Clarke, T. v. MMG Insurance Co.

J-A15045-14

2014 PA Super 192

TIMOTHY AND DEBRA CLARKE, H/W, IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellants

v.

MMG INSURANCE COMPANY AND F.
FREDERICK BREUNINGER & SON,
INSURANCE, INC.

Appellees No. 2937 EDA 2013

Appeal from the Order Entered August 1, 2013
In the Court of Common Pleas of Philadelphia County
Civil Division at No(s): 03407

BEFORE: PANELLA, LAZARUS AND JENKINS, JJ.

OPINION BY JENKINS, J. FILED SEPTEMBER 04, 2014

Appellants Timothy and Debra Clarke appeal from the order entered in

the Philadelphia Court of Common Pleas denying their motion for partial

-motion for partial summary judgment.1 We vacate and

remand for further proceedings.

On April 16, 2012, Plaintiff-Appellant Timothy Clarke suffered serious

and permanent injuries in a motor vehicle accident. Mr. Clarke was driving

his motorcycle when a car turned in front of him, causing a collision that

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1
F. Frederick Breuninger & Son, Insurance, Inc. is not a party to this appeal.
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threw him from his motorcycle. Mr. Clarke suffered multiple injuries and was

placed on life support for eleven days at Paoli Memorial Hospital. He

underwent multiple surgical procedures before his release.

At the time of the accident, Mr. Clarke had two motor vehicle

insurance policies in effect. American Modern Select Insurance Company

issued the first for the motorcycle, and MMG Insurance Company issued the

not his motorcycle. Appellants had

coverage for the motorcycle through the

American Modern Select Insurance policy. Mr. Clarke received payments of

$25,000 from American Modern Select Insurance Company for his

motorcycle policy and $1

losses from the accident.

Appellants then sought coverage under their insurance policy issued by

MMG Insurance Co. specifically under the UIM coverage clause, which

provided coverage in the amount of $300,000 per accident. MMG Insurance,

MMG Insurance asserted that the Household Exclusion clause precluded

coverage because the motorcycle involved in the accident was not a covered

vehicle under the MMG Insurance policy, which only covered two

automobiles owned by Appellants.

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On October 24, 2012, Appellants filed their initial complaint and, on

December 27, 20

complaint named MMG Insurance Company and F. Frederick Breuninger &

complaint sought declaratory relief against MMG Insurance (count I) and

asserted claims of breach of contract (count II), negligence (count III), and

breach of warranty (count IV) against both MMG Insurance and Breuninger

Insurance.

On March 5, 2013, Appellants filed a motion for partial summary

judgment on their claim for declaratory relief against MMG Insurance. MMG

Insurance opposed the motion and, on April 3, 2013, filed a cross-motion for

partial summary judgment. On April 16, 2013, the trial court denied both

motion for

motion for reconsideration. On August 1, 2013, upon a second review,2 the

cross-motion for partial summary judgment.
____________________________________________

2

court, the parties stipulated to vacate the June 20, 2013 order and place
efore the trial court for its
determination again.

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policy language of the Household Exclusion clause clearly and

unambiguously excludes the coverage sought by [Appellants], and because

the Order is consistent with Pennsylvania public policy regarding Household

on, 12/30/13, at 4.

On September 12, 2013, Appellants filed a praecipe to settle,

discontinue, and end all remaining claims against MMG Insurance and

Breuninger Insurance.3 On the same day, Appellants filed a timely notice of

appeal. Both Appellants and the trial court complied with Pennsylvania Rule

of Appellate Procedure 1925.4

Appellants raise the following issues for our consideration:

1. Where the language of the policy agreement
between Appellee MMG Insurance Company and
Appellants clearly and unambiguously excludes
underinsured motorist coverage only where the
injury is sustained while occupying a vehicle that has
no underinsured motorist coverage, did the [t]rial
[c]ourt err as a matter of law when it concluded
MMG Insurance Company did not owe the Appellants
underinsured motorist coverage for injuries
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3
The remaining claims were as follows: breach of contract (count II),
negligence (count III), and breach of warranty (count IV) against both MMG
Insurance and Breuninger Insurance.
4
On October 18, 2013, the trial court ordered Appellants to file a statement
of matters complained of on appeal within twenty-one days. On November 4,
2013, Appellants submitted their statement. On December 30, 2013, the
trial court submitted its 1925(a) opinion.

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J-A15045-14

sustained while occupying a vehicle which had
underinsured motorist coverage?

2. Where the terms of an underinsured motorist
exclusion used by MMG Insurance Company excluded
coverage only for injuries that occurred in a vehicle
that was not covered for underinsured motorist
coverage, was it error for the [t]rial [c]ourt, in
determining the intent of the parties to the
agreement, to ignore the different language used by
the insurer in the exclusion for uninsured motorist
coverage which, by its terms, excluded coverage if
the injuries occurred in a vehicle which was not
covered for uninsured motorist coverage under the
MMG Insurance policy, and therefore the [c]ourt
erred in its determination that Appellee MMG
Insurance Company owed no underinsured motorist
coverage to Appellants who were injured while
occupying a vehicle which had underinsured motorist
coverage?

3. In determining the intent of the policy agreement
between Appellee MMG Insurance Company and
Appellants, did the [t]rial [c]ourt err in examining
and relying upon public policy rather than the plain
language of the policy agreement, and therefore err
in its determination that Appellee MMG Insurance
Company owed no underinsured motorist coverage
to Appellants who were injured while occupying a
vehicle which had underinsured motorist coverage?

4. In the alternative, did the [t]rial [c]ourt err as a

Partial Summary Judgment and granting the
-Motion for
Partial Summary Judgment when it failed to construe
the ambiguous language in the underinsured
motorist coverage provision of the policy in favor of

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J-A15045-14

Appellants, which would entitle the Appellants to
underinsured motorist coverage under their MMG
Insurance Company policy?

-6.

The interpretation of an insurance contract is a question of law.

United Services Auto. Assoc. v. Elitzky, 517 A.2d 982, 986

(Pa.Super.1986), appeal denied, 528 A.2d 957 (Pa.1987). The standard of

review of questions of law is de novo, and the scope of review is plenary.

, 991 A.2d 342, 346

(Pa.Super.2010) (citing Buffalo Twp. v. Jones, 813 A.2d 659, 666 n.8

(Pa.2002)). Thus, in interpreting a contract, this Court need not defer to the

trial court. United Services Auto. Assoc., 517 A.2d at 986.

language of the UIM Coverage provision in their insurance policy agreement

with MMG Insurance. In their first issue on appeal, Appellants argue the

sustained from the underinsured motorcycle involved in the accident up to

$300,000.00. In their second issue on appeal, Appellants assert that the trial

court erred in its interpretation of the policy by failing to give effect to all of

its language. Specifically, Appellants allege the trial court erred when it

treated the different exclusionary language used by the insurer in the

UIM coverage provision, as surplusage. We agree.

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When the language of a policy is clear and unambiguous, the court is

bound to give effect to the policy and cannot interpret the policy to mean

Nationwide Mut. Ins. Co. v.

Cummings, 652 A.2d 1338, 1342 (Pa.Super.1994) (internal citations

reting an insurance policy . . . is

to determine the intent of the parties as manifested by the language of the

Kvaerner Metals Div. of Kvaerner U.S., Inc. v. Commercial

Union Ins. Co., 908 A.2d 888, 897 (Pa.2006) (internal citations omitted).

Dis

Cohen v. Erie Indem. Co., 432 A.2d 596,

597 (Pa.Super.1981).

An insurance policy must be read as a whole, and not

Luko v. Lloyd's London, 573 A.2d 1139, 1142

(Pa.Super.1990). Therefore, the two exclusions must be read together and

Masters v. Celina Mut. Ins.

Co., 224 A.2d 774, 776 (Pa.Super.1966).

treated as surplusage . . . if any reasonable meaning consistent with the

Tenos v. State Farm Ins. Co., 716 A.2d

626, 6

two competing interpretations of an insurance policy, we are bound, as a

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matter of law, to choose the interpretation which allows us to give effect to

Millers Capital Ins. Co. v. Gambone Bros.

Dev. Co., 941 A.2d 706, 716 (Pa.Super.2007), appeal denied, 963 A.2d 471

intention is that the mention of one thing implies the exclusion of another

thing. See Rimpa v. Erie Ins. Exchange, 590 A.2d 784, 787-90

(Pa.Super.1991) (interpreting the language of a statute) (citing Omodio v.

Aetna Life and Cas., 559 A.2d 570 (Pa.Super.1989)).

Here, the trial court disregarded the clear and unambiguous language

of the UIM exclusion in the policy agreement when read in the context of the

agreement as a whole. It also did not apply well-developed and fundamental

principles of contractual interpretation or rules of construction.

To ascertain the intent of the parties to the policy agreement, we must

examine the language of the insurance policy agreement as a whole, which

requires reading the UIM exclusion and the UM exclusion together, and

construing the words according to their reasonable meaning within the

policy. See Millers Capital Ins. Co., 941 A.2d at 716; Masters, 224 A.2d

at 776. The UIM coverage section excludes coverage for injuries sustained in
5
A plain reading of the UIM

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5
Appellants paid for UIM coverage under this policy. The policy included the
following exclusion to UIM coverage:

(Footnote Continued Next Page)

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exclusionary language, standing alone, dictates coverage. The vehicle that

had UIM coverage for the motorcycle through a separate insurance policy

issued by American Modern Select Insurance.

When the MMG Insurance policy, including the UM exclusion language,

is examined as a whole, it becomes apparent that the decision to deny

coverage was premised on a misreading of the terms of the UIM exclusion.

The UIM exclusion provision relied upon by MMG Insurance to deny coverage

is actually missing exclusionary language that appears elsewhere in the MMG

Insurance policy (namely, the UM exclusion provision). The trial court

shows the intent of the parties to provide UIM coverage only for the two
_______________________
(Footnote Continued)

EXCLUSIONS

***

A. We do not provide Underinsured Motorists Coverage for

1. By you while "occupying", or when struck by, any motor
vehicle you own which is not insured for this coverage.
This includes a trailer of any type used with that vehicle.

2. By a "family member who owns an auto, while "occupying",
or when struck by, any motor vehicle owned by you or any
"family member" which is not insured for this coverage.
This includes a trailer of any type used with that vehicle.

-16 (emphasis added in brief).

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J-A15045-14

covered automobiles [listed on the MMG Insurance policy] and not for any

undermines the plain language of the exclusion, which does not require that

the insured maintain the UIM coverage under the MMG insurance policy. See

Cummings, 652 A.2d at 1342.

specifically, whether it refers to UIM coverage through any insurer or UIM

coverage under the particular policy is resolved when viewed in light of the

language of the UM exclusion in the same policy. The UM coverage clause

6
coverage under this policy Thus, the

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6
When the MMG Insurance Co. policy is examined as a whole, and the UIM
exclusion is compared to other exclusions namely, the UM exclusion the
distinction is apparent. The UM exclusion explicitly states that coverage does

EXCLUSIONS

***

A. We do not

1.

for this coverage under this policy. . . . .

2.
by, any motor vehicle you own which is insured for this
coverage on a primary basis under any other policy.
(Footnote Continued Next Page)

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exclusionary language of UM coverage and, thus, the policy as a whole,

dictates coverage because the motorcycle was insured for UIM coverage

through another insurer. See Rimpa, 590 A.2d at 787-90.

Insurance understood how to exclude coverage for injuries occurring in

vehicles not insured by MMG Insurance, and confirms that the policy

intended to include UIM coverage as long as the Clarkes maintained first-tier

UIM coverage through any insurer. Specifically, and in distinction to the UIM

exclusions, the exclusions for UM coverage state that the policy only covered

UM exclusions were intended to have the same meaning, they would have

the same language. See Cohen v. Erie Indem. Co., 14 Pa. D.&C. 3d 444,

448 affirmed, 432 A.2d 596 (Pa.Super.1981) (insurance policy subsections

would be similarly phrased if their intention were the same); Farmers Ins.

Co. of Washington v. U.S.F. & G. Co., 537 P.2d 839, 842 (1975) (same);

cf 101 Pa.Code § 15.141(b)(5) (guidelines for choice of words and phrases

_______________________
(Footnote Continued)

-17 (emphasis added in brief).

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J-A15045-14

se the same word throughout if the same

meaning is intended and do not use the same word to denote different

mean ). The exclusions do not have the same words; there is an

additional element included in the UM exclusion. Thus, the parties did not

intend the exclusions to have the same meaning. The parties utilized the

e the specific exclusionary

from the UIM household exclusion. The parties, therefore, intended to

provide coverage if a first-tier UIM policy existed. Because Appellants

contracted with another insurer for first-tier UIM insurance, a determination

that they were also covered for UIM insurance under this policy gives effect

to all of the language contained in the policy agreement.

to a provision, particularly where the language was contained in a separate

provision but excluded from the provision at hand. See Madison Constr.

Co. v. The Harleysville Mut. Ins. Co., 144, 678 A.2d 802, 806

(Pa.Super.1996), affirmed

interpretation of the policy added new, extrinsic language to the MMG

Insurance policy

error.

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Not only is the UIM exclusion different from the UM exclusion, the UIM

exclusion is also different from the language typically used in insurance

policies to disclaim coverage for vehicles not listed in the policy.

important to distinguish [an insurer-

Madison

Constr. Co., 678 A.2d at 805. Pennsylvania courts have upheld household

exclusions which specifically stated that the coverage is excluded for motor

See, e.g., Erie Ins.

Exch. v. Baker, 601 Pa. 355, 972 A.2d 507 (Pa.2009). In all of the cases

that upheld a household exclusion, the critical language

merited the denial of UIM coverage and guided the court's

interpretation of the policy as clearly and unambiguously excluding

coverage. Id. In contrast, the MMG Insurance policy, by its plain language,

does not exclude coverage for vehicles not covered for UIM coverage under

that policy. Instead, the MMG Insurance policy excluded coverage for

vehicles which did not maintain any UIM coverage under any policy. Because

Appellants maintained first-tier UIM coverage through American Modern

Select Insurance, they are entitled to UIM coverage under their second-tier

MMG Insurance policy.

In their third issue on appeal, Appellants allege the trial court erred in

examining and relying upon public policy rather than the plain language of

the policy agreement. We agree.

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Municipality of Mt. Lebanon v. Reliance Ins.

Co., 778 A.2d 1228, 1232 (Pa.Super.2001). Public policy concerns are

Eichelman, 551 Pa. at 564, 711

A.2d at 1008. Courts are bound to give effect to clear contractual terms and

only examine public policy w

Prudential Prop. & Cas. Ins.

Co. v. Colbert, 813 A.2d 747, 752 (Pa.2002). By looking to public policy as

a component of its interpretation of the MMG Insurance policy itself, the trial

court failed to read, interpret, and apply the policy as it was written.

In Prudential v. Colbert, 813 A.2d 747, 752 (Pa.2002), the Court

examined public policy concerns only after the plain meaning of the policy

exclusion justified a denial of coverage. Id

matter of contract interpretation, the ... policy exclusion would justify [the

of the policy exclusion is clear and unambiguous, and thus must be given

effect.

In their fourth issue on appeal, Appellants assert, in the alternative,

that the language of the UIM exclusion creates ambiguity that requires the

Court to construe the policy language against MMG Insurance. Because we

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find the exclusionary language of the UIM coverage provision clear and

unambiguous, it is unnecessary to address this issue.

Order vacated. Case remanded. Jurisdiction relinquished.

Judge Lazarus joins the Opinion.

Judge Panella files Dissenting Opinion.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 9/4/2014

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