Richmond v. Prudential Property & Casualty Insurance

ELLIOTT, BROSKY, Before FORD BECK, JJ. BROSKY, J. prop- We decide whether an insurer

erly denied underinsured motorist cover- age because the claimant was a motorcycle on a non-owned at the time Kristin Plaintiff-appellant the accident. Richmond made a claim for underinsured motorist benefits under a issued Defendant-appellee Property Prudential (Pru- Casualty Company Insurance dential), self-propelled which Prudential denied. The A motor vehicle is a land required regis- vehicle which is parties proceeded then to arbitration and your tered for use on the law state majority of the arbitrators found public roads. against the insured and in favor of Pruden- Appellant tial. then filed a Petition to WHO IS INSURED (INCLUDES Vacate the Arbitration Award with the IN CAR A SUB- YOUR CAR) County Pleas, Lehigh Court of Common STITUTE appeal which was also denied. This fol- You a resident relative and are insured upon a careful lowed review your using while car or a substitute car matter, we reverse. part. people covered under this Other your are using insured car or a ¶2 dispute, The facts are not in part substitute car covered under this rulings only ques below concerned you give them it. permission to use Accordingly, tions of law. scope our you They way must use the car plenary. review is Kmonk-Sullivan v. intended. State Farm Mut. Auto. Ins. 746 A.2d IN A CAR NON-OWNED (Pa.Super.1999), appeal grant You and a resident relative are insured ed, while a non-owned car. using The must now determine whether the trial give permission owner must to use it. It court committed an error in denying of law way must be used intended Appellant’s Petition to Vacate the Arbitra owner. tor’s Award. HIT BY A MOTOR VEHICLE You and a resident relative are Appellant insured suffered rid- while if hit an underinsured motor vehicle ing as a on a motorcycle operat- pedestrian. while a party, ed a third Appel- the tortfeasor.

lant made a claim the tortfeasor’s UNDERINSURED MOTORISTS liability and recovered the COVERAGE available limits. this re- (see If you have this the Decla- covery inadequate fully compensate rations), we will limit up injuries, for her and she made a bodily injury liability for that is covered claim for underinsured motorist coverage (wheth- part when insured under the policy purchased car) Prudential occupying er or not is struck father, her with whom she residing an underinsured motor vehicle. Our the time of the accident. Appellee Pru- is based on the amount that an payment dential denied coverage based on the fol- legally insured is entitled to recover for lowing bodily injury policy: its insurance but could collect the owner or driver of the underinsured

DEFINITIONS motor vehicle because: ... The owner CAR responsible or driver for the accident automobile, A private passenger car is a liability has insurance or a bond wagon, station jeep-type van with that are than the full with limits less four designed wheels which is for use legally amount the insured is entitled to mainly pick-up roads. A truck damages. recover capac- with four or wheels and a load six 16a; original). R.R. 36a-37a. ity of one ton or less is also a car. entitled, 4 Part 5 of the “UN- PA MOTOR VEHICLE DERINSURED MOTORISTS PAC/5 {ED.7190) Court stated Supreme HIT A 7 As our IF ARE BY MO- YOU Insurance Paylor THAT IS UNDERIN- TOR VEHICLE Hartford (1994): 1234, 1235 continues, OB- This OUR SURED.” (PART 5), of a contract of insur- interpretation LIGATIONS TO YOU courts to a matter of law for the ance is provides: interpreting an insurance decide. UNDERINSURED MOTORISTS contract, the intent of must ascertain we COVERAGE by the lan- parties as manifested (see you the Dec- If have this agreement. When guage of the written larations), limit of pay up we will to our clear and unam- policy language bodily injury that is covered liability for to the lan- biguous, give we will effect (wheth- when an insured part guage under this of the contract. car) a is struck occupying

er or not omitted). (internal citations Paylor, supra, vehicle. Our an underinsured motor However, “if it ambiguous is is provision amount that payment is based on other of different con- reasonably susceptible to recover legally an insured is entitled being of understood capable structions and bodily injury could not collect for but Bowersox v. in more than one sense.” the owner or driver of the underin- Casualty Progressive Insurance motor vehicle because: (August sured WL provision of a Pa.Super.). “Where UN- THE OR DRIVER IS OWNER is ambiguous, policy provision the policy is DERINSURED and in favor of the insured to be construed responsible for the The owner or driver insurer, the the drafter against or a lia- liability accident has Blind Standard Venetian agreement.” that are less than bility with limits bond Insurance Empire v. American Co. legally is the full amount the insured 300, 469 A.2d damages. to recover as entitled ¶ Part 5 paragraph The first Appel interpreted could be to mean original). R.R. at 36a. could not collect UIM benefits based lant ¶ alleges inter alia that this provision because she was on this should be con- ambiguous is and by an underinsured motor vehicle. “struck” provide the insurer to cov- against strued not have been Appellant would “non-car” exclusion is erage, and that this para the covered under considerations as against a car passenger graph she were Financial Motor Vehicle set forth and an accident whose driver caused (MVFRL). Responsibility Law underinsured, not have she would because motor by an underinsured been “struck” follow, we find the reasons that 6 For vehicle. error of committed an that the trial court (1) motorist Furthermore, the underinsured that the sec- law because we note (UIM) describing of the insurance of Part paragraph ond motor preclude as to the underinsured ambiguous are so or driver of issue owner (2) Prudential; accident, clearly this for the responsible in favor of vehicle finding or driver policy con- antecedent the owner against has as its exclusion is vehicle, mentioned, even in the Motor Vehi- of the motor as set forth siderations paragraph. first Under emphasized Law Responsibility cle Financial issue, policy at (MVRFL). both the MVFRL the definition of “motor against vehicles” would anee benefits her own Prudential Thus, motorcycles.1 include an applicant policy. example, For if an automobile and coverage reading policy pro- collide, a motorcycle having passen- both covered, vision expect would mini- gers who sustain serious which mally, when “struck” an underinsured policies exceed the limits of the vehicle, motor phrase however that in- vehicles, the respective passen- then both terpreted. gers reasonably will make a UIM claim policy. their own Assume both 10 Later in Part policy, in the passengers are insured Prudential poli- section entitled “HOW WE WILL SET- (PART 5) cies identical to that the instant ease. If TLE A CLAIM LIMIT OF fault, the automobile driver is at COVERAGE,” then the policy provides: passenger in the automobile will not recov- you If or a resident relative insured er, passenger motorcycle but the on the part under this is in an accident: motorcycle fault, will. If the driver is at In a car that is insured then the automobile will recover part will not more than —we motorcycle but passenger will not. the limit of coverage for Such a result contrary to the shown on appli- the Declarations express purpose of the MVFRL. We cable to that particular car. therefore find the pertinent policy lan- 2. In a car that is not by insured this guage ambiguous applied as to the part or while a pedestrian —we such, facts of the instant case. As the will not more than the limit of language must be construed favor of the coverage for this part shown on insured. the applicable any Declarations to car one insured part. under this even if the lan R.R. at 38a. in original). Thus guage of this policy were not ambiguous, this section apparently allows coverage for language we also find the to insureds who are cars that are not be at odds with the purpose of UIM cover “by 5, insured part” applicable [Part age under the MVFRL and against the to coverage], or pedestrians. who are underlying considerations the Nevertheless, reading pari section MVFRL. We stand our assertion that materia with the section describing the “[although do courts not have a license to obligations insured, insurer’s to the contract, rewrite an insurance the insurers insured in a car not insured Part 5 do a not have license to rewrite statutes.” only would be if covered “struck” an Kmonk-Sullivan State Farm Mutual underinsured motor vehicle. The policy Co., Automobile Insurance 746 A.2d 1118 thus no makes distinction between pas- (Pa.Super.1999).

senger of a ear passenger and a on a Kmonk-Sullivan v. motorcycle 12 In State injured who is through the Co., Farm Therefore, Mutual Automobile Ins. fault of the regardless driver. (en banc), involved, type of the ap (Pa.Super.1999) vehicle if the driver insurance, pas- peal granted, does not have sufficient 565 Pa.

senger can make no claim for public underinsur- this Court examined the poli- Also, 1. See Definitions power section above. electric obtained from overhead MVFRL, wires, a motor vehicle is defined as "a trolley operated upon but not rails.” self-propelled except vehicle which is one § 75 Pa.C.S. 102. propelled solely by power which is human MVFRL, of automo- ment of the drivers underlying the MVFRL cy considerations case, required carry in that “our focus in decid to uninsured and stated biles were ing uphold whether to an insurance but not underinsured coverage, motorist exclusion, deny coverage to operates Id., which 40 P.S. coverage. citing motorist injured 1984). an is the factual circum party, to (repealed §§ 1009.101-1009.701 particular case.” Kmonk- stances in a car ac- involved Accordingly, person Sullivan, 1123, citing Paylor v. Hart at position was in a better cident Ins. uninsured, negligent driver who was ford that are “Contract had insurance but rather than one who and are public policy, in accord with not inadequate. liability limits were whose partic are advantageous to the insured MVFRL, in legislature passed The subject finding invalidity.” ularly situation, requir- rectify attempt Kmonk-Sullivan, 1123, citing at Allwein v. offer underinsured motor- ing insurers to Pa.Super. Mut. Ins. Donegal Id., Pa.C.S. coverage. citing ist (en banc) (other (1996) cita A.2d 744 1731(a). § in the present The insureds omitted). presumed “It is also tions Kmonk-Sullivan, are ex- just as [legislature intends to favor actly types of individuals whom UIM opposed any private inter interest designed protect —both Kmonk-Sullivan, 1123, citing at All est.” a tort- injured by individuals cases involve Therefore, close or “[i]n wein at 751. coverage. inadequate feasor with cases, in interpret we must doubtful at legislature tent of the coverage for the insurance to favor argues that be Appellee Kmonk-Sullivan, the insured.” riding as a cause citing Allwein at 751. motorcycle, she should not be entitled on Kmonk-Sullivan, In this Court was coverage her own to underinsured because gov on to determine whether called voluntary choices or action increased in vehicle exclusions an automo ernment punish Appel risk of loss. refuse to public policy. violated order policy bile motorcycle. If we riding lant for on case, analysis our in that we as guide exclusion, be, this we would uphold were to underlying intent legislative certained the time an saying any in effect insured stated, “the MVFRL the MVRFL. As we anything to “increase the motorist does enacted, part, to establish a liberal was loss,” right an insurer has the risk of underinsured mo compensatory scheme of By coverage. from exclude him/her 1123, citing Id. at Mar protection.” torist rationale, an insurer prevent what would Ins. roquin v. Mutual Benefit to an insured denying coverage from UIM “The PaSuper. wearing a seat- motorist if was not he/she liberally construing the MVRFL policy of or her actions by merely arguing belt his indemnifying upon is based Clearly, this the risk of loss”? “increased they harm suffer victims of accidents for in rights of the result would fetter the Id., citing Pennsylvania highways.” the intentions sured frustrate motorist Allwein 751. “Underinsured MVFRL. protect oneself purchased insurance is Kmonk-Sullivan, 15 As we stated ... whose insurance from drivers ... purpose coverage of UIM “the entire one’s con beyond decisions are purchasing to the insurer pass is to the risk loss citing Id. at trol.” fully compensate cannot when a tortfeasor Before the enact- Paylor, supra at 1238. injuries.” the insured for his Id. at 1125. owned vehicle primarily pur- business poses although permitted We refuse to believe that she was to drive some- personal employer it for use. Id. Her by taking how increased her risk of loss notify And, types failed to her of the of insur- motorcycle. ride on a it would be coverage purchased ance he had for the against of the MVFRL to allow vehicle, given nor option was she an coverage insurer to exclude this be- Plaintiff, change coverage. such insurance cause the insured was while she case, Appellant’s like father had was a in a two-wheeled motor purchased coverage UIM on vehicles she vehicle, rather than a four-wheeled motor accident, After owned. she recovered vehicle, in light the fact that the in- policy, the tortfeasor’s family sured’s voluntarily purchased UIM however, because the insur- tortfeasor’s coverage and reasonably expected to be proved inadequate, plaintiff ance filed a policy. covered under this coverage claim for employ- UIM under her The cases referenced Appel- policy. er’s When she was informed that lee in support position of its Ap- that the employer her coverage, did not have UIM pellant’s “voluntary played choices” a part she filed a claim for UIM benefits in creating the distinguish- risk of loss are personal policy. her Prudential denied able. example, Paylor, For supra, a this claim based on the exclusion for family car exclusion upheld by was “regularly in- used non-owned car” not Court, Supreme under the limited facts of policy. panel sured under this A of arbi- Paylor, case. trators found the exclusion violated Paylor, 1234. In family car exclusion policy, the trial court ap- affirmed and an upheld only plaintiff because the peal A plurality followed. of this Court that case attempting to convert under- concluded that the “regularly used non- insured coverage motorist into liability owned car” exclusion was void as coverage. Also, in Marino v. General public policy. Id. at In reaching Accident Ins. 416 Pa.Super. 610 decision, particularly this Court found per- A.2d 477 upheld this Court case, plaintiff suasive the fact that in that exclusion from uninsured/underinsured as in the had present done all she motorist when the insured vehi- could to have as she carried being operated cle was transport per- to vehicles; however, it on personal her three fee, sons/goods for a because insurance influence, she could not and did not know vary rates passenger from to commercial employer’s of her it decision to have use, and this cost should be by borne those case, company the car. In that plurali- the who utilize vehicles for pur- commercial ty public policy stated “the we find most poses. persuasive is that underinsured motorist ¶ 17 find analysis instructive the set (UIM) coverage first-party coverage is and in forth Burstein v. Property Prudential necessarily person, the therefore follows Casualty and Insurance Company, 742 Burstein, 688, citing not the vehicle.” at (en banc), A.2d (Pa.Super.1999) 684 ap- Co., Wolgemuth Harleysville v. Mut. Ins. 670, peal granted, 563 Pa. (1988) (en 759 A.2d 919 51, Pa.Super. 370 Court, banc, banc) added). where sitting en “This means “regularly addressed the used non-owned” that individual purchases underin- motor vehicle plurality coverage, exclusion and the that individual sured motorist against found it to be void as public policy. protected negligent will be from drivers Burstein, In plaintiff company- inadequate coverage regardless the used a with of the 278 happens er than is of

vehicle which he or she to be a four-wheeled motor vehicle 688, injured.” Id. little import 585 A.2d 1145. here. Therefore, by under the rationale set forth ¶ 19 Accordingly, we believe the Court, Burstein, voiding the exclu- language ambiguous preclude so to as case, “regularly sion in this like the used Prudential, finding in and we be- favor car” non-owned exclusion lieve is void as the “furthers the poli- aforementioned legislature considerations set forth the greatest possible cies cov- providing when it the MVFRL. adopted [plaintiffs], erage by compensating to the Therefore, 20 we the trial reverse them for caused a tortfeasor court’s of the to denial Petition Vacate coverage,

who had al- inadequate and Award. relin- Arbitrator Jurisdiction lowing them recover underinsured mo- quished. coverage they specifically torist had paid ¶ BECK, J., Dissenting Opin- 21 files their policy for under with [Prudential].” ion. Id. at 688-689. find reasoning 18 We cited J., BECK, Dissenting. plurality persuasive ap- Burstein and majority that the in- The concludes to the case. Further- plicable instant stant are am- insurance more, allowing we believe Prudential biguous, contrary to the purposes uphold such exclusion is as void statutes, against public policy. relevant against public Appellant policy. I respectfully dissent. case was while a on a interpretation of an own, motor vehicle that she did not of law contract is a matter for the courts (who the tortfeasor happened be the Paylor decide. v. Ins. Hartford driver) inadequate had to com- Pa. A.2d injuries. pensate for her She contract, we interpreting an insurance precisely type of individual meant parties must the intent ascertain protected by coverage. underinsured of the written manifested father pre- Her elected to additional unambiguous A agreement. clear and miums for motorist cover- underinsured given plain contract must its provision be expectations and he age, had reasonable contrary unless to do so be meaning, would that he would receive the benefit expressed public to a Win policy. (See

which he was Nationwide paying. Ins. drim Nationwide Cosenza, Ins. Co. v. 258 F.3d Mutual (1994) (exclusion (3d Cir.2001)) (where WL for resident relative who Appeals Third Circuit stated Court driving his own uninsured vehicle law, public Pennsylvania that under MVFRL; valid and enforceable under the permitted is is violated when an insurer legislative num purpose to decrease payment of under to evade UIM benefits drivers). ber of uninsured conditions, an policy where insured has a expectation coverage policy provision 3 relevant states: reasonable you coverage “If paying optional premium [Underinsured virtue of for have this Coverage], pay up for un- Motorist we will coverage injuries attributable to added). tortfeasor), injury limit of for that is bodily derinsured covered an insured daughter That his while rid- under when (whether car) occupying motor rath- not is struck ing on two-wheeled vehicle or by an underinsured motor vehicle ...” from motorist cov uninsured/underinsured allegation There was no in erage this case that for whose driver did not appellant permission was “struck” an underinsured have up use vehicle was held); Coverage motor vehicle. policy Mercury St. Paul Ins. Co. v. Cor (1993) bett, 54, is otherwise limited to caused Pa.Super. 630 A.2d 28 cars, (exclusion the definition of which antique policy upheld); does car Co., motorcycles. not include I agree therefore Marino v. General Accident Ins. (1992) (exclusion 1, with the trial court’s Pa.Super. conclusion that these 610 A.2d 477 policy provisions clearly and unambiguous- coverage where vehicle was used to ly coverage exclude under the transport facts of this or for a fee persons property case. upheld). prohibit The MVFRL does not from limiting insurer underinsured mo unambiguous Even clear and insur- coverage torist to damage caused cars policy language ance may conflict with an only.2 statute, situations, applicable such give we cannot effect to the contractual majority 6 The nonetheless concludes provision. policy Kmonk-Sullivan language State Prudential’s is void as 1118, Farm Mut. Auto. Ins. against public policy. 746 A.2d (Pa.Super.1999), appeal granted, 566 “Public is to be ascertained (2001). 647, A.2d 1285 legal reference to the laws and prece- concludes, argues, majority from general dents consider- contrary this case is supposed public ations of interest ... It statutes, to the relevant and void as only given is when is so obvious- against public policy. ly health, public for or safe- ty, morals or welfare that there is a

¶ 5 The Motor Vehicle Financial Respon unanimity virtual opinion regard to Law, sibility §§ 75 Pa.C.S. 1731-1738 it, may that a court itself the constitute (MVFRL), is to be liberally construed community [declaring voice of the afford greatest possible coverage to what not in is accord with injured claimants. Danko v. Erie Ins. Ex ...” policy] change, 428 Pa.Super. 630 A.2d 586-87, Paylor, supra at 640 A.2d at aff'd, 538 Pa. (citations omitted) (1994). (family car exclusion cases, close or doubtful However, public policy). does not violate court should meaning resolve the of insur only the clearest of cases that a policy provisions ance legislative or the may court an alleged public policy make intent in coverage favor of for the insured. judicial the basis of a decision. Eichelman that, there is no doubt al v. Nationwide Ins. though underinsured motorist coverage 1006, 1010 insurers, must be 75 Pa.C.S. offered 1731(a), § several different kinds of exclu purpose 7 The motor- underinsured sions from such have nonetheless protect ist is to the insured from See, upheld by been e.g., our courts. Na negligent the risk that a driver of another v. Cummings, injury tionwide Ins. Co. 438 Pa.Su vehicle will cause to the insured and (1994) (exclusion per. inadequate coverage compensate have determining validity 2. The fact that the form of Prudential’s insur- of exclu approved by ance the insurance sions. v. Amica Mut. Ins. Hall commissioner, though certainly not conclu- sive, "significant” has been declared a factor negligence. his for the caused LITTMAN, Appellee Eric 585-89, 640 A.2d at 1235-

Paylor, supra at forth 36. But our cases do not set type favor of the Sylvia HOEK, Appellant. VAN In- coverage here denied Prudential. deed, that certain kinds the cases indicate Pennsylvania. Superior Court of increases the of conduct the insured 13, 2001. Submitted Nov. coverage injury risk of such that denial of justified. example, For certain exclu- Filed Dec. may against public policy sions not be voluntary

where the insured’s own choices In- increase the risk of loss. actions “part in such eases have a creat-

sureds loss,”

ing the risk that contributed to the identity

and have “control over the injuries.” their

tortfeasor caused

Kmonkr-Sullivan, supra at 1125. exclusion from un- Although govern- coverage

derinsured motorist

ment vehicles was held to be owned penalized

against public policy because beyond their

the insureds “for a factor tortfeasor,”

control, identity ... reasoning applicable

such is not this case.

denial case, involving passenger

1126. This analogous more to cases motorcycle, upheld by were

where exclusions own

courts in because the insured’s

voluntary or action increased the choices Id. at 1125. I would there-

risk of loss. policy provisions, Prudential’s

fore hold into account the increased risks

which take are not by motorcycle riding,

occasioned and would affirm

contrary public policy, denying trial court’s decision underin- appellant.

sured motorist

Case Details

Case Name: Richmond v. Prudential Property & Casualty Insurance

Court Name: Superior Court of Pennsylvania

Date Published: Dec 27, 2001

Citation: 789 A.2d 271

Court Abbreviation: Pa. Super. Ct.