Pressley v. Travelers Property Casualty Corp.

LALLY-GREEN, J.,

Concurring and Dissenting:

¶ 1 While I agree that the trial court properly determined that Brown is an insured entitled to first-party and underin-surance benefits, I reach this conclusion on grounds different than those of the Majority. However, I do not agree with the Majority’s determination that Evans or Evans Agency is jointly and severally liable along with Travelers.

¶ 2 This Court has stated “an insurance policy is a contract and stands on no different grounds than any other contract.” Nationwide Mutual Ins. Co. v. Johnson, 450 Pa.Super. 519, 676 A.2d 680, 684 (1996), citing Tonkovic v. State Farm Mut. Auto. Ins. Co., 513 Pa. 445, 521 A.2d 920 (1987). Interestingly, the Majority notes this rule of law stated in Nationwide in Footnote 2 of its opinion but fails to address this rule or otherwise discuss why it is inapplicable to the case at bar. Rather, the Majority relies upon the reasonable expectations doctrine adopted by our Supreme Court in Collister v. Nationwide Life Ins. Co., 479 Pa. 579, 388 A.2d 1346 (1978). However, the reasonable expectations of the insured are not the first step in this Court’s analysis of an insurance contract. Our Supreme Court has stated the following:

The task of interpreting an insurance contract is generally performed by a court rather than by a jury. The goal of that task is, of course, to ascertain the intent of the parties as manifested by the language of the written instrument. Where a provision of a policy is ambiguous, the policy provision is to be con*1143strued in favor of the insured and against the insurer, the drafter of the agreement. Where however, the language of the contract is clear and unambiguous, a court is required to give effect to that language.

Madison Constr. Co. v. Harleysville Mut. Ins. Co., 557 Pa. 595, 735 A.2d 100, 106 (1999) (citations omitted). The Court also stated that “[i ]he polestar of our inquiry, therefore, is the language of the insurance policy.” Id. (emphasis added).

¶ 3 Further, our Supreme Court in Madison noted the existence of the reasonable expectations doctrine. The Court observed that the appellant sought application of the doctrine regardless of the express terms of the insurance policy. While the Court determined that the appellant failed to develop this argument and, therefore, declined to address it, the Court did note that the doctrine has been applied in “very limited circumstances.” Madison, 735 A.2d at 109 n. 8.

¶ 4 Thus, it is clear that this Court’s first level of inquiry must be the language of the contract, which manifests the intent of the parties. Rather than examining the contract, the Majority immediately performs an analysis of whether Brown is entitled to coverage under the reasonable expectations doctrine. I do not believe the reasonable expectation doctrine should be the first step in this Court’s analysis of the issue. Therefore, I would decline to apply the reasonable expectations doctrine without first examining the language of the contract in order to determine whether Brown is entitled to relief.

¶ 5 Under the language of the insurance policy as of the date of Brown’s injury, Brown was not a named insured and was not a member of Pressley’s household entitled to benefits. On March 16, 1997, Brown was killed when struck by a drunk driver. On March 17, 1997, Pressley telephoned Evans to inform him of the accident and her mother’s death. Evans informed Pressley that Brown had not been added to Pressley’s insurance policy due to Pressley’s failure to submit Brown’s social security number and driver’s license number. Therefore, as of the date of Brown’s injury, she was not covered under Press-ley’s insurance policy as a named insured or as a member of Pressley’s household.

Although Brown was not covered by Pressley’s insurance policy as of the date of her injury, she was subsequently brought within the scope of coverage through a backdated modification of Pressley’s policy. On March 17, 1997, Evans called Travelers and requested that Brown be added to Pressley’s policy, effective January 26, 1997. Travelers informed Evans that the change could be backdated only to March 11, 1997, the date of the last change to Pressley’s policy. Thus, Travelers effected the change to add Brown to Pressley’s policy, effective March 11, 1997.

The effect of the backdated modification done in this case is to bring a non-covered injury within the scope of coverage of the insurance policy. Despite the fact that Brown was not insured on the date of her accident, she was added as a named insured effective March 11, 1997, five days prior to the accident. Thus, the backdating of the change to Pressley’s policy brings Brown within the scope of the insurance policy. Therefore, Brown’s estate is entitled to collect the benefits due under the insurance policy.

¶ 6 The trial court found that Evans mislead Travelers. N.T., 10-11/01, vol. II, at 55. Travelers argues that but for Evans’ actions about adding an insured who was already deceased, it would not be subject to a claim by Brown’s estate. Travelers’ Brief at 38. However, “where *1144one of two innocent persons must suffer, the loss should be borne by him who put the wrongdoer in a position of trust and confidence and thus enabled him to perpetrate the wrong.” Artkraft Strauss Sign Corp. v. Dimeling, 429 Pa.Super. 65, 631 A.2d 1058, 1061 (1993).

¶ 7 In the instant case, if we nullify the backdated modification Evans procured through misrepresentation, Brown would not be entitled to benefits under the insurance policy. On the other hand, if we enforce the backdated modification, Travelers would be required to pay considerable benefits to an insured person who was not alive at the time she was added to the insurance policy. Either Brown or Travelers must bear the loss caused by Evans misrepresentation.

¶ 8 Unlike Brown, Travelers put Evans in a position of trust and confidence, which allowed him to perpetrate a wrong. By accepting Evans’ representations about Brown without seeking proof or confirmation, Travelers permitted Evans to commit a fraud upon it. Travelers, not Brown, is in a position to restrict backdating procedures or eliminate backdating altogether. Therefore, Travelers must bear the loss resulting from the misuse of its trust and confidence. Accordingly, the backdated modification adding Brown to Pressley’s insurance policy stands and brings Brown within the scope of coverage of Pressleyls policy as of the date of her injury.

¶ 9 The next point upon which I disagree with the Majority concerns the holding that Evans is jointly and severally liable with Travelers for the benefits owed under the insurance policy. The Majority states, “We note that because the lower court concluded that coverage for Brown existed, the joint and several verdict is viewed as a declaration that had coverage not been found, Travelers, Evans and Evans Agency would have been hable.” Majority Opinion at 11 n. 1. The Majority upholds the trial court’s ruling that Brown is entitled to benefits due under the policy. Nevertheless, the Majority addresses the issue regarding what would happen if coverage had not been found.

¶ 10 This Court recently stated the following:

As a general rule an actual case or controversy must exist at all stages of the judicial process, and a case once actual may become moot because of a change of facts. The appellate courts of this Commonwealth will not decide moot or abstract questions except in rare instances when the question presented is one of great public importance, or when the question presented is capable of repetition yet escaping judicial review. An issue before a court is moot if in ruling upon the issue the court cannot enter an order that has any legal force or effect.

Johnson v. Martofel, 797 A.2d 943, 946 (Pa.Super.2002) (citations omitted).

¶ 11 In the instant case, the trial court found that Brown was covered by Press7 ley’s insurance policy. The Majority holds that coverage exists for Brown, a result with which I concur. The Majority notes that the joint and several liability is an alternative holding had Brown been found not to be covered by the insurance policy. Since the joint and several liability issue is moot, this Court should not address the issue. Johnson.

¶ 12 Since I would hold that Brown’s injury is within the scope of Pressley’s insurance policy under the language of the contract, I would decline to employ the reasonable expectations doctrine. Nevertheless, I agree that Brown is covered by the insurance policy and, therefore, concur in that result reached by the Majority. However, I would decline to address the issue of joint and several liability as to *1145Evans and Evans Agency because the issue is moot. For this reason, I respectfully dissent from the conclusion reached by the Majority.