Bowers by Brown v. Estate of Feathers

• Citation: 448 Pa.Super. 263,671 A.2d 695
• Parties: Dennis L. BOWERS, A Minor, by his Mother and Natural Guardian, Sandy BROWN v. The ESTATE OF Paula S. FEATHERS, Deceased, By Shirley Feathers, Administratrix, the Universal Underwriters Insurance Company, An Insurance Corporation, Allstate Insurance Company, An Insurance Corporation, Keystone Insurance Company, An Insurance Corporation. Appeal of The UNIVERSAL UNDERWRITERS INSURANCE COMPANY, An Insurance Corporation. Charles ODY, Administrator of the Estate of Shannon Paul Ody, Deceased, Appellee, v. Shirley L. FEATHERS, Administratrix of the Estate of Paula S. Feathers, Deceased, Appellant, Dennis L. BOWERS, A Minor, by his Mother and Natural Guardian, Sandy Brown v. The ESTATE OF Paula S. FEATHERS, Deceased, By Shirley Feathers, Administratrix, the Universal Underwriters Insurance Company, An Insurance Corporation, Allstate Insurance Company, An Insurance Corporation, Keystone Insurance Company, An Insurance Corporation. Appeal of UNIVERSAL UNDERWRITERS INSURANCE COMPANY, An Insurance Corporation.
• Decision Date: 06 March 1996
• Court: Pennsylvania Superior Court

Page 695

671 A.2d 695

448 Pa.Super. 263

Dennis L. BOWERS, A Minor, by his Mother and Natural Guardian, Sandy BROWN v. The ESTATE OF Paula S. FEATHERS, Deceased, By Shirley

Feathers, Administratrix, the Universal Underwriters

Insurance Company, An Insurance Corporation, Allstate

Insurance Company, An Insurance Corporation, Keystone

Insurance Company, An Insurance Corporation.

Appeal of The UNIVERSAL UNDERWRITERS INSURANCE COMPANY, An

Insurance Corporation.

Charles ODY, Administrator of the Estate of Shannon Paul

Ody, Deceased, Appellee, v. Shirley L. FEATHERS, Administratrix of the Estate of Paula

S. Feathers, Deceased, Appellant, Dennis L. BOWERS, A Minor, by his Mother and Natural Guardian, Sandy Brown v. The ESTATE OF Paula S. FEATHERS, Deceased, By Shirley

Feathers, Administratrix, the Universal Underwriters

Insurance Company, An Insurance Corporation, Allstate

Insurance Company, An Insurance Corporation, Keystone

Insurance Company, An Insurance Corporation.

Appeal of UNIVERSAL UNDERWRITERS INSURANCE COMPANY, An

Insurance Corporation.

Superior Court of Pennsylvania.

Argued May 24, 1995.

Filed Dec. 28, 1995.

Reargument Denied March 6, 1996.

Robert E. Dapper, Jr., Pittsburgh, for Universal Underwriters Insurance Company & Shirley Feathers.

Patrick J. Demay, Bethel Park, for Dennis L. Bowers, appellee.

Jack A. Wintner, Pittsburgh, for Charles Ody.

Before WIEAND, DEL SOLE and CERCONE, JJ.

WIEAND, Judge:

The primary issue in these consolidated appeals is whether Paula Feathers was an insured and is entitled to coverage under a multiple coverage insurance policy issued by Universal Underwriters Insurance Company while driving a vehicle loaned to her by a dealer. Feathers was an insured and is entitled to coverage under the "garage" portion. However, she was not an insured under the "umbrella" portion, of the policy. Under the garage portion of the policy, moreover, Universal's liability is limited by a valid "most we will pay" clause.

Paula Feathers' car was in the Kelly Shuster Enterprises Garage on May 27, 1991, and, because Feathers was also thinking of buying a new car, the dealership allowed her to take for the weekend a 1991 Dodge. During the course of the weekend, an accident occurred in which Dennis Bowers, a passenger in Feathers' car, sustained injuries causing paraplegia; and Shannon Ody, also a passenger, was killed. ¹

The Dodge vehicle was insured as a Dealer Rent-A-Car (DRAC) vehicle under a policy of insurance issued by Allstate Insurance Company to Chrysler Credit Corporation and the dealership. A personal policy of automobile insurance was also owned by Feathers, having been issued by Keystone Insurance Company. Kelly Shuster was insured under a multiple coverage policy issued by Universal Underwriters. Keystone and Allstate paid policy limits; Universal Underwriters denied liability. In an action for declaratory judgment to determine coverage, which was filed by Dennis Bowers and to which Charles Ody, administrator of the Estate of Shannon Ody, deceased, was joined as an additional plaintiff by consent of all parties, cross-motions for summary judgment were filed. The trial court entered summary judgment against Universal Underwriters and in favor of both Bowers and Ody. Universal appeals from those judgments. ²

"[T]he interpretation of an insurance policy is a question of law for the court." State Farm Mut. Auto. Ins. Co. v. Universal Underwriters Ins. Co., 441 Pa.Super. 446, 451, 657 A.2d 1252, 1254 (1995). "Whether a particular loss is within the coverage of an insurance policy is such a question of law and may be decided on a motion for summary judgment in a declaratory judgment action." Id. at 451, 657 A.2d at 1255. Summary judgment may be entered where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Hoffmaster v. Harleysville Ins. Co., 441 Pa.Super. 490, 495, 657 A.2d 1274, 1276 (1995).

"When interpreting a contract of insurance it is necessary to consider the intent of the parties as manifested by the language of the instrument. Where the policy language is clear, the contract will be applied as written." Insurance Co. of the State of Penn. v. Hampton, 441 Pa.Super. 382, 385, 657 A.2d 976, 977-978 (1995) (citation omitted). See also: Alexander v. CNA Insurance Co., 441 Pa.Super. 507, 510-511, 657 A.2d 1282, 1284 (1995); Britamco Underwriters, Inc. v. Grzeskiewicz, 433 Pa.Super. 55, 59-60, 639 A.2d 1208, 1210 (1994).

Universal argues that the trial court erred in classifying Paula Feathers as an insured under the garage coverage part of the policy issued to Kelly Shuster. We disagree.

Under the garage portion of the Universal Underwriters policy, an insured is defined as follows:

WHO IS AN INSURED-- ...

With respect to the AUTO HAZARD: ...

3. Any other person or organization required by law to be an INSURED while using an AUTO covered by this Coverage Part within the scope of YOUR permission.

The garage portion defines "auto hazard" and "garage operations" as follows:

"AUTO HAZARD" means the ownership, maintenance, or use of any AUTO YOU own or which is in YOUR care, custody or control and:

(1) used for the purpose of GARAGE OPERATIONS or (3) furnished for the use of any person or organization.

"GARAGE OPERATIONS" means the ownership, maintenance or use of that portion of any premises where YOU conduct YOUR AUTO business and all other operations necessary or incidental thereto.

Feathers was the driver of a car required by law to be insured. She was using the vehicle with the dealer's permission and as a part of the dealer's garage operation. Therefore, Feathers was an insured and was covered by the garage portion of the Universal Underwriters Policy. See: State Farm Mutual Auto Ins. Co. v. Universal Underwriters Ins. Co., supra 441 Pa.Super. at 453-454, 657 A.2d at 1255-1256.

An endorsement to the garage policy excluded coverage if the vehicle was "leased or rented to others." Universal argues that Feathers was subject to the exclusion because she was operating the vehicle pursuant to a lease or rental agreement. In support of its position, Universal presented the deposition testimony of William Shuster, owner of the Kelly Shuster dealership, wherein Shuster testified that he had filled out the rental lease agreement paperwork and had given a copy to Feathers. Universal contends that it can be inferred that Feathers agreed to the terms of the rental lease agreement because she allegedly saw the agreement and received a copy of it from Mr. Shuster. There is no dispute that Feathers did not sign the alleged agreement and did not pay any money for use of the vehicle. There was also no evidence that Feathers orally agreed to the terms of the alleged agreement. Under these circumstances, we accept the trial court's finding that no legally cognizable, commercial agreement or lease for the vehicle was ever reached between the dealership and Feathers. Thus, Feathers was not subject to the garage policy's exclusion of coverage.

Feathers argued and the trial court held that Feathers was also entitled to coverage under the "umbrella" part of the multiple coverage policy. Universal contends that this was error.

The umbrella coverage was purchased to provide for excess coverage under the five other features of the policy. By purchasing an umbrella policy, Kelly Shuster obtained, at a comparatively modest cost, $2,000,000 in insurance coverage. "[Umbrella policies give] a financial security, as well as peace of mind, to the individual purchasing such coverage who is hopeful that he [or she] will never be involved in any substantial claim or lawsuit, but, if he [or she] is, is desirous of not losing the security it may have taken a lifetime to acquire." 8A Appleman, Insurance Law and Practice § 4909.85 (1981). This feature of the policy, however, may contain its own definition of an insured. Bowers and Ody concede that Feathers does not meet the umbrella feature's definition of an insured, but nevertheless argue that Feathers is entitled to coverage under the umbrella feature because Universal agreed to "pay for loss in excess of ... coverage provided in any UNDERLYING INSURANCE."

When the language of an insurance policy is clear, the contract should be applied as written. Insurance Co. of the State of Penn. v. Hampton, supra 441 Pa.Super. at 385, 657 A.2d at 977-978. Additionally, an insurance policy must be read in its entirety. Blocker v. Aetna Casualty and Surety Co., 232 Pa.Super. 111, 114, 332 A.2d 476, 478 (1975). Even though the garage part qualifies as an underlying insurance, Feathers did not become an insured under the umbrella feature of the policy merely because she was an insured under the garage policy. To be an insured under the umbrella feature, Feathers was required to meet the policy requirements therefor. This she failed to do. We should not ignore the umbrella's definition of "who is an insured" in order to effect an extension of liability coverage under the umbrella policy. An auto dealer may well purchase umbrella coverage to protect his or her business; however, he or she will not likely purchase such additional coverage for his or her customers. This is particularly so where, as here, the law does not require it.

The garage policy contains a "most we will pay" clause as follows:

With respect to persons or organizations required by law to be an INSURED, the most WE will pay is that portion of such limit needed to comply with the minimum limits provision of such law in the jurisdiction where the OCCURRENCE took place. When there is other insurance applicable, WE will pay only the amount needed to comply with such minimum limits.

The trial court held that such a clause is an invalid "escape clause." We disagree.

An escape clause is one which purports to relieve the insurer from any obligation to the insured if other coverage is available. Fryer v. Allstate Ins. Co., 392 Pa.Super. 418,...