J-A05037-22
2022 PA Super 85
HARTFORD FIRE INSURANCE : IN THE SUPERIOR COURT OF
COMPANY : PENNSYLVANIA
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v. :
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:
CHARLES DAVIS AND KEYSTONE :
AUTOMOTIVE OPERATIONS, INC. : No. 310 MDA 2021
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v. :
:
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HARTFORD FIRE INSURANCE :
COMPANY, INDIVIDUALLY AND :
D/B/A THE HARTFORD INSURANCE :
GROUP AND THE HARTFORD :
INSURANCE GROUP, INDIVIDUALLY :
AND D/B/A THE HARTFORD AND THE :
HARTFORD, :
:
Additional :
Defendants
Appeal from the Judgment Entered February 11, 2021
In the Court of Common Pleas of Luzerne County Civil Division at No(s):
2822-2007
BEFORE: OLSON, J., KUNSELMAN, J., and STEVENS, P.J.E.*
OPINION BY STEVENS, P.J.E.: FILED: MAY 9, 2022
Appellant, Charles Davis, appeals from the February 11, 2021 judgment
entered in favor of Appellees, Hartford Fire Insurance Company, individually
and d/b/a The Hartford Insurance Group and The Hartford Insurance Group,
individually and d/b/a The Hartford and The Hartford (hereinafter, “Hartford”),
____________________________________________
* Former Justice specially assigned to the Superior Court.
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following the trial court’s order granting Hartford’s motion for summary
judgment; denying Appellant’s counter motion for summary judgement; and
vacating the arbitration award entered against Hartford on October 31, 2007
and modified on February 8, 2008. After careful review, we vacate the
judgment and remand for proceedings consistent with this opinion.
This case stems from a September 9, 2005 motor vehicle accident in
which Appellant was injured while operating a vehicle owned by Keystone
Automotive Operations, Inc. (“Keystone”) during the course and scope of his
employment. The vehicle was insured by Hartford under a commercial
automobile policy for the April 1, 2005 to April 1, 2006 policy term. This policy
was first issued to Keystone in April 2002 and then renewed annually up and
through the time of Appellant’s accident. The record reflects that it was the
practice of Hartford to obtain an Underinsured Motorist (“UIM”) Coverage
Rejection form for each policy term renewal. See “Action for Declaratory
Judgment,” 3/16/07 at ¶¶ 8-10. Hartford obtained a Rejection of UIM
Coverage form signed by the Executive Vice President of Keystone in 2003 but
failed to do so for the 2005-2006 policy at issue. Id. At the time of the
accident, a Pennsylvania UIM Coverage Endorsement was appended to the
2005-2006 policy, although the policy did not specify a limit of UIM coverage
for Pennsylvania. See notes of testimony – deposition, 7/5/14 at 49-50; notes
of testimony – deposition, 7/23/15 at 197-199.
The trial court summarized the procedural history of this case as follows:
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[Appellant] filed a claim with Hartford for benefits by
correspondence dated October 17, 2005. The
Hartford Policy had a basket deductible of
$3,750,000.00 with a $250,000.00 deductible for
each accident involving multiple coverages within the
Hartford Policy.
In the October 17, 2005 letter, [Appellant] requested
a certified copy of the Hartford policy so that he could
determine the amount, if any, of [UIM] coverage
available. After numerous failed attempts to contact
Hartford, [Appellant] made a formal demand for
Arbitration by correspondence dated November 17,
2005. When this correspondence went unanswered,
[Appellant] filed a Writ of Summons against Hartford
on December 16, 2005 in the Court of Common Pleas
for Luzerne County. [Appellant] also filed a Petition
requesting the Court appoint Hartford’s arbitrator and
a neutral arbitrator. A Rule Returnable dated
December 17, 2005 was issued requiring Hartford to
show cause as to why the Court should not appoint a
neutral arbitrator and a hearing was scheduled for
January 26, 2006. In an order dated January 23,
2006, the Court made its Rule Returnable absolute,
by agreement of the parties, appointing a neutral
arbitrator with Hartford also appointing its arbitrator
at that time.
For the next month, Hartford participated in the
Arbitration process. In a letter dated February 28,
2006, Hartford asserted that the subject policy did not
include UIM benefits. On March 16, 2007, Hartford
commenced the instant action seeking a declaratory
judgment that the policy at issue does not provide UIM
benefits. On March 21, 2007, Hartford filed a Motion
to stay the pending UIM arbitration until there was a
determination of coverage pending in its declaratory
judgment action, which was opposed by [Appellant].
Hartford’s Motion for Stay was denied in an order
dated April 23, 2007.
The claim went to Arbitration on October 30, 2007,
and on October 31, 2007 the panel awarded the
amount of $2,930,000.00 to [Appellant]. On
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December 3, 2007, Hartford filed a Petition to Vacate
or Modify the UIM Arbitration Award which is docketed
to 2007-13910. [Appellant] opposed Hartford’s
Motion in an Answer and Brief in Opposition filed on
December 19, 2007. After briefing was complete in
that matter, the Arbitration Award was modified from
$2,930,150 to $2,000,000 to reflect the purported
policy limits of the insurance policy at issue by Court
Order dated and filed February 8, 2008.
Trial court opinion, 5/4/21 at 2-5 (citations and footnotes omitted).
The question of whether the policy provided for UIM coverage remained
undecided. Eventually, the stay of the action was lifted and on April 17, 2019,
Hartford filed a motion for summary judgment. Appellant filed a counter
motion for summary judgment of May 31, 2019. Following oral argument and
the filing of supplemental briefs, the trial court entered an order on January
11, 2021 denying both motions. On January 25, 2021, Hartford filed a motion
requesting that the trial court reconsider its denial of the parties’ summary
judgment motions. The trial court granted Hartford’s request on February 8,
2021.
As noted, on February 11, 2021, the trial court entered an order
granting Hartford’s motion for summary judgment; denying Appellant’s
counter motion for summary judgement; and vacating the arbitration award
entered against Hartford on October 31, 2007 and modified on February 8,
2008. The trial court entered judgment in favor of Hartford that same day.
In reaching this decision, the trial court found that the policy issued by
Hartford for the 2005-2006 term did not specify a limit of UIM coverage for
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Pennsylvania and, thus, the coverage limit was zero and the “Pennsylvania
UIM Coverage Endorsement” (Endorsement 60) appended thereto was a
nullity. See trial court opinion, 5/4/21 at 15-20. The trial court further held
that Keystone effectively waived UIM coverage in Pennsylvania by executing
a “Rejection of UIM Protection” form in 2003. Id. at 22-31. The trial court
found that this form: (a) was applicable to the 2005-2006 policy, despite the
fact that a new rejection form was never obtained for the 2005-2006 policy
term; and (b) fully complied with Section 1731 of the Pennsylvania Motor
Vehicle Financial Responsibility Law, 75 Pa.C.S.A. §§ 1701-1799.7. Id.
On March 5, 2021, Appellant filed a timely notice of appeal. Appellant
filed a six-page Pa.R.A.P. 1925(b) statement on March 24, 2021. The trial
court filed its Rule 1925(a) opinion on May 4, 2021, indicating that it was
relying on the reasoning set forth in its prior opinion and order entered
February 11, 2021.
Appellant raises the following issues for our review:
1 Did the Trial Court err in finding that the Policy
issued by [Hartford] to [Keystone]for the 2005-
2006 term did not provide Pennsylvania [UIM]
Coverage despite the fact that a Pennsylvania
[UIM] Coverage Endorsement was appended to
the Policy?
2. With respect to the 2003 Rejection of [UIM]
Protection form, did the Trial Court err in: (a)
finding that it was applicable to the 2005-2006
Policy term; and (b) finding that it strictly
complied with the requirements of the
[Pennsylvania Motor Vehicle Financial
Responsibility Law]?
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3. Did the Trial Court similarly err in dismissing the
extracontractual bad faith claims once it
determined that the 2005-2006 Policy term did
not provide Pennsylvania [UIM] Coverage?
Appellant’s brief at 3.
Our standard of review of a trial court’s order granting summary
judgment is well settled:
A reviewing court may disturb the order of the trial
court only where it is established that the [trial] court
committed an error of law or abused its discretion. As
with all questions of law, our review is plenary.
In evaluating the trial court’s decision to enter
summary judgment, we focus on the legal standard
articulated in the summary judgment rule. The rule
states that where there is no genuine issue of material
fact and the moving party is entitled to relief as a
matter of law, summary judgment may be entered.
Where the non-moving party bears the burden of
proof on an issue, he may not merely rely on his
pleadings or answers in order to survive summary
judgment. Failure of a non-moving party to adduce
sufficient evidence on an issue essential to his case
and on which it bears the burden of proof establishes
the entitlement of the moving party to judgment as a
matter of law. Lastly, we will view the record in the
light most favorable to the non-moving party, and all
doubts as to the existence of a genuine issue of
material fact must be resolved against the moving
party.
JP Morgan Chase Bank, N.A. v. Murray, 63 A.3d 1258, 1261-1262
(Pa.Super. 2013) (citations and internal quotation marks omitted).
Pennsylvania Rule of Civil Procedure 1035.2 governs motions for
summary judgment and provides, in relevant part, as follows:
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After the relevant pleadings are closed, but within
such time as not to unreasonably delay trial, any party
may move for summary judgment in whole or in part
as a matter of law
(1) whenever there is no genuine issue of any
material fact as to a necessary element of the cause
of action or defense which could be established by
additional discovery or expert report, or
(2) if, after the completion of discovery relevant to
the motion, including the production of expert reports,
an adverse party who will bear the burden of proof at
trial has failed to produce evidence of facts essential
to the cause of action or defense which in a jury trial
would require the issues to be submitted to a jury.
Pa.R.C.P. 1035.2.
We begin by addressing Appellant’s first two claims simultaneously.
Appellant argues that the trial court erred in finding that the 2005-2006 policy
issued by Hartford did not provide for UIM coverage at the time of his
automobile accident, despite the fact that a UIM Coverage Endorsement was
appended to thereto. Appellant’s brief at 11-20. Appellant also contends that
the trial court erred in concluding that the “Rejection of UIM Protection” form
executed by Keystone in 2003 was applicable to the 2005-2006 policy term.
Id. at 22-27. Following our careful review, we agree
It is well settled in this Commonwealth that in interpreting an
automobile insurance policy, “a court must view the policy in its entirety,
giving effect to all of its provisions.” Continental Cas. Co. v. Pro Machine,
916 A.2d 1111, 1121 (Pa.Super. 2007) (citations omitted). “An insurance
policy must be read as a whole, and not in discrete units.” Clarke v. MMG
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Ins. Co., 100 A.3d 271, 276 (Pa.Super. 2014) (citation and internal quotation
marks omitted), appeal denied, 117 A.3d 294 (Pa. 2015). “[The]
interpretation of an insurance policy presents a pure question of law, over
which our standard of review is de novo.” Erie Ins. Exch. v. King, 246 A.3d
332, 336 (Pa.Super. 2021), appeal denied, 259 A.3d 341 (Pa. 2021).
Pursuant to the Motor Vehicle Financial Responsibility Law (hereinafter,
“MVFRL”), motor vehicle liability insurance carriers are required to offer the
named insured UIM liability coverage, unless such coverage is rejected in
accordance with the statute. Subsection 1731(a) of the MVFRL provides as
follows:
(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.
75 Pa.C.S.A. § 1731(a).
Under the MVFRL, insurers are also required to inform named insureds
that they may reject UIM coverage by signing a written rejection form set
forth in Subsection 1731(c). See id. § 1731(c).
Subsection 1731(c.1) further provides that if an insurer’s UIM coverage
rejection form does not “specifically comply” with Section 1731, then UIM
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coverage shall be equal to the policy’s bodily injury liability limits. Specifically,
Subsection 1731(c.1) states as follows:
(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.
Id. § 1731(c.1).
Here, the record reflects that the policy at issue expressly provided for
UIM coverage at the time of Appellant’s September 9, 2005 accident. It is
undisputed that the 2005-2006 policy issued by Hartford contained a UIM
Coverage Endorsement. Additionally, the UIM Coverage Endorsement was
referenced on both the Declarations Pages and in the List of Policy Provisions
and Endorsements. See Hartford’s Motion for Summary Judgment, 4/17/19,
Exhibit M – Hartford Policy, 2005-2006 Policy Term.
As discussed, under the MVFRL, “Section 1731 mandates that an
insurance company issuing a policy in the Commonwealth of Pennsylvania
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must provide UM/UIM coverage equal to the bodily injury liability coverage,
unless the insured validly rejects UM/UIM coverage or validly requests lower
limits of coverage pursuant to section 1734.” Weilacher v. State Farm Mut.
Auto. Ins. Co., 65 A.3d 976, 983 (Pa.Super. 2013) (citations omitted); see
also 75 Pa.C.S.A. § 1731(c.1).
The insurance policy issued by Hartford to Keystone and in effect at the
time of Appellant’s accident provided $2,000,000.00 in liability coverage.
Thus, absent a valid and specific rejection for the 2005-2006 policy term, the
Pennsylvania UIM coverage limit was also $2,000,000.00.
Hartford would have this Court find that the UIM Coverage Endorsement
was issued as a result of a “clerical error” and the Rejection of UIM Coverage
form executed by Keystone in 2003 was applicable to the 2005-2006 policy.
See Hartford’s brief at 10. We decline to do so.
Hartford acknowledged that a signed Rejection of UIM Coverage form
was never obtained from Keystone for the 2005-2006 policy term, pursuant
to its own policies and procedures, and it specifically appended the UIM
Coverage Endorsement to the 2005-2006 policy. Contrary to the trial court’s
findings, there was also no valid and specific rejection of the UIM coverage for
the policy in effect at the time of the accident.
It is immaterial that the policy issued by Hartford for the 2005-2006
term did not specify a limit of UIM coverage for Pennsylvania. Pursuant to the
MVFRL, liability and UIM coverages must be co-extensive unless rejected in
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accordance with Subsection 1731. See id. Instantly, no Rejection of UIM
Coverage form was ever executed by Keystone for 2005-2006 policy term,
and thus, by operation of law, the policy at issue was required to provide UIM
coverage in an amount equal to the liability coverage of that policy,
$2,000,000.00.
Based on the foregoing, we find that the trial court failed to give full
effect to all the terms of the 2005-2006 policy, namely, the UIM Coverage
Endorsement appended thereto. Accordingly, we hold that the trial court
erred in granting summary judgment in favor of Hartford; vacate the February
11, 2021 judgment; and remand for proceeding consistent with this opinion.1
Judgment vacated. Case remanded. Jurisdiction relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 05/09/2022
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1In light of our disposition, we need not address Appellant’s remaining claim
of trial court error.
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