Appeal from the Order Entered June 21, 2012 In the Court of Common Pleas of Juniata County Civil Division at No(s): 2010-00322
BEFORE: BOWES, GANTMAN, and OLSON, JJ.
Rebecca Swarner commenced this declaratory judgment action against her automobile insurance carrier, Mutual Benefit Group d/b/a/ Mutual Benefit Insurance Co. ("Mutual Benefit") to determine whether the household exclusion was applicable on largely stipulated facts to preclude underinsured motorists ("UIM") benefits under that policy. Following discovery, both parties filed motions for summary judgment. The trial court granted summary judgment in favor of Mutual Benefit based on the household exclusion. After careful review, we find the exclusion inapplicable on the facts before us and we reverse and remand for entry of summary judgment in favor of Ms. Swarner.
On September 6, 2008, Ms. Swarner was a passenger on a motorcycle owned and operated by her husband, Jason. They were preparing to access the on-ramp to Route 22 eastbound in Fermanagh Township, Juniata County, when a Dodge pick-up truck driven by Joshua Bender and traveling in the opposite direction made a left-hand turn onto the ramp in the path of motorcycle. Stipulation of Facts, ¶3. The motorcycle struck the right front of the truck, and the Swarners were ejected. Mr. Swarner came to rest on the road in close proximity to the motorcycle and was pronounced dead upon arrival at Lewistown Hospital. Id. at ¶6. Mrs. Swarner became airborne and landed in the travel lane of S.R. 35, where she was subsequently run over by Philip Howie, who was operating a 2000 Dodge pick-up truck. Id. at ¶5.
The Swarners were married at the time of the accident, resided in the same household, and were named insureds under a Mutual Benefit insurance policy which covered two automobiles and a truck and provided UIM coverage of $100, 000/$300, 000, which could be stacked. Id. At ¶¶6, 7, 8, 9, 10. The motorcycle was owned by Mr. Swarner and insured under a policy issued by Progressive Insurance Company. Id. at ¶14.
Both Mr. Bender and Mr. Howie were insured by Erie Insurance Company, and each tendered his liability limits of $100, 000. Id. at ¶16. Progressive, the insurer of the decedent's motorcycle, tendered its UIM limits of $25, 000. Id. at ¶17. All settlements were consented to by Mutual Benefit. According to Ms. Swarner, she sought UIM benefits under her policy with Mutual Benefit as these sums were inadequate to fully compensate her for the serious injuries she sustained. Mutual Benefit denied benefits pursuant to the policy's household exclusion, often referred to as the family-car exclusion, for injuries sustained while occupying an owned motor vehicle that was not insured under its policy. Id. at ¶19.
Ms. Swarner commenced this action on July 28, 2010, seeking a declaration that the household exclusion was inapplicable as she was not occupying the motorcycle when Mr. Howie ran her over. Mutual Benefit filed an answer to the complaint and the parties proceeded with discovery. At the conclusion of discovery, the insurer filed a motion for summary judgment alleging that its policy's household exclusion operated to exclude underinsured motorists coverage when the insured sustains bodily injury while occupying a vehicle owned by her or her spouse that is not insured under the policy issued by Mutual Benefit. Motion for Summary Judgment, ¶20. Ms. Swarner filed a cross-motion for summary judgment. The trial court granted summary judgment for the insurer, holding, as a matter of law, that under our High Court's decision in Utica Mutual Insurance Co. v. Contrisciane, 473 A.2d 1005 (Pa. 1984), Ms. Swarner was occupying the motorcycle at the time of the accident, and that the household exclusion was applicable to bar UIM recovery.
Ms. Swarner timely appealed and presents the following issues for our review:
I. Whether the trial court erred in finding as a matter of law that Plaintiff/Appellant was occupying a vehicle not covered by her Mutual Benefit Group Insurance policy at the time of the incident?
a. Whether the trial court erred in failing to apply the plain meaning of the clear and unambiguous language of Plaintiff/Appellant's automobile insurance contract with Defendant/Appellee?
b. Whether a proper application of the Utica Mutual test for "occupying" clearly demonstrates that Plaintiff/Appellant was not occupying her husband's motorcycle at the time of the second collision?
Appellant's brief at 7.
Herein, the Declaratory Judgment Act has been invoked to interpret the obligations of the parties under an insurance contract. "The proper construction of an insurance policy is resolved as a matter of law to be decided by the court in a declaratory judgment action." Allstate Fire and Cas. Ins. Co. v. Hymes, 29 A.3d 1169, 1171 (Pa.Super. 2011). Hence, as with all issues of law, our review is de novo. "Our standard of review in a declaratory judgment action is narrow. We review the decision of the trial court as we would a decree in equity and set aside factual conclusions only where they are not supported by adequate evidence. We give plenary review, however, to the trial court's legal conclusions." Butler v. Charles Powers Estate, 29 A.3d 35, 39 (Pa.Super. 2011) (rev'd on other grounds, Butler v. Charles Powers Estate ex rel Warren, 65 A.3d 885 (Pa. 2013)). We are limited to determining whether the trial court clearly abused its discretion or committed an error of law. Id.
Insurance policies are contracts, and in reviewing the trial court's determination, we are mindful of the following principles. In interpreting a contract, the court must ascertain the intent of the parties. State Farm Fire & Cas. Co. v. Decoster, 2013 PA Super 121. Such intent is to be inferred from the written provisions of the contract. Where the contract language is clear and unambiguous, we are required to give effect to that language unless it violates a clearly expressed public policy. Adamitis v. Erie Ins. Exch., 54 A.3d 371, 375-376 (Pa.Super. 2012). We have been reluctant to invalidate a contractual provision due to public policy concerns. Eichelman v. Nationwide Ins. Co., 711 A.2d 1006, 1008 (Pa. 1998); Adamitis, supra ("It is only when a given policy is so obviously for or against the public health, safety, morals or welfare that there is a virtual unanimity of opinion in regard to it, that a court may constitute itself the voice of the community in so declaring [that the contract is against public policy]").
"Where a provision of a policy is ambiguous, the policy provision is to be construed in favor of the insured and against the insurer, the drafter of the agreement." Standard Venetian Blind Co. v. Am. Empire Ins. Co., 469 A.2d 563, 566 (Pa. 1983); Miller v. Poole, 45 A.3d 1143, 1147 (Pa.Super. 2012); Genaeya Corp. v. Harco Nat'l Ins. Co., 991 A.2d 342, 345 (Pa.Super. 2010); see also Penn-America Ins. Co. v. Peccadillos, Inc., 27 A.3d 259, 265 (Pa.Super. 2011) ("When the language of the policy is clear and unambiguous, we must give effect to that language. [However, ] when a provision in the policy is ambiguous, the policy is to be construed in favor of the ...