Bishop v. Washington

• Decision Date: 06 July 1984
• Citation: 480 A.2d 1088,331 Pa.Super. 387
• Parties: , 39 UCC Rep.Serv. 825 Robert R. BISHOP and Bailey Bishop, Administrators of the Estate of John Leboutillier Bishop, Appellants, v. Walter WASHINGTON and Nationwide Insurance Company,
• Court: Pennsylvania Superior Court

Page 1088

480 A.2d 1088

331 Pa.Super. 387, 39 UCC Rep.Serv. 825

Robert R. BISHOP and Bailey Bishop, Administrators of the Estate of John Leboutillier Bishop, Appellants, v. Walter WASHINGTON and Nationwide Insurance Company,

Superior Court of Pennsylvania.

Argued Oct. 7, 1983.

Filed July 6, 1984.

Fred T. Magaziner, Philadelphia, for appellants.

William J. Gallagher, West Chester, for appellees.

Before SPAETH, President Judge, and WICKERSHAM, BROSKY, ROWLEY, WIEAND, JOHNSON and HOFFMAN, JJ.

ROWLEY, Judge:

In this declaratory judgment action, appellants, the Administrators of the Estate of John Leboutillier Bishop (Administrators), requested the trial court to determine whether the Estate was entitled to receive payment up to the limit of liability coverage for bodily injury under each of two automobile insurance policies issued by Nationwide Insurance Company (Nationwide) despite the clear language contained in exclusionary clauses in each of the policies which prohibited double recovery. Appellants contend that the $25,000 liability coverage limit under one policy should be "stacked" upon the $25,000 liability coverage limit under the second policy, thereby obligating Nationwide to pay a total of $50,000 for injuries sustained by the Administrators' decedent.

The Administrators and Nationwide filed Cross Motions for Summary Judgment based upon the pleadings, the insurance policies and Nationwide's Answers to Interrogatories. The trial court denied the Administrators' motion and granted Nationwide's motion, holding that Nationwide was only obligated to pay the Administrators the limit of liability coverage for loss due to bodily injury under one policy of insurance. We granted en banc review to consider the application of this Court's decision in Hionis v. Northern Mutual Insurance Co., 230 Pa.Super. 511, 327 A.2d 363 (1974) to the circumstances of this case. Upon a thorough review of the record, we affirm.

The principles governing an order entering summary judgment, and an appeal therefrom, are well settled. Summary judgment will be granted only "if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Pa.R.C.P. 1035(b). The trial court must accept as true all well-pleaded facts, resolving any doubts regarding the existence of a genuine issue of material fact against the moving party. Carrollo v. Forty-Eight Insulation, Inc., 252 Pa.Super. 422, 381 A.2d 990 (1977). On appeal, we must examine the record in the light most favorable to the appellant. Speyer, Inc. v. Goodyear Tire & Rubber Co., 222 Pa.Super. 261, 295 A.2d 143 (1972).

The undisputed facts as they appear from the record in this case are as follows. Appellants' decedent, John L. Bishop, died from injuries he sustained on December 15, 1974, when his Volkswagen was struck from the rear by a bus driven by Walter Washington (Washington) and owned by the First Baptist Church of Coatesville. At the time of the accident, Washington was the owner of an automobile and a truck. Both of Washington's vehicles were insured by Nationwide under separate, but identical policies. The policy terms provided, inter alia, liability coverage for property damage and bodily injury in the event that the insured was involved in an accident while driving a "non-owned" motor vehicle. Liability coverage for bodily injury under each policy was limited to $25,000 per person. In addition, the policies included an "other insurance" provision which stated, in pertinent part:

For losses involving the use of other motor vehicles, we will pay the insured loss not covered by other insurance. If Property Damage or Bodily Injury Liability coverage in more than one policy applies to a loss, we will pay only up to the highest limit in any one policy. (Emphasis added)

This provision was listed in the policy under the general heading of "Limits of Payment".

The bus involved in this accident was covered by an insurance policy issued to First Baptist Church of Coatesville by General Accident Group. Following settlement negotiations, General Accident Group paid the Administrators $50,000--the limit of liability coverage under their policy. The Administrators then demanded a total payment of $50,000 from Nationwide on the ground that Nationwide was liable for $25,000 under the policy issued on Washington's car and an additional $25,000 under the policy issued on Washington's truck.

Nationwide paid $25,000 to the Administrators under the terms of one policy, but refused to pay an additional $25,000 under the second policy. The Administrators filed this declaratory judgment action to recover the additional $25,000. Nationwide maintains that it is only liable for the highest coverage limit in any one policy pursuant to the express limitation contained in the "other insurance" provision.

The parties to this appeal agree that appellant's damages would be in excess of $100,000, if the case were tried. We point out, however, that a General Release was executed by the Administrators and filed in the court below on July 2, 1980. That document provides:

[The Administrators] for and in consideration of TWENTY-FIVE THOUSAND (25,000.00) DOLLARS payable immediately and the additional sum of TWENTY-FIVE THOUSAND ($25,000.00) DOLLARS if a court of competent jurisdiction shall determine that the defendant, WALTER WASHINGTON'S limit of liability shall be a combined total of $50,000.00/$100,000.00 because of insuring two separate vehicles with Nationwide ... do hereby remise, release and discharge, WALTER WASHINGTON ... from all and all manner of actions and causes of action, suits, debts ... judgments, claims and demands whatsoever in law or equity, especially to No. 47 July Term, 1975, in the Court of Common Pleas of Chester County, regarding an automobile accident which occurred on December 15, 1974 in the Borough of Kennett Square, Chester County, Pennsylvania ...

Thus, Washington will not be held individually liable for any additional losses involved herein, regardless of our decision in the instant case. ¹

On the parties' Cross Motions for Summary Judgment, the Court of Common Pleas of Chester County determined that the limitation contained in both insurance policies was clearly and simply stated and should be accorded its plain and ordinary meaning. Consequently, the court refused to allow "stacking" of coverage under the second policy upon coverage provided under the first policy.

Appellant's main contention on appeal is that Nationwide is precluded from relying on the "other insurance" limitation contained in the policies to deny additional liability coverage to Washington because: 1) Nationwide failed to demonstrate that the effect of the limitation was explained to the insured as mandated by Hionis v. Northern Mutual Insurance Co., 230 Pa.Super. 511, 327 A.2d 363 (1974); and 2) Washington paid premiums to secure liability coverage under both policies. Because the appeal raised important issues regarding the scope of the Hionis doctrine, it was certified for consideration by the court en banc and arguments were heard on October 17, 1983. In the interim, this Court learned that the Hionis case had been questioned in arguments before our Supreme Court and, thus, our decision herein was delayed pending disposition of that case. On December 30, 1983, the opinion in Standard Venetian Blind Co. v. American Empire Insurance Co., 503 Pa. 300 469 A.2d 563 (1983) was filed. We analyze this case in light of our Supreme Court's most recent pronouncement regarding principles governing the interpretation of insurance contracts.

In Hionis v. Northern Mutual Insurance Co., 230 Pa.Super. 511, 327 A.2d 363 (1974), a restauranteur secured fire insurance to protect against loss to improvements made on the building he leased. The insurance policies provided that he was entitled to full coverage if the improvements were replaced within a reasonable time, but only partial coverage if the improvements were not replaced. When the restaurant was destroyed by fire, the insurer denied full coverage on the ground that the restauranteur had failed to replace the improvements. This Court determined that the insured was entitled to full coverage under both policies despite the exclusionary language contained therein. The Court stated:

When a defense is based on an exception or exclusion in a policy, our Supreme Court has held that such a defense is an affirmative one, and the burden is upon the defendant to establish it. Weissman v. Prashker, 405 Pa. 226, 233, 175 A.2d 63 (1961). Even where a policy is written in unambiguous terms, the burden of establishing the applicability of an exclusion or limitation involves proof that the insured was aware of the exclusion or limitation and that the effect thereof was explained to him. (citations omitted)

The Court specifically determined that the limiting language in the fire insurance policies in Hionis was not to be given effect because it was "technical and unclear" and because the insurer failed to offer any proof of the insured's awareness and understanding of the exclusion.

Subsequently, our Court relied on Hionis in holding that the insurer has the burden of establishing the insured's awareness and understanding of an exclusion from coverage before the insurer may rely on the exclusion to deny coverage, even if the policy language is clear and unambiguous. Kelmo Enterprises v. Commercial Union Insurance Co., 285 Pa.Super. 13, 426 A.2d 680 (1981); Klischer v. Nationwide Life Insurance Co., 281 Pa.Super. 292, 422 A.2d 175 (1980); See also, O'Malley v. Continental Insurance Co., 305 Pa.Super. 302, 451 A.2d 542 (1982) (insurer met burden of establishing the insured's awareness of the exclusion in the policy and its meaning). The federal courts have interpreted Hionis...