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WILLIAMS v. NATIONWIDE INS. CO.

September 19, 1983

DENISE K. WILLIAMS, Administratrix of the Estate of Kim George Williams, and DENISE K. WILLIAMS, Individually and as Surviving Spouse of Kim George Williams and Guardian of the Child of Kim George Williams, Plaintiff
v.
NATIONWIDE INSURANCE COMPANY, NATIONWIDE MUTUAL INSURANCE COMPANY, and NATIONWIDE LIFE INSURANCE COMPANY, Defendants



The opinion of the court was delivered by: HERMAN

 Presently before this court is Plaintiff's motion for summary judgment. The underlying cause of action involves Plaintiff's attempts to recover insurance benefits under automobile and life insurance policies issued by Defendants. Defendants refuse to make any payments under the policies claiming that the decedent, Kim George Williams, committed suicide.

 I. FACTUAL DISCUSSION

 The undisputed facts establish that Kim George Williams and Denise K. Williams, husband and wife, purchased an automobile policy from Nationwide Mutual Insurance Company *fn1" in August 1974. The Williams purchased this policy through the company's agent, Roy Dunklebarger. On page eight of the automobile policy, ten "coverage exclusions" are listed. The sixth exclusion states the following: "We will not pay any benefits to anyone who intentionally injures himself or anyone else, nor will we pay Survivor's Loss benefits to his survivors." Exhibit A in Support of Plaintiff's Affidavit.

 The undisputed affidavit of Plaintiff reveals that neither Plaintiff or her husband ever read the automobile policy. Plaintiff's Affidavit, para. 10. Neither spouse had any special knowledge or expertise in insurance matters; therefore, they relied upon the statements and representations of Dunklebarger. Id., PP 10, 11. Nationwide has admitted that it did not explain the "intentional injury/suicide" exclusion to the Williams, nor did Dunklebarger determine whether the Williams understood this exclusion. Nationwide's Response to Admissions, paras. 6, 8.

 Similarly, in January 1979 the Williams purchased a life insurance policy from Nationwide Life Insurance Company through its agent, Dunklebarger. The insurance policy covered each spouse. Under the general provisions in this policy was the following statement: "Suicide -- If within two years from the policy date the Insured [Kim Williams] dies as a result of suicide, whether sane or insane, the liability of the Company shall be limited to the amount of premiums paid without interest." Exhibit B in Support of Plaintiff's Affidavit.

 On September 9, 1980, Kim George Williams was involved in a fatal, single-vehicle automobile accident. Plaintiff sought payment from Nationwide under the automobile and life insurance policies. Nationwide refused to make any payments, claiming that the decedent had committed suicide. Plaintiff argues that the suicide exclusions contained in the policies cannot be enforced pursuant to Pennsylvania law as set forth in HIONIS v. NORTHERN MUTUAL INSURANCE COMPANY, 230 Pa. Super. Ct. 511, 327 A.2d 363 (1974).

 II. LEGAL PRINCIPLES

 Because this court has jurisdiction of this action on the basis of diversity of citizenship, Pennsylvania substantive law applies. See DABURLOS v. COMMERCIAL INSURANCE COMPANY OF NEWARK, N.J., 521 F.2d 18, 20 & n.2 (3d Cir. 1975). HIONIS represents the law in Pennsylvania concerning exclusions in insurance policies. Id.; BROKERS TITLE CO. v. ST. PAUL FIRE & MARINE INSURANCE CO., 610 F.2d 1174, 1182-83 (3d Cir. 1979) (Garth, dissenting).

 In HIONIS, the Pennsylvania Superior Court stated the following:

 
When a defense is based on an exception or exclusion in a policy, our Supreme Court has held that such a defense is an affirmative one, and the burden is upon the defendant to establish it. WEISSMAN v. PRASHKER, 405 Pa. 226, 233, 175 A.2d 63 (1961). Even where a policy is written in unambiguous terms, the burden of establishing the applicability of an exclusion or limitation involves proof that the insured was aware of the exclusion or limitation and that the effect thereof was explained to him. (Citations omitted).

 HIONIS, 230 Pa. Super. Ct. at 517, 327 A.2d at 365. Although the Pennsylvania Supreme Court has not addressed this issue, the Pennsylvania Superior Court has consistently applied the HIONIS principle. O'MALLEY v. CONTINENTAL INSURANCE COMPANY, 305 Pa. Super. Ct. 302, 451 A.2d 542 (1982) (finding the HIONIS burden satisfied); KELMO ENTERPRISES v. COMMERCIAL UNION INSURANCE COMPANY, 285 Pa. Super. Ct. 13, 426 A.2d 680 (1981); KLISCHER v. NATIONWIDE LIFE INSURANCE COMPANY, 281 Pa. Super. Ct. 292, 422 A.2d 175 (1980). *fn2" Indeed, the Pennsylvania Superior Court reaffirmed its position in KELMO ENTERPRISES stating:

 
Whether the policy is clear and precise or whether it is oblique and ambiguous, the disparity between the parties remains the same . . . . Insurers are not unduly burdened by a requirement that they explain the exclusions of their policies to insureds so that the insured can make an informed decision either to ...

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