Davis v. Government Employees Ins. Co.

• Decision Date: 30 December 1982
• Citation: 500 Pa. 84,454 A.2d 973
• Parties: Gus G. DAVIS and Clare Davis, Appellants, v. GOVERNMENT EMPLOYEES INSURANCE COMPANY.
• Court: Pennsylvania Supreme Court

Page 973

454 A.2d 973

500 Pa. 84

Gus G. DAVIS and Clare Davis, Appellants, v. GOVERNMENT EMPLOYEES INSURANCE COMPANY.

Supreme Court of Pennsylvania.

Argued Oct. 27, 1982.

Decided Dec. 30, 1982.

Jerome M. Dubyn, Philadelphia, for appellant.

David M. McCormick, Philadelphia, Richard C. Angino, Harrisburg, for appellee.

Charles T. Roessing, Philadelphia, for Pa. Def. Institute.

Before O'BRIEN, C.J., and ROBERTS, NIX, LARSEN, FLAHERTY and McDERMOTT, JJ.

OPINION OF THE COURT

ROBERTS, Justice.

Under Pennsylvania's Uninsured Motorist Coverage Law, Act of August 14, 1963, P.L. 909, § 1, as amended, 40 P.S. § 2000 (1971), all automobile insurance liability policies are required to include coverage for injuries to the insured which are caused by "uninsured" motorists. At issue on this appeal is whether a motorist who has the minimum amount of liability insurance required by Pennsylvania's financial responsibility law is nevertheless an "uninsured" motorist within the meaning of the statute whenever he causes an accident in which his insurance coverage is insufficient to indemnify the injured party for his losses. ¹

I

The essential facts are uncontroverted. Appellant Gus Davis and his spouse Clare Davis sustained injuries when their automobile collided head-on with an automobile owned and driven by Michael McFadden. ² McFadden, who admitted liability, was insured by Travelers Insurance Company under a liability policy of $35,000, an amount sufficient to meet the financial responsibility requirements contained in Pennsylvania's No Fault Act, Act of July 19, 1974, P.L. 489, 40 P.S. § 1009.104 et seq. Pursuant to a settlement, Travelers paid $3,863 to the Davises for the damage to their automobile, $6,670 to Clare Davis in full settlement of her personal injury claim, and $24,467 (the balance of the $35,000) to appellant Gus Davis in partial settlement of his personal injury claim, which alleges damages in excess of $100,000.

At the time of the accident, appellant was insured by appellee Government Employees Insurance Company (GEICO) under a policy which provided coverage for three separate vehicles. As required by law, appellant's policy included uninsured motorist coverage of $15,000 per person and $30,000 per accident for each vehicle. The GEICO policy defined "uninsured automobile" as

"an automobile with respect to the ownership, maintenance or use of which there is, in at least the amounts specified by the financial responsibility law of the state in which the insured automobile is principally garaged, no bodily injury liability bond or insurance policy applicable at the time of the accident with respect to any person or organization legally responsible for the use of such automobile, or with respect to which there is a bodily injury liability bond or insurance policy applicable at the time of the accident but the company writing the same denies coverage thereunder ..." ³

Appellant Gus Davis filed an uninsured motorist claim with appellee GEICO under the uninsured motorist provision of his own policy. Appellant's claim was based on the theory that, because his alleged damages ($100,000) exceeded his recovery from Travelers under the settlement agreement ($24,467), tortfeasor McFadden was an "uninsured" motorist. Appellant claimed that he was entitled to recover $20,533 from GEICO, the difference between the "stacked" value of his uninsured motorist coverage ($45,000), see State Farm Mutual Auto. Ins. Co. v. Williams, 481 Pa. 130, 392 A.2d 281 (1978), and his recovery from Travelers. GEICO denied coverage on the ground that under the policy's definition of "uninsured automobile" there was no uninsured motorist involved in the accident.

Appellant's uninsured motorist claim proceeded to arbitration pursuant to the arbitration clause in appellant's policy. ⁴ A majority of a panel of three arbitrators held that, because the tortfeasor maintained a policy of liability insurance in the minimum amount required by Pennsylvania law, appellant had not been injured by an uninsured motorist. Appellant filed a petition to vacate the arbitrators' award, alleging that the provision of the GEICO policy which defines uninsured automobile is contrary to the Uninsured Motorist Coverage Law. The Court of Common Pleas of Philadelphia denied appellant relief and the Superior Court affirmed. 296 Pa.Super. 198, 442 A.2d 727. We granted allowance of appeal, and now affirm. ⁵

II

Section 2000(a) of the Uninsured Motorist Coverage Law provides:

"No motor vehicle liability policy of insurance insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance or use of a motor vehicle shall be delivered or issued for delivery in this State with respect to any motor vehicle registered or principally garaged in this State, unless coverage is provided therein or supplemental thereto in limits for bodily injury or death as are fixed from time to time by the General Assembly in section 1421 of article XIV of 'The Vehicle Code,' act of April 29, 1959 (P.L. 58), under provisions approved by the Insurance Commissioner, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness or disease, including death resulting therefrom."

Appellant contends that the Legislature intended the statutory language "uninsured motor vehicles" to encompass "underinsured motor vehicles," and that the GEICO policy thus fails to provide the coverage mandated by law. We do not agree.

The Statutory Construction Act of 1972 mandates that "[w]ords and phrases shall be construed according to rules of grammar and according to their common and approved usage...." 1 Pa.C.S. § 1903(a). Notwithstanding appellant's assertion that "uninsured" is equivalent to "underinsured," the only common and approved meaning of the word "uninsured" is "having no insurance," whether the term applies to a house, a boat, a life, or, as here, a motor vehicle.

Appellant attempts to avoid the plain meaning of "uninsured" by arguing that the adoption of such a "literal" interpretation would frustrate the remedial objectives of the uninsured motorist law. While the uninsured motorist law is to be liberally construed to accomplish its stated objectives, see Harleysville Mut. Cas. Co. v. Blumling, 429 Pa. 389, 241 A.2d 112 (1968), it is inappropriate for this Court, under the guise of liberal construction, to enlarge the scope of the plain language of the uninsured motorist law by equating an uninsured motorist with one whose liability insurance meets statutory requirements but does not satisfy the injured party's claim. "When the words of a statute are free and clear from ambiguity, the letter of it is not to be disregarded under the pretext of pursuing its spirit." 1 Pa.C.S. § 1921(b). "Uninsured" simply does not mean "underinsured," and to hold otherwise would be to contravene the express judgment of the Legislature. ⁶

Our interpretation of the Uninsured Motorist Coverage Law is in accord with that of nearly every other jurisdiction which has considered the issue of the scope of uninsured motorist coverage. See, e.g., Wilbourn v. Allstate Ins. Co., 293 Ala. 466, 305 So.2d 372 (1974); Travelers Ins. Co. v. Bouzer, 39 Cal.App.3d 992, 114 Cal.Rptr. 651 (1974); Simonette v. Great Am. Ins. Co., 165 Conn. 466, 338 A.2d 453 (1973); Smiley v. Estate of Toney, 44 Ill.2d 127, 254 N.E.2d 440 (1969); Detrick v. Aetna Cas. & Sur. Co., 261 Iowa 1246, 158 N.W.2d 99 (1968); McMinn v. New Hampshire Ins. Co., 276 So.2d 682 (Miss.1973); DiLuzio v. Home Mut. Ins. Co., 289 N.W.2d 749 (Minn.1980); Brake v. MFA Mut. Ins. Co., 525 S.W.2d 109 (Mo.Ct.App.), cert. denied, 423 U.S. 894, 96 S.Ct. 192, 46 L.Ed.2d 126 (1975); Brack v. Middlesex Mut. Ins. Co., 118 N.H. 72, 382 A.2d 914 (1978) (per curiam); Tucker v. Peerless Ins. Co., 41 N.C.App. 302, 254 S.E.2d 656 (1979); Gorton v. Reliance Ins. Co., 77 N.J. 563, 391 A.2d 1219 (1978); Shelby Mut. Ins. Co. v. Smith, 45 Ohio St.2d 66, 341 N.E.2d 597 (1976); Lund v. Mission Ins. Co., 270 Or. 461, 528 P.2d 78 (1974) (en banc); Ziegelmayer v. Allstate Ins. Co., R.I., 403 A.2d 653 (1979); Strunk v. State Farm Auto. Ins. Co., 90 Wash.2d 210, 580 P.2d 622 (1978). See also Safeco Ins. Co. of America v. Wetherill, 622 F.2d 685 (3d Cir.1980) (applying Pennsylvania law). See generally Widiss, "A Guide to Uninsured Motorist Coverage," § 2.35(a) (Supp.1981) and Automobile Insurance: What Constitutes An "Uninsured" or "Underinsured" Vehicle or Motorist Within Uninsured Motorist Coverage, 26 A.L.R.3d 883 § 5 (Supp.1982) (citing cases). In each of these cases the court refused to equate "uninsured" with "underinsured," and we refuse to do so as well.

The cases from those jurisdictions which have allowed an injured party to recover under an uninsured motorist provision where his claims exceed his recovery from the responsible party's carrier do not support appellant's expansive interpretation of "uninsured." For example, in Porter v. Empire Fire and Marine Ins. Co., 106 Ariz. 274, 475 P.2d 258, mod. on other grounds, 106 Ariz. 345, 476 P.2d 155 (1970), which is often cited as the leading case permitting recovery, the injured party sought and received only the difference between the minimum insurance required by state law and his recovery from the tortfeasor's insurer. Similarly, in Palisbo v. Hawaiian Ins. Co., 57 Haw. 10, 547 P.2d 1350 (1975), and American Mutual Ins. Co. v. Commercial Union Ins. Co., 116 N.H. 210, 357 A.2d 873 (1976), the courts expressly refused to permit recovery of claimed damages in excess of the minimum amount specified in the state's financial responsibility law.

We recognize the "oft cited anomaly that those in the position of these claimants would find themselves in a better position were the tortfeasor's vehicle totally uninsured, rather than...