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Pergolese v. The Standard Fire Insurance Co.

Superior Court of Pennsylvania

April 11, 2017


         Appeal from the Judgment Entered April 11, 2014, in the Court of Common Pleas of Montgomery County Civil Division at No. 10-36947



          FORD ELLIOTT, P.J.E.

         Standard 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.

         The 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) vehicle.[Footnote 2]
[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. (Id.).
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 N).
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; or
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 that correct?
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 time.
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?
A. Correct.
* * * *
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.
A. Okay.
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 additional vehicle?
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 correct.
(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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