Schmitt v. State Farm Mut. Auto. Ins. Co.

• Decision Date: 11 January 2021
• Docket Number: No. 1767 EDA 2019,1767 EDA 2019
• Citation: 245 A.3d 678
• Court: Pennsylvania Superior Court
• Parties: Edward J. SCHMITT, Individually as Administrator of the Estate of Danielle N. Luteman, Deceased, Appellee v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY and State Farm Fire & Casualty Company and Gary J. Root & Gary J. Root Agency, Appellants

245 A.3d 678

Edward J. SCHMITT, Individually as Administrator of the Estate of Danielle N. Luteman, Deceased, Appellee

v.STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY and State Farm Fire & Casualty Company and Gary J. Root & Gary J. Root Agency, Appellants

No. 1767 EDA 2019

Superior Court of Pennsylvania.

Argued March 3, 2020

Filed: January 11, 2021

Louis Evan Bricklin, Philadelphia, for appellant.

James C. Haggerty, Philadelphia, for appellee.

BEFORE: STABILE, J., KING, J., and STEVENS, P.J.E.^*

OPINION BY KING, J.:

Appellants, State Farm Mutual Automobile Insurance Company and State Farm Fire & Casualty Company ("State Farm") and Gary J. Root and the Gary J. Root Agency, appeal from the order entered in the Montgomery County Court of Common Pleas, granting partial summary judgment in favor of State Farm on its counterclaim for declaratory relief, and granting partial summary judgment in favor of Appellee, Edward J. Schmitt, as administrator of the estate of Danielle N. Luteman, Deceased, on two counts of his amended complaint seeking declaratory relief. For the reasons that follow, we quash the appeal as interlocutory and unreviewable at this time.

On November 14, 2011, Danielle Luteman was driving her Toyota Corolla on Route 422 in Upper Providence Township. Ms. Luteman's boyfriend, Michael Taylor, occupied the front passenger seat. At some point, Mr. Taylor reached over and grabbed the steering wheel from Ms. Luteman. The vehicle left the road, struck a guardrail, and flipped over, killing Ms. Luteman. At the time of the accident, Ms. Luteman lived with her grandparents, the Schmitts. Appellee, Mr. Schmitt, as administrator of Ms. Luteman's estate, filed a complaint seeking a declaratory judgment that underinsured motorist ("UIM") benefits were available under three separate State Farm insurance policies: (1) a personal auto policy issued to Ms. Luteman ("Luteman Auto Policy"); (2) a personal auto policy issued to the Schmitts ("Schmitt Auto Policy"); and (3) a personal umbrella policy issued to the Schmitts ("Schmitt Umbrella Policy"). Appellee also sought compensatory damages.

Upon stipulation between the parties, Appellee filed an amended complaint on August 14, 2018. In the amended complaint, Appellee raised seven counts: Count I—declaratory judgment that Appellee is entitled to receive UIM benefits under the Luteman Auto Policy; Count II—compensatory relief in the form of UIM benefits under the Luteman Auto Policy; Count III—declaratory judgment that Appellee is entitled to receive UIM benefits under the Schmitt Auto Policy; Count IV—compensatory relief in the form of UIM benefits under the Schmitt Auto Policy; Count V—declaratory judgment that Appellee is entitled to receive UIM benefits under the Schmitt Umbrella Policy; Count VI—compensatory relief in the form of UIM benefits under the Schmitt Umbrella Policy; and Count VII—negligence against Gary Root and the Gary Root Agency (person/entity who sold the State Farm insurance policies to the Schmitts and Ms. Luteman) seeking compensatory damages, as an alternative claim if the court decided Appellee is not entitled to recover UIM benefits under any of the policies.

In response, State Farm filed an answer, new matter, and counterclaim seeking a declaratory judgment that State Farm is not obligated to pay UIM benefits to Appellee under any of the three policies. Appellee filed a reply to State Farm's new matter and an answer to its counterclaim on October 5, 2018. On January 24, 2019, State Farm filed a motion for summary judgment on its counterclaim and as to Counts I-VI of the amended complaint. On February 22, 2019, Appellee also filed a motion for summary judgment on Counts I-VI of the complaint, as well as a response in opposition to State Farm's summary judgment motion. On April 1, 2019, State Farm responded to Appellee's summary judgment motion. The court conducted oral argument on the competing summary judgment motions on April 29, 2019.

On May 23, 2019, the court entered summary judgment in favor of State Farm on its counterclaim for declaratory judgment on Count I, determining that State Farm has no obligation to pay UIM benefits to Appellee under the Luteman Auto Policy, and on the corresponding claim for compensatory damages at Count II. The court also entered summary judgment in favor of Appellee for declaratory judgment on Counts III and V of the amended complaint, finding Appellee is entitled to recover UIM benefits under the Schmitt Auto Policy and Schmitt Umbrella Policy.

State Farm filed a notice of appeal on June 20, 2019. On June 24, 2019, the court ordered State Farm to file a concise statement of errors complained of on appeal, per Pa.R.A.P. 1925(b). State Farm subsequently complied.

On July 8, 2019, Appellee filed an application in this Court to quash State Farm's appeal, arguing, inter alia , the court's May 23, 2019 summary judgment order is interlocutory because it left unresolved the remaining compensatory damages claims at Counts IV and VI of Appellee's amended complaint. On July 22, 2019, State Farm filed an answer to Appellee's application to quash, conceding that the trial court's summary judgment order left the compensatory damages claims outstanding. State Farm maintained the court's order was immediately appealable, however, under Pa.R.A.P. 311(a)(8) (stating appeal may be taken as of right and without reference to Rule 341(c) from order that is made final or appealable by statute, even though order does not dispose of all claims and of all parties). State Farm alleged that pursuant to the Declaratory Judgments Act at 42 Pa.C.S.A. § 7532, the court "affirmatively or negatively declare[d] the rights" of the parties, so the court's ruling was immediately appealable under this statute. (See State Farm's Answer to Appellee's Application to Quash, filed 7/22/19, at ¶6). On August 2, 2019, this Court denied Appellee's application to quash without prejudice to his right to raise the issue again in his appellate brief.

State Farm raises the following issues for our review:

Did the trial court err when it determined that the "Family Car Exclusion" contained in the State Farm Auto Policy was unenforceable and as a result declared that [Appellee] was entitled to recover underinsured motorist benefits under the State Farm Auto Policy?

Did the trial court err when it ruled that the State Farm Personal Liability Umbrella Policy was governed by the provisions of the Pennsylvania Motor Vehicle Financial Responsibility Law and that, therefore, the Family Car Exclusion contained in that policy was unenforceable as well?

Did the trial court err in granting summary judgment to [Appellee] with respect to State Farm's contention that the injuries sustained by [Appellee's] decedent were not caused by the acts of an "owner or driver" or an "owner or operator" of an underinsured motor vehicle as is required by the insuring clause of both the State Farm Auto Policy and the State Farm Personal Umbrella Policy?

Assuming, arguendo that the trial court was correct in its ruling that the Family Car Exclusions in the policies did not apply and that the injuries sustained by [Appellee's] decedent were caused by the acts or omissions of the "owner or driver" or the "owner or operator" of an underinsured motor vehicle, did the trial court nevertheless err in declaring that [Appellee] is entitled to recover underinsured benefits under the auto policy and the personal umbrella policy when no determination has yet been made in the litigation with respect to:

(a) Whether the alleged underinsured motorist was negligent;

(b) Whether there was comparative negligence on the part of [Appellee's] decedent which was greater than any negligence on the part of the alleged underinsured motorist; and

(c) The amount of damages?

(State Farm's Brief at 4-5).

As a preliminary matter, we must address Appellee's application to quash the appeal as interlocutory because "the appealability of an order directly implicates the jurisdiction of the court asked to review the order." Knopick v. Boyle , 189 A.3d 432, 436 (Pa.Super. 2018) (internal citation omitted). As a general rule, appellate courts have jurisdiction only over appeals taken from a final order. In re Bridgeport Fire Litigation , 51 A.3d 224, 229 (Pa.Super. 2012). A final order is one that disposes of all the parties and all the claims; or is entered as a final order pursuant to the trial court's determination under Rule 341(c). Pa.R.A.P. 341(b)(1), (3). An appeal may also be taken from "an order that is made final or appealable by statute or general rule, even though the order does not dispose of all claims and of all parties." Pa.R.A.P. 311(a)(8).

Section 7532 of the Declaratory Judgments Act provides, in relevant part:

Courts of record, within their respective jurisdictions, shall have power to declare rights, status, and other legal relations whether or not further relief is or could be claimed. ... The declaration may be either affirmative or negative in form and effect, and such declarations shall have the force and effect of a final judgment or decree.

42 Pa.C.S.A. § 7532.

In Bolmgren v. State Farm Fire and Cas. Co. , 758 A.2d 689 (Pa.Super. 2000), the appellee brought an action against State Farm for a declaration of coverage under a homeowner's policy and for damages. Specifically, Counts I-III of the appellee's amended complaint sought relief in the form of declaratory judgment, and Count IV sought damages, attorney's fees, interest and costs. Following competing motions for summary judgment, the court granted summary judgment in favor of the appellee on Counts I-III. State Farm appealed. As a prefatory matter, this Court considered whether the appeal was properly before us, where the damages claim in Count IV of the amended complaint remained outstanding.

In addressing whether the appeal was proper under Rule 311(a)(8) by way of the Declaratory Judgments Act, this Court explained:

Although the Act provides that the

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