2007 Update
legal briefs
PA Auto Law Update
Insurer must provide stacking waiver
for each vehicle added to policy
Sackett v. Nationwide Mutual The Trial Court found that insurable interest in the same. When
Insurance. 919 A.2d 194 (Pa. 2007) Nationwide did not have a duty to the Sacketts purchased coverage for
obtain waivers of stacking when a the additional vehicle, the available
Mr. Sackett purchased a Nationwide same named insured simply adds a sum of stacked limits increased. The
policy in 1998 for two vehicles. Mr. vehicle to the policy and entered Court stated, “naturally, an insured
Sackett was the first named insured. judgment in favor of Nationwide. ‘purchasing’ UM/UIM coverage
Mr. Sackett selected $100,000 in The Sacketts appealed to the could not waive the actual stacked
Underinsured Motorist (“UIM”) cov- Superior Court and the Superior limits available to him or her unless
erage and rejected stacked limits by Court affirmed the Trial Court's that waiver was made after coverage
executing a waiver as prescribed by holding. for the newly added vehicle was pur-
the Pennsylvania Motor Vehicle chased.” In other words, it was not
Financial Responsibility Law The Pennsylvania Supreme Court possible for the Sacketts to waive the
(“MVFRL”). had to address the following ques- stacked limits for three vehicles at the
tion: “Did the Sacketts’ purchase of time they only had two vehicles at the
On July 26, 2000, the Sacketts ac- underinsured motorist coverage upon
quired a third vehicle which required inception of the policy.
the addition of the Ford Windstar to
the Sacketts to purchase additional the existing policy trigger a duty on The Supreme Court held that the
insurance with Nationwide. When Nationwide’s part to provide Mr. specific language contained in the
Mr. Sackett added the third vehicle to Sackett with another opportunity to MVFRL makes it clear that “an insur-
the Nationwide policy, Mr. Sackett waive stacked UM/UIM coverage?” er must provide a stacking waiver
was not provided an opportunity to each time a new vehicle is added to
waive stacked UIM coverage. On In addressing the question, the the policy because the amount of cov-
August 5, 2000, Mr. Sackett was Supreme Court stated that the erage that may be stacked increases.”
injured in a motor vehicle accident. Sacketts could not have purchased
UIM coverage for the additional The Supreme Court held that
After settling the underlying tort vehicle prior to its acquisition Nationwide had to provide the
claim, the Sacketts asserted a claim because they would have had no Sacketts a stacking waiver; failure to
for stacked UIM benefits under the do so allowed the Sacketts to stack
Nationwide policy seeking $300,000 the three motor vehicles allowing
in coverage. The Sacketts argued that them $300,000 of UIM coverage.
when they added the third vehicle
they should have been provided a
stacking waiver and they were not.
For more information:
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What’s in a word? 2
Court decision overturned, based on term’s definition
Glikman v. Progressive ness or disease, including death that ily harm to a person and that person’s
Casualty Insurance. 917 A.2d 872 results from bodily harm, sickness or resulting illness, disease or death.”
(Pa. Super. 2007) disease.” Progressive argued that there Zerr, 667 A.2d at 238.
were four types of bodily injury for
Sura Glikman was crossing the street which the policy provided coverage. The Court in Glikman found:
with her husband who was struck and Those were: bodily harm, sickness, The critical difference
killed by a motorist whose motor disease and/or death that results from between the two is that in
vehicle was insured by Progressive. the first three. The term “disease” was order to be covered as a
Mrs. Glikman did not own a motor a separately identified bodily injury in injury under the Zerr
vehicle and did not reside with anyone the policy. policy, the disease must
who owned a motor vehicle. As a
Progressive did not dispute that post- be a result of bodily harm
result of witnessing her husband’s
traumatic stress disorder is a disease while, under appellee’s
accident, she was diagnosed and treat-
or the cause of Mrs. Glikman’s suffer- [Progressive] policy, dis-
ed for post-traumatic stress disorder.
ing of the same. The Trial Court ease is defined as an injury
She sought first-party benefits from
found that she did not sustain a bod- separate from bodily harm.
Progressive to pay for the cost of her
ily injury within the meaning of the Because the definition of
treatment. Progressive denied cover-
policy. what constitutes a ‘bodily
age based upon the fact that Mrs.
injury’ in the policy at
Glikman’s injuries as a result of the
The Trial Court found for Progressive issue in this case is differ-
accident were not the result of a bodi-
and found that there was no coverage. ent then the definition of
ly injury.
The Trial Court based its decision on ‘bodily injury’ in the Zerr
Pursuant to the language in the Zerr v. Erie Insurance Exchange, 667 policy, the holding of Zerr
Progressive policy, the policy provided A.2d 237 (Pa. Super. 1995). The does not apply to the facts
first-party benefits for “loss or Superior Court in Glikman held that of this case.
expense sustained by an insured per- the definition of bodily harm in the
policy at issue in Zerr did not use the The Superior Court in Glikman vacat-
son because of bodily injury caused
same language as the policy language ed the Trial Court’s Order granting
by an accident arising out of the
in the Progressive policy. The policy Progressive’s Motion for Summary
maintenance or use of a motor vehi-
language in Zerr defined “bodily Judgment and entered judgment in
cle.” The Progressive policy defined
injury” or “injury” as “accidental bod- favor of Mrs. Glikman.
“bodily injury” as “bodily harm, sick-
Ambiguous policy wording can lead to undesired result
Prudential v. Sartno. 903 A.2d her infant daughter. The woman and The Trial Court entered judgment for
1170 (Pa. 2006) her husband filed suit against Sartno Sartno finding that Prudential had a
and the pizzeria alleging negligence. legal obligation to enter a defense for
Sartno was a part-time pizza delivery
Sartno’s personal automobile was Sartno and provide him coverage.
driver for a pizzeria. His duties
insured through Prudential. Prudential appealed to the
included cleaning the restaurant,
Prudential filed a declaratory judg- Pennsylvania Superior Court which
preparing food and delivering pizza.
ment action seeking to preclude lia- reversed and held that the exclusion
He was paid $6 an hour and was per-
bility coverage for the accident and a was unambiguous and coverage was
mitted to keep any tips he received
duty to defend Sartno, alleging that excluded for Sartno’s use of his auto-
when making deliveries. The pizzeria
the “cars for hire” policy exclusion mobile as an employee who was paid
advertised free delivery and did not
applied where Sartno’s automobile wages and tips to deliver pizzas.
impose a delivery charge.
was used to carry property for a fee. Sartno appealed to the Pennsylvania
On the date of the accident, Sartno Supreme Court.
The “cars for hire” exclusion stated,
left the pizzeria to deliver pizzas.
“we will not pay for bodily injury or The Pennsylvania Supreme Court in
After placing the pizzas in his per-
property damage caused by anyone reviewing the policy found that the
sonal automobile he put the car in
using a car covered under this part to
reverse, striking a woman carrying See Prudential v. Sartno, Page 3
carry people or property for a fee.”
Full-tort benefits may apply, even if insured 3
has additional vehicles not currently insured
Progressive Halcyion Insurance mine whether Kennedy was entitled coverage under Section 1705(a)(5) of
Company v. Kennedy. to recover first-party benefits and the MVFRL. Section 1705(a)(5)
908 A.2d 911 (Pa. Super. 2006) whether he was subjected to the lim- states as follows: “an owner of a cur-
ited tort provisions on the UM claim rently registered private passenger
Kennedy was a named insured on an
under the MVFRL. The Trial Court motor vehicle who does not have
automobile insurance policy issued
granted summary judgment for financial responsibilities shall be
by Progressive. The policy in ques-
Progressive on the issue of first- deemed to have chosen the limited
tion covered Kennedy’s 1997 Ford
party benefits and denied summary tort alternative.”
and 1989 Toyota for which he select-
judgment on the issue of the UM
ed full tort coverage under the The Superior Court upheld the Trial
limited tort claim. The decision from
MVFRL. Additionally, Kennedy Court’s decision and found that
the Trial Court was appealed.
owned a 1986 Nissan that was not Kennedy was not bound by the limit-
insured under any policy. In January The Superior Court was presented ed tort alternative under the MVFRL.
2004, Kennedy was involved in a with the question as to “whether an The Superior Court reasoned that
motor vehicle accident while operat- insured party injured in a car covered since Kennedy was driving a vehicle
ing the Ford, which was insured by by the full tort option can be denied insured by Progressive at the time of
Progressive. The accident was caused full tort benefits because he also the accident and he had paid
by a phantom vehicle. As a result of owns an uninsured vehicle.” Progressive for the full tort coverage
the accident, Kennedy suffered Progressive argued that because for that motor vehicle, he was enti-
injuries and submitted a claim to Kennedy owned an uninsured vehicle tled to have full tort rights in the UM
Progressive for first-party benefits even though that vehicle was not claim.
and UM coverage. Progressive filed a involved in the accident he was
declaratory judgment action to deter- deemed to have chosen limited tort
Prudential v. Sartno, cont. guage: “(1) using a broad interpreta- Have legal questions
tion, Sartno did carry property for a
about any of
“cars for hire” exclusion was ambigu- fee because his deliveries occurred
these issues?
ous and capable of at least two during the course of his employ-
Please contact
equally reasonable interpretations. ment, for which he received wages;
or (2) under a narrower interpreta-
one of our attorneys:
The question before the Supreme
Court was whether Sartno carried tion, Sartno did not carry property
for a fee because there was no deliv- Sheila M. Burke
“property for a fee” when he deliv- smburke@bwhllc.com, 412-995-3198
ered pizza for free as a paid employ- ery charge.”
ee of the pizzeria. Prudential argued John B. Cromer
The Supreme Court stated that
that because the pizzeria paid him $6 jbcromer@bwhllc.com, 412-995-3134
“regardless of which one is ‘right’ or
an hour for duties that included pizza ‘wrong’ the fact is that because each Jennifer L. McPeak:
delivery he was carrying “property interpretation is reasonable, the jlmcpeak@bwhllc.com, 412-995-3125
for a fee” when he used his own car exclusionary term is ambiguous and
to deliver the pizza. Sartno and the Anthony C. Sunseri:
we must construe it in favor of the acsunseri@bwhllc.com, 304-231-1004
pizzeria argued that Sartno did not insured.”
“carry property for a fee” because Allan J. Wertz:
the delivery was free, with no fee or The Supreme Court found that the ajwertz@bwhllc.com, 412-995-3185
charge imposed for that service. exclusionary language was ambigu-
ous, and Prudential had to provide
The Supreme Court found that there coverage and a defense to Sartno in
were at least two perspectives that are the underlying motor vehicle lawsuit.
reasonable based upon the policy lan-
A case to watch: 4
Allowance of appeal granted on Jan. 11, 2007
Blood v. Old Guard Insurance this claim and found that the changing The Court indicated that when
Company, 894 A.2d 795 (Pa. Super. of liability coverage did not necessi- Blood’s parents’ policy was later
2006) tate filing of a new signed form set- amended, they completed a document
ting forth an affirmative selection of entitled “Pennsylvania Auto Insurance
Jay Blood was injured when he was a
lower UM/UIM coverage limits. Coverage Selection Form”; under the
passenger in a motor vehicle which
Blood appealed the Trial Court’s deci- liability limits section there were vari-
left the roadway and crashed into a
sion to the Pennsylvania Superior ous amounts with a checked box next
tree. The driver’s insurer paid Blood its
Court. to the amount of $300,000. Under the
policy limits, and Blood then sought
UM and UIM coverage section there
UIM benefits from Old Guard Blood argued on appeal that UIM
were various amounts but no box was
Insurance Company under a policy coverage must equal liability coverage
checked. The Court indicated that the
issued to his parents. His parents ini- under the MVFRL statute where a
insureds’ failure to specifically choose
tially purchased the Old Guard Policy change in liability limits is made and
an amount of UM/UIM coverage on
in 1986 and purchased liability cover- no indication is made to select an
the new form was not the same as
age in the amount of $500,000. At amount of UIM coverage. Blood rea-
rejecting such coverage; therefore, the
that time they elected a lower UM/ soned that the insurance company’s
Court ruled that the provisions of
UIM limit equaling $35,000 with a failure to obtain the insureds’ specific
Section 1731(c)(i) apply. Due to the
stacking option. In 2000, prior to the selection of lower UIM coverage lim-
fact that a lower coverage amount was
motor vehicle accident, Blood’s par- its in writing requires it to provide
not specifically selected the UM/UIM
ents decided to reduce their liability UIM coverage limits equal to the lia-
coverage must be in an amount equal
coverage from $500,000 to $300,000. bility limits.
to the bodily injury liability coverage,
The change request form included a
The Superior Court indicated that $300,000.
check mark next to the figure of
$300,000 for liability limits. There were under Pennsylvania law, “the Motor
The Court referred to this type of
separate categories of coverage for Vehicle Financial Responsibility Law
case as a “sign-down” case. A “sign-
UM and UIM coverage with differing (MVFRL) directs that motor vehicle
down” case is where an insured elects
option amounts; however, no check liability insurance policies may not be
UM/UIM coverage in an amount
marks appeared next to any figures in issued in this Commonwealth unless
lower than the liability limits. The
the UM or UIM coverage section. UM/UIM coverage is offered. 75
Court stated “where an insured in a
Pa.C.S.A. § 1731(a). Insureds must be
sign-down case later seeks to change
Old Guard paid Blood $105,000 in notified of the option to reject such
the amount of bodily injury liability
UIM coverage representing coverage coverage and may choose to do so
coverage, a new request for lower lim-
in the amount of $35,000 for each of upon signing a specific rejection form.
its of UM/UIM coverage must be
the three vehicles owned by the 75 Pa.C.S.A. § 1731(b) and (c).
submitted or the statutorily mandated
insured stacked. Blood sought Absent a valid rejection, the MVFRL
equal limits will apply.” The Court
$900,000 in UIM coverage stacked on requires insurance companies to pro-
held that since Old Guard failed to
three vehicles based upon the fact that vide UM/UIM coverage in amounts
obtain an alternate selection for
he was entitled to $300,000 per vehi- equal to the bodily injury liability cov-
UM/UIM coverage the UIM coverage
cle, an amount equal to the liability erage purchased under the policy. 75
under the Old Guard policy was equal
limits under the revised policy. Blood Pa.C.S.A. § 1731(c)(i).”
to the bodily injury liability amounts.
claimed that because UIM coverage in
The Superior Court overruled the
an amount lower than the liability lim-
lower court’s decision.
its was not elected at the time of the
revision of the insurance policy, the Allowance of the appeal was grant-
UIM coverage limits equaled the lia- ed on Jan. 11, 2007.
bility limits. The Trial Court rejected
Four Northshore Center 531 Plymouth Road 502 Carnegie Center The Maxwell Centre
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Pittsburgh, PA 15212 Plymouth Meeting, PA 19462 Princeton, NJ 08540 Wheeling, WV 26003
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