Erie Insurance v. King, J.

J-S32016-20

2021 PA Super 15

ERIE INSURANCE EXCHANGE : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellee :
:
v. :
:
JAY KING AND CORA LABAR :
:
Appellant : No. 648 EDA 2020

Appeal from the Order Entered January 27, 2020
In the Court of Common Pleas of Monroe County
Civil Division at No(s): No. 2019-06937

BEFORE: KUNSELMAN, J., KING, J., and COLINS, J.*

OPINION BY KING, J.: FILED FEBRUARY 05, 2021

Appellants, Jay King and Cora Labar, appeal from the order entered in

the Monroe County Court of Common Pleas, which granted the motion for

judgment on the pleadings of Appellee, Erie Insurance Exchange (“Erie”), in

this declaratory judgment action. We affirm.

In its opinion, the trial court set forth the relevant facts of this case as

follows:

The underlying facts of this case involve a motor vehicle
accident and subsequent claim of uninsured motorist (“UM”)
benefits.[1] On August 30, 2016, Jay King (hereinafter
“[Appellant] King”) was operating a 2005 Peterbilt Model
379 truck in which Cora Labar (hereinafter “[Appellant]
Labar”) was a passenger. [Appellant] Labar is the niece of
[Appellant] King’s paramour, Cynthia Mosier, and was
residing at their shared home at the time of the accident.
____________________________________________

* Retired Senior Judge assigned to the Superior Court.

1 Throughout this disposition, we will refer to uninsured motorist benefits as
“UM” benefits and underinsured motorist benefits as “UIM” benefits.
J-S32016-20

On the date in question, the Peterbilt truck was struck head-
on by a drunk driver on State Road 209 in Smithfield
Township, Monroe County, Pennsylvania. The other
vehicle’s operator, Jose A. Ramirez, did not have insurance
at the time of the accident.

[Appellant] King owned the Peterbilt truck which was
insured under a commercial auto policy issued by Sentry
Select. [Appellant] King was not personally listed as an
insured person under the Sentry Select policy, but rather
the corporate entity “Night Train Express, Inc.” was named.
However, [Appellant King] and Ms. Mosier did have a shared
automobile insurance policy with Erie for a personal vehicle
through [Erie] with an identification number of
Q052313453. [Appellants] initially made a claim for UM
benefits under the Sentry Select policy. Once those benefits
were exhausted, [Appellants] made a UM claim under the
Erie policy. [Appellants] may have also sought UM benefits
from an additional Erie Insurance policy which is not subject
to these proceedings. The Erie policy [at issue] included a
stacking waiver which was executed by [Appellant] King in
exchange for lower insurance premiums.

On September 5, 2019, [Erie] filed a Complaint for
Declaratory Judgment in this matter. [Erie] argues that
[Appellants] are barred from receiving UM coverage due to
either the Household Exclusion in the insurance policy or
because stacking benefits are inapplicable here.

(Trial Court Opinion, filed January 27, 2020, at 1-2).

Specifically, in Count I of its complaint, Erie alleged Appellants were

barred from coverage under the “household exclusion,” which provides:

EXCLUSIONS – What We Do Not Cover

This insurance does not apply to:

* * *

4. damages sustained by “anyone we protect” while:

a. “occupying” or being struck by a “motor vehicle”

-2-
J-S32016-20

owned or leased by “you” or a “relative,” but not insured
for Uninsured or Underinsured Motorists Coverage under
this policy. This exclusion does not apply when “anyone
we protect” is “occupying” or struck by a “motor
vehicle” owned or leased by “you” or a “relative” that is
insured for Uninsured or Underinsured Motorists Coverage
under any other Erie Insurance Group policy; or

b. “occupying” or being struck by a “motor vehicle”
owned or leased by “you” or a “relative,” but not insured
for Uninsured or Underinsured Motorists Coverage under
this policy.

Exclusion 4.a applies only when the STACKED option is
selected. Exclusion 4.b applies only when the UNSTACKED
option is selected.

(Complaint, filed 9/5/19, Exhibit A at Uninsured/Underinsured Motorist

Coverage Endorsement, p.3; R.R. at 39a) (emphasis in original).2

Erie claimed it provided “unstacked” coverage at the time of the accident

____________________________________________

2 Additionally, the Uninsured/Underinsured Motorist Coverage Endorsement
provides a definitions section stating: “Words and phrases in bold type and
quotations are used as defined in this endorsement. If a word or phrase in
bold type and quotations is not defined in this endorsement, then the word or
phrase is defined in the GENERAL POLICY DEFINITIONS section of the policy.”
(Id. at p.1; R.R. at 37a) (italics in original). The endorsement does not
contain a specific definition of the word “you.” Under the “General Policy
Definitions” section,

“You,” “your” or “Named Insured” means the
“Subscriber” identified as a Named Insured on the
“Declarations” and others identified as Named Insured(s)
on the “Declarations.” Except under the RIGHTS AND
DUTIES—GENERAL POLICY CONDITIONS Section, these
words include the spouse of the “Subscriber” identified as
a Named Insured on the “Declarations,” provided the
spouse is a “resident.”

(Id. at General Policy Definitions, p.3; R.R. at 20a) (emphasis in original).

-3-
J-S32016-20

based on Appellant King’s execution of a stacking waiver. The stacking waiver

electronically signed by Appellant King on May 23, 2014 provides:

By signing this waiver, I am rejecting stacked limits of
uninsured motorist coverage under the policy for myself and
members of my household under which the limits of
coverage available would be the sum of limits for each motor
vehicle insured under the policy. Instead, the limits of
coverage that I am purchasing shall be reduced to the limits
stated in the policy. I knowingly and voluntarily reject the
stacked limits of coverage. I understand that my premiums
will be reduced if I reject this coverage.

(Id. at Exhibit A at Uninsured Coverage Limits—Stacking Waiver; R.R. at 55a).

In Count II of its complaint, Erie alleged that even if the household

exclusion did not bar coverage, Appellant King’s execution of the stacking

waiver barred coverage. Initially, Erie maintained that neither Appellant King

nor Appellant Labar was a named insured or relative of a named insured on

the Sentry Select policy. Thus, Erie claimed Appellants did not qualify as

“insureds” as defined at 75 Pa.C.S.A. § 1702 of the Motor Vehicle Financial

Responsibility Law (“MVFRL”), such that the concept of “stacking” UM benefits

would not even apply in this case. To the extent stacking is implicated, Erie

alleged that Appellant King’s execution of a valid stacking waiver precluded

“inter-policy” stacking.3

____________________________________________

3 This Court has recently explained:

The basic concept of stacking is the ability to add the
coverages available from different vehicles and/or different
policies to provide a greater amount of coverage available

-4-
J-S32016-20

Appellants filed an answer and new matter on November 4, 2019.

Appellants claimed the household exclusion is unenforceable under

Pennsylvania law. Even if that exclusion is valid, Appellants claimed it would

not apply to Appellant Labar because neither she nor her relative owned the

vehicle involved in the accident for purposes of the exclusionary language.

Appellants further insisted the stacking waiver pertained only to “intra-policy”

stacking and not “inter-policy” stacking.

Erie filed a reply to new matter on November 19, 2019. On December

6, 2019, Erie filed a motion for judgment on the pleadings, to which Appellants

responded on January 2, 2020. On January 27, 2020, the court granted Erie’s

motion for judgment on the pleadings. Appellants timely filed a notice of

appeal on February 7, 2020. That same day, the court ordered Appellants to

file a concise statement of errors complained of on appeal pursuant to

Pa.R.A.P. 1925(b). Appellants timely complied on February 27, 2020.

Appellants raise the following issues for our review:

Whether the trial court committed an error of law in failing
to follow our Supreme Court’s holding in Generette v.
Donegal Mut. Ins. Co., [598 Pa. 505,] 957 A.2d 1180
____________________________________________

under any one vehicle or policy. There are two types of
stacking, intra-policy and inter-policy. Intra-policy
stacking is when more than one vehicle is insured under a
single policy of insurance. Inter-policy stacking…is the
addition of coverages for vehicles insured under different
policies of insurance.

Erie Insurance Exchange v. Petrie, 242 A.3d 915, 917 n.2 (Pa.Super.
2020) (internal citation and quotation marks omitted) (emphasis in original).

-5-
J-S32016-20

[(2008)], in finding that [Appellants] were improperly
seeking to stack [UM] benefits between a policy covering
them as guest passengers and a policy covering them as
“insureds.”

Whether the trial court committed an error of law in
concluding that the “household vehicle exclusion” was able
to be used to circumvent the statutory requirements of 75
Pa.C.S.A. § 1731(b) regarding how [UM] benefits must be
rejected?

Whether the trial court committed an abuse of discretion or
an error of law in determining that even though [Appellant]
Labar did not occupy a vehicle owned or leased by her or a
relative when she was injured, the household vehicle
exclusion still applied to deny her [UM] motorist benefits?

(Appellants’ Brief at 3-4).

Our standard and scope of review in this matter are as follows:

Entry of judgment on the pleadings is permitted under
Pennsylvania Rule of Civil Procedure 1034, which provides
that “after the pleadings are closed, but within such time as
not to unreasonably delay trial, any party may move for
judgment on the pleadings.” Pa.R.C.P. 1034(a). A motion
for judgment on the pleadings is similar to a demurrer. It
may be entered when there are no disputed issues of fact
and the moving party is entitled to judgment as a matter of
law.

Appellate review of an order granting a motion for judgment
on the pleadings is plenary. The appellate court will apply
the same standard employed by the trial court. A trial court
must confine its consideration to the pleadings and relevant
documents. The court must accept as true all well pleaded
statements of fact, admissions, and any documents properly
attached to the pleadings presented by the party against
whom the motion is filed, considering only those facts which
were specifically admitted.

We will affirm the grant of such a motion only when the
moving party’s right to succeed is certain and the case is so
free from doubt that the trial would clearly be a fruitless

-6-
J-S32016-20

exercise.

Rourke v. Pennsylvania Nat. Mut. Cas. Ins. Co., 116 A.3d 87, 91

(Pa.Super. 2015), appeal denied, 633 Pa. 789, 128 A.3d 221 (2015) (some

internal citations omitted). “Additionally, we note that interpretation of an

insurance policy presents a pure question of law, over which our standard of

review is de novo.” Id.

In their first issue, Appellants argue the trial court failed to apply

Generette to the facts of this case. Appellants assert the Pennsylvania

Supreme Court held in Generette that a waiver of stacking does not apply to

injuries someone received as a guest passenger in a vehicle. Appellants claim

that because they were not insured under the Sentry Select policy, they

received limited benefits under that policy as guest passengers, pursuant to

75 Pa.C.S.A. § 1733. Appellants contend the trial court improperly decided

Appellants were trying to stack UM benefits, which they could not do based on

Appellant King’s execution of the stacking waiver. Appellants insist the trial

court’s analysis was flawed because Appellants could not actually “stack” any

benefits received under the Erie policy with benefits received under the Sentry

Select policy, where Appellants were only guest passengers in the vehicle

involved in the accident. Appellants conclude the stacking waiver is

inapplicable in this case, and this Court should reverse the order granting

Erie’s motion for judgment on the pleadings and remand for further

proceedings. For the following reasons, we agree with some of Appellants’

-7-
J-S32016-20

contentions.

To begin, Section 1733 of the MVFRL provides:

§ 1733. Priority of recovery

(a) General rule.—Where multiple policies apply,
payment shall be made in the following order of priority:

(1) A policy covering a motor vehicle occupied by the
injured person at the time of the accident.

(2) A policy covering a motor vehicle not involved in
the accident with respect to which the injured person is an
insured.

(b) Multiple sources of equal priority.—The insurer
against whom a claim is asserted first under the priorities
set forth in subsection (a) shall process and pay the claim
as if wholly responsible. The insurer is thereafter entitled to
recover contribution pro rata from any other insurer for
benefits paid and the costs of processing the claim.

75 Pa.C.S.A. § 1733. Section 1738 of the MVFRL provides, in pertinent part,

as follows:

§ 1738. Stacking of uninsured and underinsured
benefits and option to waive

(a) Limit for each vehicle.—When more than one
vehicle is insured under one or more policies providing
uninsured or underinsured motorist coverage, the stated
limit for uninsured or underinsured coverage shall apply
separately to each vehicle so insured. The limits of
coverages available under this subchapter for an insured
shall be the sum of the limits for each motor vehicle as to
which the injured person is an insured.

(b) Waiver.—Notwithstanding the provisions of
subsection (a), a named insured may waive coverage
providing stacking of uninsured or underinsured coverages
in which case the limits of coverage available under the
policy for an insured shall be the stated limits for the motor

-8-
J-S32016-20

vehicle as to which the injured person is an insured.

(c) More than one vehicle.—Each named insured
purchasing uninsured or underinsured motorist coverage for
more than one vehicle under a policy shall be provided the
opportunity to waive the stacked limits of coverage and
instead purchase coverage as described in subsection (b).
The premiums for an insured who exercises such waiver
shall be reduced to reflect the different cost of such
coverage.

(d) Forms.—

(1) The named insured shall be informed that he may
exercise the waiver of the stacked limits of uninsured
motorist coverage by signing the following written rejection
form:

UNINSURED COVERAGE LIMITS

By signing this waiver, I am rejecting stacked limits of
uninsured motorist coverage under the policy for myself and
members of my household under which the limits of
coverage available would be the sum of limits for each motor
vehicle insured under the policy. Instead, the limits of
coverage that I am purchasing shall be reduced to the limits
stated in the policy. I knowingly and voluntarily reject the
stacked limits of coverage. I understand that my premiums
will be reduced if I reject this coverage.

___________________________________
Signature of First Named Insured and Date

* * *

(e) Signature and date.—The forms described in
subsection (d) must be signed by the first named insured
and dated to be valid. Any rejection form that does not
comply with this section is void.

-9-
J-S32016-20

75 Pa.C.S.A. § 1738(a)-(e).4 Additionally, the MVFRL defines an “insured” as:

“Any of the following: (1) An individual identified by name as an insured in a

policy of motor vehicle liability insurance. (2) If residing in the household of

the named insured: (i) a spouse or other relative of the named insured; or (ii)

a minor in the custody of either the named insured or relative of the named

insured.” 75 Pa.C.S.A. § 1702 (definitions).

In Generette, supra, the appellant suffered injuries while riding as a

guest passenger in a motor vehicle that collided with a third-party tortfeasor’s

vehicle. The appellant recovered $25,000.00 under the third-party

tortfeasor’s liability insurance policy, and $50,000.00 from Nationwide

Insurance Company, which provided UIM benefits for the car in which she was

a guest passenger. The appellant sought UIM benefits for her remaining

claims under her own policy with Donegal Mutual Insurance Company. The

appellant had executed a stacking waiver under the policy with Donegal. Id.

at 508-09, 957 A.2d at 1182-83.

In considering the interaction between Sections 1733 and 1738 of the

MVFRL, the Court explained:

We first review the process of UM/UIM recovery under the
MVFRL. UM/UIM coverage is triggered when the tortfeasor’s
liability coverage is not sufficient to cover the injuries
incurred in an accident. Once implicated, the provision of
underinsured motorist coverage is governed by Section
1733[.] As occurred in this case, the “policy covering a
____________________________________________

4Section 1738(d)(2) contains an identical form regarding UIM coverage limits.
See 75 Pa.C.S.A. § 1738(d)(2).

- 10 -
J-S32016-20

motor vehicle occupied by the injured person at the time of
the accident” is in first priority (“First Priority UIM policy”),
regardless of whether the injured person would otherwise
be an “insured” under the policy. 75 Pa.C.S. § 1733(a)(1).
In this case, the First Priority policy is Nationwide–UIM,
which did not cover all the injuries suffered by Appellant. If
the injuries exceed the coverage of the First Priority UIM
policy, then the injured person may seek recovery under a
“policy covering a motor vehicle not involved in the accident
with respect to which the injured person is an insured”
(“Second Priority UIM policy”). 75 Pa.C.S. § 1733(a)(2). In
this case, the Second Priority UIM policy is the Appellant’s
own Donegal–UIM policy.

Donegal, however, argues that Appellant should not recover
under the Donegal–UIM policy because she waived stacking.
[T]he application of the stacking waiver in this case turns on
whether the use of the term “insured” in the stacking and
stacking waiver section, 75 Pa.C.S. § 1738, is limited to the
definition of “insured” as provided in the MVFRL’s definitions
section, 75 Pa.C.S. § 1702, which does not include guest
passengers. If the term in Section 1738 is limited by Section
1702, then Section 1738, and the relevant provision relating
to the waiver of stacking, does not apply to injuries received
as a guest passenger in a vehicle because guest passengers
are not “insureds.”

We conclude that we are bound to apply the specific
definition of “insured” provided by the General Assembly in
Section 1702 of the MVFRL to the use of the term in Section
1738, absent any indication of the legislature that it should
not be applied.14 … [W]e are bound to interpret the
stacking waiver in Section 1738 to apply only to “insureds”
as defined by Section 1702, which does not include guest
passengers.

14 We acknowledge, however, that Section 1733(a)
suggests that guest passengers are covered by most
insurance policies, given that the first priority UIM
coverage is the policy covering the vehicle occupied,
regardless of whether the injured person is an
insured. We refuse to use this implication, however,
to override the specific definition of “insured” in
Section 1702, which does not include guest

- 11 -
J-S32016-20

passengers. As we are bound by the statute as
written, we leave amendment of the MVFRL to the
legislature to clarify what is required of insurers
concerning guest passengers.

While we hold that Appellant’s recovery under the Donegal–
UIM policy is not barred by her waiver of stacking, we must
still consider whether it is prohibited by the “Other
Insurance” clause included in the Donegal–UIM policy. …

Id. at 520-21, 957 A.2d at 1189-90. To summarize, Generette held that an

injured person can recover under Section 1733(a)(1) as a guest passenger

with respect to the policy covering the vehicle in which he/she was riding

during the accident (the first priority UM/UIM policy) and under Section

1733(a)(2) on any other policy on which he/she was an “insured” (the second

priority UM/UIM policy), regardless of whether stacking was waived on the

second priority UM/UIM policy. See id.

Instantly, the parties agree that neither Appellant King nor Appellant

Labar were “insureds” under the Sentry Select policy covering the vehicle in

which Appellants were injured. Appellants initially recovered benefits under

the Sentry Select policy in accordance with Section 1733(a)(1) as the first

priority UM policy. As those benefits were insufficient to cover Appellants’

claims, they then sought benefits under the Erie policy, of which Appellants

were both insureds,5 per Section 1733(a)(2), as the second priority UM policy.

____________________________________________

5The parties agree both Appellant King and Appellant Labar were “insureds”
under the Erie policy (Appellant King as a “named insured” and Appellant
Labar as a “resident relative” of her aunt, who was also a “named insured”).

- 12 -
J-S32016-20

Under Generette, Appellant King’s execution of a “stacking waiver” is

irrelevant to Appellants’ recovery under Section 1733, because Appellants

cannot “stack” benefits they receive from Erie with benefits they received from

Sentry Select, where Appellants are not “insureds” under the Sentry Select

policy. See 75 Pa.C.S.A. §§ 1702, 1738; Generette, supra. Thus, we agree

with Appellants’ position that Appellant King’s execution of a stacking waiver

does not bar their recovery from Erie.6

Nevertheless, our inquiry does not end here because Erie also claimed

Appellants were barred from recovery due to the household exclusion

contained in the policy. Consequently, we turn to Appellants’ second and third

issues, in which they argue that the trial court misapplied the holding in

Gallagher v. GEICO Indemnity Company, 650 Pa. 600, 201 A.3d 131

(2019). Appellants assert the Supreme Court declared a similar household

exclusion unenforceable in that case, as attempting to circumvent the

statutory language relevant to a rejection of stacking at Section 1738.

Appellants claim that another section of the MVFRL, Section 1731

(governing rejection of UM coverage), provides the sole manner in which a

person may reject UM coverage. Appellants maintain that any deviation from

the rejection form set forth in Section 1731 requires an insurance company to

provide UM coverage even where an insured did not pay for such coverage.

____________________________________________

6Based on our disposition, we do not have to decide whether the stacking
waiver applied to “inter-policy” or “intra-policy” stacking.

- 13 -
J-S32016-20

Appellants insist that under Gallagher, the household exclusion cannot be

used as a de facto rejection of UM benefits where Section 1731 provides the

exclusive means for a rejection of UM benefits to occur.7 Appellants

emphasize that premiums were paid to Erie for UM coverage, and Erie should

not be able to deprive its insureds of the benefit of that which was purchased.

Specifically, Appellants contend: “If under Gallagher, the household vehicle

exclusion is an invalid means to waive the stacking of [UM] coverage, it should

certainly be an invalid means to reject [UM] coverage. There is no reason to

draw a distinction.” (Appellants’ Brief at 24).

Alternatively, Appellants argue that even if the household exclusion is

enforceable to deny coverage to Appellant King, it should not bar coverage for

Appellant Labar. Appellants aver there is no dispute that Appellant Labar was

injured by an uninsured driver, and that she falls within the definition of an

“insured” under Erie’s policy. Appellants claim Appellant Labar was neither

occupying nor struck by a motor vehicle owned by Appellant Labar or one of

her relatives. Appellants contend Appellant Labar does not fall within the

____________________________________________

7 Erie contends that Appellants have waived on appeal any claim that the
household exclusion violates Section 1731 under Gallagher, where Appellants
raised that claim for the first time in their Rule 1925(b) statement. (See Erie’s
Brief at 8, 10-11; 20-21). Our review of the record shows that Appellants
preserved this claim in their sur-reply brief in opposition to Erie’s motion for
judgment on the pleadings, filed on January 17, 2020. In response, Erie
sought leave to respond to Appellants’ brief to address this specific argument,
and attached a proposed brief. The trial court granted Erie’s request and
accepted its attached filing on January 22, 2020. Thus, we reject Erie’s
assertion of waiver.

- 14 -
J-S32016-20

definition of “you” relevant to the exclusionary policy language. At a

minimum, Appellants insist the exclusionary language is ambiguous and

should be construed against Erie. Appellants conclude the household

exclusion cannot bar coverage in this case, the court erred by granting Erie’s

motion for judgment on the pleadings, and this Court should reverse and

remand for further proceedings. We disagree.

With respect to the household exclusion contained in insurance policies,

this Court has explained:

The household vehicle exclusion is one of several types of
exclusionary clauses included in motor vehicle insurance
policies providing uninsured motorist coverage. Specifically,
the household vehicle exclusion exempts from uninsured
motorist coverage any coverage for bodily injury sustained
while occupying a vehicle owned by the named insured, the
named insured’s spouse, or a resident relative of the named
insured, but not insured under the policy in question.

Petrie, supra at 918 n.4 (internal citation omitted).

In Gallagher, supra, the insured had two insurance policies with

GEICO, one for his motorcycle and one for his automobiles. The insured paid

for stacked UM and UIM coverage for both policies. The insured was injured

in an accident while riding his motorcycle, and recovered the full policy limits

of UIM coverage available under the motorcycle policy. When the insured filed

a claim for UIM coverage under the automobile policy, however, GEICO denied

it based on the household exclusion provision. Because the insured had

suffered bodily injury while occupying his motorcycle, which was not insured

under the automobile policy, GEICO claimed the household exclusion

- 15 -
J-S32016-20

precluded the insured from receiving UIM motorist coverage pursuant to that

policy. Id. at 604, 201 A.3d at 132-33.

Our Supreme Court held that the household exclusion did not bar inter-

policy stacking under the facts of that case, explaining:

[S]tacked UM/UIM coverage is the default coverage
available to every insured and provides stacked coverage on
all vehicles and all policies.

Under the MVFRL, insureds can choose to waive stacked
coverage. [75 Pa.C.S.A.] § 1738(b). If an insured decides
to waive stacked coverage, then the insured’s premiums
must be reduced to reflect the different cost of coverage.
Id. at § 1738(c). Importantly, the MVFRL makes clear that
to effectuate a waiver of UM/UIM coverage, an insurer must
provide the insured with a statutorily-prescribed waiver
form, which the named insured must sign if he wishes to
reject the default provision of stacked coverage. Id. at §
1738(d). This waiver provision has the salutary effect of
providing insureds with detailed notice and knowledge of
their rights to UM/UIM coverage absent such formal waiver.

* * *

This [household exclusion] policy provision, buried in an
amendment, is inconsistent with the unambiguous
requirements of Section 1738 of the MVFRL under the facts
of this case insomuch as it acts as a de facto waiver of
stacked UIM coverage provided for in the MVFRL, despite
the indisputable reality that [the insured] did not sign the
statutorily-prescribed UIM coverage waiver form. Instead,
[the insured] decided to purchase stacked UM/UIM coverage
under both of his policies, and he paid GEICO premiums
commensurate with that decision. He simply never chose
to waive formally stacking as is plainly required by the
MVFRL.

Gallagher, supra at 611-12, 201 A.3d at 137-38 (some internal citations and

footnote omitted).

- 16 -
J-S32016-20

Instantly, we have already decided that stacking under Section 1738 is

not implicated under these facts, where Appellants were guest passengers and

not “insureds” under the Sentry Select policy covering the vehicle involved in

this accident. We reiterate that because Appellants were not “insureds” under

the Sentry Select policy, there is no UM coverage on which to “stack” the Erie

policy. See Generette, supra. Thus, the holding in Gallagher—that a

household exclusion cannot circumvent the clear requirements of a rejection

of stacking set forth in Section 1738—is not directly applicable here. See

Gallagher, supra.

With respect to Appellants’ claim that we should extend the rationale in

Gallagher to render the household exclusion void as inconsistent with Section

1731, we initially observe that Gallagher did not mention Section 1731 in its

decision. See id. Section 1731 of the MVFRL provides, in pertinent part:

§ 1731. Availability, scope and amount of coverage

(a) Mandatory offering.—No motor vehicle liability
insurance policy shall be delivered or issued for delivery in
this Commonwealth, with respect to any motor vehicle
registered or principally garaged in this Commonwealth,
unless uninsured motorist and underinsured motorist
coverages are offered therein or supplemental thereto in
amounts as provided in section 1734 (relating to request for
lower limits of coverage). Purchase of uninsured motorist
and underinsured motorist coverages is optional.

(b) Uninsured motorist coverage.—Uninsured
motorist coverage shall provide protection for persons who
suffer injury arising out of the maintenance or use of a
motor vehicle and are legally entitled to recover damages
therefor from owners or operators or uninsured motor
vehicles. The named insured shall be informed that he may

- 17 -
J-S32016-20

reject uninsured motorist coverage by signing the following
written rejection form:

REJECTION OF UNINSURED MOTORIST
PROTECTION

By signing this waiver I am rejecting uninsured motorist
coverage under this policy, for myself and all relatives in my
household. Uninsured coverage protects me and relatives
living in my household for losses and damages suffered if
injury is caused by the negligence of a driver who does not
have any insurance to pay for losses and damages. I
knowingly and voluntarily reject this coverage.

___________________________________
Signature of First Named Insured

___________________________________
Date

* * *

(c.1) Form of waiver.—Insurers shall print the
rejection forms required by subsections (b) and (c) on
separate sheets in prominent type and location. The forms
must be signed by the first named insured and dated to be
valid. The signatures on the forms may be witnessed by an
insurance agent or broker. Any rejection form that does not
specifically comply with this section is void. If the insurer
fails to produce a valid rejection form, uninsured or
underinsured coverage, or both, as the case may be, under
that policy shall be equal to the bodily injury liability limits.
On policies in which either uninsured or underinsured
coverage has been rejected, the policy renewals must
contain notice in prominent type that the policy does not
provide protection against damages caused by uninsured or
underinsured motorists. Any person who executes a waiver
under subsection (b) or (c) shall be precluded from claiming
liability of any person based upon inadequate information.

75 Pa.C.S.A. § 1731(a), (b), (c.1).

Although Appellants explain the holding in Gallagher and recite the

- 18 -
J-S32016-20

statutory language of Section 1731, they do not offer any other case law to

support their position that we should expand the holding in Gallagher beyond

the facts of that case. In the absence of a well-developed argument on this

point, we decline to interpret Gallagher as broadly as Appellants suggest.8

See generally Commonwealth v. Pi Delta Psi, Inc., 211 A.3d 875, 884

(Pa.Super. 2019), appeal denied, ___ Pa. ___, 221 A.3d 644 (2019) (stating:

“When an appellant’s argument is underdeveloped, we may not supply it with

a better one”). Therefore, we hold that Gallagher does not bar applicability

of the household exclusion in this case.

Here, the household exclusion bars coverage for damages sustained by

“anyone we protect” while “occupying” or being struck by a “motor

vehicle” owned or leased by “you” or a “relative,” but not insured for UM or

UIM coverage under this policy. (See Complaint, filed 9/5/19, Exhibit A at

Uninsured/Underinsured Motorist Coverage Endorsement, p.3; R.R. at 39a)

____________________________________________

8 We recognize that in Petrie, supra, this Court interpreted Gallagher as a
“broad holding that the household exclusion provision cannot be used to skirt
the express requirement under Section 1738 that an insurer must receive an
insured’s written acknowledgment that he knowingly decided to waive stacked
UM/UIM coverage” and stated that Gallagher “is not limited to [its] facts…,
but one that finds that the [household] exclusion is inconsistent with the
requirements of Section 1738 of knowing waiver—a holding that is applicable
to all policies for automobile insurance.” Petrie, supra at 922 (explaining
that just because insured did not purchase stacking, or that policies are from
two different companies is irrelevant because Section 1738 requires knowing
waiver of stacking from whom insurance is being obtained). Although this
Court interpreted Gallagher broadly as applied to Section 1738, this Court
did not consider or decide Gallagher’s applicability with respect to Section
1731. See id.

- 19 -
J-S32016-20

(emphasis in original). Additionally, the policy defines “you,” “your” or

“Named Insured” as the “Subscriber” identified as a Named Insured on the

“Declarations” and others identified as Named Insured(s) on the

“Declarations.” (See id. at General Policy Definitions, p.3; R.R. at 20a)

(emphasis in original). In other words, the household exclusion bars UM

coverage for damages its insureds sustained in a vehicle owned by a “named

insured” that Erie did not cover under the policy.

Appellants do not dispute that they qualify as “anyone we protect” under

this exclusion or that they were occupying a motor vehicle at the time of the

accident that was not insured for UM coverage under the policy. Thus, to the

extent the household exclusion applies, Appellants challenge its applicability

only to Appellant Labar because neither she nor her relative was driving the

vehicle involved in the accident. Nevertheless, the definition of “you” makes

clear that it includes the “Named Insured” on the Declarations page of the

policy. Thus, the “you” in the exclusionary language does not necessarily

reference the claimant (Appellant Labar) but applies to a claim by any insured

where a named insured (Appellant King) owned the vehicle in which the

claimant was injured that was not insured by Erie. Notably, Appellants do not

mention the definition of “you” contained in the policy in their appellate brief.

As the policy is clear regarding the definition of “you,” we see no ambiguity in

the contract language. See Allstate Fire and Cas. Ins. Co. v. Hymes, 29

A.3d 1169 (Pa.Super. 2011), appeal denied, 616 Pa. 625, 46 A.3d 715 (2012)

- 20 -
J-S32016-20

(stating that where language of contract is clear and unambiguous, court is

required to give effect to that language); Hunyady v. Aetna Life & Cas.,

578 A.2d 1312 (Pa.Super. 1990), aff’d, 530 Pa. 25, 606 A.2d 897 (1992)

(explaining that this Court must construe insurance policy as whole and not in

discrete units; declining to find ambiguity in policy definition of “you”

referencing “named insured” on policy as opposed to actual claimant). Based

upon the foregoing, we hold that Appellants are barred from coverage under

the household exclusion in this policy, and Erie was entitled to judgment on

the pleadings. See Rourke, supra. Accordingly, we affirm.

Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 2/5/2021

- 21 -