Appeal from the Judgment Entered September 23, 2010 In the Court of Common Pleas of Luzerne County Civil Division at No(s): 05611C2003
The opinion of the court was delivered by: Panella, J.
BEFORE: STEVENS, P.J, BENDER and PANELLA, JJ.
Appellant, Harleysville Insurance Company, appeals from the judgment entered September 23, 2010, by the Court of Common Pleas of Luzerne County. In this appeal, we are asked to determine what circumstances constitute prejudice to an insurer arising from the insured's failure to inform the insurer of the involvement of an unidentified vehicle in an accident. Under the specific circumstances of this case, we conclude that the trial court abused its discretion and, therefore, reverse.
This appeal comes before this court through a long and somewhat tortuous path. The litigation arose from a motor-vehicle accident that occurred on October 4, 2001. In this accident, a vehicle driven by appellee Forester Vanderhoff rear-ended a vehicle driven by Ryan Piontkowski. In what has become the crux of this long-running case, Vanderhoff testified that he saw a white car cross the intersection, cutting off Piontkowski's vehicle, causing Piontkowski to stop suddenly. However, Vanderhoff's testimony is the only evidence of the existence of this third, "phantom" vehicle; Piontkowski denies its existence and none of the contemporaneous reports of the accident contain any reference to it. In fact, Harleysville received no notice of the third vehicle until June 2002, when Vanderhoff filed a claim for uninsured motorist benefits.
Harleysville denied Vanderhoff's claim for uninsured motorist benefits and instituted a declaratory judgment action. A non-jury trial was held on Harleysville's action wherein Harleysville contended that the third, "phantom" vehicle did not exist and that Vanderhoff had not complied with statutory requirements for eligibility for uninsured motorist coverage. The trial court determined that the third vehicle existed, and that Vanderhoff had indeed reported its existence to the police who had responded to the accident.
Harleysville appealed to this court, and by memorandum filed March 1, 2006, we reversed. See Vanderhoff v. Harleysville Ins. Co., 898 A.2d 1143 (Pa. Super. 2006) (unpublished memorandum). This court held that the trial court's finding that Vanderhoff had given timely notice of the "phantom" vehicle to Harleysville under 75 PA.CONS.STAT.ANN. § 1702 was not supported by the record and reversed. Vanderhoff filed a petition for allowance of appeal with the Supreme Court of Pennsylvania, which the Supreme Court granted in order to decide whether an insurer was entitled to deny coverage under section 1702 in the absence of a showing of prejudice.
By opinion dated July 6, 2010, the Supreme Court held that a showing of prejudice was necessary before an insurer could deny coverage based upon untimely notice, and remanded this case to the trial court for a hearing on this issue. See Vanderhoff v. Harleysville Ins. Co., 606 Pa. 272, 997 A.2d 328 (2010).
At the hearing before the trial court, Harleysville presented the testimony of Piontkowski, the responding police officer, a Harleysville claim representative, Harleysville's trial counsel, an investigator, and an accident reconstruction expert. The trial court found that Harleysville did not establish prejudice, as it did not show that the result would have been different had there been timely notice of the phantom vehicle. This timely appeal followed.
On appeal, Harleysville purports to raise four issues for our review. However, each of the four issues constitutes merely a re-phrased challenge to the trial court's determination that Harleysville did not suffer prejudice from the untimely notice. We will therefore focus our analysis on the propriety of the trial court's finding that Harleysville did not suffer prejudice.
In reviewing an appeal from a declaratory judgment action, our scope of review is narrow. See Butler v. Charles Powers Estate, 29 A.3d 35, 39 (Pa. Super. 2011). We review the trial court's decision as we would a decree in equity. See id. Therefore, we only set aside factual conclusions when they are unsupported by the record, or when the trial court clearly abuses its discretion by exercising it in a manner that lacks reason. See id.
In the case sub judice, Sincha Shaiman, a claims adjuster for Harleysville, testified that when an unidentified vehicle is involved in an uninsured motorist claim, Harleysville normally hires an investigator and outside counsel on that same day. See N.T., remand hearing, 8/24/2010, at 15-16. Shaiman testified that the investigator is retained quickly to speak to the responding officer, get photos of the accident scene, and canvass the area for witnesses. See id., at 15. Furthermore, Shaiman testified that in this case, Harleysville retained an investigator and outside counsel to investigate the phantom vehicle claim only after Vanderhoff notified them of the phantom vehicle in the summer of 2002. See id., at 17. Harleysville did not canvass the area for witness at the time, Shaiman testified, because it felt that any possible memories of the accident had dissipated. See id., at 21. Nor did Harleysville take any photographs of the scene of the accident, because after 8 months, their probative value would be diminished. See id., at 22. Finally, Shaiman testified that 9-1-1 tapes are kept for 30 days and then destroyed, so Harleysville did not attempt to review these tapes from the day of the accident. See id., at 30.
James Doherty, Esquire, testified that he was a local attorney who was often retained by Harleysville and other insurers to handle insurance matters. See id., at 36. Attorney Doherty testified that he believed that there would have been witnesses to the accident because the intersection where the accident occurred was a busy intersection and the accident occurred during daylight hours. See id., at 40. Furthermore, he testified ...