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Pergolese v. The Standard Fire Insurance Co.
Superior Court of Pennsylvania
April 11, 2017
JOHN M. PERGOLESE AND PEGGY DOUG PERGOLESE
THE STANDARD FIRE INSURANCE CO., ONE OF THE TRAVELERS INSURANCE COMPANIES D/B/A TRAVELERS PROPERTY CASUALTY AND TRAVELERS GROUP APPEAL OF: THE STANDARD FIRE INSURANCE CO., Appellant
from the Judgment Entered April 11, 2014, in the Court of
Common Pleas of Montgomery County Civil Division at No.
BEFORE: FORD ELLIOTT, P.J.E., STABILE AND STRASSBURGER,
Fire Insurance Company ("Standard Fire") appeals
from the judgment entered April 11, 2014, in this declaratory
judgment action. The trial court granted appellees'
motion for summary judgment after finding that they were
entitled to stacking of underinsured motorist benefits. After
careful review, we affirm.
relevant facts and procedural history underlying this appeal
are as follows. Appellees are husband and wife who reside in
Worcester, Montgomery County. In the early 1990s, Appellees
applied for personal automobile insurance with
Standard Fire's predecessor in interest, Aetna Insurance
Company, through their insurance agent. (Action for
Declaratory Judgment ("Complaint"), filed 12/17/10,
at ¶ 4; Answer with New Matter, filed 4/28/11, at
¶¶ 34-35; Appellant's Motion for Summary
Judgment, filed 12/12/13 ("Motion"), at ¶ 2).
On July 27, 1994, Appellees signed an Aetna Option Selection
Form indicating that they chose non-stacked underinsured
motorist ("UIM") coverage on policy number
020185337-101-1 ("20185337"). (Motion, Exhibit C).
On May 29, 1996, Peggy Pergolese signed a rejection of
stacked UIM coverage form for this policy on behalf of
Appellees with John Pergolese's full knowledge and
consent. (Motion at ¶ 3). At that time, the insurance
policy covered four (4) vehicles. (Id. at ¶ 4).
Specifically, for the 1996 coverage year, the policy insured
the following vehicles: 1989 Chevy Corvette, 1989 Mazda
B-2200, 1988 Plymouth Voyager and 1993 Mazda MX-6. (Cross
Motion for Summary Judgment, filed 1/13/14 ("Cross
Motion"), at ¶¶ 7-8; Exhibits F and G). On
August 5, 1996, Appellees executed a form waiving stacked UIM
coverage for the second policy, number 036766029-101-1
("36766029"). (Cross Motion at ¶ 6; Exhibit
E). The second policy provided coverage for one (1)
[Footnote 2] The Travelers system does not allow the
placement of more than four (4) personal vehicles on a policy
at one time. (N.T. Deposition of Cody D. Gilmore, 7/22/13
(Cross Motion, Exhibit R) at 58-59[)]; [t]herefore, policy
holders wishing to insure more than four personal vehicles at
a time are required to obtain a second policy.
On or about November 19, 1996, Appellees sought to remove the
1988 Plymouth Voyager from coverage on policy number 20185337
and replace it with a 1993 Nissan Pathfinder. (Cross Motion
at ¶ 9; Auto Change Form, Exhibit H). The amended
declaration sheet effective November 19, 1996 reflected
coverage for the following vehicles: 1989 Chevy Corvette;
1989 Mazda B-2200, 1993 Nissan Pathfinder and 1993 Mazda
MX-6. (Id. at ¶ 10; Exhibit I). Appellees
renewed the policy every six (6) months and the declaration
sheets showed non-stacked UIM benefits in the amount of $100,
000.00. The declaration sheets on policy number 20185337
dated up to and including January 27, 1998, also reflected
coverage for the same four (4) vehicles. (Id. at
¶ 11; Exhibits J, K and L).
On February 23, 1998, Appellees asked their insurance agent
to remove the 1989 Mazda B-2200 from their policy. Unlike
their request on November 19, 1996, Appellees did not add a
replacement vehicle. (Cross Motion at ¶ 12; Auto Change
Form, Exhibit M). The amended declarations page effective
February 23, 1998, lists coverage for only three (3) vehicles
and a decreased premium. (Id. at ¶ 13; Exhibit
On April 8, 1998, forty-four (44) days later, John Pergolese
called Appellees' insurance agent to request auto
insurance coverage for an additional vehicle before he took
possession. Mr. Pergolese requested that the agent fax a copy
of the insurance card so that Mr. Pergolese would have proof
of insurance before taking ownership of a 1990 Ford F-150.
(Id. at ¶ 14; Auto Change Form, Exhibit O). As
requested, the agent faxed a copy of the insurance card with
an effective date of April 8, 1998, to the location where Mr.
Pergolese was obtaining the tags and title. (Id. at
¶ 14-15; Exhibit P). The amended declarations page
effective April 8, 1998, showed the premium increase and
listed four vehicles as follows: 1989 Chevy Corvette, 1993
Nissan Pathfinder, 1993 Mazda MX-6 and 1990 Ford F-150.
(Id. at ¶ 16, 18; Exhibit Q).
Appellees' Standard Fire Auto Policy provides in
pertinent part as follows:
J. "Your covered auto" means:
1. Any vehicle shown in the Declarations.
2. Any of the following types of vehicles on the date you
become the owner:
a. a private passenger auto; or
b. a pickup or van.
This provision (J.2.) applies only if:
a. you acquire the vehicle during the policy period;
b. you ask us to insure it within 30 days after you
become the owner; and
c. with respect to a pickup or van, no other insurance policy
provides coverage for that vehicle.
If the vehicle you acquire replaces one
shown in the Declarations, it will have the same coverage as
the vehicle it replaced. You must ask us to insure a
replacement vehicle within 30 days only if:
a. you wish to add or continue Damage to Your Auto Coverages;
b. it is a pickup or van used in any "business"
other than farming or ranching.
(Policy No. 20185337, Personal Auto Policy at 1; Exhibit A to
both Motions for Summary Judgment) (emphasis added).
Appellant did not request a new waiver of stacked coverage
from Appellees after the addition of the 1990 Ford F-150 to
the three vehicle policy under 20185337. (Cross Motion at
¶ 23). Appellees continued to insure the same four
vehicles under policy number 20185337 through July 27, 2001.
(Id. at ¶ 24; Exhibit A). For the period of
July 30, 2000, to July 30, 2001, Appellees insured one
vehicle, a 1992 Toyota Pickup under policy number 36766029.
(Id. at ¶ 25; Exhibit B).
On July 23, 2001, John Pergolese suffered severe injuries
when a drunk driver rear ended his 1993 Mazda MX-6. (Motion
at ¶ 15; Cross Motion at ¶ 26). Appellees timely
submitted a claim for underinsured motorist benefits to
Appellant upon receiving the liability policy limits from the
tortfeasor and after receiving Appellant's consent to
settle and waiver of subrogation. (Complaint at ¶ 8;
Answer at ¶ 8; Motion at ¶ 16). Appellees asserted
that they were entitled to stack UIM benefits according to
the number of vehicles on their two (2) policies up to a
limit of $500, 000.00. (Complaint at ¶ 27; Motion at
¶ 17). Appellant denied that Appellees were entitled to
stack their policy benefits. (Motion at ¶ 18).
On December 17, 2010, Appellees filed an action for
declaratory judgment. On April 28, 2011, Appellant filed its
answer with new matter. Appellees replied to the new matter
on June 28, 2011. The parties conducted discovery, including
requests for admissions and depositions.
In particular, an underwriter for Travelers Insurance
testified at deposition as follows:
Q. Well, my question to you was from your understanding of
Travelers, the insurance, if someone owns four vehicles on a
policy and they delete a car, so now there's [sic] three
cars on that policy, and a month and a half or two months
later that insured buys a new car and asks for it to be added
to the policy?
A. That would be an additional vehicle.
Q. Okay. That would be an addition, an additional vehicle; is
A. That's correct.
Q. All right. That would not be considered a replacement
vehicle? A. Not if it was -- if it was not replaced at that
Q. Okay. So, meaning that it's your understanding at
Travelers that dealing with replacement vehicles is when cars
are added and deleted at the same time?
* * * *
Q. All right. I don't want -- so somebody has four cars
and they delete a vehicle on that policy, all right? And in
this case John Pergolese owned four cars on the policy, and
one of the cars he deleted, okay, because it was junked or
there was an issue. It didn't run anymore.
Q. And then a month and a half later he buys a car and adds a
new car to that policy.
A. That would be an additional vehicle.
Q. Okay. That would not be considered replacement because it
wasn't done at the same time, but that would [be] an
A. That is correct.
Q. Because when they're advising the agent of the new
car, he's purchasing coverage on that new car? A. That is
(N.T. Deposition of Cody D. Gilmore, 7/22/13 ("N.T.
Gilmore Deposition"), at 54-56). Mr. Gilmore also agreed
that the addition of the vehicle increased the premium as a
policy change. (Id. at 68).
Mr. Gilmore explained that "the agents request the
majority of changes, and they process them on
[Travelers'] system within the office, their
office." (Id. at 19). The addition of a vehicle
to a policy is never done by endorsement, the addition is
considered a policy change. (Id. at 32-33). At
Travelers "[a]n endorsement is a broadening or reduction
or change in a coverage level." (Id. at 33).
Mr. Gilmore also testified as follows:
Q. Is it your understanding that the after-acquired clause
that we just referenced is a provision in the policy that
insures a new vehicle from the time that insured gets the
vehicle until he calls somebody from Travelers to tell them
that he just bought a new car and wants coverage?
A. This provides the coverage between the time that the
vehicle -- they own the vehicle and the time they contact the
agent. Q. Okay. So once -- so, right, so the car is insured
from the time that they buy it up until they call Travelers
to tell -- to tell them about it?
A. Right, that they have advised that they --once they have
purchased and they are the owner of the vehicle, this is when
this -- that's where they obtain their coverage
automatically is once they own the vehicle.
Q. All right. What does Travelers require, if you know, from
the insured once they call to say I got a new car whatever
day it was and I want it insured?
A. The agent would inquire if there was a lienholder, the VIN
number, and they would make the change to the policy to add
it at that time.
Q. Okay. So, once they got -- if there's a lienholder, if
there is the VIN, then that -- then would it be -- in this
case, it was an agent that got the call. Then that agent
would add the policy?
A. That's correct. They would process the change.
(Id. at 44-45).
Appellant filed its Motion for summary judgment on December
12, 2013. Appellees responded in opposition on January 13,
2014, and filed their cross motion at the same time.
Appellant replied to the cross motion on February 11, 2014.
Upon review of the record, the issues presented to this
court, the applicable law and after hearing argument, the
undersigned denied Appellant's Motion and granted
Appellees' cross motion by separate orders dated April
11, 2014. Appellant filed a notice of appeal from the
court's order granting the cross motion on May 8, 2014.
On May 9, 2014, Appellant filed a second notice of appeal
from the court's order denying their Motion. The
undersigned issued an order on May 27, ...
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