Opinion
CIVIL ACTION NO. 02-7423
October 8, 2003
MEMORANDUM
Presently before the Court is Defendant Elizabeth Stoccardo's ("Defendant") Motion for Summary Judgment, Plaintiff Continental Insurance Company's ("Continental" or "Plaintiff") Response thereto, and Continental's Cross-Motion for Summary Judgment. For the reasons set forth below, Plaintiffs Motion is granted and Defendant's Motion is denied.
I. BACKGROUND
On October 8, 2000, Defendant's husband, Raymond Stoccardo, was driving his Harley Davidson motorcycle (the "Harley"), with Defendant as a passenger, when they were involved in an accident with a car driven by Robert Ramey. At the time of the accident, Raymond Stoccardo owned the Harley in his own name and had it insured by Universal Underwriters. The Universal Underwriters policy provided underinsured motorist coverage of $25,000 per person and $50,000 per occurrence.
Based on injuries that Defendant received in the accident, Defendant brought suit against Robert Ramey, whose insurance company ultimately tendered its policy limits. Defendant then submitted and settled an underinsured motorist claim against Universal Underwriters — the company that insured the Harley. Believing that she still had not been fully compensated, Defendant then submitted an underinsured motorist claim to Continental. Continental did not insure the Harley in any way, but Continental had issued an insurance policy to Raymond Stoccardo for a 1995 Chevy 2500 and a 1998 Chevy Lumina for the period of September 14, 2000 to September 14, 2001. ("Continental Policy") The Continental Policy provided underinsured motorist coverage, and it was from this coverage that Defendant sought benefits.
On or around September 23, 2002, Continental filed a declaratory judgment action seeking a declaration that it has no obligation to provide underinsured motorist coverage to Defendant based on the accident involving the Harley. Defendant answered the Complaint, and the Court ordered discovery to be completed by June 30, 2003. On or around July 21, 2003, Continental and Defendant filed Cross-Motions for Summary Judgment.
II. DISCUSSION
Both parties submit motions for summary judgment stating that there are no genuine issues of material fact. Both parties ask the Court to make the following two determinations: (1) whether, pursuant to the Continental Policy, Defendant is entitled to underinsured motorist coverage for injures that occurred from an accident on the Harley; and (2) whether the Continental Policy contains an exclusion that is contrary to public policy. In making these determinations, the parties do not dispute that Pennsylvania law should be applied, as all of the contacts regarding the Continental Policy, and the accident on the Harley, occurred in Pennsylvania.
Continental issued the Continental Policy to Raymond Stoccardo to cover a 1995 Chevy 2500 and a 1998 Chevy Lumina for the period of September 14, 2000 to September 14, 2001. (PI. Br. Ex. A.) This entire lawsuit arises from one clause within the Continental Policy, which states, "we do not provide Underinsured Motorists Coverage for bodily injury sustained: a) by you while occupying, or when struck by any motor vehicle you own which is not insured for this coverage under this policy . . ." (Pl. Br. Ex. A.) (the "Household Exclusion") A. Contract Interpretation
Such exclusions are commonly referred to as "household exclusions."
Plaintiff argues that the contract is clear, and that Defendant is not entitled to coverage because the Household Exclusion plainly states that the Continental Policy does not provide underinsured motorist coverage when an injury occurs in a vehicle that is not insured under the Continental Policy. Since the Continental Policy does not cover the Harley, Plaintiff claims that there is no coverage.
Defendant, however, claims that a strict reading of the Household Exclusion shows that the Continental Policy does provide coverage. Specifically, Defendant argues that the Household Exclusion only applies if "you own" the vehicle. Since Defendant did not own the Harley — her husband did — Defendant argues that the Household Exclusion does not apply to her, and she is entitled to underinsured motorist coverage from Continental. (Def. Br. at 3.) Defendant additionally argues that a minimum, the Household Exclusion is ambiguous, and any ambiguity should be decided in favor of the insured. (Def. Br. at 5.)
Interpreting an insurance contract is a question of law, not fact.Standard Venetian Blind Co. v. American Empire Ins. Co., 469 A.2d 563, 566 (Pa. 1983); Shelbv Cas. Ins. Co. v. Statham. 158 F. Supp.2d 610, 614 (E.D. Pa. 2001). The goal of contract interpretation is to ascertain the intent of the parties as manifested by the language of the written instrument. Standard Venetian Blind Co., 469 A.2d at 566 . Where a provision in an insurance policy is ambiguous, the Court must construe the provision in favor of the insured. Id. "Where, however, the language of the contract is clear and unambiguous, a court is required to give effect to that language." Id. Insurance policies should be read to avoid ambiguities if possible, and the language should not be tortured to create them. Jefferson v. State Farm Ins. Co., 551 A.2d 283, 284 (Pa. Super 1988). "A provision is ambiguous only if reasonably intelligent persons considering it in the light of the entire policy could honestly differ as to its meaning." Id. at 284.
In reviewing the Household Exclusion in light of the entire Continental Policy, the Court finds that there is no ambiguity, and that Defendant is not entitled to underinsured motorist coverage. The Continental Policy clearly states that it only provides insurance coverage for two vehicles — a 1995 Chevy 2500 and a 1998 Chevy Lumina. (PI. Br. Ex. A at 002.) Additionally, the Underinsured Motorist Coverage section of the Continental Policy defines insured motor vehicle as "an automobile, motorcycle or motorhome shown in the Coverage Summary if the Coverage Summary indicates `Underinsured Motorist' coverage for that vehicle." (PI. Br. Ex. A at 040.) A review of the Coverage Summary clearly shows that only two vehicles are covered-the Chevy 2500 and the Chevy Lumina — not the Harley. (PI. Br. Ex. A at 002.) Furthermore, the Household Exclusion plainly states that the Continental Policy does not provide underinsured motorist coverage for injuries that are sustained in vehicles that are not covered under the Continental Policy. (PI. Br. Ex. A at 043.) It is undisputed that the Continental Policy does not provide coverage — of any type — for the Harley; therefore, pursuant to the plain and clear language of the Continental Policy, Defendant is not entitled to underinsured motorist coverage for injuries that she sustained on the Harley.
Despite the clear language of the Household Exclusion, Defendant attempts to torture the wording in an effort to exempt herself from the Household Exclusion. Defendant argues that the Household Exclusion only applies to the owner of the vehicle, in this case, her husband. Under Defendant's twisted interpretation, she would be covered, any family member would be covered and any person occupying the Harley with the owner's consent would be covered, but her husband — the person who is the policyholder on the Continental Policy — would not be covered. This is not a sensible interpretation. Furthermore, under Defendant's reading of the Household Exclusion, Continental would be responsible for paying insurance coverage benefits on unknown risks that it never contemplated or contracted to cover. Defendant is asking Continental to provide insurance coverage benefits on the Harley, even though it is undisputed that Continental never contracted with Defendant, or anyone else, to provide any type of insurance coverage on the Harley. Again, this is not a sensible interpretation.
The Continental Policy provides uninsured motorist coverage for the Chevy 2500 and Chevy Lumina for the insured, any family member and any other person occupying the insured motor vehicle with the insured's consent.
The Court finds that after a reasonable reading of the Continental Policy in its entirety, there is no ambiguity in the Household Exclusion. Rather, Defendant tortures the language in an effort to create an ambiguity. As a result, the Court finds that Continental is not obligated to provide underinsured motorist coverage to Defendant for the accident that occurred on the Harley.
B. Public Policy Argument
Defendant next argues that the Household Exclusion is contrary to public policy, and that this Court should not enforce it. (Def. Br. at 6.) More specifically, Defendant states that the Pennsylvania legislature passed the Motor Vehicle Financial Responsibility Law ("MVFRL") intending to protect motorists from drivers with inadequate insurance. (Id.) Defendant asserts that "the policy behind the MVFRL has been the basis for courts overturning exclusions that bar underinsured motorist coverage." (Id.) In support of her assertions, Defendant cites Richmond v. Prudential Prop. Cas. Ins. Co., 789 A.2d 271 (Pa.Super. 2001); however, the Pennsylvania Supreme Court has remanded this case back to the Pennsylvania Superior Court for reconsideration. See Richmond v. Prudential Prop. Cas. Ins. Co., 821 A.2d 1246 (Pa. 2003). As a result of the remand, this Court will not examine the Richmond case. Besides the remanded Richmond case, Defendant does not offer any other authority to support her assertion that the Household Exclusion is contrary to public policy.
Not only has Defendant failed to establish that the Household Exclusion is contrary to public policy, but the Court notes that Pennsylvania State Courts and Federal District Courts have repeatedly upheld similar — and at least in one case identical — household exclusions. Specifically, in Shelby Casualty Ins. Co. v. Statham. a case with facts very similar to the instant case, Judge Van Antwerpen upheld a household exclusion that is word-for-word identical to the household exclusion in the instant case. 158 F. Supp.2d 610 (E.D. Pa. 2001). In holding that the household exclusion was not contrary to public policy, Judge Van Antwerpen cited four Pennsylvania Supreme Court decisions where the Pennsylvania Supreme Court upheld similar household exclusions. See Pavlor v. Hartford Ins. Co., 640 A.2d 1234 (Pa. 1994); Windrim v. Nationwide Ins. Co., 641 A.2d 1154 (Pa. 1994); Hart v. Nationwide Ins. Co., 663 A.2d 682 (Pa. 1995);Eichelman v. Nationwide Ins. Co., 711 A.2d 1006 (Pa. 1998). The Court in Shelbv stated,
In a case decided after Shelbv. the Pennsylvania Supreme Court again held that a household exclusion similar to the household exclusion in the instant case was not contrary to public policy. See Prudential Prop. Cas. Ins, v. Colbert. 813 A.2d 747 (Pa. 2002).
in light of the Pennsylvania Supreme Court's decisions . . . there can be no doubt that the household exclusion in the instant case is valid and enforceable. Defendants voluntarily chose to insure the motorcycle through a separate policy for a lower [underinsured motorist] limit than their other vehicles, and for this they paid a lower premium. To invalidate the household exclusion would be to allow drivers to choose and pay for lower coverage but still to receive higher benefits because of an entirely separate policy which specifically prohibits this type of manipulation.Shelbv. 158 F. Supp.2d at 616-17. Given that Defendant has failed to establish that the Household Exclusion is contrary to public policy, and in light of the overwhelming case law to the contrary, including theShelbv case where the Court upheld an identical household exclusion, this Court finds that the Household Exclusion is valid and enforceable. III. CONCLUSION
Based on the foregoing, the Court finds that the Household Exclusion is not ambiguous and that Continental is not obligated to provide underinsured motorist coverage to Defendant for injuries that she sustained on the Harley. The Court also finds that the Household Exclusion is not contrary to public policy. Given that the parties do not dispute any of the facts, the Court grants Continental's Motion for Summary Judgment and denies Defendant's Motion for Summary Judgment.
An appropriate order follows.
ORDER
AND NOW, this 8th day of October, 2003, upon consideration of Defendant's Motion for Summary Judgment (Docket No. 5), Plaintiffs Opposition thereto (Docket No. 7), and Plaintiffs Cross-Motion for Summary Judgment (Docket No. 6) it is hereby ORDERED that Plaintiffs Motion for Summary Judgment is GRANTED, and Defendant's Motion for Summary Judgment is DENIED. It is further ORDERED that Continental is under no obligation to provide underinsured motorist coverage to Elizabeth Stoccardo for injuries received in an accident on her husband's Harley Davidson on October 8, 2000. Judgment is hereby entered on behalf of Plaintiff Continental Insurance Company and against Defendant Elizabeth Stoccardo.
Based on this Judgment and the Stipulation of Judgment entered on May 19, 2003 against Defendant Raymond Stoccardo, this case is CLOSED.