United States District Court, E.D. Pennsylvania
STEFAN FREETH, Plaintiff: THOMAS MORIBONDO, LEAD ATTORNEY,
LAW OFFICE OF THOMAS MORIBONDO, WEST CHESTER, PA.
ZURICH AMERICAN INSURANCE CO., Defendant: MARC J. SYKEN, LEAD
ATTORNEY, BODELL BOVE LLC, PHILADELPHIA, PA.
Austin McHugh, United States District Judge.
case involves the complex and conceptually muddled area of
Pennsylvania's law on automobile insurance coverage. At
issue is Zurich American Insurance Company's ("
Zurich" ) compliance with the technical requirements for
lowering limits of uninsured motorist (" UM" ) and
underinsured motorist (" UIM" ) coverage. That
narrow question has great practical significance, because,
depending on the answer, Plaintiff Stefan Freeth, an employee
of Road-Con, Inc. (" Road-Con" ), either can seek
up to one million dollars in benefits, or will be limited to
collecting thirty-five thousand dollars for a serious
work-related accident. The precise question presented is
whether Zurich's use of a general Summary Form, when
coupled with certain Pennsylvania specific forms, was legally
sufficient to elect lower limits of uninsured coverage as
required by the Pennsylvania Motor Vehicle Financial
Responsibility Law (" MVFRL" ), 75 Pa.C.S.A. §
1701, et seq. Although the issue is a close one, because
Defendant failed to procure a written, express election of
reduced UM coverage, I conclude that Zurich's Business
Automobile Insurance Policy (" the Policy" ) does
not satisfy the requirements of Pennsylvania law.
Consequently, by operation of law, Defendant is required to
provide UM benefits in the amount of one million dollars to
Freeth in connection with the underlying action.
Factual Allegations and Procedural Background
September 21, 2012, Plaintiff Stefan Freeth was working from
his truck in the course of his employment with Road-Con,
performing repairs on the Northeast Extension of the
Pennsylvania Turnpike. Freeth Compl. at ¶ 17. While
standing on the tailgate of his vehicle in the northbound
lanes, a southbound tractor trailer struck a traffic sign,
causing it to propel into Plaintiff's left leg, resulting
in " serious, disabling injuries." Id.
¶ 17-19. The tractor trailer has not been identified,
giving rise to a claim for uninsured motorist benefits.
is no dispute that Mr. Freeth is eligible to receive UM
benefits. The sole question is the limit of
coverage. The face of the Policy provides for liability
coverage with a limit of one million dollars and UM/UIM in
the amount of $35,000. Id. at 5; Plaintiff's
Exhibit A; Defendant's Exhibit B & C.
the accident, Freeth submitted a claim for UM coverage in the
amount of $1,000,000.00 to Defendant Zurich, the commercial
auto insurer for Road-Con, contending that Zurich's
failure to follow proper procedures in the selection of
coverages rendered the Policy's UM limit equal to the
liability limit, by operation of law. Zurich responded that
it has no obligation to provide Plaintiff with UM benefits in
excess of $35,000.00, resulting in this declaratory judgment
action. The parties have cross-filed for summary judgment,
asking the Court to choose between these competing
interpretations of the Policy and documents leading to its
The Insurance Policy
as a matter of public policy, favors the inclusion of
adequate amounts of UM benefits in auto insurance policies.
Therefore, the limits of UM coverage are deemed equal to the
limits of liability coverage, unless the insured has
requested in writing that lower limits of UM coverage are
sought. In this case, Zurich relies upon a Summary Form meant
to encompass the requirements of each state, supplemented
with state-specific forms where states have additional
technical requirements for waiver/rejection or reduced
coverage. Plaintiff argues that the Uninsured/Underinsured
Motorists Coverage Selection/Rejection Limits Summary Form
(" Summary Form" ), signed by the President of
Road-Con, was legally insufficient under Section
1734 of the Pennsylvania MVFRL in violation of state law.
Specifically, Plaintiff contends that Defendant's Summary
Form simply lists the UM coverage limits for every state,
which fails to satisfy Pennsylvania's specific statutory
requirements. Zurich counters that the Summary Form qualifies
as a written election of lower UM limits, in full compliance
with the PA MVFRL.
Summary Form at the center of the dispute reads, in relevant
UNINSURED/UNDERINSURED MOTORISTS COVERAGE
SELECTION/REJECTION/LIMITS SUMMARY FORM
. . .
Your policy(s) contains Uninsured/Underinsured Motorists
Coverage Selection/Rejection and Limits Options forms which
allow you to reject coverage or to select various limits and
coverage options. Your signature on this summary form
indicates that you have read and understand each
state-specific form and that the selections or rejections
marked on the state forms have been accepted by you.
. . .
OPTION II State Min UM/UIM -- Combined Single
. . .
. . .
[alphabetical listing of states]
[dollar amount of coverage limits]
Please Note: * Indicates the attached State Form MUST be
signed by the First Named Insured.
Failure to return the Uninsured/Underinsured Motorist
(UM/UIM) Selection/Rejection Summary Form and required
state-specific forms prior to the policy inception dates will
result in the policy being issued with coverage limits
imposed by the operation of state law. In such event, you
shall reimburse us for the payments made on UM/UIM claims.
The amount of your reimbursement obligation shall be equal to
the amount of loss paid in excess of the IM/IUM limits shown
in the Automobile Liability Limits section of the proposal.
THIS SUMMARY IS NOT A SUBSTITUTE FOR REVIEWING EACH
INDIVIDUAL STATE'S SELECTION/REJECTION FORM FOR UM AND
UIM COVERAGE. YOU ARE REQUIRED TO DO SO.
. . .
I acknowledge that I have reviewed each individual
state's selection/rejection form, I have made the
elections indicated and that I have the authority to sign
this form on behalf of all Named Insureds on those policies
also emphasizes that the above Summary Form followed a cover
letter from Zurich Account Manager, Dave Russow, explaining
the purpose of the Summary Form as follows:
Enclosed please find the following forms that reflect the
coverage limits requested for Uninsured Motorists (UM)
Coverage . . . The Summary Form was designed to reduce
the number of state-specific forms required to be signed and
dated by the First Named Insured. . . Because you have
requested Uninsured/Underinsured Motorist coverage with
limits lower than your Auto Liability limit, we have prepared
a package ...