person and $ 30,000 per accident. I agree with Defendants' contention that the Pennsylvania Superior Court's holding in Gutman v. Worldwide Ins. Co., 428 Pa. Super. 309, 630 A.2d 1263 (Pa. Super. Ct. 1993) is dispositive on the issue of which MVFRL provisions apply to self insurers such as Avis. Moreover, I predict that the Supreme Court of Pennsylvania would follow the Gutman rule.
In Gutman, the court rejected the Defendant-rental car agency's argument that under § 1731, the agency was not required to provide uninsured motorist benefits. 630 A.2d at 1264-65. The Gutman court held that the 1990 amendments to the MVFRL, which modified § 1731
to make the purchase of uninsured motorist coverage optional, did not apply to the agency because it was a self insurer. Id. at 1265. Instead, the court affirmed that a self insurer is governed by § 1787 and, therefore, is mandated to provide such coverage. Id. Thus, any waiver provision for uninsured motorist coverage which a self insurer inserts in a rental agreement is invalid. Id.
Plaintiffs' argument fails because they claim that Avis is liable precisely because the Avis Rental Agreement did not include the waiver provision which the Gutman court found would be void as a matter of law. Therefore, the cases cited by Plaintiffs, which hold that absent a proper waiver the uninsured motorist coverage must equal the policy's bodily injury coverage, are not controlling in this action. Those cases only apply to entities which deliver or issue policies, and "with a self insurer there is no 'policy' to deliver or issue." Id.
I accept Defendants' assertion that the Additional Liability Insurance offered by Avis to the renter in the Rental Agreement was not a "motor vehicle liability insurance policy" subject to §§ 1731 and 1734 of the MVFRL. As Plaintiffs acknowledge, the policy issued by Continental to Avis is an "excess policy" which allowed Avis to offer excess coverage to renters on a case-by-case basis; excess policies are not subject to any provision of the MVFRL. Tr., Oral Argument, 8/21/95, at 8. See Electric Ins. Co. v. Rubin, 32 F.3d 814, 818 (3d Cir. 1994) (predicting that the Pennsylvania Supreme Court would not hold that an excess policy is subject to the MVFRL).
I also find as a matter of contract interpretation that Avis did not waive its status as a self insurer and take on the statutory duties of an entity which issues insurance policies. Contract interpretation is a question of law for the court. Gen. Ins. Co. of Am. v. Eastern Consol. Utils., Inc., 1995 U.S. Dist. LEXIS 10141, Civ. A. No. 94-4388, 1995 WL 428685, at * 4 (E.D. Pa. July 18, 1995) (citation omitted); Katona v. Consol. Rail Corp., 1991 U.S. Dist. LEXIS 368, Civ. A. No. 89-8753, 1991 WL 3474, at * 2 (E.D. Pa. Jan. 8, 1991) (citation omitted). The Rental Agreement states that Avis would provide additional liability coverage to the renter "subject to all the conditions of a standard automobile liability insurance policy, including all requirements as to notice and cooperation on my part, which are hereby made a part of this agreement." Pls.' Mot. Summ. J., Stip. Facts, at 3 (emphasis added). In the context of the holding in Gutman interpreting the MVFRL, Plaintiffs' contention that by this language Avis relinquished its self insurer status and expressed its intent to be bound by the notice and waiver requirements of §§ 1731 and 1734 is untenable. As Plaintiffs concede, the "my" clearly refers to the renter, not Avis. Tr., Oral Argument, 8/21/95, at 19. Thus, the clause did nothing more than obligate the renter to notify and cooperate with Avis in the event that the renter was involved in an accident with the rental car.
For these reasons, with respect to Plaintiffs' claim that Defendants must provide them with $ 1,000,000 in uninsured motorist coverage, I will deny Plaintiffs' Motion, grant Defendants' Motion, and enter judgment for Defendants.
B. Plaintiffs' Claim that Avis Must Provide Uninsured Motorist Coverage to the Unauthorized Driver
Defendants acknowledge Avis' obligation pursuant to § 1787 to provide uninsured motorist coverage of $ 15,000 per person and $ 30,000 per accident to the passengers in the car. However, they argue that, contrary to Plaintiffs' contention, Avis is not required to provide uninsured motorist benefits to the unauthorized driver.
As noted above, the parties have stipulated that: (1) the renter did not advise Avis that any other individual would be driving the rental vehicle; and (2) the unauthorized driver was neither defined as a person who could drive the vehicle under the Rental Agreement, nor listed and paid for as an additional driver. Pls.' Mot. Summ. J., Stip. Facts, at 2. Defendants point to that section of the Rental Agreement entitled Liability Insurance, which states that "ANYONE DRIVING THE CAR AS PERMITTED BY THIS AGREEMENT WILL BE PROTECTED AGAINST LIABILITY FOR CAUSING BODILY INJURY OR DEATH TO OTHERS." Id. at 3. Thus, because the driver was not authorized, and because the Rental Agreement limits liability coverage to those driving the vehicle "as permitted by this agreement," Avis argues that it is not obligated to provide uninsured motorist benefits to the unauthorized driver. In support of this argument, Defendants cite Searfoss v. Avis Rent-A-Car Systems, Inc., 349 Pa. Super. 482, 503 A.2d 950, 952-53 (Pa. Super. Ct. 1986) (affirming denial of liability coverage to underage driver of rental car because he was not a permitted driver under rental agreement).
Plaintiffs rebut that the Rental Agreement excluded liability coverage for an unauthorized driver; the Agreement did not exclude uninsured motorist coverage for an unauthorized driver. Plaintiffs assert that the failure to specifically exclude uninsured motorist coverage for unauthorized drivers must be strictly construed against Avis, the drafter of the Rental Agreement. Standard Venetian Blind Co. v. Am. Empire Ins. Co., 503 Pa. 300, 469 A.2d 563, 566 (Pa. 1983) (citation omitted); Madison Constr. Co. v. Harleysville Ins. Co., No. 4329 Phila. 1994, 1995 Pa. Super. LEXIS 3007, 1995 WL 562297 (Pa. Super Ct. 1995), at *5. I agree. Moreover, I accept Plaintiffs' argument that Defendants' reliance on Searfoss is misplaced. Searfoss, 503 A.2d at 951, involved the denial of liability coverage, and not uninsured motorist coverage, to an unauthorized driver, and therefore is inapplicable to the instant situation.
Section 1787 requires a self insurer to provide a statutory minimum of uninsured motorist coverage. The purpose behind requiring such coverage is to ensure that those injured in a car accident will be compensated for their injuries even if the tortfeasor is uninsured. Cf. Nationwide Mutual Ins. Co. v. Hampton, 935 F.2d 578, 584 (3d Cir. 1991) (citation omitted) (noting that purpose of Pennsylvania's Uninsured Motorist Act in requiring insurers to provide uninsured motorist coverage is to ensure that insured would recover damages he would have received if tortfeasor had liability insurance). Section 1787 does not distinguish between passengers and unauthorized drivers, and I conclude that it would defeat the statute's purpose to hold otherwise.
Therefore, with respect to Plaintiffs' claim that Avis is obligated to provide uninsured motorist coverage to the unauthorized driver, I will grant Plaintiffs' Motion, deny Defendants' Motion, and enter judgment in favor of Plaintiffs to the extent that Avis must provide uninsured motorist coverage to all Plaintiffs in the amount of $ 15,000 per person and $ 30,000 per accident.
An appropriate order follows.
October 24, 1995
AND NOW, this 24th day of October, 1995, upon consideration of Plaintiffs' (document no. 10) and Defendants' (document no. 11) Motions for Summary Judgment pursuant to Fed. R. Civ. P. 56, and Plaintiffs' (document no. 12) and Defendants' (document no. 13) Responses thereto, and all accompanying papers, and after oral argument held before this Court on August 21, 1995,
IT IS HEREBY ORDERED that Plaintiffs' and Defendants' Motions are GRANTED IN PART and DENIED IN PART as follows:
1. With respect to Plaintiffs' claim that Defendant Avis Rent a Car System, Inc. must provide $ 1,000,000 in uninsured motorist benefits to Plaintiffs, judgment is entered for Defendants and against Plaintiffs.
2. With respect to Plaintiff Noupith Lonesathirath's claim that Defendant Avis Rent a Car System, Inc. must provide him with uninsured motorist coverage, judgment is entered for Plaintiff and against Defendants.