. The first is a multi-vehicle policy that insures four vehicles, including the Mazda MX-6 that was involved in a July 23, 2001 accident. The second is a single-vehicle policy that insures a 1992 Toyota pickup. Both policies provide coverage for uninsured and under-insured coverage, but had signed waivers rejecting stacking of those benefits. In November 1996, Appellees removed a 1988 Plymouth Voyager from the multi-vehicle policy and replaced it with a 1993 Nissan Pathfinder, In February 1998, Appellees removed the 1989 Mazda B-2200 from their multi-vehicle policy, noting it had been “junked,” and did not add a replacement at that time. Shortly thereafter, in April 1998, Appellees requested coverage under their multi-Vehicle policy for a 1990 Ford F-150. Appellees notified their agent of this new vehicle and requested proof of coverage before they completed their purchase. Their agent faxed a copy of the insurance card and issued amended declaration pages reflecting coverage for this new vehicle and an increase in premium to the policy. At all times, Appellees’ insurance policies reflected the benefit of lower premiums for unstacked UM/UIM motorist coverage. In fact, Appellees initially waived the amount of UM/UIM coverage that they now seek to stack.
As a result of the July 23, 2001 accident involving the Mazda MX-6, Appellees made a claim against Standard Fire for stacked underinsured motorist benefits under both policies after they received the liability policy limits from the driver who caused the collision. Appellees contend that Standard Fire was required to obtain new waivers for stacked underinsured benefits under the Sackett trilogy of cases
On appeal, Appellant Standard Fire argues execution of a new waiver form rejecting stacking was not required, since vehicles were replaced under the continuous after-acquired vehicle provision of the Standard Fire policy and not by endorsement or through the purchase of new insurance. Alternatively, Standard Fire contends that even if the 1990 Ford F-150 vehicle was an additional vehicle under the policy, no new waiver was required as the after-acquired vehicle provision provided for continuous coverage. In response, Ap-pellees agree with the trial court’s conclusion that the addition of a new vehicle under their policy at the time they were completing the vehicle purchase constituted new insurance requiring Appellant to secure new waiver forms. Alternatively, Appellees maintain that the after-acquired vehicle clause was finite in coverage for additional vehicles and, therefore, new waiver forms were required under this scenario as well.
As in Shipp v. Phoenix Ins. Co.,
Section 1738 of the MVFRL provides:
Stacking of uninsured and underin-sured benefits and option to waive
(a) Limit for each vehicle.—When more than one vehicle is insured under one or more policies providing uninsured or underinsured motorist coverage, the*494 stated limit for uninsured or underin-sured coverage shall apply separately to each vehicle so insured. The limits of coverages available under this subchap-ter for an insured shall be the sum of the limits for each motor vehicle as to which the injured person is an insured.
(b) Waiver.—Notwithstanding the provisions of subsection (a), a named insured may waive coverage providing stacking of uninsured or underinsured coverages in which case the limits of coverage available under the policy for an insured shall be the stated limits for the motor vehicle as to which the injured person is an insured.
(c) More than one vehicle.—Each named insured purchasing uninsured or underinsured motorist coverage for more than one vehicle under a policy shall be provided the opportunity to waive the stacked limits of coverage and instead purchase coverage as described in subsection (b). The premiums for an insured who exercises such waiver shall be reduced to reflect the different cost of such coverage.
75 Pa.C.S.A. § 1738 (emphasis added).
In Sackett I, our Supreme Court addressed the statutory interpretation of Section 1738(c) to determine whether insureds must be given the opportunity to waive stacking of UM/UIM coverage for each instance an insured adds a vehicle to an existing policy. Based solely upon its interpretation of the statutory language of 1738(c) (each named insured purchasing uninsured or underinsured motorist coverage ... shall be provided the opportunity to waive the stacked limits of coverage), the Court answered in the affirmative. The Court held that when an insured purchases uninsured or underinsured motorist coverage for more than one vehicle under a policy, the insurer has to provide a new stacking waiver each time a new vehicle is added to a policy. The Court made certain, however, to explain that its holding did not extend to instances where an insured replaces a vehicle or renews a policy, as those instances are not considered purchases of new insurance under Section 1738.
Almost immediately after deciding Sack-ett I, the Court agreed to grant reargument requested by the insurer after inviting and receiving an amicus statement from the Insurance Commissioner of Pennsylvania. In his statement, the Commissioner offered his disagreement with Sackett I’s central conclusion that an addition of a new vehicle to an existing mul-ti-vehicle policy constitutes a new purchase of coverage. The Commissioner explained that throughout.Section 1738’s 17-year history, once policies are put into place, the Department has not treated the addition of a new vehicle, known as an “add-on,” as a new purchase of insurance. Rather, the Department deems this to be an extension of pre-existing coverage and it has not required carriers to issue, or policyholders to execute, serial waivers when vehicles are added to multi-vehicle policies to reaffirm the continuation of unstacked UM/ UIM coverage. Implicit in this explanation is that Section 1738(c)’s mandate that an insured be offered an opportunity to execute a stacking waiver applies only upon the initial purchase of an insurance policy. The Commissioner further explained that the mechanism by which vehicles generally are added to existing policies is via “newly-acquired vehicle clauses,” which are practically necessary by the mandate of the MVFRL for financial responsibility as a prerequisite to operating a motor vehicle. These clauses universally are included within automobile insurance policies issued in Pennsylvania. They permit consumers to extend existing coverage, with the same applicable types of coverage
Upon re-argument, the Sackett II Court stated that it believed the Insurance Commissioner’s argument that a UM/UIM stacking waiver remains in effect upon the acquisition of a vehicle covered under contractual after-acquired-vehicle pro-visions has substantial force. Id. at 333. The Court was concerned that Sackett I could be read as negating the effect of after-acquired-vehicle clauses, particularly since the mechanics of those provisions were not meaningfully developed in the initial proceedings in the case. Id. at 332. It thus clarified that Sackett I does not preclude enforcement of an initial waiver of stacked UM/UIM coverage extended under after-acquired-vehicle provisions of an existing multi-vehicle policy. Id. The Court accepted the Insurance Commissioner’s position that the “purchase” of UM/UIM coverage under Section 1738(c) is a term of art
Recognizing that after-acquired vehicle clauses may not always provide continuous coverage upon notice of acquisition of another vehicle, the Court instructed that only to the degree coverage under a particular after-acquired vehicle provision continues in effect throughout the existing policy, subject only to conditions such as notice and payment of premiums, its decision in Sackett I should not disturb the effect of an initial UM/UIM stacking waiver obtained in connection with a multi-vehicle policy. Id. at 334. It emphasized that the term “purchase” as used in Section 1738, did not include adjustments to the scope of an existing policy containing an after-acquired vehicle clause that continues in effect throughout the existing policy. Id. However, where coverage under such a clause is made expressly finite by the terms of the policy, its decision in Sackett I controls and requires the execution of a new UM/UIM- stacking waiver upon expiration of the automatic coverage for the unstacked coverage option to continue in effect subsequent to the expiration
While it is true that the Supreme Court’s decision in Sackett II concerned only whether new waiver forms had to be executed under Section 1738(c) when additional vehicles were added under an existing policy’s after-acquired vehicle clause, nothing in the Court’s opinion suggests that its rationale is limited only to after-acquired vehicle clauses. In fact, the rationale in Sackett II is equally applicable, if not more compelling, when vehicles are added under an existing policy’s declaration pages at the time of a vehicle’s purchase.
As explained, an after-acquired vehicle clause allows an insured to automatically extend existing coverage upon acquisition of a new vehicle without the knowledge of the insurer, so long as notice is provided to the insurer within a defined period of time. Under Sackett II, adding a vehicle in this manner is not the purchase of new insurance that requires the execution of a new waiver form. Notice to the insurer is required so that coverage can be updated to reflect changes in the vehicles insured.
The conclusion that new waiver forms are not required under Section 1738(c) when a vehicle is added to the declaration pages of an existing policy, also is consistent with Section 1791 of the MVFRL and this Court’s decision in Smith v. Hartford Ins. Co.,
It shall be presumed that the insured has been advised of the benefits and limits available under this chapter[7 ] provided the following notice in bold print of at least 10 point type is given to the applicant at the time of application for original coverage, and no other notice or rejection shall be required,
75 Pa.C.S. § 1791 (emphasis added). As this Court explained,
The General Assembly in writing this certainly knew that the purchase of an insurance policy was not a lifetime contract. Policies are renewed, vehicles are bought and sold, amounts of coverage change. Yet, in spite of this knowledge, the General Assembly has specifically stated that once the applicant has purchased the policy and been informed of the choices available, no other notice or rejection shall be required.
Smith,
This Court also noted in Smith that its conclusion was consistent with the statutory scheme outlined in Section 1705 of the MVFRL regarding election of tort options. The full tort option is the default provision. However, once an affirmative election is made, that election is presumed to be in effect throughout the lifetime of that policy. See 75 Pa.C.S.A. § 1705(b)(1). This Court saw little difference in being able to waive the right to seek non-economic damages and the ability to reject certain optional coverages. Once an election is made, that decision carries forward until affirmatively changed. I perceive no logical reason to distinguish our holding in Smith that an increase in liability coverage does not constitute the purchase of new insurance that would require the execution of new rejection forms from the instant situation where we must decide if adding a vehicle under an existing policy constitutes the purchase of new insurance that would require the execution of a new waiver form. Section 1791 unambiguously states that no new notice or rejection
Turning now to the specifics of the Standard Fire policy, and in accord with the Supreme Court’s instruction that the mechanics of a contractual provision be examined to determine if new waiver forms are required, I conclude that new waiver forms for UM/UIM coverage were not required when Appellees added their 1990 Ford F-150 to their existing policy by way of amending the policy’s declaration pages.
DEFINITIONS
J. “Your covered, auto” means:
1. Any vehicle shorn in the Declarations.
2. Any of the following types of vehicles on the date you become the owner:
a. a private passenger auto; or
b. a pickup or van.
This provision (J.2.) applies only if:
a. you acquire the vehicle during the policy period;
b. you ask us to insure it within 30 days after you become the oumer; and
c. with respect to a pickup or van, no other insurance policy provides coverage for that vehicle.
If the vehicle you acquire replaces one shorn in the Declarations, it mil have the same coverage as the vehicle it replaced. You must ask us to insure a replacement vehicle within 30 days only if:
a. you wish to add or continue Damage to Your Auto Coverages; or
b. it is a pickup or van used in any “business” other than farming or ranching.
If the vehicle you acquire is in addition to any shown in the Declarations, it will have the broadest coverage we now provide for any vehicle shown in the Declarations.
(Policy No. 20185337, Personal Auto Policy at 1; Exhibit A to both Motions for Summary Judgment) (emphasis added).
Paragraph J.l of this policy extends coverage to vehicles shown on the policy’s Declarations. The policy contains no term that would deem this coverage finite. When Appellees added their 1990 Ford F-150 to this existing policy by way of amending the declaration pages, their vehicle was insured immediately and continuously upon acquisition, subject, of course, to the payment of premium. No further notice to the insurer was required.
The after-acquired vehicle clause at paragraph J.2, likewise provides that an added vehicle to this existing policy is covered commencing on the day of ownership subject to providing notice to the insurer within 30 days of acquisition. There likewise is no finite contingency. Coverage is continuous, and if the auto is in addition to any vehicle shown in the declarations, coverage provided is the broadest for any vehicle shown in the declarations. Under Sackett II, vehicles added under this after-acquired vehicle clause would not require the execution of new waiver forms, since the mechanics of this clause, like the amended declarations, extends coverage on a continuous basis. Adjustments to the scope of coverage under an existing policy do not deem the extension of that coverage the purchase of new insurance under Section 1738(c). See Sackett II,
Citing Bumbarger, the Majority concludes that the after-acquired-vehicle provision in the Standard Fire policy is inapplicable because that clause does not apply to vehicles shown in the policy’s Declara
In Bumbarger, the insured added a third vehicle to her policy by way of an “endorsement” and a fourth by way of an “amended declarations page.” After discussing our decision in Sackett II and in Shipp, we automatically concluded that because the additional cars were added under the policy’s endorsement provision and placed on the policy’s declarations page immediately after purchase, the after-acquired vehicle clause became irrelevant.
In my view, it also is error for the Majority and for this Court in Bumbarger, to state that if a vehicle is added by way of an “endorsement,” the vehicle is covered under the “general terms of the policy” and not the after-acquired vehicle clause. See Majority Opinion at 489-90, citing
I also take issue with the Majority’s characterization of Bumbarger. The Majority states that, in Bumbarger, we held “[a]n after-acquired vehicle provision merely extends existing coverage until the insured notifies the insurer that he wishes to insure the new vehicle under his policy with the insurer. The after-acquired vehicle clause extends temporary, stop-gap coverage, thereby protecting the insured until the policy can be amended.” Majority Opinion at 488 (citing Bumbarger,
The Majority’s reliance upon Sackett III is troubling for a number of reasons as well. After remand to the trial court and appeal again to this Court, we were called upon in Sackett III to determine whether the insurer had a duty to provide stacked UIM motorist coverage to the insureds when they added a Ford Windstar to their existing policy through an “endorsement.” This Court held that once the insureds added their Ford Windstar to their policy through an “endorsement,” the insurer had to secure a new waiver to prohibit the insureds from stacking UIM benefits. The after-acquired vehicle clause in that case provided that coverage would apply to the insureds’ motor vehicles “only if you do not have other collectible insurance.” Sackett III,
I believe this Court was in error in Sackett III in concluding that the addition of a vehicle to an insurance policy by way of an “endorsement” was other “collectible insurance” to defeat extension of coverage that might be applicable under an after-acquired vehicle clause.
In Bumbarger, this Court stated that when faced with analyzing a stacking issue, it must focus on the following: “(1) how was the “new” vehicle added onto the existing automobile policy (ie., via endorsement or newly-acquired auto clause); and (2) what is the specific language of the relevant clauses found in the applicable insurance policy.” Id.,
In many of these stacking cases, we are faced initially with the legislative direction under Section 1738(c) that an insured must
Unlike the trial court, the Majority also concludes that Standard Fire’s after-acquired vehicle clause does not apply here and, therefore, it did not find the need to consider whether that clause provided continuous or finite coverage. If it were necessary to address the after-acquired vehicle clause, I would find that the trial court erred when it concluded the clause to be continuous only as it pertains to replacement vehicles. It reached this conclusion by considering that to do otherwise would render the first 30-day notice requirement under the after-acquired vehicle clause superfluous.
Standard Fire’s after-acquired vehicle clause provides that a covered auto is both one shown in the declarations or an auto on the day an insured becomes its owner. However, a replacement or additional vehicle remains only continuously insured if Standard Fire is asked within 30 days to insure the vehicle. With respect to replacement vehicles, the clause provides that a replacement vehicle will have the same coverage as the one it replaces, unless within 30 days the insured desires to change amounts of coverage. In the case of an additional vehicle, the clause provides that the replacement vehicle will have the broadest coverage provided for any vehicles shown in the declarations. The 30-day provisions under this after-acquired vehicle clause serve two separate functions and are not superfluous of each other. With either a replacement or additional vehicle, the insured must notify Standard Fire of the vehicle within 30 days to continue coverage. In the case of a replacement vehicle, which automatically will have the same coverage as the one replaced, the insured must within 30 days notify the insurer if the insured desires not to have the same coverage as the one replaced. The first 30-day period is a notice provision to continue coverage from the date of ownership. The second 30-day provision applies only if the insured desires to change coverage for a replacement vehicle which otherwise would continue with the same coverage as the vehicle replaced. Neither of these notice provisions defeats the continuous coverage provided under the after-acquired vehicle clause. Accordingly, the first 30-day clause does not render the second superfluous.
Finally, I agree with my learned colleague in his concurring opinion that it does not make sense to require a new waiver of stacking when a vehicle is added
In conclusion, I would reverse the trial court’s decision that Appellant here was required to obtain a new stacking waiver when Appellees added their 1990 Ford F-150 vehicle to their multi-vehicle policy at the time of purchase by amending the declaration pages of their policy. Under the terms of Appellees’ policy, coverage existed as of the day they purchased the vehicle and became its owner. This coverage was continuous from acquisition and did not constitute the purchase of “new” insurance under Section 1738(c) that would require the execution of a new waiver form. I reach this conclusion by giving effect to all the terms of the Standard Fire policy in accord with interpretative principles our Supreme Court detailed in Sack-ett II. In my opinion, the Majority errs by ignoring these principles and by attempting to apply the holdings of previous cases without a proper and full examination of the Standard Fire policy terms at issue in this case. I, therefore, respectfully dissent.
. 75 Pa.C.S.A. § 1701 et seq.
. The three cases are Sackett v. Nationwide,
. In interpreting the after-acquired vehicle clause in Sackett II, the Court was guided by two principles of statutory construction. The first, that words and phrases are to be construed according to rules of grammar and their common and approved usage. The second, that when technical words and phrases have acquired a peculiar and appropriate meaning, they are to be construed in accordance with such meaning or definition. Sack-ett II,
. As for its specific holding upon re-argument regarding the policy in Sackett I, the Court noted that the general provisions of the insurer’s policy, including the after-acquired-vehicle clause and its associated definitions, were not in the record. It therefore could not determine the duration of coverage extended under that particular after-acquired-vehicle clause. In light of this, the result in Sackett I was reaffirmed,
. At the time of application and every renewal, an insurer must provide an insured a "declaration of coverage limits and premiums for the insured’s existing coverages.” 75 Pa. C.S.A. § 1791.1.
. The UIM claim stemmed from injuries to the insured’s wife who was considered a "guest passenger” in his vehicle.
. The "chapter” referenced in this provision includes Section 1738,
.In my opinion, a "rejection" is synonymous in this context with a "waiver” that rejects stacking coverage.
. This definition of a “covered auto" includes at paragraph J.2 what has been referred to as the after-acquired vehicle clause. Autos included in the declarations also are insured without reference to the after-acquired vehicle clause.
. Alternatively, this Court held that, since the vehicles were added and not replacements, that the language of the newly-acquired vehicle clause did not automatically extend coverage until and unless the insured requested coverage within 14 days after becoming the vehicle owner. I take no issue. with this part of the Court’s decision.
. In my opinion, this Court in Sackett III correctly determined that the after-acquired
. Although I take issue with the manner in which Sackett III and Bumbarger were decided, this dissent would not overrule the decisions in those cases, since as stated, the terms of the endorsements that were dispositive in those cases were not disclosed, thus preventing us now from giving precedential effect to the interpretation of those provisions.
Concurrence Opinion
CONCURRING OPINION BY
I join the Majority opinion.
The Sackett trilogy and Bumbarger compel the result that a new stacking waiver is required whenever a vehicle is added to a policy.
If I were writing on a tabula rasa, I would limit the requirement of a new stacking waiver to the addition of a vehicle to a single vehicle policy. When the one-car policy was originally purchased, there was likely nothing to stack because there was only one vehicle, and no reason for the policyholder to pay for stacking coverage that did- him or her no good. When a second vehicle is added, that is usually the first time that the policyholder has to decide whether he or she wants stacking. Then it makes sense to require the insurer to provide a stacking waiver.
On the other hand, where a vehicle is added to a multi-vehicle policy, there is no reason to believe that a policyholder who ■has already rejected stacking, with its higher premium, would suddenly have a change of heart and want stacking. In that situation, the one we have here, it does not make sense to require a new waiver of stacking.
Nonetheless, the case law is what it is, and the Majority parses it correctly in my view, and thus I join.
. The insurance industry has no one to blame for this result other than itself. The industry writes the policies and could correct its problems.