State Farm v. CRALEY EX REL. CRALEY

• Decision Date: 26 September 2001
• Citation: 784 A.2d 781
• Parties: STATE FARM FIRE AND CASUALTY COMPANY, Appellant v. Randall P. CRALEY, Admr. of the Estate of Jayne Ann M. Craley, Randall P. Craley, Parent and Guardian of Keith P. Craley, A Minor, and Randall P. Craley, in His Own Right and Gloria M. Craley and Lawrence W. Craley, Husband and Wife, Appellees.
• Court: Pennsylvania Superior Court

784 A.2d 781

STATE FARM FIRE AND CASUALTY COMPANY, Appellant v. Randall P. CRALEY, Admr. of the Estate of Jayne Ann M. Craley, Randall P. Craley, Parent and Guardian of Keith P. Craley, A Minor, and Randall P. Craley, in His Own Right and Gloria M. Craley and Lawrence W. Craley, Husband and Wife, Appellees.

Superior Court of Pennsylvania.

Argued May 3, 2001.

Filed September 26, 2001.

Teresa F. Sachs, Philadelphia, for appellant.

Daniel E.P. Bausher, Reading, for appellees.

Before: DEL SOLE, President Judge, CAVANAUGH, J., McEWEN, President Judge Emeritus, JOHNSON, JOYCE, STEVENS, MUSMANNO, LALLY-GREEN, and TODD, JJ.

JOYCE, J.

¶ 1 In this declaratory judgment action, Appellant, State Farm Fire and Casualty Company (State Farm)¹ appeals from the judgment entered by the trial court following the court's decision and verdict declaring that State Farm has a responsibility to pay the uninsured motorists benefits pursuant to an insurance policy purchased by Appellee, Randall P. Craley (Randall).² For the reasons set forth below, we will quash this appeal as untimely. The pertinent facts and procedural history of this case are as follows:

1. On July 12, 1993, the decedent, Jayneann Craley (Jayneann), was killed when the 1988 GMC Jimmy S15 Sport Wagon (Sport Wagon) which she was driving, and in which her mother-in-law, Gloria M. Craley (Mrs. Craley), and her minor son, Keith P. Craley (Keith), were passengers, collided with another vehicle being driven by Terry J. McFadden, who was uninsured.

2. Mrs. Craley and Keith also sustained multiple injuries as a result of the collision.

3. At the time of this incident, Jayneann and her husband, Randall P. Craley (Randall), Keith, and Mrs. Craley, and Lawrence W. Craley, her father-in-law (Mr. Craley), all lived together in the same household at 106 Dogwood Drive, Narvon, Pennsylvania.

4. The Sport Wagon was registered in Jayneann's name and was insured under a policy issued by State Farm, No. S56-1104-C17-38A.

5. Jayneann was the regular operator of the Sport Wagon.

6. At the time of this incident, Randall owned a 1986 Mazda pickup truck which was not involved in the collision and was insured under a separate insurance policy issued by State Farm, No. S56-1103-C17-38.

7. At the time of this incident, Mr. and Mrs. Craley owned a 1990 Dodge Caravan which was likewise not involved in the collision and was insured under a policy issued by Prudential, No. 282A-670586.

8. Jayneann's Sport Wagon was not listed as an insured vehicle on either Randall's State Farm [p]olicy or on Mr. and Mrs. Craley's Prudential policy.

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10. Mrs. Craley was neither a "named insured" nor a listed operator" of the Sport Wagon which was insured under Jayneann's State Farm policy.

11. Each of the two State Farm policies provides for uninsured motorist benefits coverage in the maximum amount of $15,000.00 per person and $30,000.00 per accident.

12. Each of the two State Farm policies contains the following "waiver" signed by Jayneann and Randall entitled "Rejection of Stacked Uninsured Motorist Benefits", indicating that each of them had waived the right to "stack" uninsured motorist benefits coverage otherwise available under each State Farm policy onto the other's State Farm policy:

By signing this waiver, I am rejecting stacked limits of uninsured motorist coverage under the policy for myself and members of my household under which the limits of coverage available would be the sum of limits for each motor vehicle insured under the policy. Instead the limits of coverage that I am purchasing shall be reduced to the limits stated in the policy. I knowingly and voluntarily reject the stacked limits of coverage. I understand that my premium will be reduced if I reject this coverage.

13. Both Jayneann and Randall received a reduction in the premiums which each of them paid to State Farm for each policy in exchange for their waivers of their right to stack uninsured motorist benefits coverage.

14. Each State Farm policy also contains the following "household exclusion" clause:

THERE IS NO COVERAGE FOR BODILY INJURY TO AN INSURED UNDER COVERAGE U-3:

1. WHILE OCCUPYING A MOTOR VEHICLE OWNED BY YOU, YOUR SPOUSE OR ANY RELATIVE IF IT IS NOT INSURED FOR THIS COVERAGE UNDER THIS POLICY; ...

15. The term "relative", as set forth in this "household exclusion" clause is defined in each State Farm policy as a "person related to you or your spouse by blood, marriage or adoption who lives with you".

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23. Following the July 12, 1993 collision, the estate of Jayneann M. Craley (Jayneann's estate), Keith and Mrs. Craley filed claims for uninsured motorist benefits under Jayneann's State Farm policy, No. S56-1104-C17-38A ....

24. Both Keith['s] and Mrs. Craley's claims were based on their status as "resident relatives" living in the same household."

25. While State Farm paid the policy limits of $30,000.00 in uninsured motorist benefits available under Jayneann's State Farm policy, No. S56-1104-C17-38A, it denied coverage under Randall's State Farm policy, No. S56-1103-C17-38, to Jayneann's estate, Keith and Mrs. Craley, on the basis of Randall's waiver of his right to stack uninsured motorist benefits coverage and the "household exclusion" clause set forth herein at Finding of Fact # 14.

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27. The value of the wrongful death/survival claim by Jayneann's estate exceeds all possible ... uninsured motorist benefits coverage limits under... the State Farm ... polic[y].

28. The value of Mrs. Craley's claim for her personal injuries exceeds all possible... uninsured motorist benefits coverage limits under ... the State Farm ... polic[y].

29. The value of Keith's claim for his personal injuries is $40,000.00.

Trial Court Opinion, Findings of Fact, 12/22/1998, at 3-9.³

¶ 2 The parties stipulated to the above findings of fact, which the trial court ultimately adopted. The parties also separately submitted proposed conclusions of law and briefs in support thereof, outlining their respective positions. On December 22, 1998, the trial court issued its decision and verdict. Thereafter, both State Farm and the Craleys filed post-trial motions. On April 26, 2000, the court issued an order denying State Farm's motion and granting the motion filed by the Craleys. The court also amended the verdict to reflect the amount stipulated by the parties, i.e., $15,000.00 per person or $30,000.00 per accident. At the request of the Craleys, the amended verdict was reduced to a judgment on May 25, 2000. This appeal by State Farm followed.

¶ 3 The questions presented for our review are as follows: (1) Whether the trial court committed an error of law in refusing, on public policy grounds, to enforce the "household exclusion" clause contained in the State Farm policy; (2) Whether the trial court committed an error of law in refusing to enforce Randall Craley's waiver of stacking uninsured motorist coverage; and (3) Whether the trial court committed an error of law in converting the non-stacking uninsured motorist coverage purchased by Randall Craley into stacking coverage. See Brief for Appellant (State Farm), at 5.⁴

¶ 4 Before addressing the questions presented for our review, as a threshold matter, we must determine whether this appeal is properly before us as it implicates jurisdictional matters.⁵ We must determine if the instant appeal was timely filed pursuant to Pa.R.A.P. 903.⁶

¶ 5 This matter was initiated by State Farm as a declaratory judgment action seeking a declaration of its responsibility to provide uninsured motorist coverage under Randall's policy. The parties stipulated to the underlying facts and agreed that the matter could be decided by the trial court on the basis of the stipulated facts without testimony. The trial court issued a decision and a verdict on December 22, 1998, declaring that State Farm owed uninsured motorist benefits under Randall's policy and that the household exclusion clause contained in the policy was contrary to public policy. The parties then filed post-trial motions. Following the court's disposition of these motions, State Farm appealed to this Court. The question then becomes whether in light of the Declaratory Judgment Act, 42 Pa.C.S. § 7532; Nationwide Mutual Insurance Co. v. Wickett, 563 Pa. 595, 763 A.2d 813 (2000); Prudential Property and Casualty Insurance Co. v. Gisler, 764 A.2d 1111 (Pa.Super.2000); and Miller v. Kramer, 424 Pa.Super. 48, 621 A.2d 1033 (1993), the trial court's December 22, 1998 decision was a final and appealable order from which a direct appeal must be filed within thirty (30) days of its entry.

¶ 6 Under the Declaratory Judgment Act, 42 Pa.C.S. § 7532:

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. No action or proceeding shall be open to objection on the ground that a declaratory judgment or decree is prayed for. 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. § 7532.

¶ 7 It is undisputed that the instant case was initiated as a declaratory judgment action. Against this background, we must determine whether the trial court's decision and verdict dated December 22, 1998 affirmatively or negatively declared the rights of the parties.

¶ 8 The court's decision and verdict concluded as a matter of law that the household vehicle exclusion contained in Randall's policy issued by State Farm was unenforceable as against public policy. The court also concluded that the waiver of stacking provision signed by Randall was not applicable to "inter-policy" stacking. The court then determined that each of the three claimants was entitled to $30,000.00 in uninsured motorist benefits pursuant to Randall's policy. We find that the above decision and verdict did in fact declare the rights of the parties...