Cebula testified that when he purchased the policy from the defendant, they
did not explain to him the difference between UM/UIM coverage and bodily
injury liability coverage. Id. We find that the defendant has not
provided any evidence to dispute this testimony. If there had been such a
request, it could possibly be interpreted as being equivalent to a §
1734 writing, however, the defendant has not provided any evidence that
there was a request that the UM/UIM coverage be less than the bodily
During the testimony presented at the non-jury trial, the defendant
alleged that the fact plaintiffs continued to pay their premium notices
after the change in coverage was relevant to the issue of whether there
was a waiver by the plaintiffs. However, Pennsylvania courts have held
that when an insured does not sign an "Important Notice," but pays the
premiums for several years on which lower UM/UIM coverage was indicated,
such action cannot operate as a waiver under sections 1734 or 1791.
Breuninger v. Pennland Ins. Co., 675 A.2d 353 (Pa.Super.Ct. 1996).*fn4
We find, therefore, that the defendant did not comply with sections
1734 and 1791. Plaintiffs seek to have their policy reformed as a remedy
to the defendant's violation of the law. The plaintiffs ask that the
UM/UIM coverage be made equal to their bodily injury liability limit,
which when stacked, would equal one million dollars ($1,000,000.00). The
defendant would have us conclude that the non-compliance with sections
1734 and 1791 should not affect the resolution of this case, and that
therefore, the plaintiffs' policy should not be reformed.
The defendant argues that the Cebulas' request for reformation of the
existing policy should be denied because the text of section 1734
provides no remedy for non-compliance with the provisions therein. In
addressing this question, we note that Pennsylvania state courts have
repeatedly held that courts are ". . . required to construe the
provisions of the MVFRL liberally in order to afford (the plaintiffs) the
greatest possible coverage." Motorist Insurance Company v. Emig,
664 A.2d 559, 568 (Pa.Super.Ct. 1995). It is well established that it is
in the public interest to afford plaintiffs the greatest possible
coverage when construing the provisions of the MVFRL. Id.
As we have previously stated, sections 1731 and 1734 are rather
straightforward in stating that an insurance company cannot issue a
policy in Pennsylvania unless it provides that the UM/UIM coverage is
equal to the bodily injury liability coverage. See Resseguie, 980 F.2d at
230. That being the case, we must determine whether a remedy is available
when there is such a violation of the statute.
After reviewing the cases cited by both parties, we agree with the
plaintiffs that the main cases defendant cites in support of the argument
against reformation, are factually distinguishable from this case. In
those cases, at least one of the named insureds had requested, in some
manner, less UM/UIM coverage than liability coverage.
In the Lewis case for example, there was a definite request by the
insureds to reduce their UM/UIM coverage. Lewis v. Erie Insurance
Exchange, 753 A.2d 839 (Pa.Super.Ct. 2000). The Lewis plaintiffs argued
that their request to reduce their UM/UIM coverage was invalid, because
the rejection forms for both UM and UIM coverage were printed on the same
piece of paper, in violation of Section 1731.*fn5 Id. at 848. They
therefore, requested that their UM/UIM coverage be reformed in an amount
equal to their bodily injury liability limit. The Superior Court held
that when an applicant chooses a reduction of UM/UIM coverage rather than
a rejection of the coverage outright, the fact that an insurance
application violates § 1731 by presenting its rejection forms on the
same piece of paper, is irrelevant. Id.
The Lewis court found that reformation was not available where there
was non-compliance with sections 1731 and 1734. We find the instant case
to be distinguishable. Lewis turned on a technical question of two forms
being printed on the same piece of paper. In Lewis, the court did not
reform the insurance, as in that case, the plaintiffs actually requested
that the UM/UIM coverage be lower than the liability coverage. In the
instant case, however, there was no evidence of any request by the
insureds that their UM/UIM coverage be less than their liability
coverage. Therefore, Lewis does not apply to the present situation.
The defendant also relies on two recent Pennsylvania Supreme Court
cases to support his assertion that no remedy is available. Salazar v.
Allstate Ins. Co., 702 A.2d 1038 (Pa. 1997); Donnelly v. Bauer,
720 A.2d 447 (Pa. 1999). Neither of these cases involved the statute at
issue and additionally were not overly broad in their holdings. Also, the
Salazar case, seems to be the closest to the instant situation, yet it
only applies to compliance with section 1791.1. Moreover, the instant
case differs from Salazar, since the plaintiffs in that case actually
rejected their UM/UIM coverage. Salazar, 702 A.2d 1038. In the instant
case, the plaintiffs did not reject their UM/UIM coverage or request that
the UM/UIM coverage be lower than the liability coverage.
Defendant has provided no support for the proposition that we cannot
reform the plaintiffs' policy. Additionally, the plaintiffs note that a
recent decision by the Third Circuit Court of Appeals, which addressed
this area of law, provides guidance for the instant situation. In the
case of Nationwide Mutual Insurance Company v. Buffetta, 230 F.3d 634 (3d
Cir. 2000), the court did not reform the plaintiff's policy because a
section 1734 written request for lower UM/UIM limits had been executed by
a former spouse, who actually was a named insured under the policy.
Hence, the Third Circuit found no violation of section 1734 in that
In its opinion, however, the Third Circuit Court of Appeals addressed
the issue currently before us.
The court stated that:
Interestingly, the case law that has developed
regarding this section, which
Ms. Buffetta relies upon
[section 1734], has arisen in a different context. In
each case, the insurer has claimed that a reduction
was authorized, but the argument has focused on
whether there was in fact a signed writing that
constituted a valid, effective request of a named
insured for the reduction. In the instances in which
the insured has been successful [in obtaining
reformation], it has been based upon the absence of a
valid written request for reduced coverages signed by
a named insured. (emphasis added)
Id. at 639.
In the instant case, there was in fact, an "absence of a valid written
request for reduced coverages." Id. Therefore, we find that the Third
Circuit's analysis of this area concluded that reformation is available
in certain situations, such as the instant one, where there was no
written request by the plaintiff that would allow lower UM/UIM coverage
than liability coverage.
In addition, the goal of statutory construction is to ascertain and
effectuate the intention of the legislature. 1 Pa.C.S.A. § 1921(a).
In determining the legislative intent of the MVFRL, we may presume that
the General Assembly did not intend an absurd or unreasonable result, and
therefore intended no portions of the statute be rendered nugatory by the
absence of an explicit remedy. 1 Pa.C.S.A. § 1922(1), (2).
Accordingly, "[e]very statute shall be construed, if possible, to give
effect to all its provisions." 1 Pa.C.S.A. § 1921(a). Were we not to
allow reformation in the instant case, the relevant portions of the
MVFRL, would basically have no effect. In order for the statute to have
meaning, it must be enforceable. The MVFRL, as mentioned earlier, ". .
.mandates that an insurance company cannot issue a policy in the
Commonwealth of Pennsylvania unless it provides UM/UIM coverage equal to
the bodily injury liability coverage, except as provided in section
1734." Resseguie, 980 F.2d at 230. In order for section 1734 to be given
effect, we find reformation in the instant case is necessitated.
Additionally, since the MVFRL is designed, in part, to protect
consumers and provide the broadest possible coverage to injured parties,
the plaintiffs are among the particular group for whose benefit the
statute was enacted. Therefore, in the context of the entire MVFRL
scheme, a remedy for the defendant's disregard of sections 1734 and 1791
is consistent with the spirit and purpose of the statute.
In conclusion, we find that there was no valid section 1734 election of
reduced UM/UIM coverage and that under these circumstances there can be
no conclusive presumption of section 1791 notice. In addition, we find
that no section 1791 notice was ever provided. Having considered the
evidence and arguments of able counsel, and the relevant case law, we
find that the plaintiffs are entitled to judgment. The Cebula policy
should therefore, be reformed to include $1,000,000.00 of UM/UIM
coverage*fn6 available to the plaintiffs at the time of their loss.
AND NOW, to wit, this 23rd day of April 2001, pursuant to the attached
memorandum, we find in favor of the plaintiffs and against the
It is hereby ORDERED that:
1. The defendant's motion for summary judgment [7-1]
2. The plaintiffs' automobile insurance policy bearing
number RDA ED-78-43 is hereby reformed to include
$500,000.00 for each vehicle with a total stacked
coverage of $1,000,000.00*fn7 of UM/UIM coverage.