United States District Court, E.D. Pennsylvania
July 15, 2015
STEFAN FREETH, Plaintiff,
ZURICH AMERICAN INSURANCE CO., Defendant
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 of selection/rejection forms that includes states
in addition to those in which your vehicles are garaged.
. . .
Your signature on the Summary Form indicates that you have
read and understand each state-specific form and that the
selections or rejections marked on the state-specific forms
have been accepted by you. Failure to return the signed
Summary Form and required state-specific forms prior to the
policy inception date(s) may result in the policy being
issued with coverage limits imposed by the operation of state
addition to signing the Summary Form, Road-Con also signed
the following series of Pennsylvania-specific forms: (1)
Pennsylvania IMPORTANT NOTICE; (2) Uninsured Motorist
Protection Option Pennsylvania; and (3) Underinsured Motorist
Protection Option Pennsylvania. See Defendant's Exhibit C
& G. Significantly, these three Pennsylvania-specific forms
make no mention of the $35,000 UM limit. The signed "
Pennsylvania IMPORTANT NOTICE" form, found in the text
of 75 Pa.C.S. § 1791, simply states that the named
insured is aware of coverage options that must be made
available pursuant to Pennsylvania law. See 75 Pa.C.S. §
1791 and Defendant's Exhibit G. The
signed " Uninsured Motorist Protection Options
Pennsylvania" and the " Underinsured Motorist
Protection Options Pennsylvania" forms reject stacked
limits on UM and UIM coverage. Defendant's Exhibit C at
U-CA-555-B-556-B. None of the forms specific to Pennsylvania
allow for an explicit request for reduced UM coverage.
Summary Judgment Standard
judgment is appropriate if " there is no genuine dispute
as to any material fact and the movant is entitled to
judgment as a matter of law." Fed.R.Civ.P. 56(a); see
also Celotex Corp. v. Catrett, 477 U.S. 317, 322,
106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). When confronted with
cross-motions for summary judgment, the " 'court
must rule on each party's motion on an individual and
separate basis, determining, for each side, whether a
judgment may be entered in accordance with the Rule 56
standard.'" Schlegel v. Life Ins. Co. of N.
Am., 269 F.Supp.2d 612, 615 n.1 (E.D. Pa. 2003) (quoting
Charles A. Wright, Arthur R. Miller et. al, 10A Fed. Prac.
and Proc. § 2720 (3d ed. 1998)). Here, the parties'
dispute concerns the proper interpretation of an insurance
contract, presenting a pure question of law for the Court.
See 401 Fourth St., Inc. v. Investors Ins. Grp., 583
Pa. 445, 453, 879 A.2d 166 (2005).
parties agree that the PA MVFRL requires every motor vehicle
policy issued in Pennsylvania to include an offer of UM and
UIM coverage. Specifically, Section 1731 of the MVFRL
provides, in relevant part:
No motor vehicle liability insurance policy shall be
delivered or issued for delivery in this Commonwealth, with
respect to any motor vehicle registered or principally
garaged in this Commonwealth, unless uninsured motorist and
underinsured motorist coverages are offered therein or
supplemental thereto in amounts as provided in section 1734
(relating to request for lower limits of coverage). Purchase
of uninsured motorist and underinsured motorist coverages is
75 Pa.C.S.A. § 1731. As referenced above,
companion Section 1734 of the MVFRL allows a named insured to
elect limits of UM or UIM coverage in an amount equal to or
less than a policy's liability limit. 75 Pa.C.S.A. §
1734 (" A named insured may request in writing the
issuance of coverages under section 1731 . . . in amounts
equal to or less than the limits of liability for bodily
parties further agree that Nationwide Insurance Co. v.
Resseguie, 980 F.2d 226, 231 (3d Cir. 1992) provides the
controlling interpretation of Sections 1731 and 1734 of the
PA MVFRL. In Resseguie, the Third Circuit predicted how the
Pennsylvania Supreme Court would interpret the relevant
sections of the PA MVFRL:
§ 1731 is a simple statement whose plain meaning is
apparent from its language. It mandates that an insurance
company cannot issue a policy in the Commonwealth of
Pennsylvania unless it provides UM/UIM coverage equal to the
bodily injury liability coverage, except as provided in
. . .
§ 1734's language is plain and the Pennsylvania
General Assembly's intention is clear. By its terms, a
named insured may lower her statutorily provided UIM coverage
limits by requesting in writing of her insurer to do so. The
insurance company's obligation to issue a policy with
[UM/UIM] coverage in an amount equal to the policy's
bodily injury liability coverage is not relieved unless it
has received such a written request.
Id. at 231. The Third Circuit concluded tat Section
1734 presents " a very simple, clear-cut rule for an
insurance company to follow--to lower the limits it must
insist on a written authorization signed by the named
insured." Id. at 232. The Supreme Court of
Pennsylvania confirmed the Third Circuit's prediction in
2007, expressing agreement with the Resseguie Court's
interpretation of Sections 1731 and 1734. See Blood v.
Old Guard Ins. Co., 594 Pa. 151, 164, 934 A.2d 1218,
1226 (2007) (" As a general proposition, we agree with
the characterization of Sections 1731 and 1734 offered by
the Third Circuit in Nationwide Ins. Co. v. Resseguie,
980 F.2d 226, 230 (3d Cir. 1992)." ). In sum, "
sections 1731 and 1734 plainly state that an insurance policy
must provide UM/UIM coverage limits that are equal to the
bodily injury liability limits unless the insured completes a
proper request for reduction of the UM/UIM coverage
limits." Weilacher v. State Farm Mut. Auto. Ins.
Co., 2013 PA Super 97, 65 A.3d 976, 988 (Pa. Super. Ct.
is correct that " unlike section 1731, section 1734 does
not dictate that the opportunity for reduction, or a
form to that effect, be presented when a policy is issued. It
merely provides that a reduction of this kind may be
accomplished, but only by a writing which constitutes a
request by a named insured." Nationwide Mut. Ins.
Co. v. Buffetta, 230 F.3d 634, 639 (3d Cir.
2000). At the same time, however,
Pennsylvania case law establishing minimum requirements for
Section 1734 elections, as " requests for specific
limits coverage, in contrast to outright waiver/rejection,
require not only the signature of the insured, but also, an
express designation of the amount of coverage requested, thus
lessening the potential for confusion." Lewis v.
Erie Ins. Exch., 568 Pa. 105, 123, 793 A.2d 143, 153
(2002); see also Erie Ins. Exch. v. Larrimore, 2009
PA Super 236, 987 A.2d 732, 737 (Pa. Super. Ct. 2009) ("
Although no specific form is required or prescribed by the
MVFRL, to be a valid and enforceable written request under
§ 1734, the writing must: (1) manifest the insured's
desire to purchase uninsured and underinsured coverage in
amounts equal to or less than the bodily injury limits; (2)
be signed by the named insured; and (3) include an express
designation of the amount of uninsured and underinsured
coverage requested." ) (internal quotations and
of actual intent, the Superior Court of Pennsylvania has
explained on multiple occasions that " a signature on an
insurance application 'merely evidences the
[insured's] acceptance of the policy ...,' and
'cannot amount to a statutorily enforceable waiver of
uninsured/underinsured motorist coverage limits equal to
bodily injury limits.'" Larrimore, 987 A.2d at 738
(citing Motorists Ins. Companies v. Emig, 444
Pa.Super. 524, 664 A.2d 559, 565 (Pa. Super. Ct.
1995)). Similarly, an insured's
application signature combined with the § 1791 Important
Notice cannot " operate to satisfy the written request
for lower limits requirement of § 1734 as 'Section
1791 does not provide a mechanism for requesting UM/UIM
the history and purpose of the PA MVFRL provides meaningful
context for Section 1734 disputes.
The purpose of underinsured motorist coverage is to protect
the insured (and his additional insureds) from the risk that
a negligent driver of another vehicle will cause injury to
the insured (or his additional insureds) and will have
inadequate liability coverage to compensate for the injuries
caused by his negligence. Thus, an insured who purchases
$100,000 of liability coverage to protect others from his
negligence, must, by law, be offered the option of purchasing
up to $100,000 of underinsured motorist coverage to protect
himself and his additional insureds from the risk that they
will be severely injured by a negligent driver who has
liability coverage in an amount insufficient to fully
compensate them for their injuries.
Resseguie, 980 F.2d at 231-232 (citing Wolgemuth
v. Harleysville Mut. Ins. Co., 535 A.2d 1145, 1149, 370
Pa.Super. 51, appeal dismissed, 520 Pa. 590, 551 A.2d 216
(1988)). Here, Plaintiff Freeth falls squarely within the
class of insureds that the Pennsylvania General Assembly
aimed to protect in passing the MVFRL. Id. The
Resseguie opinion further notes that the statute "
evolves from public policy considerations and must be broadly
and liberally construed to accomplish this purpose,"
and, conversely, the portion of the statute that allows an
insured to reject UM coverage " detracts
from the public policy considerations and must therefore
be narrowly and strictly construed." Id.
at 232 (citing Johnson v. Concord Mut. Ins. Co., 450
Pa. 614, 300 A.2d 61 (1973)). Pennsylvania case law is
equally clear that one " of the objects of the MVFRL to
be effected by this liberal construction is affording the
injured claimant the greatest possible coverage." Emig,
664 A.2d at 566. And more generally, in " close or
doubtful insurance cases, it is well-established that a court
should resolve the meaning of insurance policy provisions or
the legislative intent in favor of coverage for the
insured." Danko v. Erie Ins. Exch., 428
Pa.Super. 223, 630 A.2d 1219, 1222 (Pa. Super. Ct. 1993)
aff'd, 538 Pa. 572, 649 A.2d 935 (1994) (citing
Motley v. State Farm Mut. Auto. Ins. Co., 502 Pa.
335, 340, 466 A.2d 609, 611 (1983)).
Larrimore, the Superior Court of Pennsylvania held that a
detailed and executed eight-page insurance application,
combined with a § 1791 " Important Notice" did
not meet the § 1734 writing requirement. Larrimore, 987
A.2d at 734-43. The application set forth specific coverage
limits (e.g., UM coverage in the amount of $15,000.00 and
bodily injury liability coverage in the amount of $300,000.00
per person). Id. at 734. It also included a
certification immediately preceding the signature line where
the applicant attested to giving true and complete answers,
as well as being " offered alternative coverage limits
and those listed on this application reflect my
choices." Id. at 734. The Court found it
particularly significant that the defendant insurance company
usually employed a special form for requesting lower UM/UIM
limits, but failed to use it in Larrimore's case, noting
that the existence of the form constituted " the
functional equivalent of an admission that something more
than a signed application and signed § 1791
'Important Notice' is needed to comply with the
written request for lower coverage limits requirement of
§ 1734." Id. at 740. The Court concluded
that there was no valid Section 1734 request, and the
disputed coverage limits were accordingly " deemed equal
to the bodily injury liability coverage limits."
Id. at 741-43.
contrast, in Orsag v. Farmers New Century Ins., 609 Pa.
388, 390, 15 A.3d 896, 897 (2011), the insured filled out an
insurance application that " was mostly pre-printed, but
contained blank spaces where requested information was filled
in by hand." The requested information included explicit
coverage selections, and the insured " requested bodily
injury liability coverage of $100,000 per person and
uninsured/underinsured motorist (UM/UIM) coverage of $15,000
each for two vehicles." Id. The insured signed
the application, which included the following language,
" I understand that the coverage selection and limit
choices here or in any state supplement will apply to all
future policy renewals, continuations and changes unless I
notify you otherwise in writing." Id.
Recognizing that Section 1734 compliance can take any form,
the Supreme Court of Pennsylvania found that this language
combined with the " express designation of $15,000 in
UM/UIM coverage" satisfied the requirements of the
MVFRL, because " the most effective manner in which to
'expressly designate' the amount of coverage
requested is by electing a specific dollar amount on an
insurance application." 609 Pa. at 396, 15 A.3d at 901
(citing Lewis, 568 Pa. at 123, 793 A.2d at 153).
did not purport to overrule Larrimore, and no appellate
decision since then has construed it as doing so.
2014, my colleague Judge Jones presided over a case with an
even more explicit election of reduced coverage. See
Henderson v. Charter Oak Fire Ins. Co., No. 12-4363,
2014 WL 1218743, at *9 (E.D. Pa. Mar. 21, 2014) aff'd sub
nom. Henderson v. Charter Oak Fire Ins., No.
14-1850, 615 Fed.Appx. 109, 2015 WL 4072769 (3d Cir. June 26,
2015). In Henderson, the insurer's application contained
a section titled " Uninsured and Underinsured Motorists
Selection/Rejection," which explained:
You may reject Uninsured or Underinsured Motorist Coverage,
or you may purchase Uninsured or Underinsured Motorist
Coverage with limits equal to your Bodily Injury Liability
Limits or select lower limits, but not less than the minimum
limits required by statute ($15,000 each person/$30,000 each
accident; or $35,000 each accident, combined single limit) .
. . .
Id. at *3. The form also included the following
NOTE: Your automobile liability or motor vehicle liability
policy will automatically include Uninsured and
Underinsured Motorists Coverage at the same limits as the
policy Bodily Injury Liability Limits unless you
reject the coverages or select lower limits on this
Id. Another section clearly titled, " Selection
of Lower Limits of Underinsured Motorists Coverage,"
instructed the applicant, " Please make selection below
only if you wish to select Underinsured Motorist
Coverage at limits lower than your policy Bodily Injury
Limits." Id. The application then listed
various options, the first of which offered UM coverage
" at the minimum limits." The insured circled this
option, and handwrote " $35,000." Id.
Based on these circumstances, even the plaintiffs conceded
that defendant's insurance application represented a
valid selection. In reaching his decision, Judge Jones
relied on the Superior Court's holding in Hartford
Ins. Co. v. O'Mara that Section 1734 does not
dictate particular language that must be employed in order to
reduce UM and UIM coverage limits. 2006 PA Super 236, 907
A.2d 589, 603 (Pa. Super. Ct. 2006) (finding a form "
viewed as a whole," that included (1) various notices
about UM/UIM coverage, (2) a checked box next to "
minimum amount available ($15,000 per person/$30,000 per
accident)" for UM and UIM coverage, and (3) a signature
at the bottom, satisfied the requirements of Section 1734).
Does Defendant's Summary Form Satisfy the Requirements of
the Summary Form and other state-specific forms do not
provide the explicit election of reduced UM coverage required
by the statutory scheme. Road-Con signed four documents with
regards to UM coverage, none of which were sufficiently
explicit to elect UM coverage less than that for bodily
injury. This is a close case. In contrast to Orsag and
Henderson, where unequivocal language, clearly checked boxes,
and circled list options left little doubt about whether the
insured knowingly and purposefully elected to reduce UM/UIM
coverage, Road-Con signed three Pennsylvania forms that
literally did not allow for an election of reduced coverage
to a specified amount, as well as a summary form that only
attested to the fact that Road-Con reviewed those deficient
state-specific documents. The Summary Form, by its own terms,
does not purport to serve as an election of reduced UM
coverage. In fact, the Summary Form explicitly requires the
named insured to review and sign state-specific selection or
rejection forms. See Defendant's Exhibit C (" THIS
SUMMARY FORM 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
. . ." ). Moreover, the Summary Form makes clear that if
the state-specific forms are not signed and returned prior to
the Policy inception dates, it will result in the Policy
being issued with different limits imposed by state
law. This key language is repeated, almost verbatim, in
Defendant's cover letter. Thus, the Summary Form itself
acknowledges that if the named insured does not sign the
state-specific reduction of UM and UIM coverage forms, state
law will control the amount of UM and UIM coverage.
District Judge, applying Kansas law, confronted Zurich's
Summary Form in 2008 and came to essentially the same
conclusion. See Stemple v. Zurich Am. Ins. Co., 584
F.Supp.2d 1304, 1311 (D. Kan. 2008) (" The Summary Form
does no more than affirm elections made on the individual
state forms. Thus, because no individual state form was
completed . . ., there was no election to affirm." ).
Zurich certainly knew therefore, that its summary form had
previously been held inadequate for purposes of electing or
rejecting specific coverage amounts.
find it significant that specific state forms are referenced
and attached to the Summary Form, showing that Zurich
utilizes tailored state forms in an attempt to ensure that
each state's individual laws are observed. For instance,
for the Indiana state-specific form, Zurich encloses a "
Rejection of Uninsured Motorists Coverage and Underinsured
Motorists Coverage or Selection of Lower Limit of
Liability." See Defendant's Exhibit C. The form
explains the relevant law for UM/UIM coverage in detail, and
allows the insured to mark an X in the box for the option(s)
selected, which includes the specific amount of UM/UIM
coverage chosen, in addition to signing and dating the form.
Id. Likewise, the Summary Form explicitly
establishes that for those states marked with an asterisk
(like Pennsylvania), the state form " MUST be signed by
the First Named Insured." Accordingly, based on the
plain meaning of the Summary Form and the surplus of state
specific documents attached to it and signed by the named
insured, the $35,000 limit for UM/UIM coverage listed for
Pennsylvania is not effective absent a concurrent execution
of a Pennsylvania-specific form expressly electing reduced
UM/UIM coverage in the amount of $35,000. As in Larrimore, I
see this as the functional equivalent of a recognition by
Zurich itself that something more is required than the
Summary Form alone in order to comply with the Section 1734
Defendant's Pennsylvania-specific forms include an
explicit election of reduced UM/UIM coverage. The "
Pennsylvania Important Notice" is merely informative,
certifying that the insured understands the availability of
specific insurance benefits required under Pennsylvania law.
The other two state-specific forms alter the terms of the
Policy, but only in regards to rejecting stacked UM and UIM
coverage limits. In fact, the rejection of stacked coverage
forms are clear that by signing the waiver, the named insured
" knowingly and voluntarily" rejects stacked limits
and understands that the policy premium " will be
reduced" if stacked coverage is rejected. Id.
Had Defendant included a Pennsylvania form that reduced
UM/UIM coverage to $35,000 in terms as explicit and clear as
the rejection of stacked coverage forms, just as Zurich did
for so many other states, it would have left no room for
confusion, and, in turn, complied with Pennsylvania law. See
Lewis, 568 Pa. at 123, 793 A.2d at 153.
simple terms, Pennsylvania's statutory scheme spells out
an explicit, highly technical, and rigorous standard, of
which Zurich was clearly aware. It took pains to meet the
specific requirements of other states, but not Pennsylvania.
Given that failure, coverage exists as a matter of law, and
the resulting burden to be borne by Zurich is one of its own
Road-Con intended to reduce its UM coverage, as Defendant
argues is evidenced by the Summary Form and attached cover
letter, evidence of intent cannot defeat the writing
requirement of Section 1734. See Cook, 155 Fed.Appx. at
593-594. Further, any ambiguity presented here must generally
be resolved in favor of the insured. See, e.g., Resseguie,
980 F.2d at 231-232. Correspondingly, affording the greatest
possible UM coverage advances the specific purpose of Section
1734 of the MVFRL. Id.
Defendant failed to comply with the writing requirement of
Section 1734 of the MVFRL, " (1) the lower limits
allegedly selected by the insured are a nullity; and (2)
UM/UIM coverage is deemed to be equivalent to the bodily
injury liability limits." Id. at 598 (citing
Nationwide Mut. Ins. Co. v. Heintz, 2002 PA Super
196, 804 A.2d 1209, 1216 n.7 (Pa. Super. Ct. 2002)); see also
Larrimore, 987 A.2d at 743. Accordingly, the lower UM limit
of thirty-five thousand dollars ($35,000) referenced in the
Policy is a nullity, and Plaintiff's UM coverage is equal
to the Policy's bodily injury liability limits of one
million dollars ($1,000,000.00).
reasons set forth above, Plaintiff's Motion for Summary
Judgment is granted and Defendant's Motion for Summary
Judgment is denied. An appropriate order follows.
15th day of July, 2015, Plaintiff's Motion for Summary
Judgment is GRANTED, and the Motion for Summary Judgment of
Defendant Zurich American Insurance Company is DENIED. In
accordance with Pennsylvania Law, the uninsured motorist
coverage in Defendant's Business Automobile Policy, BAP
8311570-11 (" the Policy" ) issued to Road-Con,
Inc., is hereby DECLARED equivalent to the Policy's
bodily injury liability limits. Defendant is therefore
ORDERED to provide one million dollars ($1,000,000.00) in
uninsured motorist coverage to Plaintiff, Stefan Freeth, in
connection with injuries sustained in the September 21, 2012
motor vehicle accident.
Zurich concedes that although Plaintiff is
not a signatory, as a Road-Con employee, he is insured under
the Policy, giving him the right to argue the extent of his
coverage. See Johnson v. Pennsylvania Nat. Ins.
Companies, 527 Pa. 504, 508, 594 A.2d 296, 298-99
Named insureds under commercial policies
are permitted to make coverage elections that govern UM/UIM
coverage for employees. See Travelers Indem. Co. of
Illinois v. DiBartolo, 171 F.3d 168, 172 (3d Cir. 1999)
(predicting how the Pennsylvania Supreme Court would
Pennsylvania insurers create a presumption
that the insured has been advised of available benefits and
limits by including the IMPORTANT NOTICE form as part of the
original policy application. 75 Pa.C.S. § 1791 ("
It shall be presumed that the insured has been advised of the
benefits and limits available under this chapter provided the
following notice in bold print of at least ten-point type is
given to the applicant at the time of application for
original coverage . . . [text of the " IMPORTANT
NOTICE" form]" ).
75 Pa.C.S.A. § 1731 also notably
controls compliance with the MVFRL's requirements for
waiver or rejection of UM/UIM coverage, even providing the
specific form those written rejections must take. Those
aspects of the statute are not at issue in this case.
The Third Circuit, in a non-precedential
opinion, also acknowledged that an insured's written
request for reduced coverage under Section 1734 may take
" any form." Fire & Cas. Co. of Connecticut v.
Cook, 155 Fed.Appx. 587, 589 (3d Cir. 2005).
The Court of Appeals appeared to reach the
same conclusion in Cook, 155 Fed.Appx. at 593.
The dispute in Henderson concerned whether
the insurance company's supplementary application for
renewal of this policy continued to comply with the PA MVFRL.
Id. at *4.
There are many other comparable
state-specific forms for those states marked with an asterisk
on the Summary Form, including, but not limited to: Alaska,
California, Florida, Nebraska, New Jersey, and Virginia.