Tallman v. Aetna Cas. and Sur. Co.

• Decision Date: 06 April 1988
• Citation: 372 Pa.Super. 593,539 A.2d 1354
• Parties: Harold David TALLMAN, Administrator of the Estate of Irene B. Tallman, Deceased, Appellee, v. AETNA CASUALTY AND SURETY COMPANY, Appellant.
• Court: Pennsylvania Superior Court

Page 1354

539 A.2d 1354

372 Pa.Super. 593

Harold David TALLMAN, Administrator of the Estate of Irene B. Tallman, Deceased, Appellee, v. AETNA CASUALTY AND SURETY COMPANY, Appellant.

Superior Court of Pennsylvania.

Argued Dec. 2, 1987.

Filed April 6, 1988.

Darryl R. Slimak, State College, for appellant.

William Carlucci, Williamsport, for appellee.

Before OLSZEWSKI, DEL SOLE and JOHNSON, JJ.

DEL SOLE, Judge:

Today we are asked to determine whether a provision in an automobile insurance policy which prohibits the stacking of underinsurance coverage where multiple vehicles are insured under the policy should be declared invalid as contrary to the public policy expressed in the Motor Vehicle Financial Responsibility Law, 75 Pa.C.S. §§ 1701 et seq. We affirm the trial court's ruling which determined that such a provision is void as violative of public policy.

The instant action was commenced by Appellee, administrator of the estate of his deceased wife, following a two car automobile accident. The decedent who was operating a Renault automobile suffered fatal injuries when a vehicle driven by another individual crossed the center line and collided with her vehicle. The limits of a policy issued to the other driver, $95,613.00 were received by Appellee. Since Appellee's damages exceeded this figure, a declaratory judgment action was brought against Appellant who had issued a policy of insurance to the decedent as a named insured which covered both the Renault automobile and a Chevrolet pick-up truck. The policy contained a maximum liability limit of $100,000.00 and a maximum limit of liability for uninsured and underinsured motorist coverage of $35,000.00. Because the policy issued by Appellant provided coverage for two vehicles Appellee sought to "stack" the underinsurance coverage to recover $70,000.00. Appellee averred that the loss suffered exceeded the combined total of liability limits received from the other driver's insured and the $70,000.00 of underinsurance coverage sought under the policy issued by Appellant. However, in determining whether such coverage should be obtained the trial court was presented with certain limitations contained in the amendments to the policy. The following provision was found under "Part C. Uninsured Motorists Coverage", "Limit of Liability" "B.":

If a single limit of liability for bodily injury liability is shown in the Declarations for this coverage, this is our maximum limit of liability for all damages for bodily injury resulting from any one auto accident. We will apply this limit to provide any separate limits required by law for Uninsured and Underinsured motorist coverage. However, this provision will not change our total limit of liability.

Paragraph "C.2." further provided:

With respect to damages caused by the owner or operator of an underinsured motor vehicle, the applicable limit of liability under paragraph A or B above is the most we will pay regardless of the number of covered persons, claims made, vehicles or premiums shown in the Declarations, or vehicles involved in the accident.

Judgment was entered for Appellee after the court determined that the above provisions, which purport to prohibit stacking of underinsurance coverage for multiple vehicles insured under one policy, were invalid as violative of the public policy expressed in the Motor Vehicle Financial Responsibility Law, hereinafter the MVFRL.

The task of interpreting a policy of insurance is designed so as to effectuate the intent of the parties to the contract as manifested by the language contained in the written document. Language found in the contract which is clear and unambiguous must be enforced unless such provision violates public policy. Votedian v. General Accident Fire and Life Assurance Corporation, 330 Pa. Super. 13, 478 A.2d 1324, 1326 (1984), citing Standard Venetian Blind Co. v. American Empire Insurance Co., 503 Pa. 300, 469 A.2d 563, 566 (1983). The clarity or ambiguity of the instant policy provisions which disallow the stacking of underinsurance coverage are not at issue in this case. We are only asked to determine whether these provisions are repugnant to the policy underlying the MVFRL. Since a specific statement of findings and purpose is not contained within the MVFRL, we must be guided by the established rules set forth in the Statutory Construction Act, 1 Pa.C.S.A. §§ 1501 et seq. This Act declares that the intention of the General Assembly is to be ascertained and effectuated when interpreting a statute. 1 Pa.C.S. § 1921(a). Words of a statute which are clear and free from ambiguity are not to be disregarded. 1 Pa.C.S. § 1921(b). And where words are not explicit, this court is to consider, among other matters, the following so as to ascertain the intent of the General Assembly:

(1) The occasion and necessity for the statute;

(2) The circumstances under which it was enacted;

(3) The mischief to be remedied;

(4) The object to be attained (5) The former law, if any, including other statutes upon the same or similar subjects;

(6) The consequences of a particular interpretation;

(7) The contemporaneous legislative history;

(8) Legislative and administrative interpretations of such statute.

1 Pa.C.S. § 1921(c).

The present law was enacted and prompted by growing dissatisfaction with the prior No-Fault Motor Vehicle Insurance Act. ¹ See: Wolgemuth v. Harleysville Mutual Ins. Co., --- Pa.Super. ----, 535 A.2d 1145 (1988). The No-Fault Act did not address either uninsured or underinsured coverage except to provide minimum limits for uninsured motorist coverage. Uninsured motorist coverage was required under the Uninsured Motorist Act. ² The courts of this Commonwealth have been called upon to determine the purpose and policy behind these Acts as they relate to the "stacking" question.

In the seminal case of Harleysville Mutual Casualty Co. v. Blumling, 429 Pa. 389, 241 A.2d 112 (1968) the legislative intent behind the uninsured motorist statute was examined to determine whether anti-stacking clauses were violative of the purpose of the Act. The court stated:

The purpose of the uninsured motorist law is to provide protection to innocent victims of irresponsible drivers. The amount of the coverage to be afforded by the uninsured motorist feature of the policy is set by the statute, but nowhere, explicitly or implicitly, does the Act place a limit on the total amount a victim may recover if he suffers a loss resulting from the negligence of an uninsured motorist.

....

We do not wish to imply that injured parties may be permitted to pyramid separate coverages so as to recover more than the actual loss .... We do hold, however, ... that where the loss exceeds the limits of one policy, the insured may proceed under other available policies up to their individual limits or to the amount of the actual loss.

Id. at 395-396, 241 A.2d at 115.

Different classes of insured and their ability to stack uninsured coverage were outlined in Utica Mutual Insurance Company v. Contrisciane, 504 Pa. 328, 473 A.2d 1005 (1984). Therein the court held that the decedent, the son of the named insured as well as a member of his household, was a "Class One" insured, an intended beneficiary of the policy, and entitled to "stack" coverages. The court recounted the justification for stacking:

[F]irst, ... it furthers the policies sought to be accomplished by the act; and second, that the intended beneficiary of an uninsured motorist policy is entitled to multiple coverage when multiple premiums have been paid. The latter rationale is grounded in the belief that a person has reasonable expectations when he pays separate premiums that he has obtained coverage under separate policies, and therefore is entitled to benefits under each.

Id. at 338, 473 A.2d at 1010.

Appellee aptly argues that "the same precedents that mandated a liberal intent and prohibited the exclusion of stacking in the un insured motorist context, should also now apply with respect to underinsured motorist protection under the Financial Responsibility Law." Appellee's Brief at 15. In positing that the rationale utilized in voiding prohibitions to stacking under the Uninsured Motorist Act should be applied to the instant law, Appellee, like the trial court, refers to the language of the MVFRL.

Initially, we turn to the Subchapters contained within the MVFRL and note that the provisions for both uninsured and underinsured motorist coverage were drafted together within Subchapter C. titled Uninsured and Underinsured Motorist Coverage. Appellee maintains, and we agree, that this factor is important to a determination of the legislative intent regarding the stacking question. The legislature in enacting a statute is presumed to have been familiar with the law as it then existed and the construction which the courts had placed upon such law. Wallaesa v. Wallaesa, 174 Pa.Super. 192, 100 A.2d 149 (1953). As recited, the stacking of uninsured benefits prior to the passage of the MVFRL was permitted. See discussion supra. When enacting the provisions for uninsured and underinsured motorists benefits together in Subchapter C. of the MVFRL, no express limitation regarding stacking was written into the law. We find this fact lends credence to Appellee's position that the legislature intended the stacking of uninsured benefits to continue, and by coupling uninsured and underinsured benefits within the same subchapter, the legislature intended for stacking of underinsured benefits to be permitted.

Appellee also points to the definitions found within the two acts. Under the MVFRL underinsured motorist coverage is described as designed to "provide protection for persons who suffer injury arising out of the maintenance or use of a motor vehicle and are legally entitled to recover damages therefor from owners or operators of underinsured motor vehicles." 75 Pa.C.S.A. § 1731(c). Similar language was used in the Uninsured...