Appeal from the Order Entered December 8, 1988 in the Court of Common Pleas of Lehigh County, Civil No. 87-C-2804.
Mark H. Scoblionko, Allentown, for appellant.
Eugene J. Maginnis, Philadelphia, for United Services, appellee.
Cirillo, President Judge, and Rowley and Hester, JJ.
[ 388 Pa. Super. Page 55]
The issue presented in this appeal is whether a "class one" beneficiary,*fn1 who was injured in a motor vehicle accident involving only the insured's vehicle, is precluded from recovering both liability and underinsured motorist coverage under an automobile insurance policy which excludes family-owned vehicles from the definition of underinsured vehicles.
Appellant, Sandra C. Newkirk, was riding as a passenger in a car owned and operated by her husband, Charles Newkirk, when her husband lost control of the car. The car went off the roadway and struck three tree trunks. While Mrs. Newkirk survived the crash, she sustained serious personal injuries.
Mr. Newkirk was insured at the time of the crash by appellee, United States Automobile Association (USAA). His policy with USAA provided him with $300,000 of liability coverage per person. An exception in the policy, however, limited liability coverage for bodily injury sustained by family members to $15,000.
Mrs. Newkirk filed suit against her husband in the Court of Common Pleas of Lehigh County to recover for the injuries she sustained in the accident. On behalf of Mr. Newkirk, USAA tendered a settlement offer to Mrs. Newkirk
[ 388 Pa. Super. Page 56]
in the amount of $15,000. This figure represented the maximum amount of liability coverage provided for family members under Mr. Newkirk's policy with USAA. Mrs. Newkirk refused to accept USAA's settlement offer.
Mrs. Newkirk subsequently made a settlement demand to USAA for $300,000, which was the maximum amount of underinsured motorist coverage available per person under Mr. Newkirk's policy. USAA rejected this demand based on the following definition provision in its policy (hereinafter referred to as the "family car exclusion"):
[N]either "uninsured motor vehicle" nor "underinsured motor vehicle" includes any vehicle . . . [o]wned by or furnished or available for the regular use of you or any family member.*fn2
Mrs. Newkirk then filed the instant action against USAA in the Court of Common Pleas of Lehigh County, seeking a declaration of her right to recover underinsured benefits pursuant to her husband's policy with USAA.*fn3 When pleadings closed, the parties filed cross-motions for summary judgment. Both parties agreed that there were no disputed issues of fact to be resolved and that the only issue in dispute was whether Mrs. Newkirk was potentially entitled to receive underinsured motorist benefits for her injuries under Mr. Newkirk's policy with USAA.
[ 388 Pa. Super. Page 57]
On December 8, 1988, the Honorable John E. Backenstoe ruled that Mrs. Newkirk was not entitled to underinsurance coverage pursuant to her husband's insurance policy, and entered an order denying Mrs. Newkirk's motion for summary judgment and granting USAA's motion for summary judgment. Shortly thereafter, Mrs. Newkirk filed this appeal.
The issue raised in this appeal is an issue of first impression which was specifically left unanswered by our court en banc in Wolgemuth v. Harleysville Mutual Insurance Co., 370 Pa. Super. 51, 535 A.2d 1145 (1988). In Wolgemuth, we addressed the issue of whether a guest passenger injured in a single vehicle accident, who had already recovered the maximum amount of liability coverage under the insurance policy carried by the host of the vehicle, was entitled to recover underinsured motor vehicle coverage under the same policy. The policy, like the policy at issue in the present case, excluded family cars from the definition of underinsured motor vehicles.*fn4
The appellant*fn5 in Wolgemuth argued that because the legislature made underinsured motorist coverage mandatory, any policy provision such as the family car exclusion, which operates to deny a claimant underinsured motorist benefits, violates the public policy of this Commonwealth. Id., 370 Pa. Superior Ct. at 56, 535 A.2d at 1147. We rejected this argument, ...