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Vanderhoff v. Harleysville Insurance Co.

Supreme Court of Pennsylvania

October 30, 2013

LISA VANDERHOFF, ADMINISTRATRIX OF THE ESTATE OF FORESTER VANDERHOFF, DECEASED, Appellant
v.
HARLEYSVILLE INSURANCE COMPANY, Appellee

Argued May 8, 2013

Appeal from the order of Superior Court at No. 1575 MDA 2010 dated February 6, 2012, reconsideration denied April 16, 2012, reversing the Judgment of the Luzerne County Court of Common Pleas, Civil Division, and remanding at No. 5611-C of 2003 dated September 23, 2010. Appeal allowed November 14, 2012 at 375 MAL 2012. Trial Court Judges: Lewis Wood Wetzel, Judge, Joseph M. Augello, Senior Judge. Intermediate Court Judges: Correale F. Stevens, President Judge, John T. Bender, Jack A. Panella, JJ.

For Forester Vanderhoff, APPELLANT: Brian C. Corcoran, Esq.

For Harleysville Insurance Company, APPELLEE: James C. Haggerty, Esq., Haggerty, Goldberg, Schleifer & Kupersmith, P.C.; John Jacob Hare, Esq., Richard Bruce Morrison, Esq., Marshall, Dennehey, Warner, Coleman & Goggin, P.C.

BEFORE: MR. JUSTICE EAKIN. CASTILLE, C.J., SAYLOR, EAKIN, BAER, TODD, McCAFFERY, JJ. Mr. Chief Justice Castille and Messrs. Justice Saylor and McCaffery join the opinion. Madame Justice Todd joins the majority opinion, except for the commentary regarding cost containment on page 10, as she shares the concerns expressed by Mr. Justice Baer in footnote 1 of his concurring opinion. Mr. Justice Baer files a concurring opinion.

OPINION

Page 1061

[621 Pa. 431] MR. EAKIN, JUSTICE

This is an appeal from the order of the Superior Court reversing the order of the Court of Common Pleas of Luzerne County, which held appellee Harleysville Insurance Company did not suffer prejudice as a result of appellant's failure to report a phantom vehicle within the 30-day time requirement established by the Motor Vehicle Financial Responsibility Law (MVFRL).[1] Upon review, we affirm the Superior Court decision.

Page 1062

This case involves an uninsured motorist benefits claim filed in connection with injuries allegedly sustained by appellant in an October 4, 2001, motor vehicle accident. Appellant was driving a truck insured by Harleysville when he rear-ended a vehicle driven by Ryan Piontkowski, who was waiting to make a left-hand turn. The police were summoned, and the investigating officer spoke to appellant and Piontkowski; the police report contained no mention of a phantom vehicle being involved in the accident. Appellant later reported the accident to his employer, explaining he momentarily took his eyes off the road, and when he looked again, a vehicle was stopped [621 Pa. 432] in front of him; he was unable to stop and rear-ended the vehicle. No phantom vehicle was mentioned. Twenty days later, appellant completed a written Workers' Compensation Employee's Statement[2] in which he reported the accident occurred due to Piontkowski stopping suddenly in front of him. Again, no phantom vehicle was reported.

Over eight months later, on June 14, 2002, appellant filed a claim for uninsured motorist benefits, alleging the accident was caused by a phantom vehicle pulling out in front of Piontowski, causing him to stop suddenly. Harleysville denied appellant's claim and sought a declaratory judgment that he was not entitled to uninsured motorist benefits. At a non-jury trial, Harleysville contended the phantom vehicle did not exist, and regardless, appellant failed to comply with the statutory requirement to notify Harleysville of the phantom vehicle within 30 days. The trial court determined the phantom vehicle existed, and appellant had reported it to the investigating officer at the scene and to Harleysville " as soon as practicable," as required by 75 Pa.C.S. § 1702. Trial Court Order, 11/17/04.

Harleysville appealed to the Superior Court, which reversed holding the trial court's determination appellant gave Harleysville timely notice of the phantom vehicle was unsupported by the record as the earliest evidence of appellant providing notice was during a February, 2002 independent medical examination. Vanderhoff v. Harleysville Insurance Company, 898 A.2d 1143, unpublished memorandum at 7-9 (Pa. Super. filed March 1, 2006). Additionally, the Superior Court rejected appellant's counter-argument that, under Brakeman v. Potomac Insurance Company, 472 Pa. 66, 371 A.2d 193 (Pa. 1977), even if he failed to provide proper notice to Harleysville, it could not deny him benefits as a result absent demonstrating it suffered prejudice. The court quoted our decision in State Farm Mutual Automobile Insurance Company v. Foster, 585 Pa. 529, 889 A.2d 78 (Pa. 2005), " 'that Brakeman's prejudice requirement is inapplicable to the notice provision of § 1702.'" Vanderhoff, at 9 (quoting Foster, at 82).

[621 Pa. 433] We granted allocatur to address: " Whether an insurance carrier should be required to prove prejudice relative to the late reporting to the carrier of an accident involving an unidentified vehicle when such accident was timely reported to law enforcement officials[.]" Vanderhoff v. Harleysville Insurance Company, 590 Pa. 10, 911 A.2d 917 (Pa. 2006) (per curiam). Following argument, we distinguished Foster and held, consistent with Brakeman, " before an insurer can deny uninsured motorist benefits resulting from an accident involving a phantom vehicle, the insurer must demonstrate prejudice due to the failure of an insured to notify the insurer of the phantom vehicle accident." Vanderhoff v. Harleysville Insurance Company (Vanderhoff I), 606 Pa. 272, 997 A.2d 328, 335 (Pa. 2010).

Page 1063

We remanded to the trial court for a determination of whether Harleysville was prejudiced by appellant's late notice.

On remand, in lieu of an opinion analyzing the facts of the case and applicable law, the trial court simply twice filed the following statement, first as an order and, following the filing of a notice of appeal, again as an opinion, adopting appellant's argument:

This matter comes before the Court on the directive of the Supreme Court that Defendant, Harleysville Mutual Insurance Company, in order to deny Plaintiff's claim, must prove actual prejudice to it by reason of Plaintiff's failure to notify it of a " phantom vehicle" (under Plaintiff's uninsured motorist coverage) in a timely manner. The Defendant produced numerous witnesses who opined that had they had an opportunity to investigate sooner, the investigation would have been more complete and effective as witnesses would not disappear and evidence would not disappear.
The Plaintiff, however, while not contesting this claim, takes the position that the Defendant could not show any prejudice in that it was unable to show the result would have been any different even with such a timely investigation.
If delay alone leads to legal prejudice to an insurer, the delay is all the insurer would ever have to show. This could mean thirty-one (31) days after the accident; sixty (60) [621 Pa. 434] days, or two years. No court could determine what would have been found had the investigation been so completed.
If the Defendant's argument is to be enforced, there would be no necessity for showing of prejudice because it would be prejudice ...

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