Tenos v. State Farm Ins. Co.

• Decision Date: 22 September 1998
• Citation: 716 A.2d 626
• Parties: Gregory TENOS v. STATE FARM INSURANCE CO., Appellant. Gregory TENOS, Appellant, v. STATE FARM INSURANCE CO.
• Court: Pennsylvania Superior Court

Page 626

716 A.2d 626

Gregory TENOS v. STATE FARM INSURANCE CO., Appellant.

Gregory TENOS, Appellant, v. STATE FARM INSURANCE CO.

Superior Court of Pennsylvania.

Argued Jan. 29, 1998.

Filed July 17, 1998.

Reargument Denied Sept. 22, 1998.

Daniel M. Taylor, Pittsburgh, for State Farm Insurance Co.

Mariann E. Luksik-Jarvis, Pittsburgh, for Gregory Tenos.

Before DEL SOLE, HUDOCK and ORIE MELVIN, JJ.

ORIE MELVIN, Judge:

This case involves cross-appeals from the March 8, 1995 order of the Court of Common Pleas of Butler County entering summary judgment against State Farm Insurance Company (State Farm) on the question of coverage under their homeowner's policy, and also denying Gregory Tenos' (Tenos) Motion for Leave to Amend his Complaint to add a count under the Unfair Trade Practices and Consumer Protection Act (UTPCPA). We reverse the grant of summary judgment and remand for entry of summary judgment in favor of State Farm and otherwise affirm the denial of leave to amend.

The relevant facts and procedural background of these cross-appeals are as follows. This action arises from State Farm's denial of a claim made by Tenos under his contract of homeowner's insurance with State Farm. In January of 1991, Tenos' rural residence was burglarized. Among other items, two all-terrain vehicles (ATVs) were stolen. Tenos submitted a claim for the value of the ATVs which State Farm denied on the basis that his policy did not cover the ATVs, as they were not used "solely for the service of the insured location."

Tenos filed suit and the matter was submitted to Compulsory Arbitration. 42 Pa.C.S.A. § 7361. A board of arbitrators entered an award in favor of Tenos. State Farm then appealed to Common Pleas Court for a trial de novo as permitted by § 7361(d) supra. Tenos next filed a Motion for Leave to Amend seeking to add a claim for damages under the Pennsylvania UTPCPA. Additionally, each party filed a motion for summary judgment. The trial court granted summary judgment in favor of Tenos on the issue of liability only and denied Tenos' motion to amend. Upon State Farm's admission of the ATVs value, a judgment of $ 7,552.86 was subsequently entered against State Farm. These cross-appeals followed.

On appeal the parties raise the following issues for our review:

WHETHER THE TRIAL COURT INCORRECTLY HELD THAT TENOS'S [SIC] ATVS WERE USED 'SOLELY FOR THE SERVICE OF THE INSURED LOCATION' AND WERE COVERED UNDER THE POLICY, DESPITE TENOS'S [SIC] ADMISSION THAT THE ATVS WERE USED FOR RECREATIONAL PURPOSES?

(State Farm's Brief at 5).

[WHETHER] THE TRIAL COURT ABUSED ITS DISCRETION WHEN IT DENIED TENOS' MOTION TO AMEND COMPLAINT TO INCLUDE A CLAIM UNDER THE UNFAIR TRADE PRACTICES AND CONSUMER PROTECTION LAW, WHICH CLAIM WAS WITHIN THE STATUTE OF LIMITATIONS?

(Tenos' Brief at 6).

As to the first issue, we note that when reviewing orders granting summary judgment our scope of review is plenary. State Farm Mutual Auto. Ins. Co. v. Universal Underwriters Ins. Co., 549 Pa. 518, 701 A.2d 1330 (1997). This Court has previously summarized the appropriate standard as follows:

First, the pleadings, depositions, answers to interrogatories, admissions on file, together with any affidavits, must demonstrate that there exists no genuine issue of fact. Second, the moving party must be entitled to judgment as a matter of law. The moving party has the burden of proving that no genuine issue of material fact exists. However, the non-moving party may not rest upon averments contained in its pleadings; the non-moving party must demonstrate that there is a genuine issue for trial. The court must examine the record in the light most favorable to the non-moving party and resolve all doubts against the moving party. Finally, an entry of summary judgment is granted only in cases where the right is clear and free of doubt. We reverse an entry of summary judgment when the trial court commits an error of law or abuses its discretion.

Janson v. Cozen and O'Connor, 450 Pa.Super. 415, 676 A.2d 242, 246 (1996) quoting Blackman v. Federal Realty Inv. Trust, 444 Pa.Super. 411, 664 A.2d 139, 141-42 (1995). Moreover, the question of whether a claim is within a policy's coverage or barred by an exclusion is a question of law that may be decided by a motion for summary judgment. Lebanon Coach Co. v. Carolina Casualty Ins. Co., 450 Pa.Super. 1, 675 A.2d 279 (1996). In reviewing such a determination "we are not bound by the trial court's conclusions of law, but may draw our own inferences and reach our own conclusions." Id. 675 A.2d at 283. With these principles in mind, we consider the propriety of the trial court granting summary judgment.

The first issue requires our examination of whether the trial court was correct in determining that Tenos' ATVs were covered under his homeowner's insurance policy. We begin our analysis by examining the provision of the policy pertinent to this appeal.

COVERAGE B - PERSONAL PROPERTY

....

2. Property Not Covered. We do not cover:

....

c. any engine or motor propelled vehicle or machine, including the parts, designed for movement on land. We do cover those used solely for the service of the insured location and not licensed for use on public highways; (emphasis added)

State Farm Homeowner's Policy (Special Form 3) Exhibit A attached to Complaint.

State Farm asserts that the language of the policy is clear and unambiguous. State Farm contends that ATVs are motor propelled vehicles designed for movement on land and thus are not covered unless "used solely for the service of the insured location." As part of the investigation of Tenos' claim, State Farm took a recorded statement from Tenos wherein he admitted that he used the ATVs primarily for recreational purposes and some work around the premises. ¹ Consequently, State Farm argues that Tenos' admitted use falls outside the limited service exception. Tenos counters by pointing out that since State Farm does not define the phrase, it is inherently ambiguous, and therefore the trial court correctly construed the language of the policy in favor of coverage. Tenos further asserts that the phrase in question is broad enough to include recreational use on the premises within the meaning of service. The trial court accepted Tenos' argument and held that the phrase was ambiguous and that a reasonable interpretation could include recreational use on the insured property.

We are guided by the following principles in deciding this issue:

When interpreting an insurance contract, words that are clear and unambiguous must be given their plain and ordinary meaning. Where ambiguities are found, they must be construed in the light most favorable to the insured. However, 'a contract is not rendered ambiguous by the mere fact that the parties do not agree upon the proper construction.' An ambiguity exists only when a policy provision is reasonably susceptible of more than one meaning. 'Courts should read policy provisions to avoid ambiguities, if possible, and not torture language to create them.' (citations omitted).

Ryan Homes, Inc. v. Home Indemnity Co., 436 Pa.Super. 342, 647 A.2d 939, 941 (1994). Our research has failed to uncover any Pennsylvania appellate cases interpreting the meaning of the provision in question. However, State Farm cites to several cases from other jurisdictions that have had the occasion to review the same or a very similar provision.

In Wilhite v. State Farm Fire and Casualty Ins. Co., 541 So.2d 22 (Ala.Civ.App.1989), the Alabama Court of Civil Appeals reviewed the exact same provision and held that a stolen Suzuki 4-wheel off-road recreational vehicle was properly excluded from coverage by Section 2(c). The court found the language to be "plain and unambiguous" and that "the exclusion clause could not be more straightforward and explicit." Id. at 23. However, the argument presented was different from the instant case. In Wilhite, the insured argued that since his Suzuki ATV was not defined as a motor vehicle pursuant to the definitional sections of the policy, it could not be excluded by the language of Section 2(c) which precluded coverage for theft of "any engine or motor propelled vehicle." Hence, Wilhite does not present specific guidance.

In Watamura v. State Farm Fire and Casualty Co., 206 Cal.App.3d 369, 253 Cal.Rptr. 555 (1988), again reviewing the same provision, the California Court of Appeals also found that the loss of a "sandrail" (dune buggy) was "excluded by the clear and unambiguous terms of the policy." Id., 206 Cal.App.3d at 371, 253 Cal.Rptr. at 556. Again the insured attempted to create an ambiguity by referring to the definitional section which stated that "motor vehicle" means "a motorized land vehicle designed for travel on public roads or subject to motor vehicle registration." The insured argued that whether his sandrail was in dead storage was a question of fact, and the definition of motor vehicle rendered the exclusionary clause ambiguous. In rejecting these arguments, the Watamura court opined: "[t]here was no ambiguity in this provision. The sandrail was an engine or motor propelled vehicle designed for movement on land, and was therefore excluded." Id. Although dicta, the Watamura court also expressly found that a sandrail "did not fall within the exception for vehicles 'used solely for the service of the insured location' such as a tractor-mower." Id. Implicit in this holding is the court's understanding that the limited exception to the exclusion requires the motor propelled vehicle to serve the land.

Similarly, in Fontenot v. Louisiana Farm Bureau Mutual Ins. Co., 535 So.2d 552 (La.App.1988), the Louisiana Court of Appeals found that a stolen three-wheel motorcycle was not covered under a homeowner's policy that excluded losses to "motorized vehicles, except such vehicles pertaining to the service of the premises." Id. at 553 (emphasis added). Interestingly, even the parties agreed, as evidenced by their...