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Erie Insurance Exchange v. Donna M. Larrimore and Charles

December 8, 2009

ERIE INSURANCE EXCHANGE
APPELLANT
v.
DONNA M. LARRIMORE AND CHARLES
LARRIMORE
APPELLEES



Appeal from the Order Entered January 13, 2009 In the Court of Common Pleas of Carbon County Civil at No(s): 07-1991

BEFORE: FORD ELLIOTT, P.J., PANELLA, and FREEDBERG, JJ. OPINION BY FREEDBERG, J.:

¶ 1 In this declaratory judgment action involving a coverage question under the Motor Vehicle Financial Responsibility Law ("MVFRL"), 75 Pa.C.S.A. §§ 1701 et seq., Erie Insurance Exchange ("Erie") appeals from the Order granting summary judgment in favor of Donna and Charles Larrimore and against Erie. We affirm.

¶ 2 The factual and procedural history may be summarized as follows. On April 24, 2000, Donna Larrimore, then unmarried and known as Donna Green, signed an eight page application for motor vehicle insurance. The application was prepared by an insurance agency representative following a telephone conversation with Donna Larrimore. There is a lack of any definitive independent recollection as to the specifics of any conversation regarding particular coverage amounts. The second page of the application set forth that the coverage applied for included the following: Bodily Injury Liability coverage in the amount of $300,000.00 per person and $300,000.00 per accident; Uninsured Motorist ("UM") Bodily Injury coverage in the amount of $15,000.00 per person and $30,000.00 per accident, unstacked; and Underinsured Motorist ("UIM") Bodily Injury coverage in the amount of $15,000.00 per person and $30,000.00 per accident, unstacked. This coverage limits information was inserted in the application by the agent before the application was presented to Donna Larrimore for signature. The eighth page of the application contained the following language immediately preceding the applicant's signature: I certify that I have given true and complete answers to the questions in this application. I also certify that I have been offered alternative coverage limits and those listed on this application reflect my choices.

¶ 3 On the same day she signed the application, Larrimore also signed the required "Important Notice" called for under § 1791 of the MVFRL. This single page form set forth, in pertinent part, the following: IMPORTANT NOTICE

Insurance companies operating in the Commonwealth of Pennsylvania are required by law to make available for purchase the following benefits for you . . .:

(6) Uninsured, Underinsured and Bodily Injury Liability coverage up to at least $100,000 because of injury to one person in any one accident and up to at least $300,000 because of injury to two or more persons in any one accident . . .

Additionally, insurers may offer higher benefit levels than those enumerated above as well as additional benefits. However, an insured may elect to purchase lower benefit levels than those enumerated above. YOUR SIGNATURE ON THIS NOTICE OR YOUR PAYMENT OF ANY RENEWAL PREMIUM EVIDENCES YOUR ACTUAL KNOWLEDGE AND UNDERSTANDING OF THE AVAILABILITY OF THESE BENEFITS AND LIMITS AS WELL AS THE BENEFITS AND LIMITS YOU HAVE SELECTED. If you have any questions or you do not understand all of the various options available to you, contact your agent or company. If you do not understand any of the provisions contained in this notice, contact your agent or company before you sign.

¶ 4 At the time the application and § 1791 "Important Notice" were signed by Larrimore, Erie employed a special form UF-2047 titled "Request for Lower Limits of Underinsured Motorist Coverage" for an insured to specifically request limits of UIM coverage in an amount less than the limits of bodily injury liability coverage, and to insert the amount of UIM coverage sought. This form contained the following language: By signing this form, I am requesting for myself and members of my household underinsured motorist coverage in an amount less than the limits of my bodily injury liability coverage. I am knowingly and voluntarily rejecting underinsured motorist coverage in an amount equal to my bodily injury liability limits. Rather, I am requesting the following amount of underinsured motorist coverage: ¶ 5 The form then contained blank spaces to insert the amount of UIM coverage sought. Once completed this form was to be signed and dated by the insured. At the same time, Erie employed a similarly titled and styled special form UF-2044 for an insured to request limits of UM coverage in an amount less than the limits of bodily injury liability coverage. In the present case, Erie admits that it is not in possession of any such form UF-2047 or UF-2044 signed by Donna Larrimore.

¶ 6 Erie issued an automobile insurance policy to Donna Larrimore on April 24, 2000. The policy was later amended to add her husband Charles Larrimore as a named insured, further amended to include a second vehicle, and still further amended to stack the UM and UIM coverage for two vehicles in the same amounts as reflected on the initial application. ¶ 7 On July 25, 2006, Donna Larrimore was injured in an automobile accident. Her bodily injury claim against the third party tortfeasor was settled, and she thereafter undertook pursuit of additional compensation through the UIM coverage in her policy with Erie. Taking the position that she never requested limits of UIM coverage in an amount less than the limits of her bodily injury liability coverage, Larrimore sought UIM benefits totaling $600,000.00, representing an amount equal to her bodily injury limits of $300,000.00, stacked for two vehicles.

¶ 8 On June 22, 2007, Erie filed a declaratory judgment action claiming that Larrimore's UIM coverage was limited to the amount of UIM coverage reflected on the initial application, i.e., $15,000.00 per person and $30,000.00 per accident, though now concededly stacked for two vehicles, for a total of $30,000.00. Erie and Lattimore ultimately filed motions for summary judgment.

¶ 9 By Memorandum Opinion and Order entered January 13, 2009, the Honorable Roger Nanovic, President Judge, in a thorough and well-reasoned decision, denied Erie's motion for summary judgment and granted the Larrimore motion for summary judgment, entering judgment in favor of Larrimore and against Erie. The trial court specifically ordered that the UIM coverage limits were deemed equal to the bodily injury liability coverage limits, i.e., $600,000.00, representing an amount equal to the bodily injury limits of $300,000.00, stacked for two vehicles. Erie filed a motion for reconsideration which was denied by Order entered February 9, 2009. Erie then filed this appeal. The trial court ordered Erie to file a statement of errors complained of on appeal pursuant to Rule 1925 of the Pennsylvania Rules of Appellate Procedure, and Erie complied. The trial court thereafter issued a Rule 1925 Opinion, largely incorporating its earlier Memorandum Opinion, but also finding that two issues identified by Erie in its Rule 1925 statement were not properly preserved and were therefore waived. ¶ 10 On appeal, Erie sets for the following statement of questions involved on appeal:

Did the lower court err in finding that the Application for Insurance executed by Donna M. Larrimore (then Donna M. Green) on April 24, 2000, did not constitute a valid Section 1734 written request for policy limits of UM Bodily Injury Coverage and UIM Bodily Injury Coverage in amounts less than the limits of Bodily Injury Liability Coverage under Erie Insurance Exchange Policy No. Q04- 2407916? Did the lower court err in holding that Section 1734's requirement for a written request for limits of Uninsured Motorists/Underinsured Motorists Coverage less than those mandated by Section 1731 is to be narrowly and strictly construed despite the dominant and overarching public policy underpinning the MVFRL of cost containment, such that Section 1734 should not be narrowly and strictly construed?

Did the lower court err in not finding that the receipt by Donna M. Larrimore of quarterly renewal notices, and her payment of lower premiums over six a (6) year period prior to the accident, demonstrated Donna M. Larrimore's actual knowledge of and acquiescence to her selection of UM Bodily Injury Coverage and UIM Bodily Injury Coverage with limits of protection that were lower than her Bodily Injury Liability Coverage under Erie Insurance Exchange Policy No. Q04-2407916?

Did the lower court err in failing to follow Blood v. Old Guard Insurance Company, 594 Pa. 156, 934 A.2d 1218 (2007) and Salazar v. Allstate Insurance Company, 549 Pa. 658, 702 A.2d 1038 (1997), by fashioning a remedy reforming the UM Bodily Injury Coverage and UIM Bodily Injury Coverage Limits of Protection under Erie Insurance Exchange Policy No. Q04-2407916 such that they were deemed to be equal to the Bodily Injury Liability Coverage Limits, for what the Court found to be Erie's ...


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