Prudential Prop v. Dormer , 125 F. App'x 425 ( 2005 )

Opinions of the United
2005 Decisions States Court of Appeals
for the Third Circuit
3-4-2005
Prudential Prop v. Dormer
Precedential or Non-Precedential: Non-Precedential
Docket No. 04-1598
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Recommended Citation
"Prudential Prop v. Dormer" (2005). 2005 Decisions. Paper 1474.
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 04-1598
PRUDENTIAL PROPERTY AND CASUALTY
INSURANCE COMPANY
v.
DEBRA J. DORMER,
Appellant
Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civil No. 03-cv-03796)
District Judge: Honorable Charles R. Weiner
Submitted Under Third Circuit LAR 34.1(a)
on January 28, 2005
Before: SCIRICA, Chief Judge, RENDELL and FISHER, Circuit Judges .
(Filed March 4, 2005 )
OPINION OF THE COURT
RENDELL, Circuit Judge.
In this declaratory judgment action, Prudential Property and Casualty Insurance
Company sought to obtain a ruling that it was not required to pay uninsured motorist
(“UIM”) benefits under an insurance policy it had issued to Frederick H. McCurry, father
of Debra J. Dormer, Appellant herein. The District Court granted summary judgment in
favor of Prudential, and we will affirm.
Dormer appeals, contending that factual issues prevented the grant of summary
judgment, and that she should have been permitted to inquire as to the extent of
Prudential’s knowledge as bearing on the applicability of what is commonly referred to as
the “household exclusion” in its policy.
The District Court had jurisdiction pursuant to 28 U.S.C. § 1332(a)(1) because
there is diversity of citizenship between the parties and the amount in controversy exceeds
$75,000.00. We have jurisdiction over this appeal under 28 U.S.C. § 1291.
We exercise plenary review over the grant of a motion for summary judgment.
Nationwide Mutual Insurance Co. v. Riley, 352 F.3d 804, 806 n.3 (3d Cir. 2003).
Summary judgment is appropriate where “there is no genuine issue as to any material fact
and that the moving party is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(c). “We review the facts in the light most favorable to the party against whom
summary judgment was entered.” Coolspring Stone Supply, Inc. v. American States Life
Ins. Co., 10 F.3d 144, 146 (3d Cir. 1993).
Dormer does not own a motor vehicle or use one regularly. At the time of the
accident, she was a passenger in a car owned and operated by her daughter, Amanda
Krish. Krish had a policy with Allstate, and Dormer recovered under that policy as well
as under the policy of the other driver involved in the accident. Dormer then sought
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recovery against Prudential based on the UIM provisions of a policy issued to McCurry
that covered three vehicles, none of which was involved in the accident. Dormer was an
insured under McCurry’s policy because she, Krish, and McCurry all lived together at the
same address. But, McCurry’s policy contained an exclusion:
Losses we will not pay for (Part 5).
Other household vehicles:
We will not pay for bodily injury to anyone occupying or
struck by a motor vehicle owned or leased by you or a
household resident which is not covered under this policy . . .
In order to prevail, Dormer had to invalidate this exclusion, which clearly applied
under the circumstances. Dormer urged that case law in Pennsylvania indicates that the
effectiveness of the exclusion is dependent upon facts, and that the District Court denied
her the opportunity to explore these facts when it entered a protective order against
discovery from Prudential of certain information regarding the setting of policy premium
rates.
The District Court issued a thorough and thoughtful opinion granting summary
judgment, noting that the Pennsylvania Supreme Court has routinely upheld the
enforceability of the household exclusion, although occasionally noting that factual
circumstances could alter the outcome. See e.g., Paylor v. Hartford Ins. Co., 640 A.2d
1234 (Pa. 1994); Windrim v. Nationwide Ins. Co., 641 A.2d 1154 (Pa. 1994); Eichelman
v. Nationwide Ins. Co., 711 A.2d 1006 (Pa. 1998); Burstein v. Prudential Prop. & Cas.
Ins. Co., 809 A.2d 204 (Pa. 2002). Like the District Court, we see no prospect of
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eliminating the exclusion in this case, as it appears tailor-made for this type of situation.
Dormer was in a vehicle owned by a household resident not covered under
McCurry’s policy. The presence of the household exclusion no doubt was taken into
consideration in Prudential’s calculation of the amount of the premium charged for
McCurry’s policy. This has been generally recognized in numerous Pennsylvania
appellate court opinions cited by the District Court, such that voiding the exclusion would
result in “insurers [being] . . . forced to increase the cost of insurance, which is precisely
what the public policy behind the MVFRL strives to prevent.” Prudential Prop. & Cas.
Ins. Co. v. Colbert, 813 A.2d 747, 754-55 (Pa. 2002).
We repeat and adopt the reasoning of the District Court in this case:
The household exclusion discourages family members such as
Krish from scrimping on the amount of insurance they
purchase for their own vehicle in the hopes that any shortfall
can be made up by their status as a household resident on
another family member’s policy. Defendant was injured
while a passenger in Krish’s car. As such, she properly
recovered under the terms of Krish’s own policy with
Allstate. Had defendant been injured while in one of the three
vehicles insured by McCurry with plaintiff, she would be
entitled as a household resident to the UIM benefits from
plaintiff. That is because McCurry specifically paid for UIM
coverage for each of the three vehicles. By not including
Krish’s vehicle under his policy, McCurry paid a lesser
premium than he would have had he included the Krish
vehicle. Indeed, had defendant been injured in almost any
other vehicle than her daughter’s vehicle, she would have
been entitled to UIM benefits by virtue of her status as an
insured under the McCurry policy.
As noted by the Pennsylvania Supreme Court in Windrim, the household
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exclusion does not violate public policy, and, in fact, voiding this exclusion would
provide a disincentive to purchase insurance on family vehicles because resident relatives
would rely upon UIM coverage under other resident relatives’ policies. 641 A.2d at 1154,
1158 (citation omitted). This is not a practice that should be encouraged or fostered.
We can find no policy of Pennsylvania, let alone any policy that has been
referenced by the courts in Pennsylvania, that would alter or invalidate the exclusion
agreed upon by the parties to this insurance contract, especially where, as here, plaintiff
has not been deprived of insurance recovery but, rather, has collected under the insurance
policies directly associated with the accident.1
Nor can we conclude that the District Court erred in not permitting Dormer to
explore the remote possibility of persuading it otherwise based on the way in which it
calculated the premiums it charged. That inquiry would have been time-consuming and,
no doubt, not productive, given the clear applicability of the exclusion to the fact pattern
before it.
The Pennsylvania Trial Lawyers Association submitted a brief as amicus curiae
contending that Dormer’s not owning a vehicle, not having an insurable interest, and thus
not having had an opportunity to elect to purchase benefits for herself, somehow alters the
equation. However, Dormer was clearly covered under Krish’s policy; had Dormer been
in an automobile of anyone other than Krish or another resident of the household, she
would have been covered under McCurry’s UIM policy. Therefore, whatever policy
argument might be made to insure coverage for persons otherwise deprived of coverage is
a non-argument here, for indeed, she was covered and would have been covered for
nearly any accident that occurred, either under Krish’s policy, or McCurry’s.
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Accordingly, we will affirm the order of the District Court.
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