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HOME MUTUAL INSURANCE CO. v. SHELBY MUTUAL INSURANCE COMPANY (03/14/80)

SUPERIOR COURT OF PENNSYLVANIA


filed: March 14, 1980.

HOME MUTUAL INSURANCE CO.
v.
THE SHELBY MUTUAL INSURANCE COMPANY, LLOYD A. HUMMEL, PHYLLIS J. HUMMEL, JEFFREY HUMMEL, A MINOR, AND DAVID HUMMEL, A MINOR. APPEAL OF THE SHELBY MUTUAL INSURANCE COMPANY

No. 753 October Term, 1979, Appeal from the Order of the Court of Common Pleas of Lehigh County, Pennsylvania, Civil Division, at No. 78-C-836.

COUNSEL

Steven A. Bergstein and Donald H. Lipson, Allentown, for appellant.

Mark H. Scoblionko, Allentown, for Home Mutual Insurance Company, appellee.

Armin Feldman, Allentown, will not file a brief on behalf of the Hummels, appellees.

Cercone, President Judge, and Watkins and Lipez, JJ. Watkins, J., dissents.

Author: Cercone

[ 276 Pa. Super. Page 83]

The instant appeal raises a question of first impression in Pennsylvania: whether two insurance companies, one of which insures a husband's vehicle and the other insures the wife's vehicle, must share damages pro rata in certain circumstances under the uninsured motorists coverage of their policies. The hearing court in this declaratory judgment action found that they must so share. We affirm, albeit for a different reason from that which persuaded the court below.

The material facts are not in dispute: On or about February 13, 1977, Lloyd Hummel was driving his wife's automobile, with his wife and two sons as passengers, when they were involved in a collision with another vehicle. The operator of the other vehicle was uninsured. At the time of the accident Mrs. Hummel's automobile was insured by Home Mutual, while Mr. Hummel, who owned a separate vehicle, was insured by Shelby Mutual. Both Mr. and Mrs.

[ 276 Pa. Super. Page 84]

Hummel submitted their claims to their respective carriers. Home Mutual took the position, with which the hearing court agreed, that Shelby Mutual was liable for a pro rata share.*fn1 Shelby Mutual's position was that, under these circumstances, its coverage was "excess" coverage, and Home Mutual was primarily liable up to policy limits for the damages.

Logically, analysis must commence not with whether the disputed term in Shelby Mutual's insurance contract is void, but rather with whether the Shelby Mutual policy is now accountable for payment of benefits. See, e. g., Grasberger v. Liebert & Obert, Inc., 335 Pa. 491, 6 A.2d 925 (1939); Speier v. Ayling, 158 Pa. Super. 404, 405, 45 A.2d 385 (1946); Insurance Co. of N. America v. Continental Cas. Co., 575 F.2d 1070, 1073 (3d Cir.1978); American Home Assurance Co. v. American Employers Ins. Co., 384 F.Supp. 3, 5 (E.D.Pa.1974); Jamestown Mut. Ins. Co. v. Erie Ins. Exch., 357 F.Supp. 933, 935 (W.D.Pa.), aff'd., 474 F.2d 1339 (3d Cir.1972); United States F. & G. Co. v. Liberty Mut. Ins. Co., 327 F.Supp. 462, 465 (M.D.Pa.1971). Home Mutual's contract initially provides that it will pay uninsured motorist benefits to Mr. Hummel as an injured passenger of Mrs. Hummel's vehicle. However, Home Mutual's coverage is

[ 276 Pa. Super. Page 85]

    not exclusive, but is limited to its share when "there is other applicable similar insurance. [Its] share is the proportion that [its] limit of liability bears to the total of all applicable limits." See Reproduced Record at 40a. The question becomes whether the policy issued by Shelby Mutual to Mr. Hummel is other applicable similar insurance.

Turning to Shelby Mutual's policy, it is similar insurance, that is, uninsured motorist coverage. It is also applicable on a pro rata basis*fn2 unless the "excess clause" of its contract limits recovery. Utilizing the pertinent definitions provided by the Shelby Mutual policy, as we must, see e. g., Adelman v. State Farm Mut. Ins. Co., 255 Pa. Super. 116, 122, 386 A.2d 535, 538 (1978); Great Am. Ins. Co. v. State Farm Mut. Auto. Ins. Co., 412 Pa. 538, 541, 194 A.2d 903, 905 (1963), this "excess clause" reads: "With respect to bodily injury to [Mr. or Mrs. Hummel] while occupying an automobile not owned by [Mr. or Mrs. Hummel], the insurance under [this part] shall apply only as excess insurance. . . ." (Emphasis added.) See Reproduced Record at 65a-66a. Thus, contrary to Shelby's position, the contracts when read together expressly provide that in this factual situation both insurers are primarily liable on a pro rata basis. In this regard, Shelby misperceives the holding in Grasberger v. Liebert & Obert, Inc., 335 Pa. 491, 6 A.2d 925 (1939). While Grasberger acknowledged that an excess coverage clause will be enforced when applicable, i. e., that "excess" coverage is not available until "primary" coverage is exceeded, it reached this result on the basis of the language of the particular clause there under consideration. See also Speier v. Ayling,

[ 276 Pa. Super. Page 86158]

Pa. Super. 404, 410, 45 A.2d 385, 388 (1946).*fn3 Grasberger simply holds that when the terms of a policy are unambiguous they will be given effect as written, except when they conflict with applicable statutory prohibitions.

Accordingly, the order of the court below is affirmed.


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