Matthews v. Erie Ins. Grp.

244 A.3d 844

Jason MATTHEWS, Appellant

v.ERIE INSURANCE GROUP

No. 754 EDA 2020

Superior Court of Pennsylvania.

Argued November 12, 2020

Filed January 12, 2021

Dana Klayman Weitz, Philadelphia, for appellant.

Glen Shikunov, Philadelphia, for appellee.

BEFORE: BENDER, P.J.E., LAZARUS, J., and STEVENS, P.J.E.^*

OPINION BY BENDER, P.J.E.:

Appellant, Jason Matthews, appeals from the trial court's order sustaining Appellee's, Erie Insurance Group ("Erie"), preliminary objections to venue, and transferring the matter from the Court of Common Pleas of Philadelphia County to the Court of Common Pleas of Bucks County.¹ We affirm.

The trial court summarized the background of this case as follows:

This matter arises from an April 15, 2017[ ] motor vehicle accident. Appellant ... was operating a motor vehicle insured by [Erie], under a policy issued to Ion Construction, Inc. [Appellant] was a named insured under the policy.^[2] [Appellant] asserts that Ion Construction, Inc., never rejected underinsured motorist ("UIM") coverage, and therefore the policy should be reformed to include UIM benefits.

The original complaint in this non-jury action was filed [on] June 27, 2019.

On August 22, 2019, a declaratory judgment action relating to this same matter was filed in the Bucks County Court of Common Pleas (Case No. 2019-05936).

On November 25, 2019[,] Erie filed timely preliminary objections to [Appellant's] Third Amended Complaint, seeking, inter alia , transfer of the case to the Bucks County Court of Common [Pleas] due to improper venue.

On January 24, 2020, upon consideration of Erie's preliminary objections, [Appellant's] response thereto, a reply and sur[-]reply, the court sustained the preliminary objections to venue and transferred the case to the Bucks County Court of Common Pleas, reserving the other preliminary objections for determination by that court.

[Appellant] filed a timely notice of appeal on February 20, 2020.^[3]

Trial Court Opinion ("TCO"), 5/22/20, at 1-2.

In sustaining Erie's preliminary objections as to venue and transferring the matter to Bucks County, the trial court discerned that reformation of the contract to provide for UIM coverage must also include the forum selection provisions that would have accompanied such coverage in the absence of an invalid waiver. TCO at 2.⁴ The trial court also considered that a declaratory judgment action relating to this same matter was being litigated in the Bucks County Court of Common Pleas, and noted the risk of inconsistent rulings. Id. at 3.

Presently, Appellant raises a single issue for our review:

[W]hether the trial court erred or otherwise abused its discretion when it ruled that [Erie] could enforce a forum selection clause to transfer venue that uncontrovertibly was not contained in the original insurance contract without any legal authority to support a reformation of the contract to include such a clause.

Appellant's Brief at 5.

At the outset, we acknowledge:

[A] trial court's decision to transfer venue will not be disturbed absent an abuse of discretion. An abuse of discretion occurs when the trial judge overrides or misapplies the law, or exercises judgment in a manifestly unreasonable manner, or renders a decision based on partiality, prejudice, bias, or ill-will. Additionally, a plaintiff's choice of forum is to be given great weight, and the burden is on the party challenging the choice to show it was improper[;] ... however, a plaintiff's choice of venue is not absolute or unassailable. If there exists any proper basis for the trial court's decision to grant a petition to transfer venue, the decision must stand.

Bilotti-Kerrick v. St. Luke's Hosp. , 873 A.2d 728, 729-30 (Pa. Super. 2005) (internal citations and quotation marks omitted).

Appellant's arguments center around 75 Pa.C.S. § 1731, which provides in relevant part, the following:

(a) Mandatory offering.-- No motor vehicle liability insurance policy shall be delivered or issued for delivery in this Commonwealth, with respect to any motor vehicle registered or principally garaged in this Commonwealth, unless uninsured motorist and underinsured motorist coverages are offered therein or supplemental thereto in amounts as provided in section 1734 (relating to request for lower limits of coverage). Purchase of uninsured motorist and underinsured motorist coverages is optional.

***

(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 underinsured motor vehicles. The named insured shall be informed that he may reject underinsured motorist coverage by signing the following written rejection form....

(c.1) Form of waiver.-- Insurers shall print the rejection forms required by subsections (b)[, which pertains to uninsured motorist coverage,] 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 (emphasis added).

Appellant argues that reformation of the contract to include UIM benefits is the sole remedy for failure to comply with Section 1731(c.1), and asserts that Section 1731(c.1) does not permit Erie to include additional contractual provisions that had not been contained in the original insurance policy, such as its forum selection clause. Appellant's Brief at 13, 14. Appellant contends that "[t]here is no authority in Pennsylvania whatsoever for the inclusion of any other language, provisions, clauses or coverages to be retroactively included in a policy of insurance to remedy the failure of an insurer to produce a validly signed UIM rejection form." Id. at 13. In support of his argument, he cites to the case DeSilva v. Kemper Nat'l Ins. Co. , 837 F.Supp. 98 (E.D. Pa. 1993), explaining that the court in that case rejected the plaintiff's argument that, even though the original policy at issue did not have an arbitration clause, the policy should be reformed to include an arbitration clause because the defendant's "standard" provision for UIM coverage would have contained one. See Appellant's Brief at 14-15.⁵ Here, Appellant says that Erie sets forth an argument similar to the plaintiff's rejected claim in DeSilva ; that is, because Appellant is seeking reformation of the policy to include UIM coverage under Section 1731(c.1), venue should be transferred to Bucks County, as Erie's standard UIM Endorsement, which was not contained in the original policy, would have had a forum selection clause requiring Appellant to file suit in Bucks County. Id. at 15-16.

In addition, Appellant contends that "the trial court's decision in essentially reforming the subject contract to include the forum selection clause ... was completely premature since any argument that a UIM endorsement should be included in the subject contract would only ... be ripe once there was reformation to actually include the UIM coverage ." Id. at 17 (emphasis in original). He claims that, "[s]hould the trial court ultimately determine that UIM coverage should not be afforded, any argument about the inclusion of a UIM endorsement is moot. In fact, if there is determination that there is no UIM coverage, the underlying case is over." Id. Appellant also complains that, "[d]espite acknowledging that the requirement for reformation of an insurance contract in the case of an invalid UIM waiver is dictated by Section 1731(c.1), the trial court applied common law equity to its decision to reform the policy to include [Erie's] proposed forum selection clause." Id. He advances that "[a]rbitrarily deciding that common law reformation to include [Erie's] proposed forum selection clause is warranted prior to an actual determination that UIM coverage exists, and using that clause to form the basis for a transfer of venue to Bucks County[,] is improper." Id. at 19. Finally, Appellant maintains that "venue in Philadelphia County is appropriate as [Erie] regularly conducts business in Philadelphia[,] and there is no forum selection clause contained in the applicable policy that would mandate that the case be transferred to Bucks County." Id.

In determining that the case should be transferred to Bucks County, the trial court explained:

Assuming, as we must for the purposes of these preliminary objections, that [Appellant] is correct that there was no valid waiver of UIM coverage by Ion Construction, Inc., this case presents the question of whether reformation of the contract to provide for such coverage must also include the forum selection provisions which would have accompanied such coverage in the absence of a waiver.

While the requirement for reformation of the contract in the case of an invalid waiver is dictated by statute ( 75 Pa.C.S. § 1731(c.1) ), the remedy of reformation remains essentially an equitable one: "[A]n action for reformation which calls for the court to use its equitable powers, not to compel performance of the existing contract, but to reform the contractual memorandum to conform to the true intention of the parties...[.]" Turner v. Hostetler , ... 359 Pa.Super. 167, 518 A.2d 833[ , 836 n.1] (Pa. Super. 1986).

He

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