Koenig v. Progressive Ins. Co.

• Decision Date: 26 November 1991
• Citation: 410 Pa.Super. 232,599 A.2d 690
• Parties: John E. KOENIG and Ellen I. Koenig, His Wife, Appellants, v. PROGRESSIVE INSURANCE COMPANY and Walter G. Foltz, Appellees.
• Court: Pennsylvania Superior Court

Page 690

599 A.2d 690

410 Pa.Super. 232

John E. KOENIG and Ellen I. Koenig, His Wife, Appellants, v. PROGRESSIVE INSURANCE COMPANY and Walter G. Foltz, Appellees.

Superior Court of Pennsylvania.

Argued Sept. 11, 1991.

Decided Nov. 26, 1991.

[410 Pa.Super. 234] James R. Schadel, Pittsburgh, for appellants.

Jeffrey A. Ramaley, Pittsburgh, for Progressive Ins. Co., appellee.

Before CAVANAUGH, BECK and KELLY, JJ.

CAVANAUGH, Judge:

Two issues are presented before us on appeal, one of contract interpretation and one of statutory interpretation. The first issue we must address is whether under an automobile insurance policy providing "per person" coverage for bodily injury as well as a higher "per accident" liability limit, an insurer that has exhausted its "per person" liability to a person sustaining bodily injury in an automobile accident is obligated to make additional payments within the "per accident" limit for loss of consortium by the victim's spouse. The second issue we must address, assuming we find that no such obligation exists, is whether such an insurance contract would be inconsistent with the Motor Vehicle Financial Responsibility Act, 75 Pa.C.S.A. § 1702 et seq. We find that the insurance policy treats loss of consortium as arising out of the car accident victim's claim, and hence total damages are subject to the lower "per person" limitation. We also find that such an insurance contract does not violate the Motor Vehicle Financial Responsibility Act. We affirm.

The facts are as follows: on March 25, 1989, co-appellant John Koenig was seriously injured in an automobile collision when the vehicle he was operating was struck by a vehicle operated by co-appellee Walter Foltz. The automobile Mr. Foltz drove is insured by co-appellee Progressive Insurance Company under a policy issued to his wife, Tina Foltz, covering the car being operated at the time of the accident. It is admitted for the purpose of this appeal that Mr. Foltz was insured under the policy and was negligent in the operation of automobile giving rise to the accident. John Koenig sued both Mr. Foltz and Progressive Insurance Company for his injuries. John Koenig's spouse, co-appellant Ellen Koenig, sued both Foltz and Progressive for loss of consortium, including the loss of services and affection.

The Progressive insurance policy purchased for the Foltz automobile contains coverage limits of $15,000 "per person" and $30,000 "per occurrence." Progressive has offered $15,000 to the Koenigs in full and complete settlement of their claim. The Koenigs refused, asserting that they are eligible for the full $30,000. The case is on appeal from the trial court's order granting Progressive's Motion for Judgment on the Pleadings. The court agreed with Progressive that Ms. Koenig's consortium claim was subject to the "per person" limit in its policy. It held that Progressive was not obligated to pay Ms. Koenig any damages in addition to those it may be obligated to pay her husband.

Appellants first claim that the trial court, in interpreting the insurance contract, disregarded the development of the loss of consortium claim. In Pennsylvania, the loss of consortium has developed from being merely a derivative claim to being a separate and independent injury suffered by the spouse of an injured party for which separate recovery may be had. Appellants assert there is "inherent ambiguity" in the insurance policy. Accordingly, since "[w]here a provision of a[n insurance] policy is ambiguous, the policy provision is to be construed in favor of the insured and against the insurer, the drafter of the agreement," Standard Venetian Blind Company v. American Empire Insurance Company, 503 Pa. 300, 305, 469 A.2d 563, 566 (1983), appellants call on us to interpret the policy in light of the development of the consortium tort.

The principles governing the interpretation of insurance contracts in Pennsylvania are well settled. The goal of interpreting an insurance contract is to ascertain the intent of the parties as manifested by the language of the written instrument. See Standard Venetian Blind, id. at 305, 469 A.2d at 566; Mohn v. American Casualty Co. of Reading, 458 Pa. 576, 586, 326 A.2d 346, 351 (1974). The reasonable expectations of the insured are the focal point in reading the contract language. See Collister v. Nationwide Life Insurance Co., 479 Pa. 579, 594, 388 A.2d 1346, 1353 (1978); Winters v. Erie Insurance Group, 367 Pa.Super. 253, 257-58, 532 A.2d 885 887 (1987). Where the language of the contract is clear and unambiguous, a court is required to give effect to that language. See Standard Venetian Blind, id. 503 Pa. at 305, 469 A.2d at 566; Pennsylvania Manufacturers' Ass'n. Insurance Co. v. Aetna Casualty & Surety Co., 426 Pa. 453, 457, 233 A.2d 548, 551 (1967). "[The] clear meaning of language cannot be ignored by the judiciary." Winters, id. 367 Pa.Super. at 257-258, 532 A.2d at 887 (citing Guardian Life Insurance Co. v. Zerance, 505 Pa. 345, 353, 479 A.2d 949, 953 (1984)). Where the language of a contract is ambiguous, the insured receives the benefit of the doubt, and the language at issue is interpreted in his favor. See D'Allessandro v. Durham Life Insurance Co., 503 Pa. 33, 37, 467 A.2d 1303, 1307 (1983); Winters, id. 367 Pa.Super. at 257-258, 532 A.2d at 887; Standard Venetian Blind, id. 503 Pa. at 305, 469 A.2d at 566. Language in an insurance policy should be given its ordinary meaning, unless it is clear that some other meaning was intended by the parties. Winters, id. 367 Pa.Super. at 257-258, 532 A.2d at 887. Sparler v. Fireman's Insurance Co., 360 Pa.Super. 597, 607 n. 1, 521 A.2d 433, 438 n. 1 (1987). "The policy, like every other contract, must be read in its entirety and the intent gathered from a consideration of the entire instrument." Smith v. Cassida, 403 Pa. 404, 408, 169 A.2d 539, 541 (1961); see also Newman v. Massachusetts Bonding & Ins. Co., 361 Pa. 587, 591, 65 A.2d 417, 419 (1949).

Progressive's insurance policy states in pertinent part:

LIMITS OF LIABILITY

The limits of liability shown in the Declarations apply subject to the following:

(1) The bodily injury liability limit for "each person" is the maximum we will pay as damages for bodily injury, including damages for care and loss of services, to one person in one occurrence.

(2) Subject to the bodily injury liability limit for "each person," the bodily injury liability limit for "each occurrence" is the maximum we will pay as damages for bodily injury, including damages for care and loss of services, to two or more persons in one occurrence.

(3) The property damage liability limit for "each occurrence" is the maximum we will pay for all damages to property, including loss of its use, in one occurrence. We will pay no more than these maximums regardless of the number of vehicles described in the Declarations, insured persons, claims, claimants or policies, or vehicles involved in the occurrence. Any amount payable under this coverage to or for an injured person will be reduced by any payment made to that person under the Uninsured Motorists Coverage in this policy. (Emphasis in original policy). ¹

We have examined the language of the contract in its entirety, and after giving each word its ordinary meaning, we find appellants' contractual arguments without merit. The language of the policy makes unambiguously clear that liability is limited to damages flowing from an individual's bodily injury. As made clear by the description of the liability coverage at the beginning of the policy, the policy pays out only when the insured becomes legally liable for automobile-related bodily injury or property damage. As Part I, Coverage section A states:

We will pay for damages for which an insured person is legally liable because of bodily injury or property damage resulting from the ownership, maintenance or use, including loading and unloading, of a car or utility trailer. (Emphasis in boldface is policy's, emphasis underlined is court's). ²

The Limits of Liability section (text recounted in full supra ) likewise divides when the policy will pay out into when the insured incurs bodily injury damages (see subsection 1 & 2) and property damages (see subsection 3). ³ The policy's "bodily injury liability limit" is the maximum the policy will pay for "bodily injury" "to one person in one occurrence." ⁴ Although this section provides that "damages for care and loss of services" are covered, such damages are also subject to the "maximum that we will pay" for each person. The words of the policy therefore make unequivocally clear that all liability sustained from each individual's bodily injury in an automobile accident is subject to a ceiling. The proper ceiling in this case is the $15,000 per person limit and not the $30,000 per occurrence limit. ⁵ Since we find the insurance policy unambiguous, we cannot, even if so inclined, interpret the policy in light of the development of the tort of loss of consortium. ⁶

Pennsylvania courts have consistently interpreted almost exactly the same contractual language in other policies in this fashion. ⁷ The language in the insurance policy appears to have tracked the language in precedent which favors the insurance company's position. In Smith v. Cassida, 403 Pa. 404, 169 A.2d 539 (1961), our Supreme Court was presented with a case that involved a claim by the husband of an injured spouse to receive medical care costs and damages for loss of services from Defendant's insurance company. The injured wife had previously received $10,000 in full settlement of her judgment, and the policy had a per person limit of $10,000 and a per occurrence limit of $20,000. The company offered the husband a settlement ($500) for his injuries and damage to the automobile, but refused to offer him anything based on his consortium claim.

The policy in that case contained the following language:

4. Limits of Liability

Coverage C(2): The...