Nationwide Mut. Ins. Co. v. Cummings

• Decision Date: 30 December 1994
• Citation: 438 Pa.Super. 586,652 A.2d 1338
• Parties: NATIONWIDE MUTUAL INSURANCE COMPANY, Appellee v. Joseph CUMMINGS, Appellant (Two Cases).
• Court: Pennsylvania Superior Court

Page 1338

652 A.2d 1338

438 Pa.Super. 586

NATIONWIDE MUTUAL INSURANCE COMPANY, Appellee v. Joseph CUMMINGS, Appellant (Two Cases).

Superior Court of Pennsylvania.

Argued Oct. 4, 1994.

Filed Dec. 30, 1994.

Nicholas S. Mattise, Clarks Greene, for appellant.

Lucille Marsh, Scranton, for appellee.

Before ROWLEY, President Judge, and KELLY and CERCONE, JJ.

KELLY, Judge:

In this opinion, we are called upon to determine whether a "non-permissive use" exclusion in an automobile insurance policy contravenes the legislative intent of the Motor Vehicle Financial Responsibility Law, and is against public policy, where the injured party is an uninsured passenger who has no knowledge of the fact he is occupying a stolen vehicle. We hold that the exclusion is valid and in accordance with public policy, and affirm the judgment entered by the trial court.

The pertinent facts and procedural history of this case are as follows. On May 17, 1987, appellant, who was uninsured and did not own a car, accepted a ride offered by one Kevin Sheare, also uninsured. Sheare was driving a 1974 Buick Apollo, which he had previously stolen from its owner, Ms. Theresa Cook. At that time, Ms. Cook was the named insured under a policy issued to her by appellee, Nationwide Mutual Insurance Company. Sheare represented to appellant that the automobile was his (Sheare's) aunt's automobile. Because appellant needed transportation to a certain location, he accepted the ride, and promptly fell asleep. (Trial Court Finding of Fact No. 4, November 24, 1993, at 2).

The auto was subsequently involved in a one vehicle accident. As a result of the accident, appellant suffered numerous physical injuries. Appellant collected uninsured motorist benefits under a policy carried by his sister. (Trial Court Finding of Fact No. 8, November 24, 1993, at 3). The owner-insured, Ms. Cook, never granted Sheare permission to drive her vehicle, nor appellant permission to occupy it as a passenger. (Trial Court Finding of Fact No. 7, November 24, 1993, at 3).

Appellant subsequently submitted a claim to appellee for uninsured motorist benefits under the policy covering the 1974 Buick Apollo owned by the named insured, Theresa Cook. Appellant denied the claim on the basis that the policy excluded coverage for use of the vehicle without the owner's permission. (Trial Court Finding of Fact No. 9, November 24, 1993, at 3).

The underlying action was commenced by appellee's complaint in equity seeking a declaratory judgment concerning coverage under Ms. Cook's policy. Following discovery, the parties, by stipulation, submitted the action for decision. On November 24, 1993, the trial court found in favor of appellee, and entered a decree nisi in favor of appellee and as against appellant in accordance with its decision. On December 30, 1993, following the filing of exceptions by the parties, the court entered an order denying appellant's exceptions, and amended its November 24, 1993 decree to read "final decree". On March 18, 1994, judgment was entered for appellee. This timely appeal followed. ¹

On appeal, appellant raises the following issues for our review:

1. WHETHER THE NON-PERMISSIVE USE EXCLUSION FOR UNINSURED MOTORIST BENEFITS IN A POLICY OF AUTOMOBILE INSURANCE IS INVALID AS CONTRARY TO LEGISLATIVE INTENT AND/OR PUBLIC POLICY.

2. WHETHER APPELLANT, AS A PASSENGER IN A STOLEN AUTOMOBILE INSURED BY APPELLEE, CAN PROPERLY BE CONSIDERED A NON-PERMISSIVE USER FOR PURPOSES OF THE POLICY EXCLUSION.

Appellant's Brief at 4.

Appellant claims the "non-permissive use" exclusion for uninsured motorists benefits in the policy in question is invalid as against the legislature's intent and public policy as expressed in the Motor Vehicle Financial Responsibility Law, 75 Pa.C.S.A. § 1701 et seq. ² (hereinafter "MVFRL"). Specifically, appellant asserts that there is no provision in the MVFRL that expressly authorizes exclusion of this coverage on the basis of conversion, or lack of permissive use. Appellant points out that § 1718(b) ³ (first party benefits) and § 1752(b) ⁴ (assigned claims plan) of the MVFRL expressly preclude "knowing converters" of motor vehicles from coverage and/or benefits. Appellant argues that because the legislature failed to include a limitation or exclusion in one provision, but expressly provided for it in another, the absence of a "non-permissive use" exclusion provision from the uninsured motorists section of the MVFRL signifies a different legislative intent, i.e., that exclusions from coverage based on "knowing conversion" or "non-permissive use" of an auto do not apply to cases involving uninsured victims of motor vehicle accidents. Because he was an innocent and unknowing passenger in a stolen vehicle, appellant concludes that excluding coverage here would contravene the legislature's intent and public policy.

Appellee, on the other hand, asserts that the policy exclusion is clear and that none of the applicable provisions of the MVFRL prohibit an insurer from providing coverage only where the vehicle is used with the permission of the owner. Based upon the reasoning below, we agree.

Initially, we note our standard of review of a trial court's decision in a declaratory judgment ⁵ action is narrow. Because declaratory judgment actions arise in equity, we will set aside the judgment of the trial court only where it is not supported by adequate evidence. St. Paul Mercury Ins. Co. v. Corbett, 428 Pa.Super. 54, 630 A.2d 28 (1993) (en banc ), appeal discontinued, 535 Pa. 658, 634 A.2d 221 (1993) (citing Palladino v. Dunn, 361 Pa.Super. 99, 103, 521 A.2d 946, 948 (1987)). The test is not whether we would have reached the same result on the evidence presented, but whether the trial court's conclusion can reasonably be drawn from the evidence. See Federal Kemper Ins. Co. v. Neary, 366 Pa.Super. 135, 139, 530 A.2d 929, 930-31 (1987).

The MVFRL repealed and replaced the No-Fault Motor Vehicle Insurance Act, 40 P.S. § 1009.101 et seq. (hereinafter "No-Fault Act"), effective October 1, 1984. ⁶ The provisions for uninsured motorists are contained in Subchapter C, § 1731-1736. At the time of the accident, the MVFRL required all motor vehicle insurance policies to provide for uninsured motorist coverage. ⁷ However, uninsured motorist coverage remained limited to those persons who are legally entitled to recover damages:

Uninsured motorist coverage shall provide protection for persons who suffer injury arising out of the maintenance or use of a motor vehicle and are legally entitled to recover damages therefor from owners or operators of uninsured motor vehicles.

75 Pa.C.S.A. § 1731(b) (emphasis added).

Appellant maintains that because the legislature did not include a provision in Subchapter C of the MVFRL expressly providing for either "knowing converter" or "non-permissive user" exclusions, the legislature intended that such clauses should not apply to uninsured motorists like himself. Thus, appellant concludes that the "non-permissive use" exclusion in Ms. Cook's policy which operates to deny him coverage is invalid as against legislative intent and public policy. We disagree.

It is well-settled that the interpretation of an insurance policy is a question of law for the court. Lambert v. McClure, 407 Pa.Super. 257, 261, 595 A.2d 629, 631 (1991); Geisler v. Motorists Mutual Ins. Co., 382 Pa.Super. 622, 626, 556 A.2d 391, 393 (1989). Further,

where the language of an insurance contract is clear and unambiguous, a court is required to give effect to that language. Standard Venetian Blind Co. v. American Empire Insurance Co., 503 Pa. 300, 305, 469 A.2d 563, 566 (1983). A court may not "rewrite" an insurance contract, or construe clear and unambiguous language to mean other than what it says. Guardian Life Ins. Co. v. Zerance, 505 Pa. 345, 353, 479 A.2d 949, 953 (1984); Patterson v. Reliance Ins. Companies, 332 Pa.Super. 592, 595, 481 A.2d 947, 949 (1984).... Such a provision will only be avoided if it violates public policy. Tallman v. Aetna Casualty and Surety Co., 372 Pa.Super. 593, 595, 539 A.2d 1354, 1355 (1988).

Jeffrey v. Erie Ins. Exchange, 423 Pa.Super. 483, 489-90, 621 A.2d 635, 638 (1993) (en banc ), appeal denied, 537 Pa. 651, 644 A.2d 736 (1994), reconsideration denied, (April 25, 1994) (emphasis provided).

Appellant does not allege that the language of the "non-permissive use" exclusion is unclear or ambiguous. Rather, appellant charges that the exclusion itself is void as against the legislature's intent as manifested in the MVFRL, and therefore in contravention of public policy. ⁸ Appellant avers that the MVFRL, as a remedial statute, is to be liberally construed, so as to obtain the legislative intent to protect the public from loss caused by negligence. Thus, by construing the MVFRL liberally, appellant concludes that the "non-permissive use" exclusion, which denies him benefits under Ms. Cook's policy is invalid, thereby entitling him to uninsured motorist benefits. We disagree.

The public policy of the Commonwealth with regard to the recovery of damages by uninsured motorists when injured as a result of the use of an insured motor vehicle is expressed in the MVFRL. Two major considerations that prompted the repeal of the No-Fault Act and the enactment of the MVFRL were the escalating costs of purchasing motor vehicle insurance and the increasing numbers of uninsured motorists. Jeffrey v. Erie Ins. Exchange, supra at 502, 621 A.2d at 645 (citing Wolgemuth v. Harleysville Mut. Ins. Co., 370 Pa.Super. 51, 63, 535 A.2d 1145, 1151 (1988) (en banc ), allocatur denied, 520 Pa. 590, 551 A.2d 216 (1989); Lambert v. McClure, supra, 407 Pa.Super. at 262, 595 A.2d at 631 (same). In order to fulfill its purposes, the MVFRL established a recovery scheme that sets out minimum amounts of coverage that must be offered to the insured. See Lambert v. McClure, supra at 262, 595 A.2d at 631. However, the method by which an injured party...