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QUINNEY v. AMERICAN MODERN HOME INSURANCE CO.

May 4, 2001

WILLIAM A. QUINNEY, ET AL., PLAINTIFFS,
v.
AMERICAN MODERN HOME INSURANCE COMPANY, DEFENDANT.



The opinion of the court was delivered by: A. Richard Caputo, United States District Judge.

MEMORANDUM

This matter is before me on the Plaintiffs' Motion to Dismiss Defendant's Counterclaim (Doc. 5). It presents a question of the meaning of language in the Underinsured Motorists Coverage portion of the policy.
William A. Quinney purchased what is known as the Elite Collector Policy from the Defendant. It was to cover Mr. Quinney's collector cars, a 1978 Dodge Magnum and a 1966 Plymouth Barracuda. Mr. Quinney had another vehicle, a 1993 Ford Escort, which he used regularly and which was insured by a company other than the defendant. Mr. Quinney, as a part of the policy with Defendants, agreed that the collector vehicles would not be used regularly, but rather on a limited basis such as exhibitions, club activities, parades, and occasional pleasure driving. He further agreed the vehicles would be kept in a locked garage at night.
Tragically, Mr. Quinney's son, Matthew Allen Quinney, age 15, was killed on May 2, 1999, while riding as a passenger in a car owned by Sylvia Miller and driven by Michael Miller. The Millers are not related to the Quinneys, and the car in which Matthew was riding was insured by Ms. Miller with State Farm Insurance Company. Plaintiff recovered from State Farm and from his carrier on his regular use vehicle, Erie Insurance Group, under the underinsured motorist coverage provision. Plaintiff seeks underinsured motorist reimbursement from Defendant, and has filed a declaratory judgment action seeking a declaration of coverage. The Defendant has filed an answer and counterclaim, the latter of which seeks a declaration that the sought-after underinsured motorist coverage is not available under the policy issued by the Defendant. Defendant also argues, in the alternative, that the recovery from it is limited to $133,000.

I hold that the policy by the Defendant does provide underinsured motorist coverage in the full amount of $200,000 in the circumstances here present, and therefore the motion will be granted.

STANDARD OF REVIEW

Federal Rule of Civil Procedure 12(b)(6) states that a motion to dismiss may be granted for failure to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). For the purposes of the motion to dismiss, the court takes as true all well-pleaded allegations in plaintiffs' complaint and construes all reasonable inferences in the pleader's favor. Menkowitz v. Pottstown Mem'l Med. Ctr., 154 F.3d 113 (3rd Cir. 1998). The burden is on the moving party to prove that no claim exists. See In re Corestates Trust Fee Litig., 837 F. Supp. 104 (E.D.Pa. 1993), aff'd, 39 F.3d 61 (3d Cir. 1994). A complaint should not be dismissed merely because plaintiff's allegations do not support the legal theory on which he intends to proceed. Bowers v. Hardwick, 478 U.S. 186, 202, 106 S.Ct. 2841, 2849, 92 L. Ed.2d 140 (1986). The court has a duty to examine the complaint to determine if the allegations provide for relief on any possible theory. Id. A complaint should only be dismissed for failure to state a claim if it appears beyond doubt that plaintiff can prove no set of facts in support of his claim which would entitle him to relief. Conley v. Gibson, 355 U.S. 41, 45, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957).

DISCUSSION

A. Count I of Counterclaim
This controversy centers around the language of the policy provisions entitled "Underinsured Motorist Coverage Pennsylvania Non-Stacked." The provision provides that Defendant "will pay compensatory damages which an "insured" is legally entitled to recover from the owner or operator of an "underinsured motor vehicle" because of bodily injury;
1. Sustained by an "insured"; and

2. Caused by an accident."

The provision defines an insured as follows:

"`Insured' as used in this endorsement means:

1. You or any "family member";
2. Any other person "occupying" "your covered auto".
3. Any person for damages that person is entitled to recover because of "bodily injury" to which this coverage applies sustained by a person described in 1. or 2. above."
The Defendant argues that this language must be read so as to require that the insured is occupying the vehicle, a collector car, at the time of the accident. The Defendant bolsters its argument by suggesting that this interpretation is the obvious intent of the parties, both because of the limitations on the use of the collector cars and the low premium component ($6.00 for 2 collector cars versus $70.00 for one regular use vehicle) for the underinsured motorist coverage. The defendant argues that the latter factor supports the proposition that William Quinney could not have had a reasonable expectation that underinsured motorist coverage extended beyond an accident involving an insured occupying one of the subject collector cars. See St. Paul Mercury Ins. Co. v. Corbett, 428 Pa. Super. 54, 630 A.2d 28 (1993).
The Defendant relies heavily on the Corbett case, and asserts its governance in this case. In Corbett, Mr. Corbett was injured by a hit and run driver while operating a vehicle owned by his employer. He collected on the underinsured/uninsured coverage under his employer's policy, his mother's policy (he resided with his mother), and a personal policy issued to his wife who also resided in the household. Corbett also had a special antique car policy with St. Paul which covered an antique car and which provided $50,000.00 in underinsured/uninsured motorist benefits. On the issue of coverage, a divided Pennsylvania Superior Court held that virtually the same language, structure and punctuation existent here meant that the coverage was restricted to the "insured, his family members, or any other person occupying the "covered auto; the antique vehicle." Id. at 31. The court said further that [c]overage under this policy is not independent of any connection with the "covered auto." Id. The court amplified its holding by noting that Mr. Corbett could not have reasonably ...

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