Franks v. State Farm Mut. Auto. Ins. Co.

263 A.3d 1169

Robert FRANKS and Kelly A. Franks, H/W, Appellant

v.STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY

No. 2784 EDA 2019

Superior Court of Pennsylvania.

Argued August 24, 2021

Filed September 24, 2021

James E. Hockenberry, Philadelphia, for appellant.

Laura A. Walker, Philadelphia, for appellant.

Michael Saltzburg, Philadelphia, for appellee.

BEFORE: PANELLA, P.J., BENDER, P.J.E., BOWES, J., LAZARUS, J., OLSON, J., DUBOW, J., KUNSELMAN, J., MURRAY, J., and McCAFFERY, J.

OPINION BY LAZARUS, J.:

Robert Franks and Kelly A. Franks, h/w, ("the Frankses"), appeal from the judgment, entered in the Court of Common Pleas of Bucks County, granting declaratory relief in favor of Appellee, State Farm Mutual Automobile Insurance Company ("State Farm"). Upon careful review, we affirm.

The trial court set forth the factual history of this matter, which is not in dispute, as follows:

On January 18, 2013, the Franks[es] applied for automobile coverage with State Farm for two vehicles, a 2002 Nissan Xterra and a 1999 Ford Taurus. In connection with their application for coverage, Robert Franks, the first named insured under the policy, executed a form rejecting stacked underinsured motorist coverage [("UIM")] that fully complied with the form prescribed by [section] 1738(d)(2) of the Motor Vehicle Financial Responsibility Laws ("MVFRL").^[1] Consistent with the [Frankses’] application for insurance ... and the rejection of stacked [UIM] coverage, State Farm issued the policy, effective February 3, 2013[,] with non-stacked [UIM] coverage limits of $100,000 per person/$300,000 per accident.

Effective January 22, 2014, at the request of the Franks[es], a third vehicle, a 2012 Nissan Altima, was added to the policy. Upon adding the third vehicle, the Franks[es] executed a second rejection of stacked limits of [UIM] coverage. Subsequently[,] effective July 23, 2014, at the request of the Franks[es], the 1999 Ford Taurus was deleted from the policy, reducing the total number of vehicles insured under the Franks[es]’ policy from three (3) to two (2). When the 1999 Ford Taurus was deleted from the policy, the Franks[es] did not request[,] and State Farm did not make[,] any changes to the coverages for the 2002 Nissan Xterra and 2012 Nissan Altima[,] which continued to be insured under the policy.

The deletion of the 1999 Ford Taurus from the policy resulted in a credit being applied to the Franks[es]’ State Farm [p]ayment [p]lan in the amount of $15.06 (for the 11 days of unused premium on the 1999 Ford Taurus). The deletion of the 1999 Ford Taurus did not change any of the coverages on the 2002 Nissan Xterra and 2012 Nissan Altima that continued to be insured under the policy or the premiums charged for the coverages on the two (2) remaining vehicles. From the time that the 1999 Ford Taurus was deleted from the policy[,] effective July 23, 2014[,] through the time of the August 11, 2016 accident, the total premium that State Farm charged and the Franks[es] paid for the policy was approximately $250.00 lower every six months tha[n] it had been when there were three vehicles insured under the policy.

On or about March 26, 2015, the Franks[es] replaced the 2002 Nissan Xterra on the policy with a 2013 Nissan Frontier, the vehicle [that] was involved in the accident. From July 2014 through the time of the August 11, 2016 accident, the policy continuously insured two vehicles, and the declarations page of the policy provided non-stacked [UIM] coverage.

After the number of vehicles insured under the policy was reduced from three (3) to two (2), the Franks[es] were never provided with and did not sign another form rejecting stacked [UIM] coverage. From the time of the inception of the policy on February 3, 2013, th[r]ough the time of the August 11, 2016 accident, the Franks[es] were not charged a premium for stacked [UIM] coverage. The Franks[es] were charged and paid a lower premium for non-stacked [UIM] coverage than they would have been charged by State Farm for stacked [UIM] coverage.

On August 11, 2016, Robert Franks sustained injuries in a motor vehicle accident that was caused by the negligence of the driver (hereinafter "the tortfeasor") of the other vehicle involved in the accident. After ascertaining that the bodily injury liability coverage available to the tortfeasor was insufficient to fully compensate them for the injuries and damages they sustained as a result of the accident, the Franks[es] asserted a claim for [UIM] benefits under the policy. In response to the claim, State Farm paid the Franks[es] [UIM] benefits in the amount of $100,000.

State Farm believes that the $100,000 paid to the Franks[es] represents the limit of [UIM] coverage ... available to the Franks[es] under the policy for their claim for [UIM] benefits arising from the August 11, 2016 accident.

The Franks[es] believe that State Farm is obligated to afford them a total of $200,000 [UIM] coverage for their claim arising from the August 11, 2016 accident.

Trial Court Opinion, 11/18/19, at 1-3.

On July 9, 2018, the Frankses filed a complaint for declaratory judgment, seeking a declaration that State Farm was obligated to pay them an additional $100,000 in UIM benefits because there was no valid waiver of stacked UIM coverage in effect at the time of the accident. State Farm filed a counterclaim for declaratory judgment, seeking a declaration that it was obligated to pay only the $100,000 already tendered in UIM coverage. The parties proceeded to a stipulated non-jury trial on August 27, 2019. On August 30, 2019, the court entered an order granting declaratory judgment in favor of State Farm, declaring that the insurer was only obligated to pay a total of $100,000 in UIM coverage to the Frankses. Final judgment was entered on September 4, 2019, and the Frankses appealed. After a divided three-judge panel of this Court reversed, State Farm filed an application for reargument before the Court en banc, which was granted. The Frankses raise the following issue for our review:

Did the trial court err in granting declaratory judgment relief to [State Farm] and finding that [State Farm] was not required to obtain a new stacking waiver pursuant to 75 Pa.C.S.A. § 1738(c) and that[,] consequently[,] [the Frankses] are not entitled to a total of $200,000 in underinsured motorist coverage?

Brief of Appellants, at 4 (unnecessary capitalization omitted) (emphasis in original).

Because the parties stipulated to the material facts, we are presented with a pure question of law. Accordingly, our scope of review is plenary and our standard of review is de novo . Thierfelder v. Wolfert , 617 Pa. 295, 52 A.3d 1251, 1261 (2012).

This case presents us with a matter of first impression: Whether 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 section 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. To answer this question, we must interpret section 1738 of the MVFRL.

When we interpret legislative enactments, we are guided by the Statutory Construction Act, which recognizes 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.[A.] § 1921(a). "When 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." Id. [at] § 1921(b). Words and phrases within a statute must be "construed according to rules of grammar and according to their common and approved usage," id. [at] § 1903(a), and must be read within the context of the remaining statutory language. Commonwealth v. Office of Open Records , , 103 A.3d 1276, 1285 (2014). It is only when the plain language of a statute is ambiguous that courts may resort to other tools of statutory construction in order to ascertain the General Assembly's intent. See 1 Pa.C.S.[A.] § 1921(c).

Barnard v. Travelers Home & Marine Ins. Co. , 654 Pa. 604, 216 A.3d 1045, 1050–51 (2019). Our Supreme Court has repeatedly indicated that dictionaries should be used as source material to identify a word's "common and approved usage." See, e.g. , Philadelphia Eagles Football Club, Inc. v. City of Philadelphia , 573 Pa. 189, 823 A.2d 108, 127 n. 31 (2003) ; Fogle v. Malvern Courts, Inc. , 554 Pa. 633, 722 A.2d 680, 682 (1999) ; Love v. City of Philadelphia , 518 Pa. 370, 543 A.2d 531, 532 (1988).

Section 1738 of the MVFRL governs the stacking of uninsured motorist (UM) and UIM benefits and the option to waive such coverage and provides, in relevant part, as follows:

(a) Limit for each vehicle.--When more than one vehicle is insured under one or more policies providing uninsured or underinsured motorist coverage, the stated limit for uninsured or underinsured coverage shall apply separately to each vehicle so insured. The limits of coverages available under this subchapter for an insured shall be the sum of the limits for each motor vehicle as to which the injured person is an insured.

(b) Waiver.--Notwithstanding the provisions of subsection (a), a named insured may waive coverage providing stacking of uninsured or underinsured coverages in which case the limits of coverage available under the policy for an insured shall be the stated limits for the motor vehicle as to which the injured person is an insured.

(c) 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.A. § 1738 (emphasis added).

The vast majority of Pennsylvania case law on stacking...