Bielec, J. v. American International Group, Inc.

J-A23026-17 & J-A23027-17
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
JOHN J. BIELEC : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
:
v. :
:
:
AMERICAN INTERNATIONAL GROUP, :
INC., NATIONAL UNION FIRE :
INSURANCE COMPANY OF : No. 336 EDA 2017
PITTSBURGH, P.A., VERIZON :
COMMUNICATIONS INC. AND :
VERIZON PENNSYLVANIA :
:
:
APPEAL OF: VERIZON :
PENNSYLVANIA LLC AND VERIZON :
COMMUNICATIONS INC. :
Appeal from the Order Entered December 5, 2016
In the Court of Common Pleas of Philadelphia County Civil Division at
No(s): 1440 September Term, 2014
JOHN J. BIELEC : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
:
v. :
:
:
AMERICAN INTERNATIONAL GROUP, :
INC. NATIONAL UNION FIRE :
INSURANCE COMPANY OF : No. 418 EDA 2017
PITTSBURGH, PA, VERIZON :
COMMUNICATIONS, INC. AND :
VERIZON PENNSYLVANIA, INC. :
:
:
APPEAL OF: NATIONAL UNION FIRE :
INSURANCE COMPANY :
OF PITTSBURGH, PA :
Appeal from the Order Entered December 5, 2016
J-A23026-17 & J-A23027-17
In the Court of Common Pleas of Philadelphia County Civil Division at
No(s): 1440 September Term, 2014
BEFORE: PANELLA, J., DUBOW, J., and FITZGERALD, J.*
MEMORANDUM BY DUBOW, J.: FILED DECEMBER 26, 2017
In these consolidated appeals, Appellants, Verizon Pennsylvania LLC
and Verizon Communications, Inc., (“Verizon”) and American International
Group, Inc. and National Union Fire Insurance Company of Pittsburgh, PA
(“National”) (collectively, “Appellants”) appeal from the December 5, 2016
Orders entering summary judgment in favor of Appellee, John J. Bielec, in
this Declaratory Judgment action. After careful review, we affirm.
The facts and procedural history are as follows. Appellee was an
employee of Verizon. On November 21, 2013, during the course of his
employment, Appellee was driving a vehicle owned by Verizon. At a traffic
light, an automobile struck Appellee’s vehicle. The automobile was insured
only for the minimum bodily damage limits allowed under the law. Appellee
alleged that he sustained serious injuries and damages in excess of these
minimum amounts, and consequently made an underinsured motorist
(“UIM”) claim to Verizon’s insurer, National. National denied the claim on
the grounds that, in 2013, Verizon had rejected UIM coverage, pursuant to
____________________________________________
*
Former Justice specially assigned to the Superior Court.
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J-A23026-17 & J-A23027-17
Section 1731(c) of the Motor Vehicle Financial Responsibility Law (“MVFRL”),
75 Pa.C.S. § 1731.
On September 9, 2014, Appellee commenced the instant Declaratory
Judgment action against Verizon and National. On November 5, 2014,
Verizon filed an Answer With New Matter to Appellee’s Complaint. On
November 11, 2014, National filed an Answer With New Matter and a
counterclaim for a Declaratory Judgment. In its counterclaim, National
sought a declaration that Verizon had validly rejected UIM coverage. On
November 26, 2014, Appellee filed a Reply to New Matter and Counterclaim.
On January 15, 2016, Verizon, National, and Appellee filed Motions for
Summary Judgment. The trial court scheduled a hearing on the Motions and
ordered the parties to file supplemental Briefs addressing the public policy
implications of the issues raised in the Motions.
Following the hearing, on December 5, 2016, the trial court denied
Appellants’ Motions for Summary Judgment, granted Appellee’s Motion for
Summary Judgment, and dismissed National’s counterclaim. The court
concluded that Verizon’s UIM rejection was defective as a matter of law and
that Appellee is entitled to UIM benefits under Verizon’s policy with National.
On December 29, 2016, and December 30, 2016, Verizon and National,
respectively, filed Motions for Reconsideration and Motions to Stay
Proceedings. The trial court denied the Motions on January 3, 2017.
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J-A23026-17 & J-A23027-17
On January 3, 2017, and January 4, 2017, National and Verizon each
filed Notices of Appeal. The trial court did not order Appellants to file
Pa.R.A.P. 1925(b) Statements.
National raises the following three issues on appeal, which we have
reordered for ease of disposition:
1. Does [Appellee] have standing to challenge the validity of the
rejection of [UIM] coverage made by his employer, the
Named Insured on the insurance policy issued by [National]?
2. Is the rejection of UIM coverage in this case by [Verizon] void
or invalid for failure to comply with 75 Pa.C.S. § 1731?
3. Does any Pennsylvania public policy relating to the [MVFRL]
require that notice [ ] be given to an employee of an
employer’s decision to reject UIM coverage in order for such a
rejection of UIM coverage be valid?
4. Does failure by a corporate insured to provide notice to its
employee that UIM coverage is being rejected obligate the
insurer to provide such coverage notwithstanding the
rejection of UIM coverage.
National’s Brief at 6.
Verizon raises the following two issues on appeal:
1. Is [Appellee] entitled to UIM benefits as a third-party
beneficiary of Verizon’s insurance policy because, even
though Verizon signed a form that reproduced the MVFRL’s
required rejection language verbatim with a clear intention to
waive coverage, Verizon signed only on the form’s second
page?
2. Is [Appellee] entitled to UIM benefits through Verizon’s
insurance policy because, on balance, the MVFRL’s public
policy goals require an employer to notify affected employees
when it wishes to waive UIM coverage, regardless [of]
whether they would have taken action in response to such
notice?
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J-A23026-17 & J-A23027-17
Verizon’s Brief at 5.
Standing
In its first issue, National claims that Appellee, as a third-party
beneficiary of Verizon’s insurance policy, lacks standing to challenge the
validity of Verizon’s waiver of UIM coverage. National’s Brief at 19-22.1
It is well-settled that a defendant waives a challenge to the issue of a
plaintiff’s standing to sue if he does not raise the challenge at the “earliest
possible opportunity.” Kuwait & Gulf Link Transport Co. v. Doe, 92 A.3d
41, 45 (Pa. Super. 2014). Where an objection to standing is concerned, the
“earliest possible opportunity” is defined as “in preliminary objections or in
[a defendant’s] answer to the complaint.” Drake Mfg. Co., Inc. v.
Polyflow, Inc., 109 A.3d 250, 257 (Pa. Super. 2015).
Our review of the pleadings indicates that National failed to challenge
Appellee’s capacity to bring this action for benefits under Verizon’s policy
before the trial court. In addition, in its Brief, National has not referred to
the place in the record where it preserved this issue. See Pa.R.A.P.
2119(c), (e). Thus, we conclude that National has waived this issue.2, 3
____________________________________________
1
Verizon also makes this argument in its Brief, but presents it as an
alternative argument in support of its overarching claim that the trial court
erred in finding its UIM waiver invalid, and not as a separate Question
Involved. See Verizon’s Brief at 31-36.
2
Verizon has likewise waived this issue for the reasons set forth, supra.
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J-A23026-17 & J-A23027-17
The UIM Waiver
National’s second issue and Verizon’s first issue are interrelated; thus,
we address them together. In these issues, Appellants essentially challenge
the trial court’s conclusion that Verizon’s UIM coverage waiver was invalid
under the MVFRL. National’s Brief at 22-34; Verizon’s Brief at 20-31.
We review orders granting summary judgment under a familiar
standard.
Summary judgment is proper only when the pleadings,
depositions, answers to interrogatories, admissions and
affidavits and other materials demonstrate that there is no
genuine issue of material fact and that the moving party is
entitled to judgment as a matter of law. The reviewing
court must view the record in the light most favorable to
the nonmoving party and resolve all doubts as to the
existence of a genuine issue of material fact against the
moving party. Only when the facts are so clear that
reasonable minds could not differ can a trial court properly
enter summary judgment.
Wall Rose Mut. Ins. Co. v. Manross, 939 A.2d 958, 962 (Pa. Super. 2007)
(citations omitted).
_______________________
(Footnote Continued)
3
Even if National had not waived this issue, it would not merit relief as
Appellee has standing to challenge the validity of Verizon’s UIM coverage
waiver in an effort to identify the benefits, if any, he is entitled to under
Verizon’s policy. Appellee would not have standing to bring a claim for UIM
benefits where no such benefits existed. Here, the question is whether UIM
coverage exists. See Petty v. Federated Mut. Ins. Co., 152 A.3d 1020,
1026 n.3 (Pa. Super. 2016) (holding that a third party beneficiary does not
have a claim for UIM benefits where an insured has properly rejected UIM
coverage); General Acc. Ins. Co. of America v. Parker, 665 A.2d 502,
504 (Pa. Super. 1995) (explaining that the rights of a third party beneficiary
are subject to the same limitations as those of a party to the contract).
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J-A23026-17 & J-A23027-17
When considering an order granting summary judgment in the context of a
declaratory judgment action, our scope of review is plenary. Kvaerner
Metals Division of Kvaerner U.S., Inc. v. Commercial Union Ins. Co.,
908 A.2d 888, 895 (Pa. 2006). We will reverse the Order of the trial court
only if we find that an error of law or an abuse of discretion has occurred.
Id. “The test is not whether we would have reached the same result on the
evidence presented, but whether the trial court's conclusion can reasonably
be drawn from the evidence.” Nationwide Mut. Ins. Co. v. Cummings,
652 A.2d 1338, 1341 (Pa. Super. 1994).
The issues raised by Appellants challenge the trial court’s conclusion
that Verizon’s UIM coverage waiver was invalid, which is a pure question of
law. Orsag v. Farmers New Century Ins., 15 A.3d 896, 899 (Pa. 2011).
Thus, “our standard of review is de novo, and our scope of review is
plenary.” Id.Our analysis begins with consideration of the relevant provision of the
MVFRL. When construing a statute, we must, whenever possible, give each
word meaning. Winslow–Quattlebaum v. Maryland Ins. Group, 752
A.2d 878, 881 (Pa. 2000), quoting 1 Pa.C.S. § 1921(a).
Pursuant to the MVFRL, an insured who desires to waive UIM coverage
must sign a rejection form. The form must state as follows:
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J-A23026-17 & J-A23027-17
REJECTION OF UNDERINSURED MOTORIST PROTECTION
By signing this waiver I am rejecting underinsured motorist
coverage under this policy, for myself and all relatives residing in
my household. Underinsured coverage protects me and relatives
living in my household for losses and damages suffered if injury
is caused by the negligence of a driver who does not have
enough insurance to pay for all losses and damages. I
knowingly and voluntarily reject this coverage.
___________________________
Signature of First Named Insured
___________________________
Date
57 Pa.C.S. § 1731(c). The MVFRL further provides explicit instructions with
respect to the execution of the waivers.
(c.1) Form of waiver.--Insurers shall print the rejection forms
required by subsections (b) and (c) on separate sheets in
prominent type and location. The forms must be signed by the
first named insured and dated to be valid. The signatures on the
forms may be witnessed by an insurance agent or broker. Any
rejection form that does not specifically comply with this
section is void. If the insurer fails to produce a valid rejection
form, uninsured or underinsured coverage, or both, as the case
may be, under that policy shall be equal to the bodily injury
liability limits. On policies in which either uninsured or
underinsured coverage has been rejected, the policy renewals
must contain notice in prominent type that the policy does not
provide protection against damages caused by uninsured or
underinsured motorists. Any person who executes a waiver
under subsection (b) or (c) shall be precluded from claiming
liability of any person based upon inadequate information.
75 Pa.C.S. § 1731(c.1) (emphasis added).
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J-A23026-17 & J-A23027-17
As noted above, the waiver of UIM coverage is effectuated by specific
compliance with the mandates of Section 1731(c.1). Pennsylvania courts
interpreting this statute have concluded that de minimis or hyper-technical
defects in a UIM coverage waiver will not serve to defeat an otherwise valid
rejection of UIM benefits. See, e.g., Ford v. Am. States Ins. Co., 154
A.3d 237, 245 (Pa. 2017) (holding that “when a UIM rejection form differs
from the statutory form in an inconsequential manner, the form will be
construed to specifically comply with Section 1731[.]”); Petty v. Federated
Mut. Ins. Co., 152 A.3d 1020 (Pa. Super. 2016) (affirming the trial court’s
finding that “the differences cited by [a]ppellants are hyper-technical and do
not cause confusion or result in an uninformed waiver.”).
However, as noted by this Court in Jones v. Unitrin Auto & Home
Ins. Co., 40 A.3d 125 (Pa. Super. 2012), Section 1731(c) “prescribes the
proximal relationship between the required language and the required
signature and date lines following the language.” Id. at 131 (emphasis
omitted). The proximity of the signature line to the text of the waiver is,
thus, significant. In Jones, this Court concluded that the rejection of UIM
benefits was invalid because the insurer’s UIM rejection form “interpose[d] a
sentence, not directly related to [the] rejection of UIM coverage, between
the required language and the signature line.” Id. Thus, the location of the
execution line is not “de minimis” and the requirement of a signature
thereon is not “hypertechnical.”
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J-A23026-17 & J-A23027-17
Here, the form tracked verbatim the language of the statute. The UIM
rejection paragraph at issue in Verizon’s policy on page 1, entitled “Rejection
of Underinsured Motorist Protection,” included the required signature and
date lines. Verizon UIM Waiver Form, dated 4/26/13. In addition, National
had inserted a “tick-box” next to the rejection paragraph on page 1, a
feature not required by statute. On the same page, the form had two
additional sets of paragraphs, signature and date lines, and “tick-boxes,”
entitled “Selection of Limits” and “Underinsured Coverage Limits.”
Although Verizon’s authorized representative placed a mark in the
“tick-box” next to the paragraph entitled “Rejection of Underinsured Motorist
Protection,” she did not sign or date on the lines immediately following the
rejection paragraph as required by statute. Instead, on page 2 of the
coverage form, she signed after the following untitled paragraph:
I understand the protection afforded by Underinsured Motorist
Coverage and the selection(s) I have made on this Notice
regarding Underinsured Motorist Coverage. I further understand
and agree that my selection(s) will apply to this policy and all
future transfers, substitutions, amendments, alterations,
modifications, reinstatements or replacements of this policy, and
all future renewals of this policy, unless I make a written request
to change my selection(s) and such request is received and
approved by the Company.
All other terms, conditions, and exclusions of the policy remain
unchanged.
_____________ ______________________________
Effective Date Authorized Signature of Named Insured
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J-A23026-17 & J-A23027-17
_____________ _______________________________
Date Signed Name and Title
Although Verizon’s authorized representative signed and dated on each
line immediately following the untitled paragraph indicating she had made
“selection(s),” she failed to sign on the line immediately following as
required by case law and statute to indicate explicit waiver of coverage.
Such omission created an ambiguity. As a result, Verizon did not validly
waive UIM coverage.
National argues that the UIM rejection form signed by Verizon
specifically complied with the MVFRL because: (1) it contained the required
statutory language; (2) Verizon, the named insured, signed the form; (3)
any deviations from the prescribed statutory language were de minimis; (4)
the text of the form did not modify coverage or inject ambiguity into the
statutory form; and (5) the subjective intent of the contracting parties was
clear. National’s Brief at 22-34.
Verizon set forth variations on the same arguments: (1) that the
language of the UIM form signed by Verizon matches verbatim the language
of Section 1731(c); (2) that the court erred in concluding that the location of
Verizon’s representative’s signature has legal significance; (3) that, in
keeping with its longstanding practice, Verizon intended to waive UIM
coverage; and (4) that there is no reason to invalidate the UIM rejection and
impose strict liability on National where Verizon, and not National, failed to
observe a statutory technicality. Verizon’s Brief at 20-31.
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J-A23026-17 & J-A23027-17
We are not convinced by Appellants’ bald assertion that Verizon’s
placement of an “X” in the “tick-box” next to the UIM coverage waiver
paragraph on National’s form, together with the signature on page 2 of the
form, were sufficient to effectuate Verizon’s waiver. Appellants have not
supported this argument by citing to any authority. The mandatory form
described in Section 1731(c.1) does not include a “tick-box” or any similar
method for indicating an intent to waive coverage. Rather, the express
terms of Section 1731(c) and (c.1) emphasize the importance of the
proximal relationship between the waiver language and the insured’s
signature, indicating an explicit requirement that the insured must sign on
the line directly below the waiver paragraph in order to effectuate a valid
rejection of UIM coverage.
Accordingly, we agree with the trial court that by failing to sign on the
line below the UIM waiver option paragraph, Verizon failed to select the
waiver of UIM coverage as it purportedly intended.
Thus, the trial court did not err in granting summary judgment in favor
of Appellee.4
Order affirmed. Jurisdiction relinquished.
Judge Panella joins the memorandum.
____________________________________________
4
In light of our disposition, we decline to address the public policy issues
raised by the trial court’s summary conclusion that “an employer who fails to
notify its employee driver that UIM coverage has been rejected is acting
against public policy.” Trial Ct. Op. at 13.
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J-A23026-17 & J-A23027-17
Judge Fitzgerald files a dissenting statement.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 12/26/2017
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