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HomeMy WebLinkAbout2008-4787 CINDY C. HOCKENBERRY AND : IN THE COURT OF COMMON PLEAS OF LEROY J. HOCKENBERRY, SR., : CUMBERLAND COUNTY, PENNSYLVANIA her husband, : PLAINTIFFS : : V. : : LIBERTY MUTUAL FIRE INSURANCE : COMPANY, : DEFENDANT : 08-4787 CIVIL TERM IN RE: CROSS-MOTIONS FOR SUMMARY JUDGMENT 1 BEFORE MASLAND, J. OPINION AND ORDER OF COURT Masland, J., June 16, 2011:-- Before the court are the cross motions for summary judgment filed by Plaintiffs, Cindy C. Hockenberry and Leroy J. Hockenberry, Sr., her husband, and the Defendant, Liberty Mutual Fire Insurance. After briefing by the parties and oral argument en banc, we now deny the Plaintiffs’ motion for summary judgment and grant the motion filed by the Defendant. The parties have stipulated to the following facts: 1. On November 13, 2003, at approximately 3:30 a.m., Plaintiff, Cindy C. Hockenberry, was the owner and operator of a 2003 Chevrolet Impala, traveling southbound on East Penn Drive, Enola, Cumberland County, Pennsylvania, when she was struck head-on by a vehicle driven by Matthew F. Spoto and owned by his father, Frank J. Spoto. 2. As a direct result of the crash, the Plaintiff, Cindy C. Hockenberry, has claimed that she has suffered numerous personal injuries. The Honorable J. Wesley Oler, Jr. did not participate in the consideration or 1 disposition of this case. 08-4787 CIVIL TERM 3. The tortfeasor, Matthew F. Spoto, was negligent in the operation of said motor vehicle and his negligence was the proximate cause of the crash and Ms. Hockenberry's resultant injuries. 4. As a result of her injuries, the Plaintiff, Cindy C. Hockenberry, presented a claim for damages to AIG Specialty Insurance Co., the tortfeasor's liability automobile insurance carrier. 5. AIG Specialty Insurance Co. tendered its liability insurance policy limits. 6. At all times material hereto, Plaintiffs, Cindy C. and Leroy Hockenberry, were named insureds under an automobile insurance policy with the Defendant herein, Liberty Mutual, initially purchased in 1994. A true and correct copy of the Liberty Mutual policy in effect at the time of the collision is attached hereto, made a part hereof, and marked "Exhibit A." 7. On or about July 21, 1994, Plaintiffs initially applied for automobile insurance with Liberty Mutual. A true and correct copy of the application of insurance, signed only by Leroy J. Hockenberry, Sr., submitted to Liberty Mutual Insurance Co. in July, 1994, is attached hereto, made a part hereof, and marked "Exhibit B." 8. On the first page of the application (Exhibit B), an "X" had been written on the "Limited Tort" box. 9. The Hockenberrys' renewal of their automobile policy with Liberty Mutual, from 1995 through 2003, reflected the limited-tort selection each time. Attached hereto, and marked "Exhibit C" are copies of Renewal Auto Policy Declarations, from 7/21/98 through 7/22/03. 10. The Hockenberrys were charged with a reduced premium for limited-tort insurance. 11. The application signed by the Hockenberrys includes the Notice required by 75 Pa. C.S. §1791.1 12. Before they insured through Liberty Mutual, the Hockenberrys were insured with Kemper Insurance Co. -2- 08-4787 CIVIL TERM 13. The Hockenberrys do not recall what tort option was in effect on their previous Kemper auto policy. 14. Plaintiffs, Cindy C. and Leroy Hockenberry, through their attorneys, have presented a claim to Liberty Mutual for Underinsured Motorist (UIM) benefits, seeking both economic and non-economic damages. 15. Defendant, Liberty Mutual, has denied Plaintiffs' claim for non-economic damages, alleging that Cindy C. Hockenberry was a limited-tort insured under the policy in effect at the time of the collision. Stipulation of Facts, filed September 20, 2010. Summary judgment is properly granted only where the pleadings, depositions, answers to interrogatories and affidavits establish there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Pa. R.C.P. No. 1035. Here, Defendant's motion for partial summary judgment presents a question of statutory interpretation where the relevant facts are not in dispute. As such, the instant matter is ripe for resolution via summary judgment. The Motor Vehicle Financial Responsibility Law (MVFRL) permits an insured to choose limited tort coverage in exchange for a lower premium rate. Donnelly v. Bauer, 720 A.2d 447, 450 (Pa. 1998). An insurer must observe certain statutory formalities to provide proper notice to the insured of the costs and consequences of electing the limited tort option. 75 Pa. C.S. §1705. The MVFRL provides two notice mechanisms. First, the insurer must provide the insured with a standardized form detailing the relevant differences between the full and limited tort coverage and their respective premium costs. 75 Pa. C.S. §1705(a)(1). Of particular relevance to the instant matter, the insured must sign -3- 08-4787 CIVIL TERM a form explicitly affirming their tort option selection. If an insured fails to select a tort option, the MVFRL establishes a conclusive presumption that he chose the full tort option. 75 Pa. C.S. §1705(a)(3). The second statutory notice mechanism requires the disclosure of similar information but does not demand an explanation of the premium rate differences between the tort option alternatives. 75 Pa. C.S. §1791.1. Here, as stipulated, the Defendant insurer satisfied the §1791.1 notice requirement, but failed to obtain the Plaintiffs' signatures on the standardized tort option election form as required by §1705. As such, the Plaintiffs contend no election was made and the default full tort option must apply. We disagree. We find Donnelly to be controlling. There, a group of insureds had received the §1791.1 notice but not the §1705 premium differential notice. Donnelly, 720 A.2d at 453. Due to this deficiency, the insureds argued they were entitled to the presumption of full tort coverage provided §1705(a)(3). The Supreme Court disagreed and held the MVFRL provides no remedy for failure to receive a §1705 notice. Id. at 454. There, as here, the insureds were provided with substantial, if not perfect, notice of the relevant differences in coverage relating to the full and partial tort options. They willingly selected partial tort and enjoyed the benefit of lower premium payments. As such, the Plaintiffs made a knowing election of the limited tort option and are hereby bound by the decision. This case does not present a situation where an insured is entitled to the full-tort default presumption. That provision can only be triggered where no election was made. Here, as stipulated by the parties, the Plaintiffs' insurance -4- 08-4787 CIVIL TERM application has been marked "X" indicating the election of the limited tort option, and that application was signed by the Plaintiffs. The Plaintiffs then enjoyed several years’ worth of reduced premium payments in exchange for their voluntarily chosen limited right to tort recovery. Plaintiffs cannot escape this decision. Accordingly, because there is no remedy for the Defendant's failure to comply with the §1705 signature requirement and because Plaintiffs received substantial notice of their tort option alternatives, knowingly elected the limited tort option and enjoyed the benefit of lower premium payments, the motion for summary judgment filed by the Plaintiffs is denied and the motion for summary judgment filed by the Defendant is granted. ORDER OF COURT AND NOW this ___ day of June, 2011, the motion for summary judgment DENIED filed by the Plaintiffs is and the motion for summary judgment filed by GRANTED the Defendant is . By the Court, Albert H. Masland, J. Matthew S. Crosby, Esquire For Plaintiff Andrew P. Dollman, Esquire For Defendant :saa -5-