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NATIONWIDE MUT. INS. CO. v. SWISHER

December 29, 1989

NATIONWIDE MUTUAL INSURANCE COMPANY
v.
LEONARD THOMAS SWISHER



The opinion of the court was delivered by: HUYETT

 DANIEL H. HUYETT, 3rd, UNITED STATES DISTRICT JUDGE

 Nationwide Mutual Insurance Company seeks a declaratory judgment to determine its rights and obligations, as well as those of defendant Leonard Thomas Swisher, under an automobile insurance policy as it pertains to a motor vehicle accident which occurred on September 18, 1984. In that accident, defendant was injured. The parties have filed cross-motions for summary judgment.

 The only issue before this court is whether an exclusionary clause relating to uninsured motorists benefits is void and unenforceable as against the public policy behind the Uninsured Motorists Act, Pa.Stat.Ann. tit. 40, ยง 2000 (Purdon 1971). *fn1"

 For the following reasons, defendant's motion for summary judgment shall be granted, and plaintiff's motion for summary judgment shall be denied.

 I. FACTUAL BACKGROUND

 Both parties agree that the relevant facts are not in dispute. Therefore, because there are no genuine issues of material fact, this case is ripe for disposition by way of summary judgment.

 The tractor-trailer that defendant was operating, which contained Red Star freight, was insured by Liberty Mutual Insurance Company (Liberty). On the day of the accident, defendant had an automobile insurance policy, which insured his personal automobiles, with Nationwide Mutual Insurance Company (Nationwide). The third eastbound tractor-trailer which struck defendant was insured by Integrity Insurance Company (Integrity) of Paramus, New Jersey. Integrity, a stock insurance company, was placed in liquidation by an order of the Superior Court of Bergen County, New Jersey on March 24, 1987. *fn2"

 Consequently, defendant asserted claims for uninsured motorists benefits under the liability insurance policy issued by Liberty, the primary uninsured motorist carrier, as well as under the liability insurance policy issued by Nationwide, the secondary uninsured motorist carrier. Liberty paid defendant the policy limits of the uninsured motorist benefits under the policy issued to Red Star. Nationwide, however, denied defendant uninsured motorist benefits on the basis of the Coverage Exclusion Paragraph of the Uninsured Motorists Coverage section of the policy. The particular exclusion upon which Nationwide denied coverage states that the uninsured motorist insurance "does not apply to use of any vehicle by an insured to carry persons or property for a fee." See Plaintiff's Motion for Summary Judgment, Exhibit 1 at 10.

 Defendant contends that the exclusion of liability for uninsured motorists benefits in the Nationwide insurance policy is against public policy and, thus, void and unenforceable because (1) it is an exclusion which is not specifically authorized by Pennsylvania's Uninsured Motorist Act, and (2) recognition of such an exclusion would undermine the legislative purpose of the Act.

 On the other hand, Nationwide contends that the insurance policy at issue meets or exceeds all the requirements of the Uninsured Motorist Act, and provides all due and statutorily mandated protections to innocent victims of uninsured motorists. Further, Nationwide contends that the exclusion is clear and unambiguous and, thus, operable as a matter of law to bar coverage for the accident in question.

 II. DISCUSSION

 Federal jurisdiction in this case is based on diversity of citizenship. Therefore, I am obligated to apply the governing law of the Commonwealth of Pennsylvania. Because no Pennsylvania appellate court has addressed the effect of the precise exclusionary clause at issue, I must look to analogous Pennsylvania cases to determine how the Pennsylvania Supreme Court would rule on this issue.

 It should be noted at the outset that there is no claim of ambiguity. Defendant agrees that the contract language is clear. The issue is simply whether the exclusionary clause is void as being contrary to public policy.

 The Uninsured Motorist Act (UMA) is intended to protect those "persons who while lawfully using the highways themselves suffer grave injuries through the negligent use of those highways by others" who are uninsured. Pattani v. Keystone Insurance Co., 426 Pa. 332, 231 A.2d 402, 404 (1967). Therefore, the UMA ensures that innocent victims recover the damages that they would have received had the uninsured tort-feasor maintained liability insurance. See Providence Washington Ins. Co. v. Rosato, 328 Pa.Super. 290, 476 A.2d 1334 (1984); Estate of Rosato v. Harleysville Mut. Ins. Co., 328 Pa.Super. 278, 476 A.2d 1328 (1984). The remedial intent of the UMA requires courts to find coverage unless equally strong legal or equitable considerations to the contrary are present. See Boyle v. State Farm Mut. Auto. Ins. Co., 310 Pa.Super. 10, 456 A.2d 156 (1983); Walls v. City of Pittsburgh, 292 Pa.Super. 18, 436 A.2d 698 (1981). The Pennsylvania Supreme Court has stated that "any attempt by the insurer to diminish the ...


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