The opinion of the court was delivered by: Judge Munley
Before the court is defendant's motion for summary judgment (Doc. 10) in this declaratory judgment action. Having been fully briefed, the matter is ripe for disposition.
This case centers around the amount of unisured/underinsured motorist (UM/UIM) coverage available to the plaintiffs under the automobile insurance policy issued them by the defendants. Plaintiff Gary Loughney was involved in an automobile accident on March 25, 2000. (Defendant's Statement of Undisputed Material Facts (Doc. 12 at ¶ 2).*fn1 Defendant insured him, providing a policy that had liability limits of $300,000. (Id. at ¶ 3). The policy also included protection for accidents with underinsured and uninsured ("UM/UIM") motorists. (Id. at ¶ 4). The policy contained stacked limits for this coverage of $35,000 per vehicle, or a total of $70,000. (Id. at ¶ 4). As coverage for this accident, defendant provided plaintiffs with $70,000 of UM/UIM coverage on August 12, 2005. (Id. at ¶ 6). Defendant insists that this payment is all that plaintiffs are due under the insurance policy in question. (Id. at ¶ 9).
Plaintiffs signed a "Pennsylvania Supplemental Automobile Application" upon purchasing the insurance policy in 1991. (Id. at ¶ 5). In that application, plaintiff Gary Loughney indicated that he chose to reject underinsured motorist coverage. (See Exhibit A to Complaint (hereinafter "Complt") attached as Exhibit A to Notice of Removal (Doc. 1)). On the same form, he also indicated that they chose to accept a lower limit on the policy for UM/UIM coverage. (Defendant's Statement of Material Facts at ¶ 8).
On September 7, 2006, plaintiffs filed the instant lawsuit in the Court of Common Pleas of Luzerene County, Pennsylvania. (See Complt.). The suit sought declaratory judgment from the court that the authorization was invalid and that the policy should be reformed to provide the plaintiff with UM/UIM coverage to the policy's stacked limits of $600,000. Plaintiffs argued that the authorization form for those reduced benefits was inadequate as a matter of law. Plaintiffs also argued that the insurance policy did not contain an "important notice" summarizing the benefits available for Pennsylvania motor vehicles, and thus the defendant had a duty to prove that plaintiff's waiver of UM/UIM coverage was knowing and intelligent.
On September 19, 2006, defendant remove the case to this court, citing diversity jurisdiction. (Doc. 1). After discovery, the defendant filed a motion for summary judgment. Both sides then submitted briefs, bringing the case to its present posture. Jurisdiction
Plaintiffs are citizens of Pennsylvania. Defendant is a business incorporated in Illinois with its principal place of business in that state. Because the parties are from different states and the amount in controversy exceeds $75,000, we have diversity jurisdiction to hear this case. See 28 U.S.C. § 1441.
Granting summary judgment is proper 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. See Knabe v. Boury, 114 F.3d 407, 410 n.4 (3d Cir. 1997) (citing FED. R. CIV. P. 56(c)). "[T]his standard provides that 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).
In considering a motion for summary judgment, the court must examine the facts in the light most favorable to the party opposing the motion. International Raw Materials, Ltd. v. Stauffer Chemical Co., 898 F.2d 946, 949 (3d Cir. 1990). The burden is on the moving party to demonstrate that the evidence is such that a reasonable jury could not return a verdict for the non-moving party. Anderson, 477 U.S. at 248 (1986). A fact is material when it might affect the outcome of the suit under the governing law. Id. Where the non-moving party will bear the burden of proof at trial, the party moving for summary judgment may meet its burden by showing that the evidentiary materials of record, if reduced to admissible evidence, would be insufficient to carry the non-movant's burden of proof at trial. Celotex v. Catrett, 477 U.S. 317, 322 (1986).
Pennsylvania's Motor Vehicle Financial Responsibility Law (MVFRL) "provides that insurers must offer UM/UIM coverage equal to bodily injury liability coverage except when the insured requests in writing UM/UIM coverage in amounts less than the limits of liability for bodily injury." Tukovits v. Prudential Ins. Co. of Am., 672 A.2d 786, 789 (Pa. Super. 1996). The question in this case is whether the request signed by the plaintiffs limiting their UM/UIM coverage meets the requirements of the MVFRL for valid waivers of coverage. In evaluating this waiver, we employ the standards courts have developed under Section 1734*fn2 of the MVFRL because "[a]lthough the General Assembly clearly designed both Section 1731 and 1734 as relating to UM/UIM coverage, it is just as plain that it directed each provision to a different form of election: Section 1731(c.1) to outright waiver/rejection of coverage . . . and Section 1734 to selection of specific limits." Lewis v. Erie Ins. Exch., 793 A.2d 143, 153 (Pa. 2002). This is not a case where the insurer claims that the insured waived UM/UIM coverage and refuses to provide any compensation at all. The standards related to a total waiver of coverage under Section 1731 therefore do not apply. Here, the parties disagree over whether plaintiffs properly waived down a portion of UM/UIM coverage. We shall therefore apply the standards developed for Section 1734.
Pennsylvania courts have concluded that under § 1734 "to constitute a valid request for 'specific limits coverage' . . . the named insured must sign the 'writing' and the 'writing' must include an express designation of the amount uninsured and underinsured coverage requested." The Hartford Ins. Co. v. O'Mara, 907 A.2d 589, 602-603 (Pa. Super. 2006). State law does not dictate a particular style, and "the language of the 'writing' does not violate the mandate of Section 1734 because [reviewers] could conceive of a better way to fashion the language." Id. at 603. Failure to comply with this requirement of a written consent to reduction of coverage, however, makes such a waiver invalid and the insurer liability for coverage to the policy limits for bodily injury.*fn3 See, e.g., National Mut. Ins. Co. v. Heintz, 804 A.2d 1209, 1217 n.7 (Pa. Super. 2002) (holding that "[i]f ...