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STATE FARM MUTUAL AUTOMOBILE INSURANCE CO. v. LIGHTNER

November 14, 2005.

STATE FARM MUTUAL AUTOMOBILE INSURANCE CO., Plaintiff
v.
JULIE LIGHTNER, Defendant.



The opinion of the court was delivered by: J. SMYSER, Magistrate Judge

MEMORANDUM AND ORDER

The complaint for a declaratory judgment was filed on February 28, 2005 by the plaintiff State Farm Mutual Automobile Insurance Co. Doc. 1. The answer was filed by defendant Julie Lightner, an insured, on March 11, 2005. Doc. 3. The parties consented to a magistrate judge as the judge of the case pursuant to 28 U.S.C. § 636(c).

The jurisdiction of the court is based upon the diversity of citizenship of the plaintiff and the defendant. 28 U.S.C. § 1332. The plaintiff is an Illinois corporation. The defendant is a resident of Dauphin County, Pennsylvania. The defendant on September 22, 2005 filed a motion for summary judgment, Doc. 10, and a brief, Doc. 11. The plaintiff on September 30, 2005 filed a motion for summary judgment, Doc. 12, and a brief, Doc. 13. The defendant's brief in opposition to the plaintiff's motion was filed on October 11, 2005. Doc. 15. The plaintiff's brief in opposition to the defendant's motion for summary judgment was filed on October 11, 2005. Doc. 16. Reply briefs were not filed, and these motions are ripe to be decided. This memorandum and order addresses the parties' motions for summary judgment. We find there not to be a material factual issue in dispute and conclude that the plaintiff is entitled to judgment as a matter of law.

  It is undisputed that Julie Lightner sustained injuries in a motor vehicle accident in September of 2003. She was insured under a State Farm Mutual Automobile Insurance Company policy of motor vehicle insurance, policy number 668-8213. Policy number 668-8213 was issued upon the application of Robert Lightner, Julie Lightner's father, in 1988. In the application, Julie was listed as a driver of the vehicle insured under the policy. In the 1988 application, Robert Lightner requested liability limits under the policy of $100,000 per person, $300,000 per accident. Robert Lightner selected limits upon coverages for uninsured or under-insured motorist caused injuries of $15,000 for person, $30,000 per accident. Robert Lightner signed and dated an uninsured motorist/under-insured motorist ("UM/UIM") "sign down" form specifically selecting lower UM/UIM limits than the policy's liability limits.

  On April 13, 1989, policy number 668-8213 was amended. A "change menu" was signed by Robert Lightner. The effect of the change was that he was no longer the named insured and that Julie Lightner was thereupon and thereafter the named insured under the policy. Julie Lightner was not requested to sign a UM/UIM "sign down" form and did not sign such a form.

  After the motor vehicle accident in September of 2003 in which Julie Lightner sustained personal injuries, the plaintiff State Farm paid her $15,000 in UIM benefits. She seeks further UIM benefits.

  From the inception of policy number 668-8213, the premiums paid under the policy were for UM/UIM benefits in the amount of $15,000/$30,000 and not for UM/UIM benefits in the amount of $100,000/$300,000. Julie Lightner paid a premium to acquire $15,000 in UIM coverage each year, and that is the coverage that was stated in the policies issued to her.

  Summary judgment is appropriate 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." Fed.R.Civ.P. 56(c). The moving party bears the initial responsibility of informing the court of the basis for its motion and identifying those portions of the record which demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The moving party may discharge that burden by "`showing' — that is, pointing out to the district court — that there is an absence of evidence to support the nonmoving party's case." Id. at 325. Once the moving party has met its burden, the nonmoving party may not rest upon the mere allegations or denials of its pleading; rather, the nonmoving party must "set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e). An issue of fact is "`genuine' only if a reasonable jury, considering the evidence presented, could find for the non-moving party." Childers v. Joseph, 842 F.2d 689, 693-94 (3d Cir. 1988) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986)). A material factual dispute is a dispute as to a factual issue that will affect the outcome of the trial under governing law. Anderson, supra, 477 U.S. at 248. In determining whether an issue of material fact exists, the court must consider all evidence in the light most favorable to the non-moving party. White v. Westinghouse Electric Co., 862 F.2d 56, 59 (3d Cir. 1988).

  "[T]he plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex, supra, 477 U.S. at 322. "Under such circumstances, `there can be no genuine issue as to any material fact, since a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial.'" Anderson v. CONRAIL, 297 F.3d 242, 247 (3d Cir. 2002) (quoting Celotex, supra, 477 U.S. at 323).

  There is no fact that is material to the determination of this case that is in dispute. The parties argue for competing determinations of the issue based upon two different legal theories. The plaintiff insurer asserts that the sign down executed by the initial named insured, Robert Lightner, the defendant's father, did not become inoperative or invalid after the insurance policy had been transferred by him to his daughter. The defendant insured asserts that the successor named insured is correctly held to be entitled to UIM coverage equal to bodily injury liability coverage without regard to a predecessor named insured's election under the same policy to lesser UIM coverage limits, unless the successive named insured signs down. Neither party argues for fact specific variations in these two competing theories that would indicate the presence of material factual issues in this case.

  75 Pa. C.S. § 1731(a) provided before 1990:
"(a) General rule. — No motor vehicle liability insurance policy shall be delivered or issued for delivery in this Commonwealth, with respect to any motor vehicle registered or principally garaged in this Commonwealth, unless uninsured motorist and underinsured motorist coverages are provided therein or supplemental thereto in amounts equal to the bodily injury liability coverage except as provided in section 1734 (relating to request for lower or higher limits of coverage)."
75 Pa. C.S. § 1731(a) provided after the 1990 amendment:
§ 1731. Availability, scope and amount of coverage
(A) Mandatory offering. — No motor vehicle liability insurance policy shall be delivered or issued for delivery in this Commonwealth, with respect to any motor vehicle registered or principally garaged in this Commonwealth, unless uninsured motorist and underinsured motorist coverages are offered therein or supplemental thereto in amounts as provided in section 1734 (relating to request for lower limits of coverage). Purchase of uninsured motorist and underinsured motorist coverages is optional.
75 Pa. § 1734 provides:
§ 1734. Request for lower limits of coverage
  A named insured may request in writing the issuance of coverages under section 1731 (relating to availability, scope and amount of coverage) in amounts equal to or less than the limits of liability for bodily injury. The defendant's position is that she is not a named insured who requested in writing that her coverages under 75 Pa.C.S. § 1731 be in amounts equal to less than her policy's limits of liability for bodily injury. Since she made no such request, she asserts, it was not proper under the Pennsylvania statute for her UIM limits to be set lower than her liability coverages. The plaintiff insurer considers the first named insured's request to have bound the subsequent named insured in the absence of action by the latter to raise the UM/UIM coverage amounts.

  The defendant's position, if held to be correct, would mean that upon a change from a first named insured to a second named insured, in the absence of a Section 1734 written request from the second named insured, the insurer's legal duty would be to raise the UM/UIM coverages as a matter of course to the level of the liability coverages and to accordingly raise the premiums.

  75 Pa. C.S. § 1731 requires that uninsured and under-insured motorist coverages be offered in any Pennsylvania motor vehicle insurance policy. It provides that such coverages may be rejected. After 1990, it contains no express presumptive or mandatory level of uninsured or under-insured motorist coverages but has been consistently construed to require UM/UIM coverage in the same amount as the policy's bodily injury liability coverage.

  A construction of 75 Pa. C.S. § 1731(a) and § 1734 as the defendant advocates would not create an unworkable burden upon an insurer. The insurer is, of course, a participant in the process of the replacement of one named insured by another named insured, and could treat the substitution of a new named insured for a former named insured as an occasion to ascertain the new ...


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