Banker v. Valley Forge Ins. Co.

• Decision Date: 22 January 1991
• Citation: 401 Pa.Super. 367,585 A.2d 504
• Parties: Walter and Margaret BANKER, Individually and as Parents and Natural Guardians on Behalf of Sharon Banker, a Minor, Appellants, v. VALLEY FORGE INSURANCE COMPANY, Wagner Agency, Inc. and Bernard Rafferty.
• Court: Pennsylvania Superior Court

Page 504

585 A.2d 504

401 Pa.Super. 367

Walter and Margaret BANKER, Individually and as Parents and Natural Guardians on Behalf of Sharon Banker, a Minor, Appellants, v. VALLEY FORGE INSURANCE COMPANY, Wagner Agency, Inc. and Bernard Rafferty.

Superior Court of Pennsylvania.

Argued Jan. 17, 1990.

Filed Jan. 22, 1991.

Richard C. Angino, Harrisburg, for appellants.

Karen S. Cooney, Harrisburg, for Bernard Rafferty, appellee.

Before ROWLEY, FORD ELLIOTT and HOFFMAN, JJ.

HOFFMAN, Judge:

This appeal is from the order below granting motions for summary judgment filed by appellees Bernard Rafferty and the Wagner Agency, Inc. Appellants Walter and Margaret Banker contend that the trial court erred in concluding that their cause of action was barred by this Court's prior decision in Banker v. Valley Forge Ins. Co., 363 Pa.Super. 456, 526 A.2d 434 (1987), alloc. denied 518 Pa. 623, 541 A.2d 1135 (1988) (hereinafter Banker I ). For the reasons set forth below, we agree and, accordingly, we reverse the order below and remand for proceedings consistent with this Opinion.

The facts giving rise to the litigation below were summarized in Banker I, as follows:

In January, 1981, Valley Forge Insurance Company (Valley Forge) renewed an automobile insurance policy which had been issued to Walter Banker in accordance with Pennsylvania's No-fault Motor Vehicle Insurance Act. In September, 1981, Banker's wife, Margaret Banker, contacted Bernard Rafferty, an agent employed by the Wagner Agency, Inc., and asked if it were true that the premiums of the policy could be reduced by making the family's private medical insurance the primary source of coverage in the event that a family member were to sustain injuries in an automobile accident. Rafferty responded affirmatively. Therefore, on September 29, 1981, Banker signed an application for an endorsement to his automobile policy which would provide that his personal injury protection was to be excess over any other hospital or medical expense coverage. The endorsement was issued and caused a subsequent reduction in the premiums paid by Banker. The endorsement was made a part of the policy and was listed, in bold-faced lettering, in the Schedule of Endorsements in the policy which the Bankers received from Valley Forge.

On February 23, 1983, Sharon Banker, the insured's minor daughter, was rendered a quadriplegic by injuries received in an accident involving a motor vehicle in which she had been riding as a passenger. The Bankers incurred substantial medical expenses and gave notice to Rafferty and the Wagner Agency, which in turn, notified Valley Forge. Because of the excess coverage endorsement, however, the Bankers were instructed to submit their medical bills to their private health care insurer and were told that Valley Forge would pay only those bills for which the primary health care carrier denied coverage.

The Bankers commenced an action against Valley Forge and also against Rafferty and the Wagner Agency in which they sought to invalidate the excess insurance endorsement and compel payment of the medical bills incurred on behalf of their daughter. They alleged in an amended complaint that Valley Forge had failed to inform them that except for the endorsement they could have recovered from both insurers or retained the private health insurance maximum benefits for non-accident related bills. Valley Forge filed preliminary objections in the nature of a demurrer to the complaint. It argued that the endorsement which the insured had requested more than two years before the accident was clear and unambiguous and that under the circumstances it had no duty to offer an explanation of the endorsement to its insured. The trial court agreed and sustained the preliminary objections.

363 Pa.Super. at 458-60, 526 A.2d at 435 (footnotes omitted). In its order dismissing Valley Forge, the trial court also dismissed present appellees Rafferty and the Wagner Agency, even though they had filed neither answers to the complaint nor preliminary objections.

On appeal, the Banker I Court affirmed the dismissal with respect to Valley Forge, holding that the decision was controlled by the contract principles outlined in Standard Venetian Blind Co. v. American Empire Ins. Co., 503 Pa. 300, 469 A.2d 563 (1983). Specifically, the panel reasoned that:

where, as here, the policy provision is clear and unambiguous, neither the insurer nor its agents have a duty to explain all of the hypothetical consequences which may result from an excess coverage endorsement which the insured has specifically requested. The trial court correctly held that the amended complaint failed to state a cause of action against Valley Forge.

363 Pa.Super. at 464, 526 A.2d at 438. The panel remanded the case with respect to appellees Rafferty and the Wagner Agency, however, because the question of the sufficiency of the complaint as to them was not before the trial court. The panel was careful to emphasize that the decision regarding Valley Forge in no way affected the Bankers' separate cause of action against Rafferty and the Wagner Agency:

The trial court also dismissed appellants' amended complaint against the insurance brokers who had obtained for appellants the policy of insurance and the excess insurance endorsement thereto. This was error. Rafferty and the Wagner Agency, although having been served with the amended complaint, did not file preliminary objections thereto or answer the complaint on the merits. They requested and received an extension of time within which to file a pleading, but they had not filed the same when Valley Forge's preliminary objections were decided. With respect to Rafferty and the Wagner Agency, therefore, there was nothing before the trial court which required decision. For the court to dismiss the complaint against them sua sponte was improper. It may be, of course, that appellants will ultimately be unable to plead or prove a legally cognizable cause of action against the brokers, but that is a matter separate from the cause of action alleged against Valley Forge and must await further proceedings.

Id. at 465, 526 A.2d at 438 (emphasis supplied).

On remand, Rafferty and the Wagner Agency filed answers to the amended complaint. Thereafter, on April 11, 1988, depositions were taken of Margaret Banker, Walter Banker, and Bernard Rafferty, and those depositions were filed with the trial court. Both Rafferty and the Wagner Agency then filed motions for summary judgment, and the Bankers filed responses thereto. On June 26, 1989, the court below filed a Memorandum Order granting the motions for summary judgment, and this timely appeal followed.

Our standard of review of the granting of a motion for summary judgment is well-settled:

A motion for summary judgment may properly be granted when the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. See Hedlund Mfg. Co. v. Weiser, 517 Pa. 522, 539 A.2d 357 (1988); see also Gabovitz v. State Auto Ins. Ass'n, 362 Pa.Super. 17, 523 A.2d 403 (1987); Pa.R.Civ.P. 1035(b). Summary judgment may be entered only in cases that are clear and free from doubt. Weiss v. Keystone Mack Sales, Inc., 310 Pa.Super. 425, 430, 456 A.2d 1009, 1011 (1983). Additionally, the record must be examined in the light most favorable to the non-moving party, accepting as true all well-pleaded facts in its pleadings and giving that party the benefit of all reasonable inferences drawn therefrom. Hower v. Whitmak Assoc., 371 Pa.Super. 443, 445, 538 A.2d 524, 525 (1988); Ferguson v. King, 362 Pa.Super. 543, 524 A.2d 1372 (1987). Moreover in summary judgment proceedings, the court's function is not to determine the facts, but only to determine if a material issue of fact exists. French v. United Parcel Service, 377 Pa.Super. 366, 372, 547 A.2d 411, 414 (1988). Thus an order granting a motion for summary judgment will not be reversed unless the court below has committed an error of law or clearly abused its discretion. Ackler v. Raymark Indus. Inc., 380 Pa.Super. 183, 185, 551 A.2d 291, 292 (1988); Jones v. Keystone Ins. Co., 364 Pa.Super. 318, 321, 528 A.2d 177, 179 (1987); Miller v. Federal Kemper Ins. Co., 352 Pa.Super. 581, 585-86, 508 A.2d 1222, 1225 (1987).

Kaller's Inc. v. Spencer Roofing, 388 Pa.Super. 361, 364, 565 A.2d 794, 795-96 (1989).

The court below was of the opinion that disposition of the motions for summary judgment was controlled by Banker I. The court held that, "the claims against all defendants are really indivisible and as such the duties owed by Agent Rafferty and Agency Wagner Insurance are inseparable from those owed by the insurer Valley Forge Insurance Company." See Memorandum Order, June 26, 1989, at 1. Although the court did not specify the basis for this conclusion, appellees submit that the court's reasoning was correct under either the law of the case doctrine or res judicata. We cannot agree.

The "law of the case" doctrine applies,

only if, inter alia, the parties on the two appeals are the same. 'It is hornbook law that issues decided by an appellate court on a prior appeal between the same parties become the law of the case and will not be reconsidered on a second appeal.' Commonwealth v. Tick, Inc., 431 Pa. 420, 427, 246 A.2d 424, 427 (1968) (citations omitted) (emphasis supplied). See also Burke v. Pittsburgh Limestone Corp., 375 Pa. 390, 394, 100 A.2d 595, 598 (1953) ('[t]he doctrine of "the law of the case" is that, when an appellate court has considered and decided a question submitted to it upon appeal, it will not, upon a subsequent appeal on another phase of the same case, reverse its previous ruling even though convinced that it was erroneous....') (citation omitted) (emphasis supplied); Daniels v. State Farm Mut. Auto Ins. Co., 305...