St. Paul Mercury Ins. Co. v. Corbett

• Decision Date: 13 August 1993
• Citation: 630 A.2d 28,428 Pa.Super. 54
• Parties: ST. PAUL MERCURY INSURANCE COMPANY, Appellant, v. Scott J. CORBETT.
• Court: Pennsylvania Superior Court

Page 28

630 A.2d 28

428 Pa.Super. 54

ST. PAUL MERCURY INSURANCE COMPANY, Appellant, v. Scott J. CORBETT.

Superior Court of Pennsylvania.

Argued April 19, 1993.

Filed Aug. 13, 1993.

James C. Haggerty, Philadelphia, for appellant.

Richard L. Hughey, Media, for appellee.

Before CAVANAUGH, WIEAND, McEWEN, CIRILLO, DEL SOLE, BECK, TAMILIA, JOHNSON and HUDOCK, JJ.

CIRILLO, Judge:

This is an appeal from a judgment entered in the Court of Common Pleas of Delaware County denying appellant St. Paul Mercury Insurance Company's (St. Paul) post-trial motions and reaffirming its holding in favor of appellee Scott J. Corbett (Corbett). We reverse.

On June 21, 1985, Corbett, while in the course and scope of his employment, was involved in a motor vehicle accident in which he was the operator of a vehicle owned by his employer. The accident in question was a "hit and run" in which Corbett sustained severe personal injuries.

At the time of the accident, the employer's vehicle was insured by Liberty Mutual Insurance Company (Liberty Mutual) and provided $15,000.00 of uninsured/underinsured motorist coverage (UM/UIM coverage) per person in accordance with the provisions of the Pennsylvania Motor Vehicle Financial Responsibility Law (MVFRL), 75 Pa.C.S.A. § 1701 et seq. At the time of the accident, there also existed an insurance policy issued by Allstate Insurance Company (Allstate) to Corbett's mother, Jane Corbett, with whom he resided. The Allstate policy provided $100,000.00 of UM/UIM coverage per person. There also existed a personal policy of insurance issued by CIGNA Insurance Company (CIGNA) to Diane Corbett, wife of Scott Corbett and a resident of the same household. This policy provided for $300,000.00 of UM/UIM coverage per person. Finally, Corbett himself had a special antique vehicle policy with St. Paul covering a 1952 Singer Roadster which provided for $50,000.00 of UM/UIM benefits.

Following the accident, Corbett made claims against all four of the above-mentioned policies for uninsured motorist (UM) benefits. ¹ Pursuant to the MVFRL, Liberty Mutual paid Corbett $15,000.00 in UM benefits since the accident occurred while he was driving an employer-owned vehicle insured by Liberty Mutual. See 75 Pa.C.S.A. § 1733(a)(1). Thereafter, Corbett sought recovery of additional UM benefits from Allstate, CIGNA and St. Paul.

St. Paul filed a petition seeking declaratory relief claiming that UM benefits were not recoverable by Corbett because the antique automobile insurance policy provided coverage limited to injuries sustained while Corbett was operating the antique automobile. The Honorable Anthony R. Semeraro denied St. Paul's petition, finding Corbett was entitled to UM benefits under the antique policy. This timely appeal followed.

Appellant St. Paul presents one issue for our review:

(1) Whether the trial court erred in concluding that Corbett may maintain a claim for recovery of uninsured motorist benefits under the antique automobile policy issued by St. Paul?

(a) Whether the parties to the antique automobile policy reasonably expected coverage to extend to use of automobiles beyond the antique automobile and its limited uses?

(b) Whether the coverage limitations contained within the antique policy which allowed for a substantial reduction in premiums violated public policy?

Initially, we note that our standard of review is narrow. Palladino v. Dunn, 361 Pa.Super. 99, 103, 521 A.2d 946, 948 (1987); see also Supp v. Erie Insurance Exchange, 330 Pa.Super. 542, 479 A.2d 1037 (1984). Since declaratory judgment actions follow the practice and procedure of actions in equity, we will review the determination of the trial court as we would a decree in equity and set aside the judgment of the trial judge only where it is not supported by adequate evidence. Palladino, 361 Pa.Super. at 103, 521 A.2d at 948; see also Shepley v. Dobbin, 351 Pa.Super. 182, 505 A.2d 327 (1986).

Absent a rejection of uninsured motorist benefits in the form of a written waiver signed by the insured, the MVFRL requires that every motor vehicle liability insurance policy issued in the Commonwealth include both uninsured and underinsured motorist coverage. See 75 Pa.C.S. § 1731. ² See also Johnson v. Pennsylvania National Insurance Companies, 527 Pa. 504, 594 A.2d 296 (1991); Wolgemuth v. Harleysville Mutual Insurance Company, 370 Pa.Super. 51, 535 A.2d 1145 (1988). St. Paul's Antique Automobile Insurance Policy provided the mandatory offering of UM coverage. That coverage, however, is limited in these circumstances as provided in the clear language of the policy.

After reviewing the parties' arguments, the insurance contract, the MVFRL and the applicable case law, we conclude that Corbett is not entitled to UM benefits under the Antique Automobile Policy. In our judgment, this conclusion is neither contrary to public policy nor in derogation of the right created by statute.

I. INTENT AND REASONABLE EXPECTATIONS OF INSURED.

This court has held that the proper focus regarding issues of coverage under insurance contracts is the reasonable expectation of the insured. Dibble v. Security of America Life Ins. Co., 404 Pa.Super. 205, 210, 590 A.2d 352, 354 (1991). In determining the reasonable expectations of the insured, courts must examine the totality of the insurance transaction involved. Id.; see also Curbee, Ltd. v. Rhubart, 406 Pa.Super. 505, 509, 594 A.2d 733, 735 (1991) (an interpretation of an exclusion clause in an insurance policy must be based on the policy in its entirety); Luko v. Lloyds of London, 393 Pa.Super. 165, 171-172, 573 A.2d 1139, 1142 (1990) (insurance must be construed as a whole, and not in discrete units). However, while reasonable expectations of the insured are the focal points in interpreting the contract language of insurance policies, see Collister v. Nationwide Life Insurance Co., 479 Pa. 579, 388 A.2d 1346 (1978); Winters v. Erie Insurance Group, 367 Pa.Super. 253, 532 A.2d 885 (1987), an insured may not complain that his or her reasonable expectations were frustrated by policy limitations which are clear and unambiguous. Neil v. Allstate Insurance Co., 379 Pa.Super. 299, 549 A.2d 1304 (1988). Like every other contract, the goal of interpreting an insurance contract is to ascertain the intent of the parties as manifested by the language of the policy. Koenig v. Progressive Insurance Co., 410 Pa.Super. 232, 236, 599 A.2d 690, 691-692 (1991).

The policy at issue is clear and unambiguous; it limits coverage to antique automobile activities. The Antique Auto Endorsement to the policy in effect at the time of the accident provides:

What This Endorsement Does

This endorsement helps define coverage under your Antique Auto Policy.

The covered auto must be used mainly for car club activities, exhibits, parades or a private collection. Occasional use of the automobile for other reasons is permitted. However, those reasons do not include the uses as listed below.

Regular driving. We won't cover loss or damage if the vehicle is driven for regular auto usage. Example of regular auto usage includes driving to and from work or school.

* * * * * *

(emphasis in original). As indicated, this endorsement applies to all coverages provided by St. Paul. All policy benefits, therefore, including UM benefits, contemplate limited coverage consistent with the limited use of the antique automobile. Clearly, had Corbett engaged in "regular driving" of his antique automobile, on his way to or from work as he was during this hit and run accident, he would not, under the clear terms of the endorsement, be eligible for UM benefits. Can an insured under these circumstances then reasonably expect coverage when he is driving another motor vehicle and the covered automobile is safely garaged? Furthermore, Part C of the antique automobile policy, entitled "Uninsured Motorists Coverage," clearly restricts UM benefits in accordance with the endorsement:

We will pay damages which a covered person is legally entitled to recover from the owner or operator of either an uninsured motor vehicle or underinsured motor vehicle, but not both, because of bodily injury:

1. Sustained by a covered person; 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 uninsured motor vehicle or underinsured motor vehicle.

* * * * * *

"Covered person" 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.

* * * * * *

(emphasis in original). ³ On page one of the Antique Automobile Policy, under the general heading DEFINITIONS, "Your Covered Auto" is defined as follows:

"Your covered auto" means:

1. Any antique vehicle, classic vehicle or special interest vehicle shown in the Declarations.

2. Any antique vehicle, classic vehicle or special interest vehicle of which you acquire ownership during the policy period provided that it replaces one shown in the Declarations and you ask us to insure it within thirty days after you become the owner....

(emphasis in original). ⁴ Although the dissent would find that under the terms of the policy uninsured motorist coverage extends to the named insured even when not occupying the antique automobile, the policy, when read in its entirety, limits coverage to antique automobile activities. Thus, UM coverage is restricted to the insured, his family members, or any other person occupying the "covered auto," the antique vehicle. Paragraph one and paragraph two in the definition of covered person must be read together. In so doing, the phrase "occupying your covered auto" clarifies both "you or any family member" and "any other person." Coverage under this policy is not independent of any connection with the ...