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State Farm Insurance Co. v. Taylor

November 25, 2003

STATE FARM INSURANCE COMPANY, PLAINTIFF
v.
KATHRYN TAYLOR, MARK TAYLOR, AND TAYLOR GENERAL CONTRACTING, INC., DEFENDANTS



The opinion of the court was delivered by: Rufe, J.

MEMORANDUM OPINION AND ORDER

This insurance coverage dispute comes before the Court on the parties' cross-motions for summary judgment. For the reasons below, Plaintiff's motion is granted and Defendants' motion is denied.

I. BACKGROUND

Plaintiff is State Farm Mutual Automobile Insurance Company ("State Farm"), a mutual insurance company with its principal place of business in Illinois. Defendants are Pennsylvania citizens Kathryn and Mark Taylor (wife and husband) and Taylor General Contracting, Inc. (the "Corporation"). The Corporation is closely held by Mark Taylor. Kathryn Taylor is the Secretary of the Corporation. Jurisdiction is premised on diversity of citizenship. See 28 U.S.C. § 1332(a)(1).

On June 5, 1992, Mrs. Taylor was involved in an automobile accident and suffered personal injuries. She presented an insurance claim against the other driver and settled for the limits of that driver's liability insurance policy. At the time of the accident both Mrs. Taylor and her son were named insureds on two State Farm policies. Mrs. Taylor presented claims for underinsured motorist ("UIM") benefits under both of these polices, and State Farm paid the limits of UIM coverage on both policies.

The Corporation was the named insured on four identical automobile policies issued by State Farm with UIM limits of $100,000 each. Seeking to stack her UIM coverage, Kathryn Taylor made a claim for UIM benefits under these corporate policies. State Farm denied each claim and the instant action followed.

The parties seek a declaratory judgment as to whether Kathryn Taylor qualifies as an "insured" for purposes of collecting UIM benefits under the four Corporation policies. See 28 U.S.C. §§ 2201-02. The Court heard oral argument on the parties' cross-motions for summary judgment on October 31, 2003. The parties agree that there are no material issues of fact in dispute,*fn1 and that Pennsylvania law governs.

II. DISCUSSION

State Farm argues that UIM benefits under the Corporation's policies are limited to individuals who occupy the vehicles insured under that policy (i.e., the corporate vehicles) at the time of the accident. Because Kathryn Taylor occupied her own personal vehicle at the time of the accident, not one of the four corporate vehicles covered under the Corporation's policies, she is not entitled to UIM benefits.

It is firmly established that the task of interpreting an insurance contract is generally performed by a court rather than a jury. Standard Venetian Blind Co. v. Am. Empire Ins. Co., 469 A.2d 563, 566 (Pa. 1983). The Court must ascertain the intent of the parties as manifested by the language of the written instrument. Id. If the contractual language is clear and unambiguous, the Court must give effect to that language. Id.

The policies at issue define "insured" in two places. The "general definition" provides: "Insured - - means person, persons or organization defined as insureds in the specific coverage." State Farm Policy Form 9838.5 at p. 3 (attached to Plaintiff's Motion at Ex. A). The definition of "insured" applicable to UIM coverage appears in the endorsement. It provides:

Who is an Insured - - Coverages U and W

Insured - - means the person or persons covered by uninsured motor vehicle or underinsured ...


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