Robert Henderson v. Charter Oak Fire Insurance , 615 F. App'x 109 ( 2015 )

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
____________
No. 14-1850
____________
ROBERT M. HENDERSON;
NATALIE HENDERSON; RICHARD H. BARONE,
Appellants
v.
CHARTER OAK FIRE INSURANCE; TRAVELERS INSURANCE, CO.
____________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. No. 2-12-cv-04363)
District Judge: Honorable C. Darnell Jones, II
____________
Submitted Under Third Circuit LAR 34.1(a)
June 2, 2015
Before: RENDELL, HARDIMAN and VANASKIE, Circuit Judges.
(Filed: June 26, 2015)
____________
OPINION*
____________
*
This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does
not constitute binding precedent.
HARDIMAN, Circuit Judge.
This appeal is taken from the District Court’s summary judgment in favor of
Charter Oak Fire Insurance Company and its parent corporation, Travelers Insurance
Company. We will affirm.
I
In October 2010, Robert Henderson and Richard Barone were operating a vehicle
owned by Haverford Township, Pennsylvania, when they were struck by another vehicle
and seriously injured. At the time, the Township had a commercial automobile policy
issued by Charter Oak that included $1 million in primary liability coverage and the
statutory minimum of $35,000 in combined single limit uninsured motorist (UM) and
underinsured motorist (UIM) coverage. Following the accident, Henderson and Barone
submitted claims to Charter Oak for UIM benefits and received $35,000 ($17,500 each).
Unsatisfied with the $35,000 payment, Henderson and Barone claimed they were
entitled to UIM benefits equal to the primary liability coverage of $1 million because the
Township’s 2010-2011 insurance policy application didn’t comply with Pennsylvania’s
Motor Vehicle Financial Responsibility Law (MVFRL), 75 Pa. Cons. Stat. § 1701 et seq.
They filed an action for declaratory relief and damages in the Philadelphia Court of
Common Pleas, which Charter Oak and Travelers (Insurers) removed to the United States
District Court for the Eastern District of Pennsylvania. Both sides moved for summary
judgment, and the District Court granted the Insurers’ motion. Henderson and Barone
2
filed this appeal.1
II
We exercise plenary review over the District Court’s summary judgment and apply
the same standard it applied. Blunt v. Lower Merion Sch. Dist., 767 F.3d 247, 265 (3d Cir.
2014). In doing so, we review the record in the light most favorable to the nonmovant, id.,affirming if there is no genuine dispute as to any material fact and the movant is entitled
to judgment as a matter of law, Fed. R. Civ. P. 56(a).
III
The question presented is whether the Township violated the MVFRL when it
selected the minimum limit of UIM coverage, i.e., $35,000. We hold that it did not.
A
Under the MVFRL, insurers must offer UM and UIM coverage equal to bodily
injury liability limits (here, $1 million). See 75 Pa. Cons. Stat. §§ 1731(a), 1734. This
does not mean, however, that insureds are obliged to purchase such coverage. In fact, they
can forego UM/UIM coverage entirely, id. § 1731(a), or they can select in writing
UM/UIM coverage lower than the bodily injury liability limits, but not less than the
minimum limit required by statute ($35,000), id. § 1734.
1
The District Court had diversity jurisdiction under 28 U.S.C. § 1332, and we
have jurisdiction under 28 U.S.C. § 1291. Henderson’s wife, Natalie Henderson, is also
an Appellant.
3
In this case, the record shows that 2002-2003 was the last year the Township
purchased $1 million in both liability coverage and UM/UIM coverage. Thereafter, the
Township continued to purchase $1 million in liability coverage but reduced its UM/UIM
coverage to $35,000. That includes 2008-2009, when the Township submitted a
supplementary application stating that it “may purchase [UM/UIM coverage] with limits
equal to your Bodily Injury Liability Limits or select lower limits, but not less than the
minimum limits required by statute ($15,000 each person/$30,000 each accident; or
$35,000 each accident, combined single limit[).]” The application was signed by the
Township’s manager and contained a handwritten “$35,000” next to a circle indicating
that the Township had selected both UM and UIM coverage at the “minimum limits.” The
Township’s manager testified that it continued to make this selection “[i]n every
succeeding year,” including 2010-2011, the year of the accident.
B
Appellants concede that the 2008-2009 application complied with the MVFRL’s
requirements and reduced the Township’s UM/UIM coverage to $35,000. Nevertheless,
they argue that the 2010-2011 supplementary application is the only one that matters here,
and that it didn’t comply with the MVFRL. For the election of the minimum limit of
$35,000 to be valid, Appellants argue, “(1) the named insured must sign the request for
lower limits; and (2) the named insured must expressly designate the amount of
[UM/UIM] coverage being elected.” Br. of Appellants 17 (emphasis in original) (citing
4
Lewis v. Erie Ins. Exch., 793 A.2d 143 (Pa. 2002), and Orsag v. Farmers New Century
Ins., 15 A.3d 896 (Pa. 2011)). Because the Township in the 2010-2011 application never
expressly designated the amount of UM/UIM coverage to be $35,000, they say, the
amount must be reformed to the default limit of $1 million. We disagree.
First and foremost, the 2008-2009 application explicitly states that “[t]he coverage
rejections or selections indicated by you on this application . . . will apply to all future
renewal policies until you notify the Company IN WRITING of any changes.” App. 278
(emphasis in original). Appellants admit that the 2008-2009 application was valid; the
Township renewed the policy every year and never altered its election of reduced limits;
and so it follows that the terms of the 2008-2009 policy were still in effect at the time of
the 2010 accident.
Second, even considering the 2010-2011 application on its own terms, we hold that
it is valid under the MVFRL because it conveyed the Township’s intent to purchase the
statutory minimum limit of $35,000 in UM/UIM coverage. The 2010-2011 application
contains a subsection instructing the Township to “make selection below only if you wish
to select Underinsured Motorists Coverage at limits lower than your policy Bodily Injury
Liability Limits.” App. 126 (emphasis in original). Immediately below, the Township
marked an “X” in a box labeled “Underinsured Motorists Coverage at the minimum
limits” and the Township’s manager signed the bottom of that page. App. 126. As in the
2008-2009 application, the 2010-2011 application clearly defines the term “minimum
5
limits” as “$15,000 each person/$30,000 each accident; or $35,000 each accident,
combined single limit[.]” App. 123. In addition, the District Court found that the
Township paid premiums for $35,000 in UIM coverage.
Appellants contend this isn’t enough. They believe that under § 1734 of the
MVFRL, the Township had to expressly designate that it had selected the amount of
$35,000 in UIM coverage. But while the Pennsylvania Supreme Court has noted that
“[c]learly, the most effective manner in which to ‘expressly designate’ the amount of
coverage requested is by electing a specific dollar amount,” Orsag, 15 A.3d at 901 (citing
Lewis, 793 A.2d at 153), doing so isn’t required. Accordingly, we hold that the 2010-2011
application complied with the MVFRL and that, viewed as a whole, it clearly shows the
Township’s intent to purchase the statutory minimum limit of $35,000 in UIM coverage.
See Hartford Ins. Co. v. O’Mara, 907 A.2d 589, 603 (Pa. Super. Ct. 2006) (holding that
the application “viewed as a whole” indicated the insured’s decision to select UM/UIM
coverage lower than her liability limits).
* * *
The order of the District Court will be affirmed.
6