Tenos v. State Farm Insurance

CORRECTLY HELD THAT TENOS’S SOLE, Before DEL HUDOCK and ORIE ‘SOLELY ATVS WERE USED [SIC] MELVIN, JJ. THE FOR THE SERVICE OF IN- SURED LOCATION’ AND WERE MELVIN, Judge: ORIE POLICY, COVERED UNDER THE cross-appeals This case involves from [SIC] DESPITE TENOS’S ADMIS- 8,1995 March order of the Court of Common USED THAT THE ATVS WERE SION County summary entering of Butler Pleas FOR RECREATIONAL PURPOSES? judgment State Farm Insurance 5). (State Brief Farm’s Farm) (State Company on the THE TRIAL COURT [WHETHER] policy, coverage under their homeowner’s ITS WHEN ABUSED DISCRETION (Teños) denying Gregory and also Teños’ TO IT DENIED TEÑOS’ MOTION Complaint for Leave to Motion Amend INCLUDE TO AMEND COMPLAINT Prac- a count under the Trade add Unfair A THE UNFAIR UNDER CLAIM (UTPC- tices and Consumer Protection Act TRADE PRACTICES AND CONSUM- PA). summary grant reverse LAW, ER WHICH PROTECTION summary entry of judgment and remand for THE STAT- CLAIM WAS WITHIN judgment other- favor State LIMITATIONS? UTE OF amend. the denial of leave to wise affirm 6). (Teños’ Brief at procedural relevant facts back- The issue, first we note ground cross-appeals are follows. As of these summary judg- reviewing granting orders Farm’s denial This action arises State ment, scope plenary. analysis by examining our review our policy pertinent appeal. Farm Mutual Auto. Ins. Co. v. Universal - Underwriters Ins. 549 Pa. B COVERAGE PERSONAL PROPER- previously This has sum- Court TY appropriate marized standard as follows: Property Not do Covered. We

First, pleadings, depositions, the an- cover: interrogatories, swers to admissions on file, together affidavits, must demonstrate that genuine there exists no any engine propelled c. or motor Second, party of fact. moving

issue the machine, including parts, cle or the de- judgment must be entitled to as matter signed for movement on We land. do moving party of law. The has the burden cover those used for the service proving of genuine that no issue materi- of of insured location and not licensed However, al non-moving fact exists. public highways; (emphasis for use on may upon added) party not rest averments con- pleadings; in non-moving tained (Special Farm Policy State Homeowner’s party must is a demonstrate there 3) Complaint. Form Exhibit A attached to genuine issue for trial. The must court Farm language State asserts light examine the in the record most favor- policy unambiguous. is clear and State non-moving able to resolve pro- Farm contends that ATVs are motor all Fi- moving party. doubts pelled designed. vehicles for movement on nally, entry summary an judgment is land and thus are not covered unless “used granted only right in cases where the is solely for the service clear and free of doubt. We an reverse claim, part investigation As of the of Teños’ entry summary judgment when the trial took a recorded statement from court commits an error law or abuses its wherein he admitted that he used the discretion. primarily purposes ATVs for recreational premises.1 O’Connor, and some work around the Con- Janson v. Cozen and Pa.Su- 242, (1996) sequently, argues State Farm Teños’ per. 415, quoting admitted use falls outside the Trust, limited Realty Blackman Federal Inv. (1995). exception. by pointing Teños counters out Pa.Super. 141-42 Moreover, that since State Farm does not define the question whether a is claim phrase, inherently it is ambiguous, and there- policy’s coverage by within a an barred correctly fore the trial court construed the question may exclusion is a of law that be language coverage. in by favor of summary decided motion for judgment. phrase Teños further asserts that in Casualty Coach Lebanon Co. v. Carolina question enough broad to include recre- Ins. 675 A.2d 279 premises use on within mean- ational reviewing such determination accepted ing of service. The trial court Te- “we bound the trial court’s conclu- argument phrase nos’ held that was law, may sions of but draw our infer- own interpreta- ambiguous that a reasonable ences and reach our own Id. conclusions.” tion could include recreational on the use principles 675 A.2d .at 283. With these in property. mind, propriety we consider the granting summary judgment. following guided We are principles deciding this issue: requires The first issue our examination interpreting whether the trial court was in deter- correct When an insurance con- tract, mining unambigu- that Teños’ were ATVs covered words that are clear and policy. begin given plain ordinary homeowner’s insurance must their ous Reply 1. In his to New Matter Teños made admits statements therein. authenticity of the recorded statement and the found, pub- designed meaning. ambiguities are for travel Where ized land vehicle subject registra- light to motor vehicle they must most lic roads or be construed argued that The insured whether his favorable to the insured. ‘a con- tion.” storage was dead was a ambiguous by tract is not rendered sandrail fact, of motor vehicle parties agree mere fact that do not and the definition exclusionary ambiguous. upon proper An ambi- rendered the clause construction.’ arguments, the guity policy provision rejecting these Watamura exists “[tjhere ambiguity reasonably susceptible opined: of more than one engine provision. meaning. policy pro- The sandrail was ‘Courts should read designed ambiguities, possible, if vehicle visions avoid motor land, create movement on and was therefore exclud- torture them.’ (citations omitted). dicta, Although ed.” Id. Watamura expressly that a sandrail court also found Homes, Co., Ryan Indemnity Inc. v. Home exception “did not fall within the for vehicles 342, 939, 436 941 ‘used for the service the insured any Our research has to uncover Penn- failed location’ such as a tractor-mower.” Id. Im- sylvania appellate interpreting cases the plicit holding in this is the court’s under- meaning provision question. How- exception that the standing limited ever, Farm from cites several eases requires propelled the motor exclusion jurisdictions other that have had the occasion cle to serve the land. very provi- same a review the or similar sion. Similarly, in Fontenot v. Louisiana (La. Co., Bureau Mutual Ins. 552 535 So.2d

In Wilhite State Farm Fire and Casual- App.1988), Appeals Co., the Louisiana Court of ty (Ala.Civ.App.1989), Ins. 541 22 So.2d motorcycle found that stolen three-wheel the Alabama Appeals Court of Civil reviewed was not covered under a homeowner’s the exact same held that a and vehicles, that excluded losses “motorized stolen Suzuki 4-wheel off-road recreational except pertaining such vehicles to the service properly coverage vehicle was excluded premises.” 2(e). (emphasis Id. at 553 add by Section The court found the lan- ed). parties agreed, even Interestingly, guage “plain unambiguous” be and and by stipulation, that evidenced their that “the exclusion clause could not more was which three-wheeled bike not vehicle straightforward explicit.” and Id. at 23. “pertained However, premises.” to the service of the argument presented was dif- Casualty D’Arrigo v. Wilhite, See also Aetna and ferent from the instant case. Co., 345, Surety 115 495 A.D.2d N.Y.S.2d 818 argued that since ATV his Suzuki (no (App.Div.1985) coverage motorcycle pursuant was not as a motor defined vehicle not used to service insured’s residence re policy, the definitional sections of the it being gardless of whether it in dead is held by could be excluded 2(c) storage). precluded Section which for coverage “any engine

theft of or motor vehi- Obviously, none of the above-referenced Hence, present specif- cle.” Wilhite does not specifically cases address whether recre- guidance. ic contemplated by phrase ational use is “solely In Watamura v. Fire and for the service of the insured State Farm Co., rely Casualty Cal.App.3d Consequently, we 253 Cal. do (1988), reaching Rptr. again reviewing upon our None- the same them decision. theless, underlying assump- provision, Appeals Court of we believe the California (dune usage also is the common of “ser- found that loss of “sandrail” tion all vice”, context, contemplates buggy) some “excluded dear and unam in this sort Id., biguous repair premises. policy.” terms of 206 Cal. of maintenance fact, App.3d ordinary everyday Cal.Rptr. Again plain, at 556. and mean- attempted ambiguity ing simply term does to create an “service” by referring conjure thoughts of Webster’s to the definitional section which recreation. Dictionary provides no Collegiate “a motor- Ninth New stated “motor vehicle” means equates definition that given service recre- also be to the term “service” Rather, ational activities. the verb “service” would include recreational of an ATV on use repair provide “to the Strand court never defined as mainte- the land. nance for.” When takes a specifically equates someone vehicle in addresses how sendee service, it recreational use. The Strand commonly that with understood some repairs per- presents myopic maintenance or will be view of the issue and vehicle; they long formed on are not believes that as use the ATV is taking joyride it some around the block. for servicing permit- the land then all use is give problem cannot rewrite a contract or it a ted. The first with this rationale is plain, construction that conflicts with Strand accepts or- that the fact that an dinary accepted meaning of put the words simply ATV can be to dual uses Serv., Volunteer Firemen’s Ins. Inc. v. used. ignores limiting effect of the word “sole- Property Agency, CIGNA Ins. Cas. ly”. interpretation negates Such an the in- (Pa.Super.1997). “solely”. Secondly, clusion of the word Strand court tries to draw a distinction be- The case cited either tween phrase “to service the insured spe- reaches a different and which conclusion location” “for the the insured cifically issue is Strand precise addressed the location.” This is a distinction without a v. State Farm Ins. App.3d 34 Ohio difference and such cannot serve as a Strand, 265 N.E.2d In a three- interpretation. basis for a broader We find wheel was stolen ATV and the court conclud- Strand misplaced, court’s focus is and its phrase solely ed that the “used for the ser- reasoning unpersuasive. strained and vice of the insured to be ambiguous location” “subject interpretation to a broader than Strand states requiring the test as Id. suggested by [State Farm].” N.E.2d purpose goal or “some for some act is conclusion, at reaching 267. this aby motor-propelled undertaken vehicle to Strand court stated: broadly aid the defined term of ‘insured loca said, simply While have [State Farm] could Id. applied tion’.” if Even we motor propelled ‘[w]e cover vehicles used change test it not would our conclusion. location’, solely to service the insured When someone drives an ATV across his or thereby suggesting physical proximity to pick up inspect her to or debris (as premises the land or itself was the test damage, reasonably it can to be said service lawnmowers, would the case be roto- using the land. an ATV for snowblowers), tillers or not it did use those terrain, driving the thrill rugged of over Instead, words. it formu- shows a broader only being performed is the fulfill lation—‘for the service of the insured loca- ment of the driver’s recreational desires. thereby the test suggesting is some tion’ — way purpose goal This or in no “aids the purpose goal or for which some act provision insured location.” The by motor-propelled a undertaken vehicle to say, does not “we cover unlicensed motor broadly aid defined term ‘insured propelled vehicles used for the service location’. say, Nor of the insured.” does it “we cover (footnote omitted). Id. at 268. The court unlicensed motor vehicles used further stated: “we are not convinced that solely on the insured The ad location.” any pleasure riding obtained this motor- modify “solely” verb serves to the verb deprives any pur- bike rider of somehow covered, “used.” Thus order to be pose Id. serving exclusively ATVs must be used “for the ser Naturally, accept Teños advocates that we acreage vice of the insured location.” The the Strand reasoning court. For the the land or whether the ATVs are used ex follow, reasons we decline do so. clusively are irrelevant. on the insured land The Strand upon Instantly, he the broad Teños admits that used the focused policy gives primarily only ATVs occa definition the term “in- recreation and leaps sionally performed jobs sured with one of location” and conclusion odd correspondingly ambiguity that a definition them. find no broad must Since we these herein, coverage, than as set forth consti- admittedly ATVs were for more vide just land, or faith.’ service of tutes ‘bad determining an of law in committed error sufficiently find such averments do use fit within this limited recreational a either the UTPCPA raise claim under exception to exclusion. Statute, 42 Pa. Pennsylvania Bad Faith Teños further word contends § 8371. C.S.A. “solely” disqualify intended to v. Nationwide Mutual Fire Romano cles like a truck or a car which are Pa.Super. 646 A.2d 1228 Ins. exclusively used location. on (1994), defined the term “bad this Court merit, argument such This has no vehicles faith” in the insurance context mean: already phrase “not li- excluded part insurer [an] ‘Bad faith’ on the highways.” public censed for use on Section any pay frivolous or unfounded refusal 2(c) Policy, supra. Homeowner’s proceeds policy; necessary a it suggests To construe this pur- For that such refusal be fraudulent. the inclusion “ser- would render word poses an insurer for action superfluous. vice” rules of construction Our claim, pay such conduct im- failure to permit contract to be “wordfs] do ports purpose and means a dishonest any surplusage treated as ... if reasonable (i.e., duty good faith and breach of known meaning parts consistent with the other can dealing), through self- fair some motive of Mills, given to it.” Inc. v. General Snave- will; negligence ill interest or mere bad ly, judgment is not bad faith. (1964). Teños would have us construe “ser- proposed Id. 646 A.2d at 1232. Teños’ vice the insured location” to include allegation of a dishon- type amendment makes performed recreational activities part purpose or ill will on the of State using pro- est one’s land an unlicensed motor Rather, only alleges Farm. that the accept If he pelled vehicle. we were to Teños’ allegation view, ambiguous; is such does then to we would also have find cover- if bikes, equate purpose. a Even it dishonest age go-carts for dirt and other did, already previously we have imaginable discussed unlicensed motor ques- in policy provision that adopt to determined cle. We refuse such an untenable Hence, ambiguous. there can interpretation. tion was be no faith. bad Turning propriety to the of the now in to under Similarly, order state claim trial court’s denial of Motion to Teños’ specific the UTPCPA averments fraud Amend, have proposed we reviewed proposed raised. Teños’ amend- must be (2) only it amendment and find that adds two respect. again lacking is in this More- ment averments, new which state: over, in by this as stated Court Gordon property 10. Plaintiffs under Shield, Pennsylvania Blue policy is the aforementioned residential (1988), used A.2d 600 test “[t]he his property only Plaintiff and in if there exists a cause of action determine family noncommercial for residential and growing of a of contract is tort out breach such, purposes. As the insurance contract performance improper there was an whether by and Plaintiff Defendant is between and (misfeasance) obligation rath- of a contracted meaning a ‘consumer contract’ within (nonfea- perform that the mere failure to er Pennsylvania Practices of the Unfair Trade sance)”. Instantly, Id. A.2d at 604. (citation Act. and Consumer Protection only alleges Gor- Teños nonfeasance. See omitted). (nonfeasance don, is not suffi- supra alone contract, Plaintiff As consumer pursuant to the UTPC- cient raise claim power negotiate bargaining had PA). contract, at best re- terms of Therefore, granting we reverse the order coverage quire provide Defendant [sic] in and misleading summary judgment favor ambiguous and and worst is entry sum- court for pro- remand to in its refusal to terms. Defendant’s Farm, land, mary in judgment favor of ence to a tract and 75-acre limited to maintenance, majority affirm and the fails to conclu- the denial Teños’ motion to amend. Rather, sively argue point. majori- this in part Order reversed and in affirmed ty, relying upon Webster’s Ninth New Colle- part, entry record and the remanded giate Dictionary to define the word “service” summary judgment in favor State Farm. mistakenly states that “service” is a verb. relinquished. Jurisdiction provision In policy, of the “service” is verb, not a it is a noun. In New Webster’s SOLE, J., DEL Dissenting Opinion. filed a Unabridged Dictionary Universal the noun SOLE, DEL Judge, dissenting: twenty-six “service” has different definitions question I The presented dissent. to this while the “service” four verb has definitions. is whether the all-terrain vehicles This itself should sufficient convince owned the insured this court to follow the Strand court and find and stolen were “used question for the service of in ambiguous to be the insured location”1 therefore subject interpretation. covered to broad policy. the insured’s homeowner’s majority suggests that “the The record establishes insured loca- Strand presents myopic view of the addition, tion was a tract 75-acre of land. Myopic issue.” in defined Webster’s Ninth the record substantiates that ATVs were Collegiate Dictionary New “a narrow view work, used for basic travelling recreation and something.” By defining incorrectly on property. majority The is correct in restricting word to exclude all “service” noting Pennsylvania appellate the lack of maintenance, meanings suggest but I interpret meaning eases which of the majority’s interpretation of the exclusion is a question. Unfortunately, my “narrow reading policy, view.” determination, reaching majority ana- provided by I consider the “service” the mo- lyzes correctly concludes four cases tor similar vehicles in to be jurisdictions inapposite from other while common usage word “service” refer- accept in Strand v. declining reasoning example, ence to other motor For vehicles. State Farm Ins. App.3d 34 Ohio particular that a statement location “has (1986), N.E.2d ease the coun- provide bus means service” that buses trans- try exactly point which is and addresses Likewise, portation in location. a taxi policy language the identical factual sce- used for the of a area “service” certain refers nario before us. transportation to taxi in access via a that Strand, stolen Consequently, ATV was and the area. to de- “service” court solely determined the term “used note transportation the existence of and we the the service of insured location” to be should not limit the word to maintenance. ambiguous subject interpreta- and to broad Additionally, purpose the of the word tion. That court that the use of concluded , “solely” is limit use on the vehicle’s the the ATV on three acres for both maintenance location,” type “insured not the use re- policy and recreation was within the lan- Therefore, quired “solely” of the vehicle. However, guage. majority the of this court limits not performed, where the service is policy language unambiguous finds the and performed. what Interestingly, concludes that non-maintenance-related ac- argues State Farm never that the nature of coverage. tivities remove ATVs from location, the use of the vehicle on the insured maintenance, with the Strand agree

I in its court result. either recreation increases I agree majority responsibility do not with the that in its in risk of loss this theft vehicle, language policy. “used for the service of the I believe a in service of its location, performs insured that func- location” the term “service” limits owner’s insured others, by transporting There is tion ATV use maintenance. owner “service,” long finding premises. rationale for that in refer- as it is on the done opinion, majority Throughout support argument, ignoring alters the its thus rule that policy provision in an we of the effort to cannot rewrite contract. interpretation supports interpret- the insured’s It is axiomatic contracts drafter, case, in this clause. Strand was decided ed in State case, Farm, aware the State in the Farm. the insurer desired to limit Had However, Farm had cho- the outcome. State service motor vehicles insured change policy of the only engaged sen not to this purposes for theft those Obviously, since maintenance, ruling. rather all other use on an since the Strand than- time, location, policy language its mean- unequivocally insured it could have , satisfactory to ing been so. should it for them. under Strand have done not do Therefore, to now Farm. its choice maintenance, equal Service does pay ignore the Strand determination and Consequently, equal location does not land. policy supports a claim of bad faith under the “service location” limited I amendment. allow the would I would to maintenance land. find term includes activities “service” recreational and, result, as a applied in favor

terms should be

of the insured.

Finally, majority disagree I with the con- properly trial clusion that the denied JETER, Appellant, Jesse complaint. motion to insured’s amend v. that, Pennsylvania It is well settled OWENS-CORNING FIBERGLAS Pennsylvania Rule Civil Procedure CORP., al., Appellees. et pleadings liberally will be amendments allowed secure the determination cases Lucy Theodore LOMAX Capobianchi Corp., on their v. BIC merits. Lomax, h/w, Appellants, (1995). 666 A.2d 344 v. al- an amendment should OWENS-CORNING FIBERGLAS lowed where there is an error of law or CORP., al., Appellees. et resulting party. prejudice an adverse Zazyczny, v. Pa. Werner OPDENAKER, Appellant, Frederick J. present Neither is case. v. Instead, presented the insured in the OWENS-CORNING FIBERGLAS complaint allegation a proper amended CORP., al., Appellees. et Consequently, bad faith. disallowing

abused its discretion Edmund J. and Jean GIORDANO amplified amendment. This is the fact Giordano, Appellants, of limitations under statute Pennsylvania Unfair Trade Practices and FIBERGLAS OWENS-CORNING years. Consumer Protection Law is six Ga- CORP., al., Appellees. et O’Hara, 383, 534 briel v. The record shows the theft and Marion Brooks CROPPER January original occurred in 1991. The com- Cropper, h/w, Appellants, 1992; plaint April the motion to filed amend in December less than was filed FIBERGLAS loss, OWENS-CORNING years original four from the and two CORP., al., Appellees. et original years one from the com- half Thus, plaint. was within the amendment Pennsylvania. Superior Court of statute of limitations. 25, 1998. March Submitted Moreover, support facts a bad faith 27, 1998. July Filed pay Farm’s claim. State refusal majority supported As the caselaw. in the

explains, ease nation there is one that case this issue and addresses

Case Details

Case Name: Tenos v. State Farm Insurance

Court Name: Superior Court of Pennsylvania

Date Published: Jul 17, 1998

Citation: 716 A.2d 626

Court Abbreviation: Pa. Super. Ct.