Franks, R. v. State Farm Mutual ( 2021 )

J-E02001-21
2021 PA Super 192ROBERT FRANKS AND KELLY A. : IN THE SUPERIOR COURT OF
FRANKS, H/W : PENNSYLVANIA
:
Appellant :
:
:
v. :
:
: No. 2784 EDA 2019
STATE FARM MUTUAL AUTOMOBILE :
INSURANCE COMPANY :
Appeal from the Judgment Entered September 4, 2019
In the Court of Common Pleas of Bucks County Civil Division at No(s):
No. 2018-03954
BEFORE: PANELLA, P.J., BENDER, P.J.E., BOWES, J., LAZARUS, J., OLSON,
J., DUBOW, J., KUNSELMAN, J., MURRAY, J., and McCAFFERY, J.
DISSENTING OPINION BY McCAFFERY, J.:FILED SEPTEMBER 24, 2021
Because Section 1738(c) of the Motor Vehicle Financial Responsibility
Law1 (MVFRL) was enacted with the aim of consumer protection, I conclude
the statute requires a new stacking waiver whenever the amount of UIM
coverage changes, regardless of whether that change is an increase or
decrease in the amount of stacked coverage as a result of the addition or
removal of a vehicle. Thus, I respectfully dissent.
When considering the application of a statute, we must bear in mind
that “[t]he object of all interpretation and construction of statutes is to
ascertain and effectuate the intention of the General Assembly.” 1 Pa.C.S. §
____________________________________________
1 75 Pa.C.S. §§ 1701-1799.7.
J-E02001-21
1921(a). Furthermore, “[w]hen the words of a statute are clear and free from
all ambiguity, the letter of it is not to be disregarded under the pretext of
pursuing its spirit.” 1 Pa.C.S. § 1921(b).
It is well-settled that “the MVFRL should be construed liberally in favor
of the insured.” Progressive Halcyon Ins. Co. v. Kennedy, 908 A.2d 911,
916 (Pa. Super. 2006).
One of the objects of the MVFRL to be effected by this liberal
construction is affording the injured claimant the greatest
possible coverage. We must remain mindful that in close or
doubtful cases, we must interpret the intent of the legislature and
the language of insurance policies to favor coverage for the
insured.
Jones v. Unitrin Auto & Home Ins. Co., 40 A.3d 125, 127 (Pa. Super. 2012)
(citation omitted and emphases added). See AAA Mid-Atl. Ins. Co. v. Ryan,
84 A.3d 626, 633 (Pa. 2014) (“[T]he ‘clearly expressed’ public policy
underlying the MVFRL is protecting ‘those injured by a [negligent driver] who
lacks adequate coverage[.]’”).
As the Majority explains, the issue raised in this appeal is one of first
impression, namely, “[w]hether the removal of a vehicle from an auto
insurance policy providing non-stacked UIM coverage for three vehicles
constitutes the ‘purchase’ of coverage as contemplated by [S]ection
1738(c) of the MVFRL, such that the insured must be provided the opportunity
to waive the stacked limits of coverage at the time of removal.” Majority Op.
at 4 (emphases added). Relevant herein, Section 1738 requires an insurer to
provide its insured the opportunity to waive stacked UIM coverage in exchange
-2-
J-E02001-21
for a reduced premium. 75 Pa.C.S. § 1738(b)-(c). Specifically, Subsection
1738(c) mandates that when a policy covers more than one vehicle:
Each named insured purchasing uninsured or underinsured
motorist coverage for more than one vehicle under a policy
shall be provided the opportunity to waive the stacked limits of
coverage and instead purchase coverage as described in
subsection (b). The premiums for an insured who exercises such
waiver shall be reduced to reflect the different cost of such
coverage.
75 Pa.C.S. § 1738(c) (emphases added).
The Majority thoroughly summarizes the current law regarding stacked
coverage. It is clear the addition of a vehicle to an existing multi-vehicle
policy requires the insurer to provide the insured with a new stacking rejection
form. See Majority Op. at 6-8, citing the Sackett Trilogy.2 Furthermore, this
Court has held that when a policy includes a non-finite after-acquired vehicle
clause, the replacement of one vehicle with another on an existing multi-
vehicle policy does not require a new stacking waiver. Shipp v. Phoenix
Ins. Co., 51 A.3d 219, 223-24 (Pa. Super. 2012). The Shipp Court explained
that, although the insured added collision coverage for the replacement
vehicle, the UM/UIM coverage remained the same:
The matter of importance in all of these cases, as well as in
section 1738, pertains only to the UM/UIM policy coverage,
whether it has changed, and whether a new waiver of
stacked coverage is required. At all times, both before and
after the acquisition of the [the replacement vehicle], the UM/UIM
coverage limits of the . . . policy remained at $200,000 stacked,
____________________________________________
2See Sackett v. Nationwide Mut. Ins. Co., 940 A.2d 329 (Pa. 2007);
Sackett v. Nationwide Mut. Ins. Co., 919 A.2d 194 (Pa. 2007); Sackett v.
Nationwide Mut. Ins. Co., 4 A.3d 637 (Pa. Super. 2010).
-3-
J-E02001-21
$100,000 unstacked. We find the addition of collision coverage to
be irrelevant to the issue of stacking under section 1738.
. . . In the case of a replacement vehicle, there is no change
whatsoever in the amount of UM/UIM coverage. The only change
is in the identity of the covered vehicle. Indeed, both before and
after the purchase of the [replacement vehicle], the UM/UIM
coverage available to the [insureds] remained at all times
$200,000 stacked, $100,000 unstacked. Since no new insurance
coverage was purchased under such circumstances, [the insurer]
would not need to re-obtain waiver of stacked coverage from the
[insured].
Id. at 224 (emphasis added).
As noted supra, however, neither this Court nor the Supreme Court has
considered whether the removal of a vehicle from a multi-vehicle policy
requires a new stacking waiver. In concluding that it does not, the Majority
finds guidance in the Pennsylvania Supreme Court’s decision in Barnard v.
Travelers Home & Marine Ins. Co., 216 A.3d 1045 (Pa. 2019). In that
case, the Court considered the following certified question of law, on remand
from the Third Circuit Court of Appeals:
If an insured under a policy of insurance subject to the [MVFRL]
has waived stacking but later secures an increase in the limit of
her UIM coverage on her existing policy, must her insurance
carrier obtain a separate waiver of her right to stack the coverage
or does a prior waiver of the right to stack the coverage remain in
effect?
Id. at 1049. In concluding the insurer must obtain a new stacking waiver
when an insured increases UIM coverage in an existing policy, the Court relied
upon the definition of the term “purchase” as it is used in Section 1738(c).
Id. at 1051-52. The Court opined:
We emphasize that, in ordinary usage, the term “purchase”
requires two things: (1) the acquisition of something; and (2)
-4-
J-E02001-21
payment. Paying an increased premium satisfies the second
requirement, but, in order to satisfy the first, the insured must
obtain something that she does not already possess. Specifically,
in the context of Subsection 1738(c), an insured must obtain UIM
coverage. An insured paying for an increased UIM coverage limit
undoubtedly acquires more UIM coverage than she initially had.
Id. at 1053.
Relying on Barnard’s definition of “purchase” — obtaining something
the insured did not already possess — the Majority reasons “it is clear that the
deletion of a vehicle from a policy does not result in a ‘purchase’ as
contemplated by [S]ection 1738(c).” Majority Op. at 10. In my view, the
Majority’s focus is too narrow. Further, this myopic interpretation undermines
the stated purpose of the MVFRL which is to afford coverage to insureds.
In determining whether a new stacking waiver is required, what is
critical is whether there is a change in the potential amount of stacked
coverage. When a new vehicle was added in Sackett, the Supreme Court
concluded a new waiver of the increased stacked coverage was required.
Sackett, 919 A.2d at 202. Similarly, in Barnard, the Court held that a new
waiver was required when the insured increased their UIM coverage on
vehicles they already possessed, noting the insurer “was required to offer [the
insured] the opportunity to waive stacking of the new, aggregate amount
of UIM coverage at that time.” Barnard, 216 A.3d at 1054 (emphasis added).
Notably, however, in Shipp, this Court determined a new waiver was not
required when the insured replaced one vehicle with another, despite the fact
the insured added collision coverage on the replacement vehicle which
increased the cost of the policy. Shipp, 51 A.3d at 224. The Shipp Court
-5-
J-E02001-21
explained, “[i]n the case of a replacement vehicle, there is no change
whatsoever in the amount of UM/UIM coverage. The only change is in the
identity of the covered vehicle.” Id.The Majority insists the language in Shipp requiring a new stacking
waiver whenever there is a “change” in UIM coverage is inapplicable to the
facts in the present case because the Shipp Court was not confronted with a
decrease in UM/UIM coverage. See Majority Op. at 10-11. Again, I conclude
the Majority’s reading is too restricted. The Shipp Court could have narrowed
its holding by stating a new stacking waiver is required only when an insured’s
coverage increases. It did not do so. Indeed, even under the Majority’s
definition, the Frankses acquired something they did not have before —
coverage for only two vehicles.
In my opinion, Section 1738(c) requires a new stacking waiver
whenever the stacked amount of UIM coverage changes — regardless of
whether the change is an increase or decrease in the amount of stacked
coverage. This interpretation complies with our stated policy of construing
the statute “liberally in favor of the insured”3 so as to “afford[ ] the injured
claimant the greatest possible coverage.” See Jones, 40 A.3d at 127. Thus,
I would conclude the Frankses were entitled to stacked UIM coverage in the
amount of $200,000, and I would reverse the declaratory judgment entered
in favor of State Farm.
____________________________________________
3 Progressive Halcyon, 908 A.2d at 916.
-6-
J-E02001-21
Accordingly, I respectfully dissent.
President Judge Panella and Judge Kunselman join this Dissenting
Opinion.
-7-