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CEBULA v. ROYAL SUNALLIACE INS. CO.

April 23, 2001

FRANK J. CEBULA AND DAWN CEBULA, PLAINTIFFS
v.
ROYAL & SUNALLIANCE INSURANCE CO. DEFENDANT



The opinion of the court was delivered by: James M. Munley, United States District Judge.

MEMORANDUM

Before the court for disposition is a case where we must determine whether the plaintiffs are entitled to $1,000,000.00 or $600,000.00 in underinsured motorist coverage.*fn1 The plaintiffs are Frank and Dawn Cebula, (hereinafter "plaintiffs"), and the defendant is Royal & SunAlliance Insurance Co. (hereinafter "defendant"). The parties agreed that both the defendant's summary judgment motion and the merits of the plaintiff's complaint would be addressed at a non-jury trial. A trial was held on November 22, 2000, addressing the plaintiffs' declaratory judgment complaint and the motion for summary judgment.*fn2 At that time, the parties formally presented their recommended stipulated facts and their respective legal theories. After the one-day non-jury trial, and upon review of the parties' submissions, we rule as follows.

Facts

Based upon the record, we find as follows:

1. On December 2, 1996, Plaintiff Dawn Cebula was injured in a motor vehicle accident and received One Million Two Hundred Thousand Dollars ($1,200,000.00) from the insurance carrier of the third party who was responsible for the accident.
2. The plaintiffs had purchased a personal automobile policy from the defendant with single bodily injury liability limits of $300,000.00 and single uninsured/underinsured motorist (hereinafter "UM/UIM") coverage of $300,000.00.
3. Covered under the policy were two (2) vehicles, a 1995 Dodge Intrepid, and a 1996 Chevrolet S10 pick-up truck.
4. The plaintiffs subsequently desired to purchase a liability umbrella policy from the defendant.
5. As a prerequisite to purchasing the umbrella policy, the defendant's agent advised the plaintiffs that they had to increase their auto policy limit to $500,000.00.
6. The plaintiffs acquiesced to the agent's advice and a new policy was issued to the plaintiffs which provided for $500,000.00 of bodily injury liability coverage, and $300,000.00 of UM/UIM coverage.
7. Since the Cebulas' owned two motor vehicles and no rejection form was found, Royal & SunAlliance conceded that stacking applies, resulting in six hundred thousand ($600,000.00) in underinsured motorist coverage under the above referenced policy instead of three hundred thousand ($300,000.00)
8. The plaintiffs never executed a written request for UM/UIM limits lower than the bodily injury liability limits on their policy, as provided in section 1734 of the MVFRL.
9. The policy in question (RDA E.D. 78-43) is not an original policy, rather, it is a renewal policy and Royal & SunAlliance is unable to locate or produce either a § 1734 writing or signed proof of a § 1791 notice.
10. Plaintiff Frank Cebula did not request UM/UIM coverage that would be lower than his bodily liability coverage.

Standard of Review

Summary judgment is proper "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. Knabe v. Boury, 114 F.3d 407, 410 n. 4 (3d Cir. 1997) (citing Fed.R.Civ.P. 56(c)). "[T]his standard provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-8 (1986) (emphasis in original).

In considering a motion for summary judgment, the court must examine the facts in the light most favorable to the party opposing the motion. International Raw Materials, Ltd. v. Stauffer Chemical Co., 898 F.2d 946, 949 (3d Cir. 1990). The burden is on the moving party to demonstrate that the evidence is such that a reasonable jury could not return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A fact is material when it might affect the outcome of the suit under the governing law. Id. Where the non-moving party will bear the burden of proof at trial, the party moving for summary judgment may meet its burden by showing that the evidentiary materials of record, if reduced to admissible evidence, would be insufficient to carry the non-movant's ...


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