Lambert v. McClure

• Decision Date: 21 August 1991
• Citation: 407 Pa.Super. 257,595 A.2d 629
• Parties: Wendy A. LAMBERT, Administratrix of the Estate of Timothy D. Lambert, Deceased v. Darrell Dean McCLURE and Donegal Mutual Insurance Company. Appeal of DONEGAL MUTUAL INSURANCE COMPANY.
• Court: Pennsylvania Superior Court

Page 629

595 A.2d 629

407 Pa.Super. 257

Wendy A. LAMBERT, Administratrix of the Estate of Timothy D Lambert, Deceased v. Darrell Dean McCLURE and Donegal Mutual Insurance Company Appeal of DONEGAL MUTUAL INSURANCE COMPANY.

Superior Court of Pennsylvania.

Argued March 21, 1991.

Filed Aug. 21, 1991.

Richard A. Lanzillo, Erie, for appellant.

Henry W. Gent, III, Franklin, for Lambert, appellee.

Before ROWLEY, President Judge, and WIEAND, and HOFFMAN, JJ.

HOFFMAN, Judge:

This appeal is from a July 31, 1990 order granting the motion of appellee, Wendy Lambert, for judgment on the pleadings. Appellant, Donegal Mutual Insurance Co. ("Donegal"), contends that the trial court erred in holding that the liability limitation provision in appellee's decedent's insurance policy was contrary to the public policy of the Pennsylvania Motor Vehicle Financial Responsibility Law ("MVFRL"), 75 Pa.C.S.A. §§ 1701-1798.4, and, thus, was void. ¹ For the following reasons, we affirm.

This case arises from a single vehicle automobile accident that occurred on July 15, 1988 in Mineral Township, Venango County. At the time of the accident, Darrell Dean McClure was operating the vehicle, and appellee's decedent, Timothy Lambert ("Lambert"), was a passenger. Lambert was killed when McClure lost control of the vehicle causing it to leave the roadway. The vehicle was owned by Lambert and insured by Donegal. Under the insurance policy, Donegal provides $100,000 liability coverage for one person injured in a single accident. If, however, that one person is the insured or a family member, an Endorsement to the policy limits the liability coverage to the statutory minimum ($15,000). On October 11, 1988, appellee filed a complaint against McClure and Donegal. The first two counts were directed at McClure, and the third count was directed at Donegal. In the third count, appellee alleged that because McClure was an uninsured motorist, Donegal was liable to appellee under the terms of Lambert's insurance policy in the amount of $100,000. Donegal responded that its maximum potential liability was $15,000 due to the specific limitation set forth in the policy at Endorsement No. PP0151. On August 16, 1989, with the consent of Donegal and McClure, appellee filed an amended complaint. Thereafter, on September 22, appellee filed a motion for judgment on the pleadings with respect to the third count solely against Donegal. On October 2, Donegal filed a cross-motion for judgment on the pleadings against appellee with respect to the third count of the complaint. Subsequently, appellee, Donegal, and McClure entered into a stipulation, filed on November 21, 1989, in which they agreed to amend appellee's complaint and Donegal's answer. On July 31, 1990, the court granted appellee's motion for judgment on the pleadings and denied appellant's cross-motion. ² This timely appeal followed.

Our review of the trial court's order granting judgment on the pleadings is guided by the following standard:

[A] motion for judgment on the pleadings may be granted in cases which are so free from doubt that a trial would clearly be a fruitless exercise. Such a motion is in the nature of a demurrer; all of the opposing party's well pleaded allegations are viewed as true but only those facts specifically admitted by him may be considered against him.

Gallo v. J.C. Penney Cas. Ins. Co., 328 Pa.Super. 267, 270, 476 A.2d 1322, 1324 (1984) (citations omitted). See also Pa.R.Civ.P. 1034. Furthermore, in conducting this inquiry, the court's consideration is confined to the pleadings and other relevant documents; no affidavits, depositions or briefs may be considered. See Gallo v. J.C. Penney Cas. Ins. Co., supra (citations omitted). Finally, we note that in cases turning upon the construction of a written agreement, the granting of a motion for judgment on the pleadings may be particularly appropriate. See id. at 270-71, 476 A.2d at 1324 (citation omitted).

In granting appellee's motion, the trial court found that Endorsement No. PP0151 was ineffective because it was contrary to the public policy embodied in the MVFRL. Appellant contends that the court's construction of the policy and the MVFRL was erroneous. Specifically, appellant claims that the liability limitation provision is consistent with §§ 1791 and 1792 of the MVFRL and, therefore, is not void. Thus, appellant claims that appellee is entitled to recover a maximum amount of $15,000.

It is well-settled that the interpretation of an insurance policy is a question of law for the Court. See Geisler v. Motorists Mut. Ins. Co., 382 Pa.Super. 622, 626, 556 A.2d 391, 393 (1989) (citations omitted); Duffy v. Nationwide Ins. Co., 374 Pa.Super. 55, 57, 542 A.2d 144, 145 (1988) (citation omitted). We are mindful to construe policy clauses providing coverage "in a manner which affords the greatest possible protection to the insured.... The insured's reasonable expectations are the focal point in reading the contract language." Geisler v. Motorists Mut. Ins. Co., supra. With these principles in mind, we turn to the policy at issue.

The insurance policy issued by appellant provides liability coverage in the amount of $100,000 for each accident. An amendment to the policy, however, includes Endorsement No. PP0151 which provides as follows:

We do not provide Liability Coverage for any person for "bodily injury" to you or any "family member" to the extent that the limits of liability for this coverage exceed the limits of liability required by the Pennsylvania Motor Vehicle Financial Responsibility Law of 1984.

See Complaint, Exhibit A, Form No. PP0151. After looking to the relevant provision of the MVFRL, the effect of this policy provision becomes clear. ³ The MVFRL requires a minimum liability of $15,000 for an accident causing injury to one person. Id. § 1702. Thus, the Endorsement, if it is enforceable, reduces the available coverage in this case to $15,000. The question we now must decide is whether the provision is contrary to the MVFRL.

The MVFRL must be construed liberally to effect its objects and promote justice. See 1 Pa.C.S.A. § 1928(c); Wolgemuth v. Harleysville Mut. Ins. Co., 370 Pa.Super. 51, 62, 535 A.2d 1145, 1151 (1988) (citation omitted) (en banc), alloc. denied, 520 Pa. 590, 551 A.2d 216 (1989). Moreover, with regard to the interpretation of a statute, legislative intent controls. See 1 Pa.C.S.A. § 1921. "When the words of a statute are clear and free from all ambiguity, the letter of it is not to be disregarded under the pretext of pursuing its spirit." Id. § 1921(b). One purpose of the MVFRL is to reduce the escalating costs of purchasing motor vehicle insurance. See Wolgemuth v. Harleysville Mut. Ins. Co., supra 370 Pa.Super. at 63, 535 A.2d at 1151. The statute also attempts to address the problems caused by the increasingly high numbers of uninsured motorists. See id. To reach these objectives, the statute explicitly sets out the minimum amounts of coverage that must be offered to the insured. See Tallman v. Aetna Cas. and Sur. Co., 372 Pa.Super. 593, 597, 539 A.2d 1354, 1356 (1988) (citation omitted).

The MVFRL requires that certain liability coverages be made available to an insured:

[A]n insurer issuing a policy of bodily injury liability coverage pursuant to this chapter shall make available for purchase higher limits of uninsured, underinsured and bodily injury liability coverages up to at least $100,000 because of injury to one person in any one accident....

Id. § 1792 (emphasis added). Furthermore, regarding adequate notice of these coverage options to an insured, the MVFRL provides that

[i]t shall be presumed that the insured has been advised of the benefits and limits available under this chapter provided the following notice in bold print of at least ten-point type is given to the applicant at the time of application for original coverage or at the time of the first renewal after October 1, 1984, and no other notice or rejection shall be required....

Id. § 1791. Section 1791 then sets out the "Important Notice," which would inform potential insureds of, inter alia, (1) the insurance company's legal responsibility "to make available for purchase the following benefits" for the insured and the insured's family; and (2) the amounts of those benefits. Id.

Here, a careful review of the pleadings reveals that appellant never made the insured aware that he had an option to purchase more than $15,000 for bodily injury to family members or that they offered such coverage. ⁴ Furthermore, appellant did not allege that it gave Lambert the "Important Notice" of § 1791 or any other adequate notice of the benefits and limits that were available to him. See id. Indeed, in a stipulation with appellee that amended the pleadings, appellant directly rebutted the presumption in § 1791 by admitting that,

[s]ince 1986, Endorsement No. PP0151 has been automatically issued by the Defendant, Donegal Mutual Insurance Company as part of each personal motor vehicle insurance policy which it issues in the Commonwealth of Pennsylvania.

Stipulation as to Amendment of Pleadings, filed November 21, 1989. ⁵ The effect of this stipulation was to amend appellee's complaint and appellant's answer and new matter to include the averment and admission. See id. In light of these undisputed facts, we find that appellant did not "make available" to the insured those benefits required by the MVFRL.

Appellant nevertheless suggests that Lambert was free to purchase other accident benefits, and, in fact, it would have provided Lambert greater benefits if he had sought them. Thus, argues appellant, it complied with the MVFRL. We cannot agree. In our construction of the policy, we must focus on Lambert's reasonable expectations. See Geisler v. Motorists Mut. Ins. Co., supra. Here, appellant's admitted practice of automatically attaching Endorsement No. PP0151 to its insurance policies without explaining the coverage...