Quinney v. American Modern Home Ins. Co.

• Decision Date: 04 May 2001
• Docket Number: No. CIV.A. 3:CV-00-0571.,CIV.A. 3:CV-00-0571.
• Parties: William A. QUINNEY, et al., Plaintiffs, v. AMERICAN MODERN HOME INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — Middle District of Pennsylvania

145 F.Supp.2d 603

William A. QUINNEY, et al., Plaintiffs, v. AMERICAN MODERN HOME INSURANCE COMPANY, Defendant.

No. CIV.A. 3:CV-00-0571.

United States District Court, M.D. Pennsylvania.

May 4, 2001.

COPYRIGHT MATERIAL OMITTED

Robert J. Powell, Stephen A. Seach, Law Offices of Robert J. Powell, West Hazleton, PA, for Plaintiffs.

Eugene A. Luciw, Hecker, Brown, Sherry & Johnson, Bethlehem, PA, for Defendant.

MEMORANDUM

CAPUTO, District Judge.

This matter is before me on the Plaintiffs' Motion to Dismiss Defendant's Counterclaim (Doc. 5). It presents a question of the meaning of language in the Under-insured Motorists Coverage portion of the policy.

William A. Quinney purchased what is known as the Elite Collector Policy from the Defendant. It was to cover Mr. Quinney's collector cars, a 1978 Dodge Magnum and a 1966 Plymouth Barracuda. Mr. Quinney had another vehicle, a 1993 Ford Escort, which he used regularly and which was insured by a company other than the defendant. Mr. Quinney, as a part of the policy with Defendants, agreed that the collector vehicles would not be used regularly, but rather on a limited basis such as exhibitions, club activities, parades, and occasional pleasure driving. He further agreed the vehicles would be kept in a locked garage at night.

Tragically, Mr. Quinney's son, Matthew Allen Quinney, age 15, was killed on May 2, 1999, while riding as a passenger in a car owned by Sylvia Miller and driven by Michael Miller. The Millers are not related to the Quinneys, and the car in which Matthew was riding was insured by Ms. Miller with State Farm Insurance Company. Plaintiff recovered from State Farm and from his carrier on his regular use vehicle, Erie Insurance Group, under the underinsured motorist coverage provision. Plaintiff seeks underinsured motorist reimbursement from Defendant, and has filed a declaratory judgment action seeking a declaration of coverage. The Defendant has filed an answer and counterclaim, the latter of which seeks a declaration that the sought-after underinsured motorist coverage is not available under the policy issued by the Defendant. Defendant also argues, in the alternative, that the recovery from it is limited to $133,000.

I hold that the policy by the Defendant does provide underinsured motorist coverage in the full amount of $200,000 in the circumstances here present, and therefore the motion will be granted.

STANDARD OF REVIEW

Federal Rule of Civil Procedure 12(b)(6) states that a motion to dismiss may be granted for failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). For the purposes of the motion to dismiss, the court takes as true all well-pleaded allegations in plaintiffs' complaint and construes all reasonable inferences in the pleader's favor. Menkowitz v. Pottstown Mem'l Med. Ctr., 154 F.3d 113 (3rd Cir.1998). The burden is on the moving party to prove that no claim exists. See In re Corestates Trust Fee Litig., 837 F.Supp. 104 (E.D.Pa.1993), aff'd, 39 F.3d 61 (3d Cir.1994). A complaint should not be dismissed merely because plaintiff's allegations do not support the legal theory on which he intends to proceed. Bowers v. Hardwick, 478 U.S. 186, 202, 106 S.Ct. 2841, 2849, 92 L.Ed.2d 140 (1986). The court has a duty to examine the complaint to determine if the allegations provide for relief on any possible theory. Id. A complaint should only be dismissed for failure to state a claim if it appears beyond doubt that plaintiff can prove no set of facts in support of his claim which would entitle him to relief. Conley v. Gibson, 355 U.S. 41, 45, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957).

DISCUSSION

A. Count I of Counterclaim

This controversy centers around the language of the policy provisions entitled "Underinsured Motorist Coverage Pennsylvania Non-Stacked. The provision provides that Defendant will pay compensatory damages which an "insured" is legally entitled to recover from the owner or operator of an "underinsured motor vehicle" because of bodily injury;

1. Sustained by an "insured"; and

2. Caused by an "accident."

The provision defines an insured as follows:

"`Insured' as used in this endorsement means:

1. You or any "family member";

2. Any other person "occupying" "your covered auto".

3. Any person for damages that person is entitled to recover because of "bodily injury" to which this coverage applies sustained by a person described in 1. or 2. above."

The Defendant argues that this language must be read so as to require that the insured is occupying the vehicle, a collector car, at the time of the accident. The Defendant bolsters its argument by suggesting that this interpretation is the obvious intent of the parties, both because of the limitations on the use of the collector cars and the low premium component ($6.00 for 2 collector cars versus $70.00 for one regular use vehicle) for the underinsured motorist coverage. The defendant argues that the latter factor supports the proposition that William Quinney could not have had a reasonable expectation that underinsured motorist coverage extended beyond an accident involving an insured occupying one of the subject collector cars. See St. Paul Mercury Ins. Co. v. Corbett, 428 Pa.Super. 54, 630 A.2d 28 (1993).

The Defendant relies heavily on the Corbett case, and asserts its governance in this case. In Corbett, Mr. Corbett was injured by a hit and run driver while operating a vehicle owned by his employer. He collected on the underinsured/uninsured coverage under his employer's policy, his mother's policy (he resided with his mother), and a personal policy issued to his wife who also resided in the household. Corbett also had a special antique car policy with St. Paul which covered an antique car and which provided $50,000.00 in underinsured/uninsured motorist benefits. On the issue of coverage, a divided Pennsylvania Superior Court held that virtually the same language, structure and punctuation existent here meant that the coverage was restricted to the "insured, his family members, or any other person occupying the "covered auto"; the antique vehicle." Id. at 31. The court said further that [c]overage under this policy is not independent of any connection with the "covered auto." Id. The court amplified its holding by noting that Mr. Corbett could not have reasonably expected underinsured/uninsured motorist coverage beyond the covered auto because of his agreed limited use of the covered auto and the low premium component ($6.00 for the antique car versus $102.00 for the regular use policy) attributed to the underinsured/uninsured coverage.

Defendant concludes with the reminder that when the highest state appellate court has not addressed an issue, a federal court, in predicting what that highest appellate court would do, should afford "considerable weight" to the decision of an intermediate appellate court. Sprague, Levinson & Thall v. Advest, Inc., 623 F.Supp. 11, 14 (E.D.Pa.1985); see also Mosley v. Wilson, 102 F.3d 85, 92 (3d Cir.1996).

My review of the language of the policy here at issue leads me to conclude that the underinsured motorist coverage exists.

The law applicable to the interpretation of insurance policies is the same as that which applies to contracts. Contracts mean what the parties intend. Steuart v. McChesney, 498 Pa. 45, 48-49, 444 A.2d 659, 661 (1982); see also Salant v. Fox, 271 F. 449, 451 (3d Cir.1921) ("The cardinal rule in every case is to ascertain the intention of the parties. The law presumes that the parties understood the import of their contract and that they had the intention which its terms express."). The exercise is to determine the intention of the parties as manifested by the language of the contract. Koenig v. Progressive Insurance Co., 410 Pa.Super. 232, 236, 599 A.2d 690, 691-2 (1991). My analysis of the insurance contract's language is as follows.

The policy provision entitled "Underinsured Motorists Coverage Pennsylvania Non-Stacked" provides in pertinent part:

INSURING AGREEMENT

A. We will pay compensatory damages which an "insured" is legally entitled to recover from the owner or operator of an "underinsured motor vehicle" because of "bodily injury":

1. Sustained by an "insured"; and

2. Caused by an accident.

The owner's or operator's liability for these damages must arise out of the ownership, maintenance, or use of the "underinsured motor vehicle."

B. "Insured" as used in this endorsement means:

1. You or any "family member";

2. Any other person "occupying" "your covered auto."

3. Any person for damages that person is entitled to recover because of "bodily injury" to which this coverage applies sustained by a person described in 1. or 2. above.

In paragraph number B.1., the words "You or any `family member'" are separated from the words "Any other person `occupying' `your covered auto'" by a semi colon. This punctuation notes a complete thought and separate from B.2. It says that the only people who must be occupying the covered auto in order to have coverage are persons other than you (the owner of the policy) or any family member (defined elsewhere in the agreement). It seems clear from this sentence structure that you, the owner, or a family member are not required to have occupied the covered auto at the time of the accident in order to have coverage. Moreover, the use of the reference "by a person described in 1. or 2." in B.3 supports that the claim of people described in B.1. are different from those described in B.2., the latter being those who must be occupying the covered vehicle in order to sustain coverage.

The superior court in Corbett places emphasis on the word "other" which precedes "person" in B.3. to suggest that "occupying the covered vehicle" applies to policy owner and family member. Corbett, 630 A.2d at 31. They read it as the insured, a family member and any other person who occupies the covered vehicle. I do not agree with this interpretation. Were that the...