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Toth v. Donegal Companies

January 14, 2009

DARLA J. TOTH
v.
DONEGAL COMPANIES, ALSO KNOWN AS DONEGAL MUTUAL INSURANCE COMPANY, ALSO KNOWN AS DONEGAL MUTUAL, ALSO KNOWN AS DONEGAL INSURANCE COMPANY, ALSO KNOWN AS DONEGAL MUTUAL INS. CO., ALSO KNOWN AS DONEGAL INSURANCE, ALSO KNOWN AS DONEGAL, A CORPORATION, PARTNERSHIP, PROPRIETORSHIP, ASSOCIATION, OR OTHER ENTITY, APPELLANT



Appeal from the Order, August 22, 2007, in the Court of Common Pleas of Westmoreland County Civil Division at No. 145 of 2003.

The opinion of the court was delivered by: Ford Elliott, P.J.

BEFORE: FORD ELLIOTT, P.J., ORIE MELVIN AND SHOGAN, JJ.

OPINION

¶ 1 Donegal Mutual Insurance Company ("Donegal") appeals the order of August 22, 2007, granting Darla J. Toth's ("Toth") motion for summary judgment. Toth was in a motor vehicle accident and subsequently filed a claim for underinsured motorist ("UIM") benefits under her policy with Donegal, which denied the claim on the basis that Toth had rejected UIM coverage. The trial court determined that the form rejecting UIM coverage was void because it was not signed by Toth, the first named insured, as required by the MVFRL;*fn1 rather, the form was signed by Toth's husband, John D. Toth, in both their names and allegedly with Toth's permission. After careful review, we reverse.

¶ 2 The underlying facts of this matter are straightforward. Darla and John Toth were the named insureds on a personal automobile liability insurance policy written by Donegal. Prior to April 1997, their policy provided UIM protection. In April 1997, apparently because their teenaged son became a driver, John Toth discussed with their insurance agent ways to reduce the premium. Based on those discussions, Toth signed both their names to various coverage selection forms, including the UIM coverage rejection form.

¶ 3 Revised policy declarations showing that no UIM coverage was provided were sent to the Toths' home, together with renewal notices every six months. The Toths paid reduced premiums in exchange for rejecting UIM protection. On January 10, 2001, Darla Toth suffered injuries in an automobile accident. After recovering the amount of the at-fault driver's liability insurance coverage, Toth brought an action to recover UIM benefits from Donegal, arguing that the UIM coverage rejection form was invalid because her husband had signed her name.

¶ 4 The trial court agreed, finding that because Darla Toth, as the first named insured, did not sign the form herself, it was void.

Subsections 1731(c) and (c.1) of the MVFRL provide that the form rejecting UIM protection must be signed by the first named insured, and that any rejection form that does not specifically comply with Section 1731 is void. It was not disputed that Darla Toth did not sign the form. Therefore, the trial court held the form was void and Toth was entitled to UIM coverage in an amount equal to the policy's bodily injury liability limits. For purposes of summary judgment only, the trial court assumed that Darla Toth gave her husband permission to sign her name on the rejection form. However, the trial court decided that whether John Toth had authority to sign Darla Toth's name is irrelevant, since the statute clearly requires that the form be signed by the first named insured.*fn2

¶ 5 The trial court's decision and order granting summary judgment on Toth's behalf was filed August 22, 2007*fn3 and on September 19, 2007, Donegal filed a timely notice of appeal. Donegal was not ordered to file a concise statement of errors complained of on appeal pursuant to Pa.R.A.P. 1925(b); on September 27, 2007, the trial court filed a Rule 1925(a) opinion, relying on its decision and order of August 22, 2007.

¶ 6 Donegal presents the issue for our review on appeal as follows:

Whether the Trial Court erred by granting summary judgment to Darla Toth where the undisputed facts are:

1) Donegal received from the Toths the underinsured motorist coverage rejection form bearing Darla Toth's signature,

2) Mrs. Toth's husband has testified that she authorized him to sign the form on her behalf,

3) the Toths received renewal notices for more than three years showing no underinsured motorist coverage and for that same period of time the Toths accepted the reduction of premiums resulting ...


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