Lead Opinion
Opinion by
This аppeal arises from a judgment for the plaintiff-insured, Mr. Sands, in the amount of $10,000 after a jury trial below.
The facts of the case, though tantalizingly incomplete in the record, may be stated as follows, giving the plaintiff the benefit of all the favorable inferences and interpretations to which he, as the verdict winner, is entitled: In April of 1966, Mr. Sands came to Universal Insurance Agency in order to purchase insurance for his 1964 Chevrolet. At that time he told Universal’s
Unfortunately for plaintiff, Universal neither explainеd nor mentioned to him that the insurance application form carried a waiver of uninsured motorists coverage which read as follows:
“Uninsured Motorist Coverage has been explained and offered to me and I do [ ] do not [ ] wish to accept this coverage at this time.
“I understand that if I have not accepted Uninsured Motorist Coverage at this time, I may at any time have such coverage added to my policy only by sending written request by certified mail, with $2.00 to the home office of the company and to take effect when written endorsement is issued by an authorized representative of the company.”
For reasons which remain unknown, Universal checked the “do not” box on the application. Thereafter Granite accepted coverage and plaintiff received a copy
In April of 1967, at plaintiffs request, the policy was renewed and plaintiff again paid the premium as charged by Universal, directly to Universal which deducted its commission and sent the balance to Granite. Once again plaintiff signed the application in blank; however, this time Universal merely filled in the preliminary language identifying Mr. Sands, his policy number and so forth. Over the body of the application Universal printed in lаrge letters “No Change.” Coverage was accepted by Granite, and the policy again was prepared and forwarded to plaintiff by Universal. Once more plaintiff did not examine it.
In Marqh of 1968, Universal sent plaintiff what was, ostensibly, a form renewal of policy notice informing plaintiff that his current insurance policy would lapse and that Universal had a new policy to replace it and that he could come to the officе to discuss it if he wished. Handwritten at the bottom of the letter was the message: “Your policy expires April 8th. Please send $47.00 to renew your policy.” Ironically, the form letter closed with the warning, in bold-faced type: “Remember, When You Ride Without Auto Insurance, You Gamble All You Own.” Heeding that grim caveat, plaintiff promptly called Universal to advise them that he wished to renew. He also informed them that he did not wish to pay for the insurance in $47.00 installments, but would rather pay the entire yearly premium as soon as possible. He immediately paid $100.00, and within two months paid the premiums in full. Universal, however, sent Granite neither a renewal application nor their share of plaintiffs payments.
In June of 1968, a car driven by an uninsured motorist struck a car in which plaintiff was a passenger, seriously injuring plaintiff. The driver of the automo
The two principal questions raised by this appeal concern the extent of Universal’s authority to bind Granite to provide a contract of insurance; and, the validity of the purported waiver of uninsured motorists coverage which appeared in plaintiff’s initial application for insurance.
I.
Granite’s principal argument against the existence of authority in Universal to bind them to provide insurance coverage rests upon a distinction more useful in the insurance industry than in the law — the distinction between a broker and an agent.
The facts developed at trial clearly indicate that in the lexicon of the insurance world, Universal was a
The distinction between brokers and agents is no more helpful in ascertaining the extent of Universal’s authority to bind Granite in the instant case. In fact, even if we were to determine that Universal was, acting in part as an agеnt for plaintiff in procuring insurance for him, that would not preclude our finding
The facts developed at trial in the instant case amply demonstrate that Universal had apparent, if not actual, authority to bind Granite, unless and until Granite notified the insured of the denial of coverage and refunded the premium to the extent it was not earned.
First, plaintiff’s exhibits, which included various application forms, policies and receipts, shоw that the prior periods of insurance began on April 8, 1966, and April 8, 1967, in both cases running for twelve-month terms. Yet, in neither case were the policies “approved” by the home office on or before April 8th. Usually such approvals did not occur for several weeks after the coverage purportedly began. If we accepted the insurance company’s argument that the policies were not in force until apрroved by the home office, we would necessarily be finding that each year plaintiff purchased three to four weeks of insurance for which he received no coverage — the period of time between the “effective date” of the policy and its approval by the home office.
Second, the plaintiff produced his 1966-67 insurance policy from the records of Granite, which Granite did not repudiate and which listed Univеrsal Insurance Agency as both an “Authorized Representative” and a
Finally, the president of Granite, Mr. Easterby, took the stand and admitted that Universal was permitted to set rates and deduct its commissions directly from the premium payments as it received them. In fact, compared with the other agencies which transacted business for Granite, Universal stood in a unique relationship— they were the only brokers who were permitted to establish insurance rates for Granite. Furthermore, in 1966 Universal and Granite both submitted an application to the Insurance Commissioner of the Commonwealth to license Universal as an agent for Granite. Although the insurance commission refused to grant the license, the application itself indicates the close working relationship between Universal and Granite.
As one commentator has suggested: “[w]here a broker holds himself out as a general agent, solicits a policy, collects a premium a part of which he retains as his commission according to his custom, and a policy is issued upon information procured by him, he is an agent of the insurer by implication as to the insured who, in good faith, dealt with him as such.” 3 Couch on Insurance 2d, § 26:25 (1960). See also Benanti v. Security
Tlie courts of Pennsylvania have long concurred in this principle. In Thomas v. Western Ins. Co.,
II.
Granite’s second contention is that even if Universal had the authority to orally bind Granite to a renewal of the outstanding insurance policy, the renewal would be on the same terms and conditions as the policy it replaced. Therefore, since plaintiff’s initial application contained a waiver of uninsured motorists coverage, such coverage was not provided in the renewal policy
It is of course ordinarily true that one is bound by the representations which he has authorized another to make on his behalf. Restatement of Agency, 2d, § 284 & Comment a. It is also hornbook law that one is not excused from contractual obligations simply because he has failed to read the writing: Applebaum v. Empire State Life Assur. Soc.,
In Harleysville Mut. Cas. Co. v. Blumling,
Employing such policy considerations most recently our Supreme Court found in Johnson v. Concord Mut. Ins. Co.,
“ ‘[TJhat portion of the statute permitting rejection of uninsured motorist coverage detracts from the public policy considerations and must therefore be narrowly and strictly construed’ ....
“Recognizing these previously expressed public policy considerations, we must conclude that a waiver of uninsured motorist coverage is effective only if the waiver manifests the intentional relinquishment of this legislatively granted right of insurance protection. ... To constitute a waiver of a legal right, there must be a clear, unequivocal and decisive act of the party with knowledge of such right and an evident purpose to surrender it . . . .” (Citations omitted.)
In the instant case plaintiff expressed to Universal his desire to be “fully insured.” The unrefuted facts clearly indicate that Universal never explained to plaintiff that he was entitled to uninsured motorists coverage, much less what that coverage comprehendеd. Nor would one expect an informed applicant to decline such coverage. As one commentator has stated: “In those
Judgment is affirmed.
Jacobs, J., concurs in the result.
Watkins, P. J., dissents.
Notes
These figures represent standard limitations of liability in the .policy: $10,000 maximum per person per accident; $20,000 maximum per accident; and $5,000 maximum in property damage per accident.
Plaintiff testified that until the accident he had never heard of uninsured motorists coverage. He stated that it was only upon his seeking the assistance of counsel that he learned about such protection.
The appellant also challenged several portions of the trial court’s instructions to the jury. Those contentions are answered, either explicitly or implicitly, in the larger discussion in text below and do not warrant individual treatment herein.
This case, therefore, is substantially different from Taylor v. Crowe,
Granite also argued that their relationship with Universal had ended prior to plaintiff’s accident. However, if Granite and Universal had concluded their relationship prior to the time that plaintiff’s policy came up for renewal, they should have notified plaintiff and others in his position if they wished to avoid liability arising from prior dealings with Universal. “[I]t may be necessary to give third persons notice of the faсt of voluntary termination by the insurer in order to avoid a continuation of the agent's power to bind the insurer by contracts with third persons.” 3 Couch on Insurance 2d, § 26:28 (1960). So far as plaintiff knew, Universal was still acting with authority to bind Granite when it offered to renew the insurance policy. The acceptance of this offer, which included an immediate and substantial premium payment, therefore bound Granite to provide coverage until it notified plaintiff to the contrary. Id. at § 26:50. In such cases payment to the insurer’s agent is equivalent to payment to the insurer. Gosch v. Firemen’s Ins. Co.,
Concurrence Opinion
CONCURRING Opinion by
I join in Judge Cercone’s opinion and only wish to add a comment regarding practice.
This suit is based upon a written contract of insurance, yet no copy of the policy is included in the complaint (or anywhere else in the record), nor is its absence explained. This is a violation of Pa. R. C. P. No. 1019 (h), and although presumably any objection is long since waived, it is no aid to this court to omit the document that is central to the controversy.
If the policy did contain a standard uninsured motorist clause (including a common law arbitration provision), and then the insured signed an agreement waiving that clause’s protection, it would follow that the lower court had no jurisdiction over the dispute. This would be so because the arbitration provision in the uninsured motorist clause would vest jurisdiction in the
Here, however, both parties have argued on the basis that there was no uninsured motorist clause in the policy. It can therefore be presumed that there was none.
It should be noted that if there were an arbitration clause in the policy, not even an explicit stipulation by both parties that they did not wish to submit the dispute to arbitration would properly take the dispute out of arbitration and into the courts. Allstate Ins. Co. v. Taylor,
Johnson is distinguishable irom cases such as B. Axe Ent. v. N. E. Fire Ins. Co.,