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HomeMy WebLinkAbout01-562 CivilPENNSYLVANIA NATIONAL MUTUAL : CASUALTY INSURANCE COMPANY, Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW GEORGE WILLIAM MANUEL, SR., MARGARET MANUEL AND TAMMI JO MANUEL, Defendants NO. 01-0562 CIVIL TERM IN RE: PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT BEFORE HOFFER, P.J., and OLER, J. OPINION and ORDER OF COURT OLER, J., May 23, 2003. In this declaratory judgment action, Plaintiff, an automobile insurance company, seeks a determination that Defendants may not stack underinsured motorists coverage on a multi-vehicle policy issued by Plaintiff and, as a consequence, are entitled to a total of only $35,000.00 in such coverage. For disposition at this time is Plaintiff' s motion for summary judgment. For the reasons stated in this opinion, the motion will be denied. STATEMENT OF FACTS On a motion for summary judgment, the record includes pleadings, depositions, answers to interrogatories, admissions, affidavits, and expert reports. Pa. R.C.P. 1035.1. In the present case, the pertinent factual record consists of Plaintiff' s complaint, Defendant's answer with new matter, Plaintiff' s reply to new matter, affidavits of Michael L. Rode, Douglas C. Stage, Jr., and Joseph R. Williard, depositions of Mr. Rode and Mr. Stage, and Plaintiff's motion for summary judgment. On a motion for summary judgment, the record "must be viewed in the light most favorable to the non-moving party .... "Dean v. Common~vealth of Pennsylvania, Department of Transportation, 561 Pa. 503, 507, 751 A.2d 1130, 1132 (2000). Viewed in this light, the evidence may be summarized as follows: Defendant George William Manuel, Sr., was, at all times relevant to this case, an employee of General Electrical Service Co., inc., and/or General Electrical Service and Sales Company (hereinafter GE).~ He was employed as a salesman or estimator for GE, and was not an officer of the company.2 The other Defendants, Margaret Manuel and Tammi Jo Manuel, were members of Mr. Manuel's household.3 A 1994 Buick Skylark (hereinafter the Buick) was provided by GE to Mr. Manuel4 for personal and business use.5 The Buick was insured by Plaintiff, Pennsylvania National Mutual insurance Company (hereinafter Penn National), pursuant to a policy issued to GE.6 in connection with the policy, Michael L. Rode, an authorized officer of GE, executed a "Pennsylvania Motor Vehicle Financial Responsibility Option Selection Sheet," electing an underinsured motorists coverage limit of $35,000.00.7 With regard to such coverage, he elected the "stacking" option.8 ~ Plaintiff's complaint, para. 3; Defendants' answer with new matter to Plaintiff's complaint, para. 3. : Plaintiff's complaint, paras. 4-5; Defendants' answer with new matter to Plaintiff's complaint, paras. 4-5. s Plaintiff's complaint, para. 2; Defendants' answer with new matter to Plaintiff's complaint, para. 2. 4 Plaintiff's complaint, para. 6; Defendants' answer with new matter to Plaintiff's complaint, para. 6. 5 Deposition of Michael L. Rode, at 7, 10-11. 6 Plaintiff's complaint, paras. 8-9; Defendants' answer with new matter to Plaintiff's complaint, paras. 8-9. 7 See Plaintiff's complaint, para. 9; Defendants' answer with new matter to Plaintiff's complaint, para. 9. 8 Plaintiff's complaint, para. 9, Ex. B (Pennsylvania Motor Vehicle Financial Responsibility Law Option Selection Sheet Commercial Lines); Defendant's answer with new matter to Plaintiff's complaint, para. 9; Deposition of Douglas C. Stego, Jr., at 6. 2 In addition to providing for insurance on the Buick, the policy also provided for insurance on thirteen other vehicles of GE.9 The annual premium for underinsured motorists coverage for each of five of the vehicles, including the Buick, was $17.00, and the premium for such coverage for each of the remaining nine vehicles was $7.00.1° All premiums paid included charges for stacking,~ The higher premium for the Buick and four other vehicles was attributable to their utilization as personal as well as business vehicles.~2 A policy declaration identified the "Named insured" as "General Electrical Service Co inc.''13 A "Special Named insured Endorsement" identified "the person(s) or organization(s) named in the Declarations of [the] policy" as "General Electrical Service Co inc and/or General Electrical Service & Sales Company.''~4 In an endorsement entitled "Pennsylvania--Named individuals--Broadened First Party Benefits," the policy extended "named insured" status for purposes of first party benefits to the following individuals: "Michael L. Rode, Karen R. Rode (spouse), Leo[n] M. Rode, and Betty M. Rode (spouse).''~5 The policy provided that "[t]hroughout this policy the words 'you' and 'your' refer to the Named Insured shown in the Declarations.''~6 With specific 9 Plaintiff's complaint, para. 8, Ex. A; Defendants' answer with new matter to Plaintiff's complaint, para. 8. l0 Plaintiff's complaint, para. 8, Ex. A; Defendants' answer with new matter to Plaintiff's complaint, para 8. ~ Deposition of Douglas C. Stego, Jr., at 6-7. ~2 Defendants' answer with new matter to Plaintiff's complaint, para. 24; Plaintiff's reply to Defendant's new matter, para. 24. ~3 Plaintiff's complaint, para. 8, Ex. A; Defendants' answer with new matter to Plaintiff's complaint, para. 8. ~4 Plaintiff's complaint, para. 8, Ex. A; Defendants' answer with new matter to Plaintiff's complaint, para. 8. ~5 Plaintiff's complaint, para. 8, Ex. A; Defendants' answer with new matter to Plaintiff's complaint, para. 8. 16 Plaintiff's complaint, para. 8, Ex. A (Business Auto Coverage Form); Defendants' answer with new matter to Plaintiff's complaint, para. 8. 3 reference to underinsured motorists coverage, the policy defined "an insured" as (1) "you," (2) "[i]f you are an individual, any 'family member,'" (3) "[a]nyone else 'occupying' a covered 'motor vehicle,'" and (4) "[a]nyone for damages he or she is entitled to recover because of a 'bodily injury' sustained by another 'insured.'"~7 By its terms, the policy limited stacking with respect to underinsured motorists coverage as follows: Except as provided in the following paragraph, the most we will pay for all damages resulting from any one "accident" is the Limit Of insurance for Underinsured Motorists Coverage shown in the Schedule or Declarations regardless of the number of covered "motor vehicles", "insureds", premiums paid, claims made or vehicles involved in the "accident". However, if "bodily injury" is sustained in an "accident" by you or any "family member", and there is more than one covered "motor vehicle", our maximum limit of liability for all damages in any such "accident" is the sum of the limits applicable to each covered "motor vehicle". Subject to our maximum limit of liability for all damages, the most we will pay for "bodily injury" sustained in such "accident" by an "insured" other than you or any "family member" is the Limit Of insurance for Underinsured Motorists Coverage shown in the Schedule or Declarations for the covered "motor vehicle" the "insured" was "occupying" at the time of the "accident". This is the most we will pay regardless of the number of covered "motor vehicles", "insureds", premiums paid, claims made or vehicles involved in the "accident". la A list of persons who would be driving the vehicles covered by the policy (hereinafter the driversheet) was provided by GE to Penn National.~9 The ~7 Plaintiff's complaint, para. 8, Ex. A (Pennsylvania Underinsured Motorists Coverage--Stacked Endorsement); Defendant's answer with new matter to Plaintiff's complaint, para. 8. ~8 Plaintiff's complaint, para. 8, Ex. A (Pennsylvania Underinsured Motorists Coverage--Stacked Form); Defendants' answer with new matter to Plaintiff's complaint, para. 8. For these purposes, a "family member" was defined as "a person related to you by blood, marriage or adoption who is a resident of your household, including a ward or foster child." Id. 19 Defendants' answer with new matter to Plaintiff's complaint, para. 18, Ex. B; Plaintiff's reply to Defendant's new matter, para. 18. 4 driversheet included the name of Mr. Manuel.2° According to Defendants, the driversheet was part of the policy, designed to effect Mr. Manuel's inclusion as a named or designated insured for purposes of underinsured motorists coverage.2~ On July 10, 1999, the Buick was involved in an automobile accident in Dickinson Township, Cumberland County, Pennsylvania.22 At the time, all three Defendants were in the vehicle.23 As a result of the accident, Defendants demanded underinsured motorists coverage from Penn National in the amount of the sum of the limits applicable to each covered vehicle under the policy.24 Penn National, declining to accede to Defendants' demand that the coverage be stacked, paid to Defendants the amount of only $35,000.00.25 The present declaratory judgment action to resolve the issue was commenced by the insurer on January 26, 2001. The affidavits of Mr. Rode, as chief executive officer of GE, Mr. Stago as an insurance agent utilized by GE, and Mr. Williard, as an underwriter for Penn National, tended to lend factual support to the interpretation of the status of Mr. Manuel as other than the equivalent of a named insured--thus bolstering the position of Penn National. The deposition testimony of Mr. Rode and Mr. Stago contributed similarly to Penn National's factual position. 20 Defendants' answer with new matter to Plaintiff's complaint, para. 18, Ex. B; Plaintiff's reply to Defendant's new matter, para. 18. 2~ Defendants' answer with new matter to Plaintiff's complaint, paras. 17-21, 25. 22 Plaintiff's complaint, para. 7; Defendant's answer with new matter to Plaintiff's complaint, para. 7. 23 Plaintiff's complaint, para. 7; Defendant's answer with new matter to Plaintiff's complaint, para. 7. 24 Plaintiff's complaint, para. 10; Defendant's answer with new matter to Plaintiff's complaint, para. 10. 25 Plaintiff's complaint, para. 11; Defendant's answer with new matter to Plaintiff's complaint, para. 11. 5 DISCUSSION Statement of Law Summary judgment. Under Pennsylvania Rule of Civil Procedure 1035.2, it is provided as follows with respect to summary judgment: 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. When considering whether summary judgment is proper, a court must examine the record in the light most favorable to the non-moving party, with all doubts resolved against the moving party. Demmler v. SmithKline Beecham Corp., 448 Pa. Super. 425, 430, 671 A.2d 1151, 1153 (1996) (citing Denlinger, Inc. v. Dendler, 415 Pa. Super. 164, 170, 608 A.2d 1061, 1064 (1992)). In addition, "[o]ral testimony alone, either through testimonial affidavits or depositions, of the moving party or the moving party's witnesses, even if uncontradicted, is generally insufficient to establish the absence of a genuine issue of material fact." Note, Pa. R.C.P. 1035.2 (citing Penn Center House, Inc. v. HofJhtan, 520 Pa. 171, 553 A.2d 900 (1989); Nanty-Glo v. American Surety Co., 309 Pa. 236, 163 A. 523 (1932)). Stacking. "[M]ost automobile insurance policies identify three classes of intended insureds: (1) class one--includes the named insured and any designated insured, and spouses or relatives if members of the same household; (2) class 6 two--any other person operating or occupying an insured vehicle; and (3) class three--any person entitled to recover damages because of bodily injury sustained by an insured under # 1 or # 2 (i.e., a spouse claiming loss of consortium)." Insurance Company of Evanston v. Bowers, 758 A.2d 213,217 n. 1 (Pa. Super. Ct. 2000). As a general rule, "[t]he right to stack coverages lies with all persons within the 'class one' category of the 'insured', and.., a 'class two' claimant, who is insured only because he is an occupant in a vehicle, is not entitled to stack coverages. The rationale underlying [this general rule is] that a claimant whose coverage was solely a result of membership in the second category had not paid premiums, nor was he a specifically intended beneficiary of the policy. Thus, [such a claimant] ha[s] no recognizable contractual relationship with the insurer, and there exist[s] no basis upon which he could reasonably expect multiple coverage." Selected Risk Insurance Co. v. Thompson, 520 Pa. 130, 135-36, 552 A.2d 1382, 1384-85 (1989); see Utica Mutua/ Insurance Co. v. Contrisciane, 504 Pa. 328, 338-39, 473 A.2d 1005, 1010-11 (1984). The Superior Court "has never held that simply being listed as a driver on an insurance policy automatically transforms an individual into a class one insured." Caron v. Reliance Insurance Co., 703 A.2d 63, 68 (Pa. Super. Ct. 1997). On the other hand, in at least one case the Superior Court has held that an insured's employee was entitled to stack coverage where the employee was driving an insured vehicle designated for his use by the employer, even though the employee had not contributed to payment of premiums for the insurance. See Marchese v. Aetna Casualty & Surety Co., 284 Pa. Super. 579, 426 A.2d 646 (1981). Application of Law to Facts In the present case, although the testimony of Plaintiff's witnesses may well prove persuasive as to the intended effect of the driversheet, the facts that (a) GE had elected the stacking option with respect to uninsured motorists coverage, (b) 7 that it was paying increased premiums for such stacking coverage, and (c) that Mr. Manuel was assigned a specific covered vehicle by GE and named for the insurer, when considered in conjunction with the rule that a motion for summary judgment should generally not be granted on the basis of testimonial evidence of the moving party's witnesses, militate against a disposition of this litigation in favor of Plaintiff without benefit of a finder of fact. Accordingly, the following order will be entered: ORDER OF COURT AND NOW, this 23rd day of May, 2003, upon consideration of Plaintiff's motion for summary judgment, and for the reasons stated in the accompanying opinion, the motion is denied. BY THE COURT, Peter J. Speaker, Esq. P.O. Box 999 305 North Front Street Harrisburg, PA 17108 Attorney for Plaintiff Gregory M. Feather, Esq. 1300 Linglestown Road P.O. Box 1177 Harrisburg, PA 17110 Attorney for Defendants s/ J. Wesley Oler, Jr. J. Wesley Oler, Jr., J. 8 9 PENNSYLVANIA NATIONAL MUTUAL : CASUALTY INSURANCE COMPANY, Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA Vo CIVIL ACTION - LAW GEORGE WILLIAM MANUEL, SR., MARGARET MANUEL AND TAMMI JO MANUEL, Defendants NO. 01-0562 CIVIL TERM IN RE: PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT BEFORE HOFFER, P.J., and OLER, J. ORDER OF COURT AND NOW, this 23rd day of May, 2003, upon consideration of Plaintiff's motion for summary judgment, and for the reasons stated in the accompanying opinion, the motion is denied. BY THE COURT, Peter J. Speaker, Esq. P.O. Box 999 305 North Front Street Harrisburg, PA 17108 Attorney for Plaintiff Gregory M. Feather, Esq. 1300 Linglestown Road P.O. Box 1177 Harrisburg, PA 17110 Attorney for Defendants J. Wesley Oler, Jr., J.