United States District Court, M.D. Pennsylvania
September 22, 2005.
UNITRIN AUTO & HOME INSURANCE COMPANY, Plaintiff,
TAMMY A. HEISTER Defendant.
The opinion of the court was delivered by: JOHN JONES, District Judge
MEMORANDUM AND ORDER
THE BACKGROUND OF THIS ORDER IS AS FOLLOWS:
Pending before the Court are cross-motions for Summary Judgment
filed by Plaintiff Unitrin Auto & Home Insurance Company
("Unitrin" or "Plaintiff") and by Defendant Tammy A. Heister
("Heister" or "Defendant"). (Rec. Docs. 11 and 13).
Diversity jurisdiction in this Court is proper pursuant to
42 U.S.C. § 1332.
For the following reasons, we will grant the Plaintiff's Motion
for Summary Judgment and deny Defendant's Motion for Summary
Judgment. STANDARD OF REVIEW:
Summary judgment is appropriate if "there is no genuine issue
as to any material fact and . . . the moving party is entitled to
judgment as a matter of law." Fed .R. Civ. P. 56(c); see also
Turner v. Schering-Plough Corp., 901 F.2d 335, 340 (3d Cir.
1990). The party moving for summary judgment bears the burden of
showing "there is no genuine issue for trial." Young v.
Quinlan, 960 F.2d 351, 357 (3d Cir. 1992). Summary judgment
should not be granted when there is a disagreement about the
facts or the proper inferences which a fact finder could draw
from them. Peterson v. Lehigh Valley Dist. Council,
676 F.2d 81, 84 (3d Cir. 1982).
Initially, the moving party has a burden of demonstrating the
absence of a genuine issue of material fact. Celotex Corporation
v. Catrett, 477 U.S. 317, 323 (1986). This may be met by the
moving party pointing out to the court that there is an absence
of evidence to support an essential element as to which the
non-moving party will bear the burden of proof at trial. Id. at
Federal Rule of Civil Procedure 56 provides that, where such a
motion is made and properly supported, the non-moving party must
then show by affidavits, pleadings, depositions, answers to
interrogatories, and admissions on file, that there is a genuine
issue for trial. Fed.R.Civ.P. 56(e). The United States Supreme Court has commented that this requirement is tantamount to the
non-moving party making a sufficient showing as to the essential
elements of their case that a reasonable jury could find in its
favor. Celotex Corp., 477 U.S. at 322-23.
It is important to note that "the non-moving party cannot rely
upon conclusory allegations in its pleadings or in memoranda and
briefs to establish a genuine issue of material fact." Pastore
v. Bell Tel. Co. of Pa., 24 F.3d 508, 511 (3d Cir. 1994)
(citation omitted). However, all inferences "should be drawn in
the light most favorable to the non-moving party, and where the
non-moving party's evidence contradicts the movant's, then the
non-movant's must be taken as true." Big Apple BMW, Inc. v. BMW
of N. Am., Inc., 974 F.2d 1358, 1363 (3d Cir. 1992), cert.
denied, 507 U.S. 912 (1993) (citations omitted).
Still, "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, 247-48 (1986) (emphasis in
original). "As to materiality, the substantive law will identify
which facts are material." Id. at 248. A dispute is considered
to be genuine only if "the evidence is such that a reasonable
jury could return a verdict for the nonmoving party." Id. STATEMENT OF MATERIAL FACTS:
In the main, the facts of this case are undisputed. On March
29, 2004 at approximately 1:10 a.m., Defendant was injured in an
automobile accident when the vehicle in which she was a front
seat passenger was struck by a tractor trailer in South
Middletown Township, Cumberland County, Pennsylvania. As a result
of the accident, Defendant suffered significant and severe
injuries. At the time of the accident, Defendant was insured by
an automobile policy number CV705534 issued by Plaintiff (the
"Policy"). The Policy included liability insurance for Defendant
in the amount of $100,000 per person and $300,000 per accident.
The Policy also indicated that it did not provide underinsured
motorist ("UIM") benefits as a result of Defendant having signed
a form provided by Plaintiff entitled "Rejection of Underinsured
Motorist Protection" ("UIM rejection waiver form") on August 24,
2003. (Rec. Doc. 13, Ex. A). This UIM rejection waiver form
REJECTION OF UNDERINSURED MOTORIST INSURANCE
By signing this waiver, I am rejecting underinsured
motorist coverage under this policy, for myself, and
all relatives residing in my household. Underinsured
coverage protects me and relatives living in my
household for losses and damages suffered if injury
is caused by the negligence of a driver who does not
have enough insurance to pay for all losses and
damages. I knowingly and voluntarily reject this
coverage. By rejecting this coverage, I am also
signing the waiver on pg. 10 rejecting stacked limits of
underinsured motorist coverage.
(Rec. Doc. 13, Ex. B) (emphasis added). On that same date,
Defendant also signed a form rejecting stacked UIM coverage
("stacked UIM waiver form").
Defendant's parents purchased a similar policy from the
Plaintiff which was issued to number CV893989 (the "Parents'
Policy"). On or about July 20, 2003 Defendant's parents signed a
form entitled "Rejection of Underinsured Motorist Protection"
that was identical to above-excerpted UIM rejection waiver form
signed by Defendant. Defendant's parents also signed a stacked
UIM waiver form. It is of course not disputed that both policies
as just described are governed by the Pennsylvania Motor Vehicle
Financial Responsibility Law ("MVFRL"), codified at 75 Pa. Cons.
Stat. § 1701 et seq.
Subsequent to signing these forms, Defendant made claims
against Plaintiff under both her Policy and the Parents' Policy
for UIM benefits stemming from the March 2004 accident. In light
of the aforementioned signed waivers from Defendant and her
parents, Plaintiff filed this action seeking a declaratory relief
that it need not pay UIM or UIM stacking benefits to Defendant.
Defendant contends that the UIM rejection waiver forms are
invalid because they do not comply with the requirements of
75 Pa. C.S. § 1731. Both parties' Motions for Summary Judgment have been fully
briefed and are therefore ripe for review.
A. APPLICABLE STATUTORY SECTIONS
Section 1731 of the MVFRL has made UIM insurance optional for
all insured drivers in Pennsylvania.*fn1
See 75 Pa. Cons.
Stat. § 1731(c). For an insured to opt out of UIM coverage:
the named insured shall be informed that he may
reject underinsured motorist coverage by signing the
following written rejection form:
REJECTION OF UNDERINSURED MOTORIST PROTECTION
By signing this waiver I am rejecting the
underinsured motorist coverage under this policy, for
myself and all relatives residing in my household.
Underinsured coverage protects me and relatives
living in my household for losses and damages
suffered if injury is caused by the negligence of a
driver who does not have enough insurance to pay for
all losses and damages.
Signature of First Named Insured
75 Pa. Cons. Stat. § 1731(c) (capitalization in original). The
MVFRL also provides the following about how an insurer is to
present said rejection form to an insured: Form of waiver. Insurers shall print the
rejection forms required by subsections (b) and (c)
on separate sheets in prominent type and location.
The forms must be signed by the first named insured
and dated to be valid. The signatures on the forms
may be witnessed by an insurance agent or broker. Any
rejection form that does not specifically comply with
this section is void. If the insurer fails to produce
a valid rejection form, uninsured or underinsured
coverage, or both, as the case may be, under that
policy shall be equal to the bodily injury liability
limits. On policies in which either uninsured or
underinsured coverage has been rejected, the policy
renewals must contain notice in prominent type that
the policy does not provide protection against
damages caused by uninsured or underinsured
motorists. Any person who executes a waiver under
subsection (b) or (c) shall be precluded from
claiming liability of any person based upon
Id. § (c.1). The MVFRL includes a similar statutory section
governing waiver of stacked UIM coverage. See 75 Pa. Cons.
Stat. § 1738.
B LEGALITY OF DEFENDANT'S WAIVER OF UIM BENEFITS
At issue is the effect of the following sentence appended by
Plaintiff to the UIM rejection waiver form: "By rejecting this
coverage, I am also signing the waiver on pg. 10 rejecting
stacked limits of underinsured motorist coverage." (Rec. Doc. 12,
Ex. 4 at 9). Upon receiving the UIM rejection waiver form,
Defendant signed it as well as the stacked UIM waiver
form.*fn2 Defendant now contends that since the UIM rejection waiver form failed to strictly comply with the
requirements of § 1731 of the MVFRL the waiver must be deemed
invalid and that as a result the subject UIM insurance benefits
are activated to the aforesaid limit of the liability coverage.
1. INSURANCE DEPARTMENT APPROVAL OF UIM REJECTION WAIVER
Our analysis begins with the approval status of the rejection
form signed by the Defendant and her parents. Plaintiff contends
that the very form at issue was approved by the Commissioner of
the Pennsylvania Insurance Department (the "Commissioner" or
"Insurance Department") for use in the Commonwealth. With its
Motion, Defendant submitted an affidavit from Susan Fiorentino,
an employee of Plaintiff's subsidiary Kemper Independence
Insurance Company. (Rec. Doc. 12, Ex. 5) Ms. Fiorentino's
affidavit states that Kemper submitted the subject UIM rejection
waiver forms to the Commissioner and that the forms were approved
by the Commissioner.*fn3 In proof of Ms. Fiorentino's
statements is an attached letter dated April 14, 2003 and stamped
by the Insurance Department. This stamp indicates that the forms
submitted under cover of the letter were "Approved, Effective 5/6/03." (Rec. Doc. 12, Ex. 5 at 5). We see no need to
doubt the veracity Ms. Fiorentino's affidavit, nor any reason to
disregard the stamp of the Insurance Department as genuine. It
appears to us that aforementioned stamp signals the Insurance
Department's approval Plaintiff's UIM rejection waiver form.
(Rec. Doc. 12, Ex. 5 at 5).
The case law indicates that we should afford substantial
deference to the Pennsylvania Insurance Department's approval of
Plaintiff's UIM rejection waiver form. "It is well settled that
when the courts of this Commonwealth are faced with interpreting
statutory language, they afford great deference to the
interpretation rendered by the administrative agency overseeing
the implementation of such legislation." Winslow-Quattlebaum v.
Maryland Insurance Group, 561 Pa. 629, 635 (2000). Therefore,
absent fraud, bad faith, abuse of discretion or clearly arbitrary
action, our courts will not "disturb administrative discretion in
interpreting legislation within an agency's own sphere of
expertise." Id. at 636.
The Insurance Department is the agency charged with the
implementation of the MVFRL and we accordingly defer to its
approval of Plaintiff's UIM rejection waiver form. We therefore
find that Defendant's and Defendant's parents' signatures on the
contested form constituted legal waivers of UIM benefits. It
should be noted that Defendant does not plead any allegation of
fraud, bad faith, abuse of discretion or arbitrary action relating to the Insurance
Department, and therefore, deference to the Insurance Department
2. LEGALITY OF UIM REJECTION WAIVER FORM UNDER SECTION 1731
OF THE MVFRL
The foregoing analysis makes it unnecessary for us to determine
the validity of the UIM rejection waiver form under § 1731 of the
MVFRL in the absence of its approval by the Insurance Department.
However, for the sake of completeness we note that regardless of
the Insurance Department's approval of the contested form,
Plaintiff's UIM rejection waiver form does satisfy the
requirements of § 1731, despite the additional sentence appended
It is undisputed by the parties that the UIM rejection waiver
contains all of the language required by § 1731. Despite
Defendant's arguments to the contrary, it appears to us that the
disputed sentence was added by Plaintiff to clarify the
relationship between the UIM waiver and the waiver of stacked UIM
benefits that appears on a separate sheet of paper. By
highlighting the conjunctive relationship between the waivers,
the additional sentence was surely designed to aid the insured in
understanding his policy, an otherwise esoteric and complicated
document for the lay reader to comprehend. We elect to take a common-sense approach to the resolution of
the matter before the Court. To find today that a clarifying
sentence, appended to a waiver that otherwise fully complies with
§ 1731, invalidates the waiver's effect is truly to elevate form
over substance.*fn4 In part, we look to Pennsylvania case
law to support the approach we choose to take today. In Allstate
Insurance Company v. Seeyle, the Pennsylvania Superior Court
held that a waiver of stacking for uninsured motorist coverage
was valid despite the use of additional language in the waiver.
The court reasoned that the additional language only served to
clarify the text of the waiver. See Seeyle, 826 A.2d 1286,
1288 (Pa. Super. Ct. 2004). The same year in Vosk v. Encompass
Insurance Company, the Pennsylvania Superior Court held that
"minor deviations in the title of the executed [stacked UIM
rejection] form" did not void the legality of the waiver. Vosk,
851 A.2d 162, 167 (Pa. Super. Ct. 2004). Once again, the court
reasoned that the purpose of additional words were to achieve
clarity. See id. at 168. Although we recognize that Seeyle
and Vosk involved § 1738 of the MVFRL, the import of both cases
is to illuminate the policy of the Commonwealth courts to uphold
otherwise statutory complaint rejection forms that merely utilize clarifying language.
We are also not persuaded by Defendant's arguments that the use
of the word "specifically" in § 1731(c.1) is fatal to Plaintiff's
claim. In fact, Plaintiff's UIM rejection waiver form does
specifically comply with the statute, inasmuch as it uses the
exact language required by § 1731. Furthermore, § 1731(c.1)
nowhere indicates that additional clarifying language vitiates an
otherwise valid UIM rejection waiver form.
Although we find for Plaintiff today, we take pause to mention
that we believe the better practice for Plaintiff and its fellow
insurance companies is not to supplement the required language
of § 1731. Efforts to achieve clarity regarding UIM waivers are
better suited perhaps in the form of a cover letter or in a
dialogue between the insured and an insurance carrier
representative. Surely by utilizing only the exact language
provided for in the statute, Plaintiff and other insurance
carriers doing business in Pennsylvania will reduce their
exposure to future litigation on this issue. NOW, THEREFORE, IT IS HEREBY ORDERED:
1. Plaintiff's Motion for Summary Judgment (doc. 11) is
2. Defendant's Motion for Summary Judgment (doc. 13) is DENIED.
3. The Clerk shall close the file on this case.
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