Kimball v. Cigna Insurance

POPOVICH, Judge:

This case involves an appeal from the order (reduced to judgment¹) of the Court of Common Pleas of Allegheny County denying the post-trial motions of the plaintiff/appellant, Jennifer E. Kimball, and limiting her uninsured motorist coverage to a maximum of $300,000.00 versus a claimed $900,-000. 00 with stacking.

We affirm in a case of first impression.

The facts are not in dispute: In 1983, the plaintiff was listed as a driver under her father’s policy with Cigna Insurance Co. Even with the parents’ divorce in 1984, the plaintiffs status remained unchanged under the policy, save that her mother was the only “named insured.”

On December 6, 1990, the mother executed a “sign down” form reducing the uninsured/underinsured limits of coverage from $300,000.00 to $100,000.00. With the plaintiffs purchase of a vehicle in 1991, the “endorsement” portion of the policy added the plaintiff as a “named insured.” However, at no time during the coverage period (which included two renewals of the policy) was the plaintiff informed by Cigna’s agent that the uninsured/underinsured (limits of $100,000.00) could be carried at levels equal to the liability limit of $300,000.00. Thus, Cigna never obtained an executed “sign down” document from the plaintiff evidencing such an election in coverage.

On November 23, 1992, the plaintiff was injured by an uninsured motorist. When she attempted to recover under the uninsured provisions of her policy in an amount equal to the liability limits of $300,000.00, Cigna disputed her entitlement on the basis that the mother’s execution of the “sign down” form (as a “named insured”) bound the plaintiff to the same limits of coverage, i.e., $100,000.00 for uninsured claims.

After the submission of numerous pleadings, the parties agreed to have the case resolved by a judge upon stipulated facts. Argument and briefs were presented, after which the court held: 1) a single policy existed; 2) the plaintiffs mother was the “first” named insured with the plaintiffs name to follow; 3) the plaintiffs signature and use of the amended policy required, the court to assume that the plaintiff read and comprehended its terms; 4) Cigna’s agent did not conceal any pertinent information from the plaintiff precluding her from negotiating a separate policy in her name only; and 5) Pennsylvania law was satisfied when the “first” named insured [mother] executed a written sign-down. Accordingly, the court ruled that “the total amount of uninsured motorist coverage available to plaintiff ... from the policy issued by ... Cigna ... [wa]s $300,000.00.”² This appeal followed and raises but a single argument; to-wit:

I. THE LOWER COURT ERRED IN DETERMINING THAT APPELLANT, A NAMED INSURED, WAS BOUND BY THE ELECTION OF REDUCED UNINSURED MOTORIST COVERAGE BY ANOTHER NAMED INSURED TO THE SAME POLICY, WHEN APPELLANT WAS ADDED TO THE POLICY AFTER SAID ELECTION, WAS NEVER INFORMED AS TO THE AMOUNT OF COVERAGE AVAILABLE AND NEVER EXECUTED A WRITTEN REQUEST FOR LOWER COVERAGE AS IS REQUIRED BY 75 PA. C.S.A. § 1734.

In responding to the appellant’s contention, we begin with the observation that, in 1984, the No-Fault Act was repealed by the Motor Vehicle Financial Responsibility Law³ (MVFRA) to allow for, inter alia, uninsured/underinsured motorist coverage equal to liability coverage. See 75 Pa.C.S.A § 1731 (Supp.1994). To reject uninsured/underinsured motorist protection, the “first” named insured must be placed on notice of such a right (either at the time of application for original coverage or at the time of the first renewal). Id. at § 1791. Further, requests for uninsured/underinsured protection in amounts less than the limits of liability for bodily injury must be in writing (id. at § 1734) and evidenced by a written document prescribed by statute and executed by the “first” named insured. Id. at § 1731.

Those cases which have had occasion to interpret the MVFRL are limited to common pleas and federal court cases. Nonetheless, we sense a course to pursue from their reading. For instance, in Liberty Mutual Fire Insurance Co. v. Lindsey, 3 D. & C.4th 659 (York Cty., 1989), the court was confronted with the issue of whether the election of lower uninsured/underinsured coverage by one named insured (husband) was binding on the other named insured (wife). The court held so on the following basis: 1) the lower uninsured/underinsured limits were paid from joint accounts, which evidenced wife’s actual knowledge, understanding and acceptance of benefits and limits selected; 2) insurer’s notice to the husband and wife complied with Section 1791, raising a statutory presumption that the wife was advised of the benefits and limits available; 3) wife confirmed and ratified the husband’s selection of lower limits by electing to stay covered and not seeking a separate policy — presumes that wife has knowledge of limits of liability; 4) no evidence that wife intended to accept higher limits other than lack of her signature on release form, which absence of “her signature was a mere oversight”; and 5) wife deferred to husband on matters of insurance. 3 Pa.D. & C.4th at 667-68. Accord Hepler v. Liberty Mutual Fire Insurance Co., 7 D. & C.4th 521 (Cumberland Cty., 1990) (wife bound by the uninsured/underinsured limits requested in writing by husband); see also U.S. Fidelity & Guaranty v. Franks, 12 D. & C.4th 47 (Cumberland Cty., 1991) (named insured (father) can elect lower limits for “family member” (son, who was not listed as a “named insured” on policy)).

On the other hand, the District Court for the Eastern District of Pennsylvania in Groff v. Continental Ins. Co., 741 F.Supp. 541 (1990), had to decide, among other things, whether Ms. Groffs husband effectively reduced their uninsured coverage so as to foreclose recovery by their son’s estate.

The suit in Groff was instituted with the death of Groffs son by an uninsured motorist. Both parents were listed as “named insured” on a policy carrying $1,000,000.00 of uninsured coverage. Thereafter, Mr. Groff elected uninsured coverage of $35,000,00 and paid premiums for the lower coverage for the entire policy period, which encompassed the accident. Ms. Groff did not sign a similar document, but the insurer’s representatives maintained that the wife was present when the husband executed the reduction form. Also, an amended policy was mailed to the Groffs residence and their account was credited for the premiums paid.

The District Court concluded that Mr. Groff acted knowingly and intelligently in reducing his uninsured coverage.⁴ In doing so, the Groff Court wrote:

First, for several years previously, the Groffs obtained the same level of uninsured motorist coverage, a single $35,000 limit, from other companies — Federal Kemper Insurance Company and Utica Mutual Insurance Company. Second, the Groffs only paid the premium for the lower amount of uninsured motorist coverage. In fact, they received a reduction in their premiums reflecting Raymond Groffs election of lower coverage. Third, the Groffs never questioned the level of their uninsured motorist coverage, after receiving the endorsement amending the policy and incorporating the Pennsylvania Supplemental Automobile Application signed by Raymond Groff into the policy by reference. Finally, when the Groffs added vehicles to their insurance during the police period, the forms they received from Continental also noted that the uninsured motorist coverage was a single $35,000 limit.

741 F.Supp. at 548 (Emphasis added); cf. Nationwide Insurance Co. v. Resseguie, 782 F.Supp. 292, 294 (M.D.Pa.1992), aff’d in part, 980 F.2d 226 (3rd Cir.1992) (no one but “named insured” can reduce uninsured/underinsured coverage; where one of two “named insured” requests change in limits of coverage, the request held to bind the other “named insured”).

At bar, albeit the plaintiff was not listed as a “named insured” at the time her mother executed a “sign down” form to reduce uninsured/underinsured coverage, she was a “named insured” when the “endorsement” amending the policy and listing her as a “named insured” was received at the Kimball household. Specifically, the amendment indicated in clear language that the uninsured motorist coverage stood at $100,-000.00 and no higher. However, no action was taken by the plaintiff to rectify this level of coverage. She could have increased coverage under her mother’s policy (with accompanying premium increases) or secured her own separate policy should her mother not be amenable to the increased coverage and additional cost associated therewith. The plaintiff took no action on either front.

Moreover, the policy limits remained in effect for two renewal periods without any effort on the plaintiffs part to increase coverage beyond the $100,000.00 limit for uninsured/underinsured insurance. Rather, the premiums (at the lower rate) continued to be paid without question or complaint to the Cigna agent about the level of coverage. Under this scenario, as is consistent with 75 Pa.C.S.A. § 1791, the payment of the renewal premiums (which here occurred at least twice while the plaintiff was a “named insured”) “evidences [the plaintiffs] actual knowledge and understanding of the availability of these benefits and limits as well as the benefits and limits ... selected.” Id.; Resseguie, supra; Lindsey, supra.

Accordingly, if the plaintiff did not accept her mother’s election, upon receipt of the policy with the lower limit and lower premiums, she could have contacted the insurance company, informed them of the dissatisfaction with the amount of uninsured/underinsured coverage and requested it be corrected or obtained another policy on her own. Instead, the plaintiff accepted the policy with the lower limits without complaint and permitted payment of the lower premium without incident. To find that the plaintiff is not bound by her mother’s election and remaining silent on the issue of increased coverage, while reaping the benefits of reduced rates, would be to reward inaction. Here, the plaintiff had the means and opportunity to avoid any insurance shortfall, but she took no action to remedy the matter.

Therefore, we will not act in the plaintiffs stead and do what she could have done for herself once she received the endorsement sheet reflecting coverage below that which she now claims was never intended. Further, we will not amend a contract absent any evidence of fraud or mutual mistake of fact. Accordingly, under the particular facts of this case, we find no fault with the court’s order.

Judgment affirmed.

FORD ELLIOTT, J., files a dissenting statement.

1 . The order became appealable with its entry into the judgment docket on praecipe by the plaintiff. See Pa.R.App.P. 302(a).

2 . The plaintiff sought $900,000.00 under the stacking provisions of the Motor Vehicle Financing Responsibility Law (75 Pa.C.S.A. § 1738 (Supp.1994)), given the 3 insured vehicles in the household by Cigna.

3 . 75 Pa.C.S.A. § 1701 et seq. (Supp.1994).

4 . The Groff Court stated, in dicta, that the wife’s right to select coverage could not be waived by the husband’s selection of lower coverage, each being a "named insured.” However, this position was predicated upon a common pleas court case since repudiated by the jurist that issued it. See Hepler v. Liberty Mutual Fire Ins. Co., 7 D. & C.4th 521, 526 (Cumberland Cty., 1990). Thus, we find unpersuasive that portion of Groff indicating that a named insured cannot waive another named insured’s level of coverage.