J. A10007/17
2017 PA Super 297
SAFE AUTO INSURANCE COMPANY : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
v. :
:
RENE ORIENTAL-GUILLERMO, :
RACHEL DIXON, PRISCILA JIMENEZ, :
LUIS JIMENEZ, ALLI LICONA AVILA :
AND IRIS VELAZQUEZ :
: No. 3226 EDA 2016
APPEAL OF: PRISCILA JIMENEZ & :
LUIS JIMENEZ :
Appeal from the Order Entered September 13, 2016,
in the Court of Common Pleas of Lehigh County
Civil Division at No. 2015-C-1547
BEFORE: DUBOW, J., SOLANO, J., AND FORD ELLIOTT, P.J.E.
DISSENTING OPINION BY FORD ELLIOTT, P.J.E.:FILED SEPTEMBER 18, 2017
I respectfully dissent. I believe that the MVFRL was never intended to
abandon those who are injured using Pennsylvania highways for the
protection of an automobile insurer’s bottom line. While it is correct that the
MVFRL was enacted to address the high cost of insurance in this
Commonwealth which skyrocketed under the former No-Fault Act, I do not
believe that it was ever the intent of the legislature to enact a system in
which low-cost, low-coverage insurance effectively makes for no insurance
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at all.1 Automobile insurance companies come into Pennsylvania, register,
and aggressively compete for business. The fact that all vehicles operated
on our highways must be insured has something to do with that. I believe
the MVFRL serves a dual purpose to both lower the cost of insurance, which
in turn allows those who operate a vehicle to afford to do so, all in
furtherance of protecting victims who are injured due to the operation of
those vehicles. Broad coverage exclusions which eliminate these protections
should not be enforceable. The insurer is in a much better position to accept
the risk related to its insured than is the innocent injured victim.
When the legislature amended Section 1786(f) in 1990, it specifically
expanded the breadth of financial responsibility for owners of motor vehicles.
In Progressive Northern Ins. Co. v. Universal Underwriters Ins. Co.,
898 A.2d 1116 (Pa.Super. 2006), appeal denied, 909 A.2d 1290 (Pa.
2006), we set forth the following:
The 1990 amendments added subsection (f) to
§ 1786 to provide:
Any owner of a motor vehicle for which
the existence of financial responsibility is
a requirement for its legal operation shall
not operate the motor vehicle or permit
it to be operated upon a highway of
1
See, e.g., An v. Victoria Fire & Cas. Co., 113 A.3d 1283, 1289-1290
(Pa.Super. 2015), appeal denied, 130 A.3d 1285 (Pa. 2015) (upholding a
“named driver only” exclusion in a policy described as a “low-cost express
product,” which excluded liability coverage for any person not listed as a
named driver on the policy in exchange for “substantially reduced
premiums”).
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this Commonwealth without the financial
responsibility required by this chapter.
75 Pa.C.S.A. § 1786(f) (emphasis added). This
added provision alters the former § 1786
significantly. Where the pre–1990 provision required
only that each motor vehicle registrant certify the
registrant’s financial responsibility, § 1786 now
speaks directly about the necessity of ensuring
coverage for each operated motor vehicle. Further,
§ 1786 now also directly states that financial
responsibility is required when another operates the
owner’s vehicle with permission. Thus, contrary to
Universal’s position, the relevant provisions of the
MVFRL did set forth material changes which make
the analysis offered in [State Farm Mut. Auto. Ins.
v. Universal Underwriters Ins. Co., 701 A.2d
1330 (Pa. 1997)] inapplicable. In addition, we find
that the language set forth in the 1990 version of the
MVFRL suggests a contrary result to that reached in
State Farm.[2]
Admittedly, the MVFRL continues not to include
specific language directing that all permissive users
of a vehicle be insured under the owner’s insurance.
However we find that the changes to § 1786
implicitly direct that such coverage be provided.
2
The court [in State Farm] considered the
[pre-1990] language of § 1786 which provided “that
each motor vehicle registrant shall certify that he
has provided ‘financial responsibility’ at the time he
registers his vehicle.” [State Farm, 701 A.2d at
1333] (citing 75 Pa.C.S.A. § 1786). The court
rejected the proposition that all permissive users
would have to be insured under the owner’s policy to
be in compliance with § 1786. It noted that § 1786
“is utterly silent as to whom the coverage of the
owner’s policy runs.” Id. The court reasoned that
such language could not be read as a mandate
requiring insured drivers using another’s vehicle with
permission to be insured under the owner’s policy.
Progressive v. Universal, 898 A.2d at 1118-1119.
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Subsection (f) speaks directly about requiring
financial responsibility for vehicles which are being
operated on the highways of this Commonwealth by
owners or by others who have the owner’s
permission to operate their vehicle. This language
supports this Court’s statement that “[t]he
requirements of the Motor Vehicle Financial
Responsibility Law . . . are consistent with the
concept that primary coverage follows ownership of
the vehicle.” Nationwide Ins. Co. v. Horace
Mann Ins. Co., 759 A.2d 9, 13 n.3 (Pa.Super.
2000). Thus, our reading of the MVFRL causes us to
agree with the trial court that the legislature has
provided clear indication that vehicle owners must
provide coverage to vehicles they own and operate
or permit others to operate. Accordingly, we uphold
the trial court’s ruling finding that McNeely, while
using the Young Volkswagen vehicle with permission,
was an insured under the Universal policy.
Id. at 1119. See also Allstate Ins. Co. v. Tokio Marine & Nichido Fire
Ins. Co., Ltd., 464 F.Supp.2d 452, 460-461 (E.D.Pa. 2006) (“[T]he MVFRL
requires that all other vehicle owners maintain active financial responsibility
on their vehicles at all times and that all permissive users of a vehicle be
insured under the owner’s insurance.” (footnote omitted)); Lebanon Coach
Co. v. Carolina Cas. Ins. Co., 675 A.2d 279, 284 (Pa.Super. 1996),
appeal denied, 687 A.2d 378 (Pa. 1997) (“Under Pennsylvania’s [MVFRL],
the vehicle’s owner or registrant is responsible for maintaining financial
responsibility for the vehicle. See [75] Pa.C.S.A. § 1786. It is the vehicle
that is covered by the automobile policy, while an individual is covered only
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by nature of his function as the driver of that vehicle.” (footnotes and
citation omitted; emphasis in original)).3
I am still of the belief that the legislature intended the insurance to
follow the vehicle and did not intend that policies covering a vehicle could or
should be limited by who is operating the vehicle. Section 1718(c) affords
protection to both an insurer and an insured to exclude specific individuals
whose risk of driving the vehicle is too high, both in cost of coverage and
risk of injury to others. Absent this specific enactment, the exclusion of
particular classes of drivers not specifically provided under the MVFRL clearly
flies in the face of the legislative intent of the 1990 amendments to the
MVFRL.
The Majority adopts the trial court’s interpretation that Section 1786(f)
“places the obligation on the owner of a vehicle, and not the insurance
company, to ensure that anyone who drives the owner’s car has insurance.”
(Majority Memorandum at 8.) According to the Majority, an owner of a car
should only permit another person to drive his car if that driver has his own
insurance. The Majority posits that any other interpretation of
3
The policy exclusion at issue here provided that Safe Auto is not liable for
damages that occur “while your covered auto is being operated by a resident
of your household or by a regular user of your covered auto, unless that
person is listed as an additional driver on the Declarations Page.” Therefore,
the insured could give permission to a total stranger to drive his car and that
person would be covered, whereas his live-in fiancée is not. This incongruity
suggests to me that even Safe Auto believed when it drafted the policy
language that it could not exclude all permissive users under the MVFRL.
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Section 1786(f) unfairly shifts the risk to insurance companies to insure
unidentified individuals who might have access to an insured’s vehicle. (Id.
at 9, 12.)
However, in my mind, Section 1786 simply mandates that owners of
motor vehicles have insurance. See Cangemi v. Com., Dept. of Transp.,
Bureau of Driver Licensing, 8 A.3d 393, 400-401 (Pa.Cmwlth. 2010) (“In
enacting the MVFRL, the Legislature intended to provide a minimal level of
compensation for victims of motor vehicle accidents. To ensure this
compensation, the Legislature placed the burden on the owner or registrant
of a vehicle to insure his or her vehicle and imposed penalties for the failure
to do so. 75 Pa.C.S.[A.] §§ 1786(d)(1), (f). This policy choice is reasonable
because the owner or registrant of a vehicle is in a better position to
guarantee that the vehicle has insurance than a driver who is granted
permission to borrow the vehicle.” (citation omitted)). I believe that the trial
court’s interpretation, adopted by the Majority, runs counter to this court’s
holding in Progressive v. Universal that Section 1786(f) of the MVFRL
implicitly directs that all permissive users of a vehicle be insured under the
owner’s insurance. But for the unlisted resident driver exclusion in this case,
that would include Rachel Dixon, the insured’s live-in fiancée, who was
indisputably a permissive user of the covered vehicle. Compare
Nationwide Mut. Ins. Co. v. Cummings, 652 A.2d 1338 (Pa.Super.
1994), appeal denied, 659 A.2d 988 (Pa. 1995) (upholding a
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“non-permissive use” policy exclusion where the uninsured claimant was a
passenger in a stolen vehicle).
Additionally, regarding the oft-repeated rubric that cost containment
was the overarching policy concern of the MVFRL, appellants aptly point to
the concurring Opinions in Williams v. GEICO, 32 A.3d 1195, 1200 (Pa.
2011), in support of their argument that the Pennsylvania Supreme Court
has signaled a willingness to depart from prior pronouncements using cost
control to validate all manner of policy exclusions. (Appellants’ brief at 13.)
Appellants are correct that a four-member majority of our supreme court, as
constituted at that time, expressed their concern regarding cost control as
the overriding goal of the MVFRL. See Williams, 32 A.3d at 1211 (“I join
my colleagues in calling for advocates and the judiciary to cease their
continued reliance on the unthinking perpetuation of the long-ameliorated
concern for cost containment”) (Baer, J., concurring); id. at 1213 (“I join
those Justices who eschew the mantra of cost containment -- used by
various courts to rotely limit the rights of insureds -- in favor of a recognition
of other equally important policies and goals that are foundational to the
MVFRL, such as the remedial objectives of the statute and the coverage
rights of insureds”) (Todd, J., concurring). See also Heller v. Penn.
League of Cities and Municipalities, 32 A.3d 1213, 1222 (Pa. 2011)
(“Despite our repeated affirmance of the cost containment policy underlying
the MVFRL, we have cautioned that it has limits. While the enactment of the
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MVFRL grew out of a legislative concern for the ‘spiraling’ costs of
automobile insurance, the cost containment objective cannot be
mechanically invoked as a justification for every contractual provision that
restricts coverage and purportedly lessens the cost of insurance.” (citation
omitted)).
Besides cost containment, it is beyond cavil that another, equally
important goal of the MVFRL is to protect Pennsylvania motorists from
uninsured/underinsured drivers and to expand coverage. See
Kmonk-Sullivan v. State Farm Mut. Auto. Ins. Co., 746 A.2d 1118, 1123
(Pa.Super. 1999), affirmed, 788 A.2d 955 (Pa. 2001) (“The policy of
liberally construing the MVFRL is based upon the policy of indemnifying
victims of accidents for harm they suffer on Pennsylvania highways.”
(citation omitted)); Cummings, 652 A.2d at 1342 (“Two major
considerations that prompted the repeal of the No-Fault Act and the
enactment of the MVFRL were the escalating costs of purchasing motor
vehicle insurance and the increasing numbers of uninsured motorists. In
order to fulfill its purposes, the MVFRL established a recovery scheme that
sets out minimum amounts of coverage that must be offered to the insured.”
(citations omitted)). I believe enforcement of Safe Auto’s unlisted resident
driver/regular user policy exclusion is not only contrary to Section 1786(f) of
the MVFRL, which requires that permissive users be covered under the
owner’s insurance, but also very possibly contrary to public policy.
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I respectfully dissent.
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Safe Auto Ins. v. Oriental-Guillermo, R.
Combined Opinion