In the Non-Precedential Memorandum Opinion Bricker v. State Farm Mutual Automobile Insurance Company, Memorandum Decision, No. 102 MDA 2014 (Pa. Super. August 22, 2014), the Pennsylvania Superior Court again reiterated the rule that deviations from statutory requirements in wording or procedures surrounding the UIM rejection form will render it void.
Plaintiff originally purchased a policy of insurance with State Farm Fire and Casualty Company in 2000 and rejected UIM coverage under policy 106-4416. In August of 2004, Plaintiff signed UIM rejection forms and other documents acknowledging the limits of her policy’s coverage, some of which referred to a State Farm Mutual Company policy that was to become effective on September 1, 2004, but all of which referred to the original State Farm Fire and Casualty Company policy 016-4416. On September 1, 2004, the Fire Company policy expired and the Mutual Company policy 0730-575-38 policy took effect.
Plaintiff was involved in a motor vehicle accident in January of 2005. She settled the third party case and placed State Farm on notice of her intent to assert a claim for underinsured motorist benefits. State Farm denied her claim, asserting that the rejection forms applied to the policy of insurance that became effective on September 1, 2004. Plaintiff filed a declaratory judgment action against State Farm regarding whether she had coverage under the policy.
The trial court granted summary judgment in favor of State Farm Mutual Automobile and determined that the UIM rejection form complied with section 1731(c) of the Vehicle Code. The court also noted that Plaintiff Bricker did not provide an explanation as to why she signed the rejection forms in August of 2004. The Plaintiff appealed, arguing ambiguity in the policies. Plaintiff first argued that the “Important Notice” section of the policy constituted “extraneous evidence and should not have been considered by the trial court to determine the ultimate issue of the case – to which policy the UIM rejection form pertains.” Bricker at 6. The Court held that it was proper for the trial court to consider the evidence in the context of the full contract. Id.
Plaintiff also argued that the trial court improperly granted State Farm’s Motion for Summary Judgment by incorrectly determining that the UIM rejection forms signed in August of 2004 applied to the September 2004 State Farm Mutual Automobile Insurance Company policy. She further contended that the policy was ambiguous and should be construed in her favor.
The Court explained the process by which automobile insurance companies are required to offer UIM protection under 75 Pa. C.S.§ 1731 (a), but that individuals are not required to purchase the coverage. However, to “opt out [of the coverage], they must sign and date a rejection form, which must be on its own sheet of paper and contain the exact language prescribed in 1731(c).” Id. The Court also cited the longstanding rule in Pennsylvania that “deviations from the specific statutory requirements in the wording or procedures surrounding the UIM rejection will render it void.” Id. at 7 (citing Jones v. Unitrin Auto & Home Ins. Co., 40 A.3d 125, 131 (Pa. Super. 2012)).
The Court determined that the August 18, 2004 form the Plaintiff signed was valid on its face, as it met all the statutory requirements set forth in 1731 and plainly referred to policy number 016-4416. However, the Court recognized that the UIM form had the names of both insurance companies, State Farm Fire and Casualty and State Farm Mutual, written across the top, “lending no certainty as to which policy or entity the form pertained.” Bricker at 10. When the Court read the UIM form in conjunction with the Important Notice (which stated that the coverage was applicable to September 1, 2004) that form referred to policy 016-4416 which was expired on that date.
The Court ultimately determined that “[a]n examination of the entire policy, taking into account its factual context . . . yields more questions than answers.” Id. at 10. The Court could not determine to which policy the forms referred from their plain language, and the factual record did not provide any assistance in clarifying the ambiguity. As there was ambiguity as to which policy the rejection form applied, the policy was construed in favor of coverage for the insured.
Furthermore, the Court determined that State Farm could not prove its defense with forms alone, and that “[w]hen an insurance company argues that a policy exclusion absolves in of the obligation to provide coverage, it has asserted an affirmative defense.” Id. at 12. Therefore, the burden of proof should have shifted to State Farm Mutual and Plaintiff should not have borne the burden of explaining why she signed the forms in August of 2004.