The opinion of the court was delivered by: Arthur J. Schwab United States District Judge
Before the Court in this declaratory judgment action are cross-motions for summary judgment*fn1 filed on behalf of plaintiff, Horace Mann Insurance Company ("Horace Mann" or "insurer") and defendants Robert Alben and Marie Ann McDonald for underinsured motorist benefits under a policy of insurance issued for a 2003 Chrysler PT Cruiser owned and financed by both defendants and issued to Ms. McDonald as "insured," but listing both her and Mr. Alben, her live-in companion, on the declarations page as "listed drivers." Although the Court finds and declares that defendant Alben is not covered under the terms of the policy for underinsured motorist benefits, Pennsylvania's "reasonable expectations of the insured" doctrine nevertheless estops plaintiff from denying such benefits under all of the circumstances, because defendants reasonably expected that they had purchased such insurance for both listed drivers from Horace Mann's agent, the Mitchell Agency.
Unless otherwise indicated, the following facts are not in dispute.
A. The Insurance Relationship and Policy
Defendant McDonald has purchased automobile insurance from Horace Mann since the 1980's, initially through its agent Patricia Wolfe and then, commencing in 1990, through agent Wolfe's successor, Randy L. Mitchell, an employee and "captive" agent for Horace Mann, and his Mitchell Agency. All contacts between defendant McDonald and the Mitchell Agency regarding the purchase and changing of insurance policies were by telephone with members of the Mitchell Agency's staff.
In 2001, Ms. McDonald was the registered owner of a 1989 Pontiac and was the named insured on an insurance policy on the vehicle issued by Horace Mann through the Mitchell Agency. Since at least November 2001, Horace Mann and the Mitchell Agency were advised and knew that Mr. Alben lived with Ms. McDonald. Mr. Alben is not related to Ms. McDonald by blood, marriage or adoption.
On or about November 20, 2001, Ms. McDonald telephoned the Mitchell Agency to have Mr. Alben added as a driver to that insurance policy, and Horace Mann issued an amended declarations page adding him as a "listed driver." Ms. McDonald asserts that she advised the Mitchell Agency that Mr. Alben would be using the vehicle on a regular basis; plaintiff denies that the Mitchell Agency or Horace Mann were advised that he would be using the Pontiac on a "regular basis," although plaintiff's agents do not have evidence specifically contradicting defendants' "regular basis" assertions. In any event, this factual dispute is not material for purposes of the summary judgment motions.
On July 2, 2003, defendants jointly purchased a 2003 Chrysler PT Cruiser; title to the vehicle was registered in both defendants' names, and financing was obtained in both names. On July 1st and 2nd, defendant McDonald made at least two telephone calls to the Mitchell Agency to arrange for automobile insurance for the PT Cruiser. Ms. McDonald testified in her deposition that she advised staff at the Mitchell Agency at least twice that "Robert and I" were purchasing the PT Cruiser jointly; plaintiff denies that it knew that Ms. McDonald and Robert Alben were joint owners of the PT Cruiser because it has no record of any such telephone calls or the content of such calls, although it offers no evidence specifically disputing this assertion. See Plaintiff's Response to Defendants' Concise Statement of Material Facts and Additional Material Facts (doc. no. 38), Answer to ¶ 13.
Shortly thereafter, plaintiff issued a policy of insurance for the PT Cruiser, transferring the same coverage from the 1989 Pontiac to the new car.*fn2 The Complaint for Declaratory Judgment (doc. no. 1) attaches the policy as Exhibit A. The "Amended Declaration" page, inter alia, declares that Horace Mann has issued a "Continuous Renewal Policy," namely, "Readable Car Policy No. 37-23992470" on the PT Cruiser with "Underinsured Motor-Vehicle-Stacked Bodily Injury" insurance in the amount of $100,000 per person / $300,000 per accident; identifies "McDonald, Marie Ann" in the box for "Insured"; and declares the "Listed Driver(s)" as "McDonald, Marie Ann (Classed Driver) [-] Alben, Robert." Subsequently, Horace Mann issued an insurance card to Ms. McDonald listing her as the "insured."
The critical terms of the policy are as follows: The Uninsured/Underinsured Motor Vehicle coverage provisions of the policy provide that Horace Mann "will pay damages which an insured is legally entitled to recover from the owner or operator of either an uninsured motor vehicle or underinsured motor vehicle, but not both, because of bodily injury: 1. sustained by an insured; and 2. caused by an accident." Bolded terms are defined in the policy, which also provides that "Insured as used in this section means: 1. you; 2. your relatives; 3. Any other person who, at the time of the accident, is occupying: a. your car, a temporary substitute car, or a newly acquired car . . . b. a car not owned by you or any relative, but driven by you . . . ." (UM/UIM Amendatory Endorsement; CC-N04PA1(7-96)). The Policy defines "Relative" to mean "a person related to you by blood, marriage or adoption who lives with you. It includes your unmarried and dependant child who is away at school." (Defined Words, CC-N00PA1(5-89)).
On October 14, 2003, Robert Alben was involved in an automobile-truck accident in the State of Ohio and sustained serious injuries while driving a tractor-trailer owned and insured by his employer, R&L Transfer, Inc., during the course of his employment. Following settlement of the tort action, Robert Alben submitted a claim for underinsured motorist benefits under the policy of insurance issued by Horace Mann and covering the 2003 Chrysler PT Cruiser owned by Robert Alben and Marie McDonald. Horace Mann ...