Erie Ins. Exchange v. Weryha

• Decision Date: 20 August 2007
• Docket Number: No. 1976 WDA 2006.,1976 WDA 2006.
• Citation: 931 A.2d 739
• Parties: ERIE INSURANCE EXCHANGE, Appellee v. David A. WERYHA, Rita S. Weryha, individually and as the Administratrix of the Estate of Timothy A. Weryha, Deceased and as the Parents and Natural Guardians of Steven A. Weryha and Samanthalyn M. Weryha; Alex Weryha and Heidi Weryha, Husband and Wife; and American Manufacturers Mutual Insurance Company, Appellants.
• Court: Pennsylvania Superior Court

931 A.2d 739

ERIE INSURANCE EXCHANGE, Appellee v. David A. WERYHA, Rita S. Weryha, individually and as the Administratrix of the Estate of Timothy A. Weryha, Deceased and as the Parents and Natural Guardians of Steven A. Weryha and Samanthalyn M. Weryha; Alex Weryha and Heidi Weryha, Husband and Wife; and American Manufacturers Mutual Insurance Company, Appellants.

No. 1976 WDA 2006.

Superior Court of Pennsylvania.

Argued June 26, 2007.

Filed August 20, 2007.

Thomas V. Myers, Erie, for appellants.

Craig R.F. Murphey, Erie, for appellee.

BEFORE: ORIE MELVIN, TAMILIA and JOHNSON, JJ.

OPINION BY TAMILIA, J.:

¶ 1 David A. Weryha and Rita S. Weryha appeal, both in their individual capacities and on behalf of their children, with Mrs. Weryha also acting in her capacity as an administratrix of decedent Timothy Weryha's estate, from the trial court's September 15, 2006, Order granting appellee Erie Insurance Exchange's (Erie) motion for summary judgment in this declaratory judgment action.

¶ 2 The background of this case is not in controversy. On June 12, 2001, Timothy Weryha was killed while attempting to cross the road in front of his residence in Erie County after being struck by a vehicle driven by Lindsay S. Bedrow. Mrs. Weryha, and two of her other children-Steven and Samanthalyn, regrettably witnessed the tragic accident. Subsequently, the Weryhas reached a settlement with Bedrow's insurance carrier. Mrs. Weryha was also able to settle her underinsured motorist claim under a policy issued by Erie.

¶ 3 When appellants submitted an underinsured motorist claim under Mr. Weryha's policy with Erie, however, he was notified coverage did not lie because Timothy was neither a named insured nor a "resident" as defined within Mr. Weryha's policy. Record, No. 6, Complaint for Declaratory Judgment, Exb. A, Pioneer Family Auto Insurance Policy, at p. 4. At the time of the accident, Mr. and Mrs. Weryha were separated and Mr. Weryha had moved in with his parents in Oil City— some 60 miles away from Erie.

¶ 4 On October 23, 2003, Erie initiated the underlying proceedings by filing a complaint seeking a declaration that Mr. Weryha was not eligible to recover underinsured motorist benefits for Timothy's death. Record, No. 6. On June 27, 2006, after a considerable period of inactivity in the case, Erie filed a motion for summary judgment and a brief in support thereof. The trial court carefully considered the issue of Timothy's residency and, subsequently, issued the Order now under consideration wherein it concluded Timothy did not reside with Mr. Weryha at the time of the accident and, therefore, was not covered under Mr. Weryha's policy. This timely appeal followed.

¶ 5 Appellants raise the following issues for our review:

1. Whether the trial court erred in finding the Weryha family is barred from recovering under David Weryha's policy because his son did not physically live with him at the time of his death and thus was not a resident as defined by the applicable insurance policy?

A. The terms "relative" and "resident" are ambiguous, vague and capable of being understood in more senses than one.

B. The definition of resident in Erie's policy is void because it impermissibly conflicts with the Motor Vehicle Financial Responsibility Law, 75 Pa.C.S.A. § 1701, et. seq.

C. Timothy Weryha was a resident of his father's "household" based on the significant and consistent amount of family time spent with his father and in his "household."

2. Whether the trial court committed an error of law in not finding that Timothy Weryha was an insured under the David A. Weryha policy because Timothy Weryha was an unmarried, unemancipated child under the age of 24, attending school full-time and living away from home?

3. Whether the trial court committed an error of law in finding that the plaintiff did not violate the defendant's reasonable expectations of receiving UIM coverage for his dependent minor children?

Appellants' brief at ii.

¶ 6 Our standard of review over an Order granting summary judgment requires us to determine whether the trial court abused its discretion or committed an error of law. Mee v. Safeco Ins. Co., 908 A.2d 344, 347 (Pa.Super.2006), citing Chenot v. A.P. Green Servs. Inc., 895 A.2d 55, 60-62 (Pa.Super.2006). Our scope of review is plenary. Id. at 346. In analyzing a trial court's grant of summary judgment, we apply the same rule of law employed by the trial court—namely, we review all of the evidence in the light most favorable to the non-moving party while resolving all doubts as to the existence of a genuine issue of material fact against the moving party. Id. at 346-347. We will only sustain a grant of summary judgment when it is clear no genuine issue of material fact exists such that the moving party is entitled to judgment as a matter of law. Id. at 347.

¶ 7 All parties agree that the heart of this dispute centers on the following language contained in Mr. Weryha's policy:

DEFINITIONS

. . .

• "relative" means a resident of your household who is:

1. a person related to you by blood, marriage or adoption, or

2. a ward or any other person under 21 years old in your care.

• "resident" means a person who physically lives with you in your household. Your unmarried, unemancipated children under age 24 attending school full-time, living away from home will be considered residents of your household.

. . .

OUR PROMISE

If Underinsured Motorists Coverage is indicated on the Declarations, we will pay damages for bodily injury that the law entitles you or your legal representative to recover from the owner or operator of an underinsured motor vehicle. . .

. . .

OTHERS WE PROTECT

1. Any relative.

. . .

Record, No. 6, Complaint for Declaratory Judgment, Exb. A, Erie Insurance Exchange Pioneer Family Auto Policy.

¶ 8 Erie Exchange, and the Defense Institute as amicus curiae, contend Timothy was not a "resident" of Mr. Weryha's home at the time of the fatal accident and, consequently, cannot be defined as a "relative" for purposes of underinsured motorist coverage under the policy. Appellants, and the Pennsylvania Trial Lawyers Association as amicus curiae, contend the trial court erred in finding Timothy was not a "relative" under Mr. Weryha's policy as a matter of contract interpretation, statute, and public policy.

¶ 9 The Weryhas first argue the terms "relative" and "resident" are ambiguous and, as a consequence, the terms must be construed in their favor. Appellants' brief at 10, citing Mohn v. American Cas. Co. of Reading, 458 Pa. 576, 326 A.2d 346, 351 (1974). The central tenet of their argument is that these terms do not spell out whether a "child of separated or divorced parents may be a resident of both parents' households." Id. at 11. The trial court accepted the Weryhas' argument and determined these terms were indeed ambiguous. Trial Court Opinion, Connelly, J., 9/15/06, at 8-9.

¶ 10 An insurance contract is ambiguous "if, and only if, it is reasonably or fairly susceptible of different constructions and is capable of being understood in more senses than one and is obscure in meaning through indefiniteness of expression or has a double meaning." Pappas v. UNUM Life Ins. Co. of Am., 856 A.2d 183, 187 (Pa.Super.2004), quoting Young v. Equitable Life Assurance Soc'y, 350 Pa.Super. 247, 504 A.2d 339, 341 (1986).

¶ 11 We do not find either the term "relative" or "resident" is ambiguous as a matter of law. The term "relative" refers to a blood relative or ward who is a "resident of [the insured's] household." Record, No. 6, Complaint for Declaratory Judgment, Exb. A. The term "resident" is, in turn, defined as one who "physically lives" in the insured's household. Id. The salient question then, which is apparent from the face of the litigants' briefs, is what constitutes physically living with another.

¶ 12 The question of whether one physically lives with another is a factually intensive inquiry and it requires the trial court to look at a host of factors in reaching a common-sense judgment. We do not find ambiguity in the phrase "physically lives" simply because the policy does not spell out every single factor a court should look at in making this determination. Further, the Weryhas do not set forth what factors they think should be considered; rather, they contend we should take a "qualitative" approach to determining whether Timothy physically lived with Mr. Weryha as opposed to a merely quantitative approach. See e.g., Appellants' reply brief at 3, citing Nationwide Mut. Ins. Co. v. Budd-Baldwin, 947 F.2d 1098 (3d Cir. 1991).

¶ 13 Erie, however, does not contend the policy language requires a quantitative analysis in conducting the inquiry; instead, Erie Exchange argues Timothy's contacts with Mr. Weryha's household are not of the quantity or the quality that would give rise to a finding of residency under the policy. Thus, we are not confronted with a situation where the parties are each advocating for a different construction of the policy language; hence, the language of the policy is unambiguous in this instance as a matter of law. See Pappas, supra at 187.

¶ 14 The Weryhas next argue the policy violates the Motor Vehicle Financial Responsibility Law¹ (MVFRL) by "contractually narrow[ing] the classes of individuals with the status of `insured'" in contravention to the definition of "insured" contained within the MVFRL. Appellants' brief at 13, citing Prudential Prop. & Cas. Ins. Co. v. Colbert, 572 Pa. 82, 813 A.2d 747 (2002). Specifically, the Weryhas contend the underinsured motorist policy limits the definition of "insured" by prohibiting a person with dual residences to be a named insured under the policy and, therefore, the policy definition conflicts with the MVFRL definition of "insured," which contains "no limitation ... of insured[s] from having dual residences." Appellants' brief at 13.

¶ 15 The MVFRL defines "insured" as follows:

(1) An individual...