Swords v. Harleysville Ins. Companies

• Decision Date: 29 September 2005
• Citation: 883 A.2d 562,584 Pa. 382
• Parties: Wayne SWORDS and Bernell Swords, Appellants v. HARLEYSVILLE INSURANCE COMPANIES, Appellee.
• Court: Pennsylvania Supreme Court

883 A.2d 562

584 Pa. 382

Wayne SWORDS and Bernell Swords, Appellants v. HARLEYSVILLE INSURANCE COMPANIES, Appellee.

Supreme Court of Pennsylvania.

Argued December 2, 2004.

Decided September 29, 2005.

Christian Earl Eaby, Lancaster, for Swords et al, appellants.

Scott B. Cooper, Harrisburg, for PA Trial Lawyers Ass'n, appellant amicus curiae.

Robert E. Kelly, Jr., Harrisburg, for Harleysville Ins. Companies, appellee.

Suzanne T. Tighe, James C. Haggerty, Philadelphia, for PA Defense Institute.

Before: CAPPY, C.J., CASTILLE, NIGRO, NEWMAN, SAYLOR, EAKIN and BAER, JJ.

OPINION

Chief Justice CAPPY.

In this appeal, we are asked to determine whether the Motor Vehicle Financial Responsibility Law ("MVFRL" or the "Law"), 75 Pa.C.S. § 1701 et seq., renders an owner of a registered but uninsured vehicle ineligible to recover first-party benefits when such an owner is injured in an accident which does not involve the owner's uninsured vehicle. For the reasons that follow, we hold that, under these circumstances, the MVFRL bars the owner from recovering first-party benefits. We, therefore, affirm that portion of the Superior Court's order reversing the trial court's entry of partial summary judgment in favor of Appellants.

The undisputed facts and relevant procedural history underlying this appeal are as follows. Bernell Swords ("Father") was the owner of a 1997 Chevrolet S-10 pickup truck. Father insured his truck through Appellee Pennland Insurance Company ("Pennland").¹ On September 14, 1999, Father gave permission to his son, Wayne Swords ("Son"), to use the truck. On that day, Son was involved in an automobile accident in New Holland, Pennsylvania while operating Father's truck. At the time of the accident, Son owned a vehicle which he registered with the Pennsylvania Department of Transportation but for which he never obtained any insurance coverage.

Following the accident, Son sought to recover first-party benefits² pursuant to Father's Pennland policy. Pennland denied Son payment of first-party benefits.

Father and Son (collectively "Appellants") then filed suit against Pennland in the Court of Common Pleas of Lancaster County. Appellants' complaint consisted of eight counts, which included a request for a declaratory judgment. Appellants specifically contended that as a result of the accident, Son incurred medical and other expenses that qualify as first-party benefits under the MVFRL. Appellants asserted that Pennland was statutorily mandated to cover these expenses pursuant to various provisions of the MVFRL. Accordingly, Appellants sought to have the court declare that Pennland was required by the MVFRL to provide Son with first-party benefits.

Pennland filed an Answer and New Matter, arguing that Section 1714 of the MVFRL, 75 Pa.C.S. § 1714, requires the owner of a vehicle registered with the Pennsylvania Department of Transportation to insure the vehicle as a condition precedent to obtaining first-party benefits under the MVFRL. Because Son owned a registered but uninsured vehicle at the time of the accident, Pennland averred that it properly denied Son first-party benefits pursuant Section 1714.

After answering Pennland's New Matter, Appellants filed a Motion for Partial Summary Judgment on their declaratory judgment count.³ They argued that Pennland's act of denying coverage to Son was contrary to settled law as announced in this Court's decision in Henrich v. Harleysville Insurance Companies, 533 Pa. 181, 620 A.2d 1122 (1993), and the Superior Court's decision in Kafando v. State Farm Mutual Automobile Insurance Company, 704 A.2d 675 (Pa.Super.Ct.1998). Appellants asserted that these decisions hold that the limit on first-party benefits contained in Section 1714 of the MVFRL does not apply to a driver who is not operating his or her uninsured vehicle at the time of the accident. Relying on this authority, the trial court granted Appellants' Motion for Partial Summary Judgment.

On appeal, a unanimous en banc Superior Court reversed and remanded. Swords v. Harleysville Insurance Companies, 831 A.2d 641 (Pa.Super.Ct.2003).⁴ The court found that the language of Section 1714 unambiguously requires that "in order to be eligible to receive first-party benefits[,] a person must have the required insurance on any and every vehicle currently registered in that person's name in Pennsylvania at the time of the accident in question." Id. at 645 (emphasis in original). In reaching this conclusion, the Superior Court necessarily overruled its decision in Kafando, determining that the Kafando court misinterpreted our decision in Henrich. Swords, 831 A.2d at 643

.

In order to appreciate fully the reasoning of the Superior Court on this point, a brief review of our decision in Henrich and the Superior Court's decision in Kafando is necessary. In Henrich, Elizabeth Henrich, a passenger in her friend's uninsured vehicle, was injured when the vehicle veered off of the road. 620 A.2d at 1123. At the time of the accident, Henrich owned a registered but uninsured vehicle. Henrich was considered a "covered person" under the terms of her father's automobile insurance policy and, therefore, sought to recover uninsured motorist coverage from her father's policy. Her father's insurer denied coverage, arguing that Section 1714 of the Law precludes owners of registered but uninsured vehicles from recovering any insurance benefits. Id. This Court ultimately allowed Henrich to recover uninsured motorist coverage and determined "that Section 1714 does not apply to Ms. Henrich because she was not operating her own uninsured motor vehicle at the time of the accident." Id. at 1124 (emphasis in original). Relying primarily on Henrich, in Kafando, the Superior Court held that Section 1714 did not bar Kafando, the owner of a registered but uninsured vehicle, from recovering first-party benefits because he was not injured in his uninsured vehicle, but rather, he was injured as a passenger in a properly registered and insured vehicle. See Kafando, supra.

In its opinion regarding the matter sub judice, the Superior Court focused on the fact that Son was seeking first-party benefits, not the uninsured motorist coverage that Elizabeth Henrich sought. Because a claim for uninsured and underinsured motorist coverage is based on various provisions of the MVFRL which are distinguishable from the first-party benefits that are statutorily unavailable to owners of registered but uninsured vehicles pursuant to Section 1714, the court stated that any discussion of first-party benefits in Henrich is dictum and that the Kafando court erred in relying on Henrich in reaching its conclusion that because Kafando was not injured in his uninsured vehicle, he was not precluded under Section 1714 from recovering first-party benefits. Swords, 831 A.2d at 643-46. Lastly, the Superior Court found support for its decision in Section 1713 of the MVFRL,⁵ concluding that Section 1713 indicates that the Legislature intended first-party benefits to follow the person and not the vehicle. Swords, 831 A.2d at 646.

For these reasons, the Superior Court reversed the trial court order and remanded the matter to the trial court. Appellants then petitioned our Court for allowance of appeal, which we granted. Swords v. Harleysville Insurance Companies, 579 Pa. 694, 856 A.2d 835 (2004).

The standards which govern summary judgment are well settled. When a party seeks summary judgment, a court shall enter judgment whenever there is no genuine issue of any material fact as to a necessary element of the cause of action or defense that could be established by additional discovery. Fine v. Checcio, 870 A.2d 850, 857 (Pa.2005). A motion for summary judgment is based on an evidentiary record that entitles the moving party to a judgment as a matter of law. In considering the merits of a motion for summary judgment, a court views the record in the light most favorable to the non-moving party, and all doubts as to the existence of a genuine issue of material fact must be resolved against the moving party. Finally, the court may grant summary judgment only when the right to such a judgment is clear and free from doubt. Id. An appellate court may reverse the granting of a motion for summary judgment if there has been an error of law or an abuse of discretion. Id. n. 3. Whether the MVFRL precludes owners of registered but uninsured vehicles from recovering first-party benefits is a question of law; accordingly, our standard of review is de novo. See id. Our scope of review, to the extent necessary to resolve the legal question before us, is plenary. Id.

By way of background, the Pennsylvania No-Fault Motor Vehicle Insurance Act⁶ ("No-Fault Act") was the predecessor to the MVFRL. In 1984, the Legislature repealed the No-Fault Act, replacing it with the MVFRL. "[T]he primary concerns in repealing the No-Fault Act were the spiraling costs of automobile insurance and the resultant increase in the number of uninsured motorists." Id. (citation omitted). In fact, this Court specifically has recognized that "the MVFRL reflects a heightened concern by the General Assembly toward the increasing consumer cost of automobile insurance attributable in part to motorists who ignore the legal requirement that they insure their vehicles." Windrim v. Nationwide Insurance Company, 537 Pa. 129, 641 A.2d 1154, 1157 (1994).

In order to address this heightened concern, the MVFRL "required (and requires) that a vehicle owner show financial responsibility at the time of registration in terms of an ability (by way of insurance or otherwise) to respond to specified damages claims, [ ] and subjects owners to penalties for failing to maintain financial responsibility." Lewis v. Erie Insurance Exchange, 568 Pa. 105, 793 A.2d 143, 150 (2002) (citing 75 Pa.C.S. §§ 1714 and 1305(d)). Such penalties are reflected throughout the MVFRL and evidence the intent of the Legislature to forcefully deter people from...