benefits election and the resulting inclusion of the endorsement in the policy. Id.
The policy, including the endorsement, was renewed in March and September 1981. Id. On December 15, 1981, while the policy was in effect, Plaintiff was injured in an automobile accident. Id. para. 1. As a result of the accident, Plaintiff incurred and continues to incur substantial medical and rehabilitation expenses which qualify as "allowable expenses" under the No-Fault Act. Id. para. 9. At the time of the accident Plaintiff was also covered by a Blue Cross/Blue Shield plan maintained through his employer, which also provided for payment of these expenses. See Stip. Ex. D.
As of the date of the Stipulation entered into by the parties, Blue Cross/Blue Shield had paid benefits in the total amount of $61,807.38, of which $15,364.00 was paid in 1982 under the major medical portion of the Blue Cross/Blue Shield coverage. Id. para. 14. The parties further agree that all "allowable expense" incurred by Plaintiff as a result of the accident has been paid by either Allstate or Blue Cross/Blue Shield. Accordingly, the parties agree that if the endorsement is valid and effective, Allstate is not liable for any additional benefits on account of "allowable expense" incurred to date. Id. para. 16.
Plaintiff claims that Allstate failed to explain to him, either orally or in writing, the effect of the coordination of benefits endorsement, and that his election to include it in the policy was invalid and ineffective. Id. para. 2, 10. Plaintiff also claims that Defendant's agent fraudulently induced Plaintiff to purchase the policy with the coordination of benefits provision. Plaintiff's Pretrial Statement, at 1.
Specifically, Plaintiff contends that Allstate was obliged to inform him, prior to the making of any coordination of benefits election, of (a) the availability of a double recovery of medical payments arising from both Allstate and Plaintiff's Blue Cross/Blue Shield plan if no coordination of benefits election was made; and (b) the possibility that medical expense benefits paid under Plaintiff's Blue Cross/Blue Shield plan as a result of an automobile accident might exhaust or reduce the limits of coverage under that plan and so leave Plaintiff and his family without medical insurance or with less medical insurance applicable to illnesses and injuries unrelated to the use or operation of a motor vehicle. Id. para. 11.
Defendant's Motion for Summary Judgment
Defendant argues that all of Plaintiff's claims are based on the allegation that he was misinformed or inadequately informed by Allstate as to the meaning and effect of the endorsement prior to and at the time he elected it, with the result he was unable to make an informed decision as to the election. Defendant's Motion for Summary Judgment, at 2. Allstate asserts that there is no evidence in the record, apart from Plaintiff's allegations, of 1) any affirmative misrepresentations regarding the coordination of benefits election; or 2) any failure by Allstate to disclose the relevant facts. Id. at 4. Further, Allstate argues that there is no evidence that Plaintiff was not fully informed as to the effect of the election on double coverage or Plaintiff's other medical benefits, or that he relied on Allstate to advise him either when making the election or when renewing the policy. Id.
Defendant has moved for summary judgment with respect to the other claims asserted in this action, arguing that they are based on the same facts as Plaintiff's breach of contract claim. In addition, Allstate argues that the Pennsylvania Unfair Trade Practices Act is inapplicable to the business of insurance.
Rule 56, provides, in part, that summary judgment shall be entered "if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c).
When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest on the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered against him.
Fed. R. Civ. P. 56(c)(emphasis added). See Ness v. Marshall, 660 F.2d 517, 519 (3d Cir. 1981).
We are, of course, aware that any doubts as to the existence of genuine issues of material fact are to be resolved against the moving parties. Continental Ins. Co. v. Bodie, 682 F.2d 436, 438 (3d Cir. 1982); Hollinger v. Wagner Mining Equipment Co., 667 F.2d 402, 405 (3d Cir. 1981). Further, the facts and inferences to be drawn from the facts must be viewed in the light most favorable to the party opposing the motion. Betz Laboratories, Inc. v. Hines, 647 F.2d 402, 404 (3d Cir. 1981).
It is well established that the language of a contract clause which limits liability coverage must be clear and precise in order to prevent unfair surprise. Bishop v. Washington, 331 Pa. Super. 387, 480 A.2d 1088, 1095 (1984)(citing K&C, Inc. v. Westinghouse Electric Corp., 437 Pa. 303, 308-09, 263 A.2d 390, 393 (1970)). The goal in interpreting an insurance contract, like any contract, is 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 construed 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. Votedian v. General Accident Fire & Life Assurance Corp., 330 Pa. Super. 13, 478 A.2d 1324, 1326 (1984) (quoting Standard Venetian Blind Co. v. American Empire Insurance Co., 503 Pa. 300, 469 A.2d 563, 566 (1983)).
In Standard Venetian Blind the Supreme Court of Pennsylvania held that an insured may not avoid the effect of a clear and unambiguous exclusion clause in an insurance contract by showing that it was either unaware or did not understand the effect of the exclusion. 469 A.2d at 564, 566-67. Standard Venetian Blind thus overruled Hionis v. Northern Mutual Ins. Co., 230 Pa. Super. 511, 327 A.2d 363 (1974), which held that, in order to rely upon an exclusion in an insurance policy, the insurer must show that the insured was aware of and understood its effect. Id. at 517, 327 A.2d at 365. After Standard Venetian Blind, the relative knowledge and understanding of the insured is no longer relevant, provided that the exclusion is clear and conspicuous. See St. Paul Surplus Lines Ins. Co. v. 1401 Dixon's Inc., 582 F. Supp. 865, 869 (E.D. Pa. 1984). The Standard Venetian Blind decision has been given retroactive effect. Short v. Metropolitan Life Ins. Co., 339 Pa. Super. 124, 488 A.2d 341, 343-44 (1985). The only exception, where the Hionis line of cases remains potentially applicable, is where the limitation clause was ambiguous or unconscionable at the time it was made. Standard Venetian Blind, 469 A.2d at 567. See also Haegele v. Pennsylvania General Ins. Co., 330 Pa. Super. 481, 479 A.2d 1005, 1011 (1984).
In the case at bar, Defendant has submitted five affidavits in support of its summary judgment motion. It also relies on the depositions taken in the case.
The affidavit of Janet Haggerty, the Allstate agent who sold Plaintiff the policy in question, states that she took the insurance policy application from Plaintiff on or about August 29, 1980. Haggerty Aff., at 1. Ms. Haggerty states that she does not recall what she and Mr. Hess discussed, but that the policy application reflects that Plaintiff requested coordination of benefits with respect to the medical expense portion of the personal injury protection coverage ("PIP") included in the policy. Id. See Stip., Ex. C. Ms. Haggerty stated that, prior to the repeal of the No-Fault Act, when selling a policy of insurance, she always inquired whether the prospective insured had medical insurance and, if so, explained the availability of coordination of benefits. Haggerty Aff. at 1. She explained that, if the insured took the regular coverage, Allstate would pay all expenses arising from automobile accidents. Id. She also explained that if a prospective insured chose to coordinate benefits, he would save 40% on his PIP premium and his other medical insurance would be primary, with Allstate providing secondary coverage. Id. at 1-2. Ms. Haggerty stated that this was her routine practice. Id. at 2.
In addition, Ms. Haggerty's affidavit states that her routine initial explanation of the coordination of benefits option did not address 1) the impact of the option on the prospective insured's other insurance coverage; 2) whether election of the option might reduce the available insurance under other insurance coverage relating to medical expenses; or 3) whether the insured might be able to obtain benefits under both an automobile policy and other medical insurance if he chose not to coordinate benefits. Id. Ms. Haggerty stated that she has never made any statement regarding the nature and effect of a coordination of benefits election in order to induce anyone to elect the provision unless she was confident the statement was true. She stated that at no time has she ever concealed or withheld any information which she thought a potential insured might wish to know about the nature and effect of a coordination of benefits election. Id.
Defendant also submitted the affidavits of the following Allstate employees: Margaret Spohrer, Communication's Administrator; George Van Ryan, Product Administration Director; Barry Nicholas, Senior Project Manager, Systems Department; and Gary Laughern, an Actuary specializing in group medical insurance. The affidavits explain Allstate's regular business practice with respect to the mailing of various informational brochures. The affidavits state that one packet of information, consisting of inserts X1640 and X1415-1, were inserted in all renewal offers sent to all "line 12" policyholders for the year commencing November 1, 1979. Van Ryan Aff. at 1-2 and Ex. 1-3; Nicholas Aff., at 2-3. "Line 12" policies were assigned risk policies such as the one held by Plaintiff in July and August, 1980. See Spohrer Aff. at 1-2. The information explained the coordination of benefits provision. See Van Ryan Aff., Ex. 2. The contents of the mailing packages was spot-checked by supervisory personnel to assure the correct documents were included. Spohrer Aff., at 2.
Mr. Hess stated at his deposition that, as a result of his accident, his memory is very poor. Hess Dep., at 4. He has no recollection of any of the events surrounding his purchase of insurance in August and September, 1980. Id. He does not recall receiving any correspondence in connection with his insurance. Id. at 6. Mr. Hess testified that he received a B.A. in business administration, and had worked as an insurance agent for several years. Id. at 6-7. Mr. Hess was shown a copy of the coordination of benefits provision at his deposition (Dep. Ex. 1) and the mailing packet communication sent to assigned-risk policyholders. (Dep. Ex. 2). When asked to read and state his understanding of Option A, covering Excess Medical Expense (Dep. Ex. 2), Mr. Hess stated:
A. I am reading that it would be that, "Your health insurance plan would pay first," and it's what your thing says here and, "Then, your auto insurance would take" - pick up on anything unpaid.
Q. And what does that convey to you regarding what your auto insurance would do about the expenses paid by your other plan?