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WIERBINSKI v. STATE FARM MUT. AUTO. INS. CO.

October 1, 1979

Stephen WIERBINSKI, by Rena Wierbinski, His Next Friend, Plaintiff,
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant.



The opinion of the court was delivered by: KNOX

MEMORANDUM OPINION

This case comes to us on the basis of diversity jurisdiction, 28 U.S.C. § 1332. Defendant, State Farm Mutual Automobile Insurance Company, is an Illinois corporation, and plaintiff, twenty-one year old Stephen Wierbinski, a New York domiciliary at the time of the accident, is now residing in Pennsylvania. All material facts have been stipulated to by both parties in this action to recover insurance proceeds. On or about July 4, 1978, defendant executed and delivered to plaintiff an automobile insurance policy covering plaintiff's 1964 Buick vehicle in accordance with the Comprehensive Automobile Insurance Reparations Act of New York State (New York No-Fault Act), Section 670-77 (McKinney Supp.1976). The policy contained an "Out-of-State Insurance Endorsement" as required by the New York No-Fault Act.

 On or about July 19, 1978, while the policy was in effect, plaintiff was involved in a one-car accident in the City of Erie, Commonwealth of Pennsylvania. This accident caused serious bodily injury to the plaintiff, eventually necessitating his confinement in Erie's St. Vincent's Health Center, where he remains today. Pursuant to the policy of insurance, defendant made payments totaling $ 51,000 to plaintiff, which defendant claims is the limit of its liability under the provisions of the New York No-Fault Act. Since plaintiff has already incurred medical and rehabilitative expenses far in excess of this amount, he asserts the applicability of the basic loss benefits available to victims of automobile accidents under the Pennsylvania No-Fault Motor Vehicle Insurance Act (Pennsylvania No-Fault Act), 40 P.S. § 1009.101 et seq., which provides for the payment of unlimited medical and rehabilitative benefits.

 The case is now properly before the court on cross motions for summary judgment, as there is no genuine issue as to any material fact. Ely v. Hall's Motor Transit Co., 590 F.2d 62 (3d Cir. 1978). The legal question to be decided is whether, under the Pennsylvania No-Fault Act, the plaintiff is entitled to receive the unlimited basic loss benefits for losses of this kind provided for in the Pennsylvania Act, or whether recovery is limited to the $ 51,000 provided for in the New York Act.

 Prior to the passage of the No-Fault Act, Pennsylvania replaced the Lex loci delictus and Lex loci contractus rules with the modern "contacts" approach to conflict of laws for both contracts and torts. Under this approach, the court is to apply the law of the state with the most significant relationship to, or contact with, the parties and the transaction. Neville Chemical Co. v. Union Carbide Corp., 422 F.2d 1205 (3d Cir. 1970); Kuchinic v. McCrory, 422 Pa. 620, 222 A.2d 897 (1966). The Pennsylvania legislature has expressly incorporated a choice of law provision into the Pennsylvania No-Fault Act which states that "The basic loss benefits available to any victim or to any survivor of a deceased victim shall be determined pursuant to the provisions of the state no-fault plan for motor vehicle insurance in effect in the state of domicile of the victim . . . ." 40 P.S. § 1009.110(c)(1). Both parties agree that whether the analysis is begun under the Pennsylvania conflict of laws rules, or under the statutory mandate of § 110(c), we must begin by examining Pennsylvania law. Pennsylvania law, in turn, directs us to the New York No-Fault Act to determine the basic loss benefits available to the plaintiff under these facts.

 Section 672 of the New York No-Fault Act specifically includes New York domiciliaries injured in out-of-state accidents within the scope of persons entitled to first party benefits under the New York Act. *fn1" Complications arise in sub-section 5 of § 672, which requires every New York insurance policy to provide insurance coverage for its vehicles traveling out-of-state at least in the minimum amount required by the laws of such other state. *fn2" Plaintiff's policy included an out-of-state endorsement to comply with this requirement which read as follows:

 6778 OUT-OF-STATE ENDORSEMENT

 
It is agreed that, subject to all the provisions of the policy except where modified herein, the following provision is added:
 
If, under the provisions of the motor vehicle financial responsibility law or the motor vehicle compulsory insurance law or any similar law of any state or province, a non-resident is required to maintain insurance with respect to the operation or use of a motor vehicle in such state or province And such insurance requirements are greater than the insurance provided by the policy, the limits of the company's liability and the kinds of coverage afforded by the policy shall be as set forth in such law, in lieu of the insurance otherwise provided by the policy, but only to the extent required by such law and only with respect to the operation or use of a motor vehicle in such state or province; provided that the insurance under this provision shall be reduced to the extent that there is other valid and collectible insurance under this or any other motor vehicle insurance policy. In no event shall any person be entitled to receive duplicate payments for the same elements of loss. (Emphasis added).

 Plaintiff reasons that the statutory provisions of the New York No-Fault Act, together with the plain and ordinary meaning of the language of the out-of-state endorsement, indicate that plaintiff's coverage is increased to the level of coverage required by the Pennsylvania No-Fault Act.

 Defendant disagrees that § 672.5 entitles plaintiff to all the benefits of the Pennsylvania No-Fault Act. Rather, defendant contends that § 672.1(b) specifically extends New York Personal Injury Protection (PIP) to New York domiciliaries injured in out-of-state accidents and that sub-section 5 was intended to protect other classes of victims who may be entitled to Pennsylvania basic loss benefits, such as a Pennsylvania domiciliary injured while riding in a car driven by a New York domiciliary with a New York insurance policy. Defendant interprets sub-section 5 as requiring the maintenance of insurance "coverage" sufficient to pay any claims which may arise under the laws of Pennsylvania, by a Pennsylvania domiciliary, distinguishing the requirement of providing minimum coverage from a guarantee that a New York domiciliary will receive Pennsylvania basic loss benefits.

 Undoubtedly § 672.1 of the New York No-Fault Act extends New York first party benefits to New York domiciliaries injured in accidents outside the state of New York. The difficult question is the construction of § 672.5. Under the interpretation given to the mirror provision of § 672.1 in the Pennsylvania No-Fault Act, § 110(b), *fn3" § 672.1 may be read to guarantee a New York domiciliary benefits At least up to the statutory maximums of the New York Act. *fn4" This insures that New York domiciliaries will at least be entitled to the New York PIP benefits in the event they are involved in an accident in a no-fault state with substantially lower benefits. The logical construction of § 672.5 and the out-of-state endorsement is that they raise the limits of liability and the kinds of coverage afforded by plaintiff's insurance policy to meet any higher requirements of a no-fault state in which an accident occurs.

 There is nothing in the wording of the New York Act or in the insurance policy to indicate clearly and unambiguously that the increased protection of the Pennsylvania Act was meant only to be afforded to Pennsylvania domiciliaries who may be injured by a New York policy holder. An insurance policy must be read to give effect to its plain and ordinary meaning, and any ambiguity in the language must be read in a light most favorable to the insured. Rubin v. Empire Mutual Ins. Co., 57 Misc.2d 104, 290 N.Y.S.2d 241, aff'd, 57 Misc.2d 106, 291 N.Y.S.2d 906 (1967); Polstein v. Pacific Fire Ins. Co., 122 Misc. 194, 203 N.Y.S. 362 (1924). Where, by reason of ambiguity in the language employed in a policy in insurance, there is doubt or uncertainty as to its meaning and it is fairly susceptible of two interpretations, one favorable to the insured, and the other favorable to the company, the former will be adopted. 44 C.J.S. Insurance § 297c; Mobil Oil Corp. v. Reliance Co., 69 Misc.2d 876, 332 N.Y.S.2d 532, aff'd 39 A.D.2d 839, 333 N.Y.S.2d 747 (1971). Either the out-of-state endorsement plainly states that the limits of State Farm's liability and the kinds of coverage afforded by the policy shall be as set forth in the Pennsylvania law, or the wording is susceptible of two interpretations. In either case, it is clear that the matter must be resolved in a manner favorable to the plaintiff. Therefore, the plaintiff's contract of insurance and the New York No-Fault Act must be read to raise defendant's liability and plaintiff's coverage to be in accordance with Pennsylvania law.

 The Pennsylvania law sets out the requirements for the minimum security to be carried by each vehicle operating within the Commonwealth in § 104 of the No-Fault Act ...


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