Jones v. Unitrin Auto & Home Insurance

OPINION BY MUNDY, J.:

Appellant, Lee Jones, appeals from the order entered February 4, 2011, granting the motion for summary judgment filed by Unitrin Auto and Home Insurance Company (Unitrin) in Appellant’s declaratory judgment action wherein she sought a determination of her eligibility for underin-sured motorist benefits. After careful review, we conclude that, by inclusion of additional language, the underinsured motorist insurance (UIM) rejection form contained in Appellant’s insurance application failed to specifically comply with statutory requirements and was therefore void. Accordingly, we reverse and remand for further proceedings.

The trial court summarized the pertinent undisputed facts and procedural history as follows.

On or about December 14, 2009 [Appellant] commenced the present action by filing a complaint against [Unitrin and George Durst Insurance Agency]. In the complaint, [Appellant] set forth a declaratory judgment action and a class action against Unitrin as well as a negligence action against George Durst Insurance Agency.

On or about July 9, 2009, [Appellant] was a named insured pursuant to a Unit-rin motor vehicle policy, number HB865793, which was issued subject to the Pennsylvania Motor Vehicle Financial Responsibility Law (hereinafter “MVFRL”). On the aforesaid date, [Appellant] was injured while she was a passenger in a motor vehicle due to the negligence of a third party tortfeasor. The damages suffered by [Appellant] as a result of the motor vehicle accident exceeded the liability limits for the tort-feasor’s vehicle. Pursuant to MVFRL, Unitrin was required to provide uninsured motorist (hereinafter “UM”) and underinsured motorist (“UIM”) coverage in an amount equal to the liability coverage to its insureds, unless a valid rejection form was executed by the named insured. [Appellant] alleges that the Unitrin rejection form executed by her for UIM coverage did not comply with Section 1731(d) of MVFRL and thus was not valid.

Unitrin filed its motion for summary judgment to [Appellant’s] declaratory judgment action on May 13, 2010. Oral argument was held before [the trial c]ourt on August 13, 2010.

Trial Court Opinion, 2/4/11, at 2-3; Certified Record (C.R.) at 24.

The trial court granted Unitrin’s motion for summary judgment by order and accompanying memorandum opinion filed February 4, 2011. C.R. at 24. On February 22, 2011, Appellant filed a praecipe to discontinue, with prejudice, its case against George Durst Insurance Agency. C.R. at 25. Thereafter, on February 28, 2011, Appellant filed a notice of appeal. C.R. at 26.¹

On appeal, Appellant raises the following questions for our review.

I. Is the insurer’s uninsured/under-insured (“UM/UIM”) rejection form void as it adds language regarding stacking which does not comply with the mandated rejection form contained in section 1731?

II. Is there a factual issue which precludes summary judgment as to whether Unitrin Auto and Home Insurance Company’s deviation from the statutorily-required language in its UIM rejection form was confusing to the claimant?

Appellant’s Brief at 4.

When reviewing a trial court’s decision to grant a motion for summary judgment, we adhere to the following standard and scope of review.

We view the record in the light most favorable to the nonmoving party, and all doubts as to the existence of a genuine issue of material fact must be resolved against the moving party. Only where there is no genuine issue as to any material fact and it is clear that the moving party is entitled to a judgment as a matter of law will summary judgment be entered. Our scope of review of a trial court’s order granting or denying summary judgment is plenary, and our standard of review is clear: the trial court’s order will be reversed only where it is established that the court committed an error of law or abused its discretion.

Erie Ins. Exchange v. Larrimore, 987 A.2d 782, 786 (Pa.Super.2009) (citation omitted). Additionally, we note, “[ojrdinary summary judgment procedures are applicable to declaratory judgment actions.” Keystone Aerial Surveys, Inc. v. Pennsylvania Property & Cas. Ins. Guar. Ass’n, 777 A.2d 84, 88 (Pa.Super.2001) (citation omitted), affirmed, 574 Pa. 147, 829 A.2d 297 (2003).

Resolution of this matter requires interpretation of section 1731 of the MVFRL, which is a pure question of law. “As the issue in this case is a question of law, our standard of review is de novo and our scope of review is plenary.” Vanderhoff v. Harleysville Ins. Co., 606 Pa. 272, 997 A.2d 328, 333 (2010). With respect to statutory construction of the MVFRL, we are further guided in our review by the following principles.

Overall, the MVFRL ... is to be construed liberally in order to promote justice and to give effect to its objects. 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.

Larrimore, supra at 740 (quotation marks and citations omitted). “[T]he rules of statutory construction require that ‘whenever possible each word in a statutory provision is to be given meaning and not to be treated as surplusage.’ ” Winslow-Quattlebaum v. Maryland Ins. Group, 561 Pa. 629, 752 A.2d 878, 881 (2000), quoting 1 Pa.C.S.A. § 1921(a).

Appellant first argues that the UIM rejection form contained in her policy application with Unitrin is void for failure to comply with section 1731 of the Motor Vehicle Financial Responsibility Law (MVFRL).² Appellant’s Brief at 7. Specifically, Appellant faulted the UIM rejection form used by Unitrin in her policy application for impermissibly adding a sentence to the statutorily mandated language of 75 Pa.C.S.A. § 1731(c). Id.

The statute provides as follows.

(c) Underinsured motorist coverage.— Underinsured motorist coverage shall provide protection for persons who suffer injury arising out of the maintenance or use of a motor vehicle and are legally entitled to recover damages therefor from owners or operators of underin-sured motor vehicles. The named insured shall be informed that he may reject underinsured motorist coverage by signing the following written rejection form:

REJECTION OF UNDERIN-SURED MOTORIST PROTECTION By signing this waiver I am rejecting underinsured motorist coverage under this policy, for myself and all relatives residing in my household. Underin-sured 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

(c.l) 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.

75 Pa.C.S.A. § 1731(c), (c.l) (emphasis added).

The UIM rejection form at issue in Appellant’s policy with Unitrin includes the mandated language albeit with an additional sentence.

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. Underin-sured 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. By rejecting this coverage, I am also signing the waiver on P. 13 rejecting stacked limits of underinsured motorist coverage.

Signature of first named insured /s/ Ms Lee Jones

Date 10/8/08

Policy Number [number typed in here]

Plaintiff’s Complaint, Exhibit B; C.R. at 1 (emphasis added).

The trial court, after reviewing pertinent case law, noted that “[t]here are no appellate decisions addressing the effect of additional words on the validity of a § 1731(c) rejection form.” Trial Court Opinion, 2/4/11, at 10-11. The trial court then reviewed this Court’s decision in American Intern. Ins. Co. v. Vaxmonsky, 916 A.2d 1106 (Pa.Super.2006), wherein we “determine[d] to what extent insurers must comply with 1731(c.1)’s mandate in printing the 1731(c) form.” Id. at 1108. In Vaxmonsky, the insured claimed the UIM rejection form contained in his policy application was void because it did not “specifically comply” with section 1731(c) as required by section 1731(e.l). Id. at 1107. Distinguishing precedent permitting an insurer’s substantial compliance with other sections of the MVFRL, the Vaxmonsky Court recognized “that valid rejections of UIM coverage must use the specific form in section 1731(c), while other forms do not expressly mandate specific compliance with the statute.”³ Id. at 1109. “Giving meaning to each word of the relevant sections, we find that Section 1731(c.1) requires more exacting scrutiny of the relevant forms-” Id. Accordingly, the Vaxmonsky Court determined that the omission of the word “all” from the mandated phrase “all losses and damages” set forth in section 1731(c)’s UIM rejection form was noncompliant with section 1731(c.1). “[T]he MVFRL specifically expands the scope of UIM coverage to all losses and damages; thus, [the insurer] has limited coverage by deleting ‘all,’ and therefore imposed ambiguity where none existed. Furthermore, by deleting this expansionary and clarifying word, Appellant has also failed to include all of the required statutory language.” Id. Because the UIM rejection form was noncompliant, it was void. Id. at 1110. The Vaxmonsky Court expressly noted the limitation of its holding relative to the circumstances we confront in the case sub judice, where language is added to the mandated text of the prescribed Rule 1731(c) UIM rejection form. “[W]e offer no opinion as to whether the addition of clarifying language to a 1731[ ](c) form would be considered in specific compliance with Section 1731(c.l).” Id. at 1109, n. 5.

Next, the trial court considered our Supreme Court’s decision in Winslow-Quattlebaum, supra. In Winslow-Quattlebaum, “[t]he sole issue before [the Supreme] Court [was] whether an insured’s rejection of underinsured motorist benefits must appear alone on a page in the insurance application to be valid pursuant to 75 Pa.C.S. § 1731(c.l).” Id. at 879. In that case, the UIM rejection form appeared on the same page in the insurance application as the UIM stacking rejection form. Our Supreme Court held,

[t]here is nothing in the language of section 1731(c.l) to suggest that the required rejection statement for UM or UIM coverage must stand alone on a page without any other writing. Rather, the plain language of this section merely requires that the rejection statement for subsection (b)(UM) coverage appear on a page separate from the rejection statement for subsection (c) (UIM) coverage.

Id. at 880-881 (emphasis in original). Significantly, the specific compliance of each form with the language requirements imposed by sections 1731(c) and 1738(e) was not at issue, and the UIM rejection form appeared intact above its signature and date lines followed by the UIM stacking rejection form above its signature and date lines. Id. at 879-880.

Construing the foregoing cases, the trial court ultimately concluded that the additional sentence in Unitrin’s UIM rejection form was more akin to the circumstance in Winslow-Quattlebaum than in Vaxmon-sky. It reasoned, since “[t]he additional sentence provided by Unitrin also pertains to UIM information[,] ... the UIM rejection here specifically complied with § 1731(c.l) and is not void due to the inclusion of the additional sentence.” Trial Court Opinion, 2/4/11, at 12. We disagree.

The trial court focuses on the fact that all of the prescribed language in section 1731(c) was contained in Unitrin’s UIM rejection form. However, section 1731(c) also prescribes the proximal relationship between the required language and the required signature and date lines following the language.⁴ Instantly, Unitrin’s UIM rejection form interposes a sentence, not directly related to rejection of UIM coverage, between the required language and the signature line. Accordingly, it does not “specifically comply” with section 1781(c) as required by section 1731(c.l). See 75 Pa.C.S.A. § 1731.

Unitrin and the trial court justify the additional sentence by characterizing it as “clarifying” language.⁵ Unitrin’s Brief at 13-14. “[The additional sentence] is merely a clerical sentence, intended to assist the reader in distinguishing the UIM forms.” Id. at 14. However, as we recognized in Vaxmonsky, the legislature, due to the importance of the rights at stake, directed that insurers specifically comply with section 1731. This directive obviated the need for reviewing courts to engage in a substantial compliance analysis otherwise applicable to other sections of the MVFRL. See, e.g., Vosk v. Encompass Ins. Co., 851 A.2d 162 (Pa.Super.2004) (addressing substantial compliance with section 1738 rejection of UIM stacking form), appeal denied, 581 Pa. 708, 867 A.2d 524 (2005); Hartford Ins. Co. v. O’Mara, 907 A.2d 589 (Pa.Super.2006) (en banc) (addressing substantial compliance with section 1734 reduction of UIM coverage limits), appeal denied, 591 Pa. 727, 920 A.2d 833 (2007). If we accept Unitrin’s position, reviewing court’s would now, akin to determining if altered language amounted to substantial compliance, be obligated to address the question of whether added language was indeed “clarifying” or, on the other hand, created an ambiguity. This would thwart the legislative intent and the plain import of its requirement of specific compliance with section 1731.

Finally, Unitrin advances as persuasive authority the unreported U.S. District Court decision in Unitrin Auto & Home Ins. Co. v. Heister, 2005 WL 2314372 (M.D.Pa.2005). See Martin v. Hale Products, Inc., 699 A.2d 1283, 1287 (Pa.Super.1997) (holding, “decisions of the federal district courts ... are not binding on Pennsylvania courts, ... [but may] possess a persuasive authority”). In Heister, the District Court held that a UIM rejection form identical to the one at issue in the instant case did specifically comply with Rule 1731(c). Id. at *4-*5. The Heister court based its decision on two grounds. First, it cited our Supreme Court’s pronouncement in Winslow-Quattlebaum that “the courts of this Commonwealth ... afford great deference to the interpretation [of statutory language] rendered by the administrative agency overseeing the implementation of such legislation.” Win-slow-Quattlebaum, supra at 881 (citations omitted). After reviewing certain affidavits presented by the insurer, the Heister court found that the Pennsylvania Insurance Department had approved the forms, and the court deferred to that approval. Heister, supra at *3-*4. As an alternative basis for its decision, the Heister court cited Pennsylvania appellate cases concerning forms rejecting stacking of UIM coverage under section 1738 of the MVFRL. Extrapolating those cases, the Heister court found that the subject form did specifically comply with section 1731(c).

We conclude the holding of the Heister court is unavailing to Unitrin. As noted by the trial court, Unitrin presented no evidence in the record of the instant case of the administrative agency’s interpretation of section 1731(c) relative to the form used in Appellant’s policy. Trial Court Opinion, 2/4/11, at 6 n. 1. We also note that both Winslow-Quattlebaum and Pair-monsky cited 31 Pa.Code § 68.103 and the therein referenced Appendix A, which prescribed use of the exact form contained in the statute.⁶ Winslow-Quattleb-aum, supra at 882. Additionally, Heister was decided before this Court’s decision in Vaxmonsky, supra, which rejected the approach used by the Heister court and “[d]ecline[d] to expand [the] holdings [of section 1738(e) cases] to section 1731 forms.” Vaxmonsky, supra at 1109 n. 5. We also note that, notwithstanding its holding, the Heister court admonished, “we believe the better practice for [insurers] is not to supplement the required language of § 1731.” Heister, supra at *5 (emphasis in original).

In conclusion, we hold that additions to the prescribed language, and deviation from the proximal relationship of the components, of the UIM rejection form required by 75 Pa.C.S.A. § 1731 fail to specifically comply with the statute and is consequently void.⁷ Accordingly, we determine the trial court erred as a matter of law when it granted Unitrin’s summary judgment motion. We therefore reverse the order of February 4, 2011, and remand for further proceedings consistent with this opinion.

Order reversed. Case remanded. Jurisdiction relinquished.

Judge ALLEN files a Dissenting Opinion.

1 . The trial court did not order Appellant to file a concise statement of errors complained of on appeal under Pa.R.A.P. 1925(b) and did not file any additional Rule 1925(a) opinion.

2 . 75 Pa.C.S.A. §§ 1701-1799.7.

3 . For example, section 1738(e)'s requirements for rejecting stacking coverage provide that "[a]ny rejection form that does not comply with this section is void.” 75 Pa.C.S.A. § 1738(e). Contrastingly, section 1731(c.l) requires that UIM rejection forms "specifically comply" with the section. 75 Pa.C.S.A. § 173l(c.l) (emphasis added).

4 . The forms at issue in Winslow-Quattlebaum, supra, adhered to this proximal relationship. Accordingly, Winslow-Quattlebaum provides no support for the contention that additional material on the same page as the UIM rejection form is equivalent to additional language within the form itself.

5 . Whether the added language used in this case is in fact clarifying is by no means apparent. It conflates the issues of underinsurance coverage and underinsurance stacking and adds ambiguity to the UIM rejection form where in its absence none existed.

6 . The cited Code section was as extant in 1998. The section was designated reserved on July 31, 1999, and remains so designated. See 31 Pa.Code Chapter 68.

7 . In light of our resolution of Appellant's first issue we do not reach her second issue, whether a material issue of fact existed relative to whether the UIM rejection form in the instant case was confusing.