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HomeMy WebLinkAbout2017-06350 NAPA TRANSPORTATION, : IN THE COURT OF COMMON PLEAS OF INC., : CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff : : v. : CIVIL ACTION : WESCO INSURANCE : COMPANY and THE : GLATFELTER AGENCY, INC., : t/d/b/a THE GLATFELTER : AGENCY, : Defendants : NO. 2017-06350 CIVIL TERM IN RE: SUMMARY JUDGMENT BEFORE SMITH and HYAMS, JJ. OPINION and ORDER OF COURT HYAMS, J., November 18, 2021. In this civil action, a trucking company has sued its insurer and an insurance 1 agency in a dispute involving the calculation of premiums under the insurance policy. 2 For disposition at this time is a motion for summary judgment filed by the agency. 3 Briefs have been submitted by the parties, and the matter was argued on October 4 15, 2021. judgment will be denied. 1 See Second Amended Complaint, filed August 11, 2020 (hereinafter Complaint). 2 Motion for Summary Judgment of Defendant The Glatfelter Agency, Inc., t/d/b/a The Glatfelter Agency, 3 Brief of Defendant The Glatfelter Agency Inc., t/d/b/a The Glatfelter Agency in Support of Their Brief of Plaintiff in Opposition to Motion for Summary Judgment of Defendant, The Glatfelter Agency, 4 See Praecipe for Listing Case for Argument, filed September 22, 2021. 1 STATEMENT OF FACTS 5 This action was commenced by the filing of a complaint on June 7, 2017. The int, filed August 11, 2020, pertinent to 6 the motion sub judice, may be summarized as follows: Plaintiff NAPA Transportation, Inc., is a Pennsylvania corporation, engaged in the 7 trucking business, with its principal place of business located in Cumberland County, 8 Pennsylvania. the fictitious name The Glatfelter Agency is a licensed insurance broker engaged in the business as an independent broker, as well as an authorized agent of defendant Wesco 9 Pennsylvania. 9. For the policy period of July 10, 2013 to July 10, 2014 \[the insurance company\] wrote a commercial package policy for commercial auto and general liability estimated total premium of $1,261,825.00. . . . 10. For the policy period of July 10, 2014 to July 10, 2015 \[the insurance company\] wrote a commercial package policy for commercial auto and general liability 10 estimated total premium of $1,104,933.00. . . . Features of the insurance contract included (a) ayment of 11 cash collateral of $1 5 Complaint, filed June 7, 2017. 6 In summarizing the pertinent allegations of Plaint opinion as to their accuracy. 7 ¶8-9. 8 9 10 plaint, ¶¶9-10. 11 It would appear ng the policy period. 2 and (b) an initial premium payment influenced by anticipated mileage during the policy 1213 year, subject to recalculation, based upon actual mileage, l premium audit. This premium audit was described in the following terms: a. The estimated premium for this coverage form is based on the exposures you told us you would have when this policy began. We will compute the final premium due when we determine your actual exposures. The estimated total premium will be credited against the final premium due and the first Named Insured will be billed for the balance, if any . . . . If the estimated total premium exceeds the final premium due, the first Named Insured will get a refund. b. If this policy is issued for more than one year, the premium for this coverage form will be computed annually based on our rates or premiums in effect at the beginning 14 of each year of the policy. As it transpireds position, as evidenced in a final premium audit in 2015, that only a portion of the total estimated premium payment would be credited to 15 Plaintiff in the final premium audit process as it related to mileage was not understood by Plaintiffspecifically, it was not understood that only the portion of the estimated premium attributable to liability coverage would be credited to Plaintiff in the year-end 16 calculation of an over- or under-payment due to a mileage adjustment. For the 2013-2014 policy year, an over-payment was calculated in the final 17 premium audit process in the amount of $67,444.00. With respect to the methodology used to arrive at request information from either \[the insurance company\] or its third-party 12 -10, 16. 13 14 Plaintiff. 15 See 16 See -39. The insurer would argue that this is the portion of the total premium based on mileage. See Second Amended Complaint, Exhibit D. 17 3 administrator . . . as to the source of the premium credit, how it was calculated or any 18 details associated with the final premium audit . . . After Plaintiff requested, at the end of the second, and final, policy year, a return 19 of the unused portion of its security deposit, it was told that a final premium audit for 20 that year had revealed a premium deficiency in the amount of about $100,424.00. Had the final premium audits utilized the entire estimated premiums paid by Plaintiff as credits, Plaintiff would have been owed $299,519.00 for the first year and $87,047.00 for 21 the second. With respect to this insurance coverage, advice and guidance associated commercial trucking business 22 Defendant supplied 2324 to plaintiff, Notwithstanding this undertaking, Defendant had failed to show Plaintiff a proposal that it received from the insurance company for the 2014-2015 policy year that could be interpreted as indicating 25 that only the liability portion of the estimated premium was based on mileage. overall conduct was both negligent and in breach of its contractual obligations to Plaintiff in the following particulars: 45. . . . \[I\]n providing such services prior to plaintiff purchasing the involved insurance policy from \[the insurance company\] for the 2013-2014 and 2014-2015 policy periods, defendant The Glatfelter Agency, Inc. was negligent and breached its duty of good faith and fair dealing in failing to properly advise plaintiff as to the financial premium risk, potential audit, premium adjustment, how the final premiums were to be calculated under the policy, \[and\] failing to supply plaintiff with material documents, 18 25. 19 d Amended Complaint, ¶15. 20 -17. 21 22 23 24 49. 25 ¶17-19 and Exhibit D. 4 including, but not limited to the audit documentation for the 2013-2014 policy period . . . and insurance proposal . . . issued to defendant The Glatfelter Agency, Inc. by \[the insurance company\] that itemized the premium due under the policy and how it was 26 calculated. * * * * proper advice and information regarding the calculation of the final premiums that could become due under the involved insurance policy was a breach of its contractual agreement with plaintiff, including a failure to make a full and complete disclosure to plaintiff of all information, including, but not limited to the insurance audit 27 documentation and proposal . . . . decision regarding insurance coverage: to plaintiff material information, including, but not limited to the insurance documentation and proposal . . . , plaintiff was denied the opportunity to make an informed decision as to whether to maintain the involved insurance coverage with \[the insurance company\] for the policy period of July 10, 2014 to July 10, 2015 or to seek 28 recovery of premiums due from \[the insurance company\]. e additional premiums sought by \[the insurance company\] in the amount of $100,424.00 for the 2014- the premium overpayments of $232,075.00 for the policy period 2013-2014 policy 29 period\[,\] and $87,047.00 for the policy period 2014- for a total or $419,546.00. A legal challenge by way of preliminary objections in the nature of demurrers to 30 was rejected by the court in 31 2017. 26 27 49. 28 29 30 Defendant Glat Complaint, filed August 1, 2017. 31 Order of Court, dated November 16, 2017 (Ebert, J.). 5 sub judice was filed on August 1, 3233 2021. The motion cites the above-quoted premium audit provision, notes that Plaintiff 34 after the first policy year, and maintains that the record establishes that Plaintiff was 35 aware of the methodology to be used in the final premium audit calculation and, in any 36 event, suffered no damages as a result of this methodology. 37 premium audit process, Defendant cites as well as 38 testimony of one of its own account executives, which Defendant maintains was 39 corroborated by witnesses representing Plaintiff. On the subject of damages, Defendant points to the fact that a policy from another insurance company available to Plaintiff was 40 less favorable than that recommended by Defendant, and that deposition testimony of 41 Notwihe record s view, support the proposition s representative acknowledged being advised that only the liability portion of the total estimated premium paid would be credited to 32 It appears that, technically, this motion is not referencing the most recent complaint filed by Plaintiff, although the discrepancy would not appear material to the issues presented. See Summary Judgment, Exhibit 1. 33 ¶11. 34 35 -21. 36 -30. 37 38 ¶¶16-19; see N.T. 17, 89-91,101-102, 104-108, Deposition of Edward G. Down, 39 ¶20-21. 40 ummary Judgment, ¶26-27. 41 ion for Summary Judgment, ¶28. 6 42 Plaintiff in the mileage reconciliation process. In addition, an employee of Defendant conceded that the form of premium determination utilized by the insurance company in 43 custome-versed when it c\[omes\] to these 44 Plaintiff, furthermore, does not concede that the policy language plainly determines credit in the mileage reconciliation process based upon the portion of the estimated premium paid for liability coverage, pointing out that the provision in question 45 refers, without qualification, to a credit for the total premium ted from good and accepted commercial 46 an expert retained by Plaintiff directed attention, in part, to the following: First, the . . . insurance policy language regarding the premium audit provision is clear and unambiguous . . . The Estimated Total Premium is clearly listed on the Commercial Carrier Coverage Part a/k/a Declarations Page . . . and is comprised of Liability, Personal Injury Protecnderinsured Motorist premiums . . . . \[A part\] of the policies in question is simply a page defining how the audit will be calculated \[w\]hich clearly states the Estimated Total Premium will be credited against the final premium calculated based on exposures, in this case mileage. This is simple mathematical equation involving addition and subtraction. The Total Estimated Premium includes not only the liability portion but PIP, UM/UIM and Trailer Interchange premiums that are not getting credited to \[Plaintiff\] in the final audit. Second, the omission of any clear definition of what is included in the mileage rate on a composite rate endorsement \[may be noted\]. In my 30 years in the business, I have never seen a mileage composite rate that excluded PIP, UM/UIM and Trailer 42 See N.T. 199-201, 207-209, Deposition of Joseph Dennison, August 27, 2020, Defendant 43 See N.T. 165, Deposition of Edward G. Down, May 4, 2021, Defendantfor Summary Judg 44 See N.T. 165, Deposition of Edward G. Down, May 4, 2021, Defendantfor Summary 45 See Brief of Plaintiff in Opposition to Motion for Summary Judgment of Defendant, The Glatfelter Agency, Inc., t/d/b/a The Glatfelter Agency, at 6, filed September 9, 2021. 46 Expert report of Anthony J. Kocis, AAI \[Accredited Advisor in Insurance\], dated April 15, 2021, at 3, 7 Interchange premiums. Normally, in accordance with industry standards they would all be included when calculating the mileage rate. Had that occurred, or some disclosure in the policy that PIP, UM/UIM and Trailer Interchange would not be included in the Estimated Total Premium, then there would be no dispute. Third, the error and/or omission by \[Defendant\] in reviewing the proposal sent to them by \[the insurance company and its administrator\] . . . and properly questioning the unique way the mileage rate was calculated for this policy \[may also be noted\]. This 47 \[Plaintiff\] how this would apply to the final audit for \[Plaintiff\]. DISCUSSION Statement of law. Pennsylvania Rule of Civil Procedure 1035.2 provides as follows: After the relevant pleadings are closed, but within such time as not to unreasonably delay trial, any party may move for summary judgment in whole or in part as a matter of law (1) whenever there is no genuine issue of any material fact as to a necessary element of the cause of action or defense which could be established by additional discovery or expert report, or (2) if, after the completion of discovery relevant to the motion, including the production of expert reports, an adverse party who will bear the burden of proof at trial has failed to produce evidence of facts essential to the cause of action or defense which in a jury trial would require the issues to be submitted to a jury. . . . Woodford v. Insurance Department, ___ Pa. ___, ___, 243 A.3d 60, 70 (2020). Entry of summary judgment is proper is no genuine issue of material fact and that the moving party is entitled to judgment as a Summers v. Certainteed Corp., 606 Pa. 294, 308, 997 A.2d 1152, 1159 (2010) (citation omitted). of the party having the burden of proof is oral, the credibility of that testimony is always Bremmer v. Protected Home Mutual Life Insurance Company, 436 Pa. 494, 498, 260 A.2d 785, 787 (1970). 47 Expert report of Anthony J. Kocis, AAI, dated April 15, 2021, at 1- 8 As \[the Pennsylvania Supreme Court\] stated in Nanty-Glo Borough v. American Surety Co., 309 Pa. \[236,\] 238, 163 A. \[523,\] 524 \[(1932)\]However clear and indisputable may be the proof when it depends upon oral testimony, it is nevertheless the province of the jury to decide, under instructions from the court, as to the law applicable to the facts, and subject to the salutary power of the court to award a new trial if they should deem the verdict contrary rule\] did not and was not intended to change the law in this respect. Id. at 498-99, 260 A.2d at 787. to be consMadison Construction Company v. Harleysville Mutual Insurance Company, 557 Pa. 595, 606, 735 A.2d 100, 206 (1999) (citation omitted). Application of law to facts. In this case, where the parties have disparate versions of whether Plaintiff was alerted by Defendant to methodology to be employed in the final premium audit with respect to the mileage adjustment, it can not be said that the record clearly demonstrates an absence of a genuine nce in its capacity as an advisor. The fact that another insurance policy might have proven less economical for Plaintiff does not demonstrate that Plaintiff suffered no loss in terms of a putative overcharge for the policy it did purchase. Accordingly, and without intimating any opinion as to the proper outcome of the with the following order: 9 ORDER OF COURT th AND NOW, this18day ofNovember, 2021, upon consideration of the Motion for Summary Judgment of Defendant The Glatfelter Agency, Inc., t/d/b/a The Glatfelter Agency, filed August 1, 2021, and for the reasons stated in the accompanying opinion, the motion is denied. BY THE COURT, ________________ Carrie E. Hyams, J. DISTRIBUTION: Matthew E. Hamlin, Esq. PERSUN & HAMLIN, P.C. Suite 160 1700 Bent Creek Boulevard Mechanicsburg, PA 17050 Attorney for Plaintiff Charles E. Haddick, Jr., Esq. Christine L. Line, Esq. Anthony D. Cox, Jr., Esq. DICKIE,McCAMEY & CHILCOTE, P.C. Suite 105 2578 Interstate Drive Harrisburg, PA 17110 Attorneys for Defendant The Glatfelter Agency, Inc. Karl S. Meyers, Esq. Adriel J. Garcia, Esq. STRADLEY RONON STEVENS & YOUNG, LLP 2600 One Commerce Square Philadelphia, PA 19103-7098 Attorneys for Defendant Wesco Insurance Company 10