On Appeal From the United States District Court For the Middle District of Pennsylvania. (D.C. Civil Action No. 90-1837).
Before: Mansmann, Roth and Rosenn, Circuit Judges.
This suit arises from a dispute over the meaning of § 1734 of the Pennsylvania Motor Vehicle Financial Responsibility Law. Appellant Nationwide Insurance Company ("Nationwide") contends that the underinsured motorist coverage of its named insured, appellee Marian Resseguie, was lowered by the verbal request of her husband. We are required to evaluate whether under Section 1734 of the Pennsylvania Motor Vehicle Financial Responsibility Law a request to lower underinsured motorist coverage must be in writing to be effective. Nationwide Insurance Company sought a declaration in the district court that the limits of underinsured motorist coverage in its policy issued to Marian Resseguie are $15,000 per person and $30,000 per accident. Marian Resseguie asserts that the policy's underinsured motorist limits are equal to its bodily injury liability limits of $50,000 per person and $100,000 per accident.
In his memorandum opinion, the district Judge stated that "short of a written request by Marian Resseguie for the lower coverage, or an admission on her part that she had actual knowledge of the lower coverage, Nationwide simply was not authorized to alter her policy." Nationwide Insurance Co. v. Resseguie, 782 F.Supp. 292, 294 (M.D. Pa. 1992) (emphasis added). The meaning of § 1734 is clear; we will therefore affirm the judgment of the district court insofar as it is based on the requirement that a request for lower coverage be in writing by a named insured. However, we do not agree with the further holding of the district court that "an admission on [Marian Resseguie's] part that she had actual knowledge of the lower coverage" is legally significant.
The parties do not dispute the material facts in this case. On July 28, 1983, Marian Resseguie signed an automobile insurance application for Nationwide automobile insurance on her 1980 Plymouth Volare four-door sedan. The application provided for bodily injury limits of $50,000 per person and $100,000 per accident ("$50,000/$100,000") and uninsured motorist ("UM") coverage with limits of $15,000/$30,000. Marian Resseguie was the sole named insured on the policy; both Marian and her husband Richard were listed as drivers under the policy.
On October 1, 1984, the Motor Vehicle Financial Responsibility Law ("MVFRL"), 75 Pa. Cons. Stat. Ann. §§ 1701-99 (Supp. 1992) became effective. On November 14, 1984, approximately two and one-half months before the first policy renewal date following the MVFRL's enactment, Nationwide mailed the "IMPORTANT NOTICE" required under § 1791 of the MVFRL to Marian Resseguie. The "IMPORTANT NOTICE" advised her that, pursuant to the MVFRL, Nationwide made available to her higher UM and underinsured motorist ("UIM") coverage equal to the bodily injury liability limits of $50,000/$100,000. Nationwide also mailed her an options selection form.
On January 8, 1985, approximately twenty days before the renewal date of January 28, 1985, Nationwide mailed to Marian Resseguie a renewal notice indicating that Nationwide had automatically provided the higher UM/UIM coverage because they had not received her option selection form. The renewal notice further advised her to contact her agent if she desired to make changes to her policy or to discuss the available options. Marian Resseguie did not contact her agent to make changes and on February 15, 1985, she personally delivered a cash payment to her Nationwide agent for the higher UIM coverage. On February 20, 1985, Nationwide issued and mailed to Marian Resseguie a policy with bodily injury liability limits of $50,000/$100,000 and UM/UIM coverage limits of $50,000/$100,000. The message on the policy's declaration page read: "Thank you for your renewal premium payment. This new policy replaces your former no-fault personal injury protection with your new first-party injury benefits coverages. -- See premium notice enclosed." App. at 61.
On February 20, 1985, Richard Resseguie orally requested from Nationwide a reduction in UIM coverage limits from $50,000/$100,000 to $15,000/$30,000. Following Richard Resseguie's verbal request, a Nationwide agent's secretary, in her own handwriting, issued a customer service request ("CSR") providing for a reduction in UIM coverage from $50,000/$100,000 to $15,000/$30,000.*fn1 Based upon this CSR, on March 5, 1985, Nationwide issued and mailed to Marian Resseguie a declaration setting forth the lower UM/UIM coverage limits on her policy. The message on the policy's declaration page read: "Your policy has been changed effective 1/28/85 resulting in a premium reduction of $11.60 which has been applied to your premium balance. We have, on your 80 Plymouth Volare changed uninsured motorists coverage . . . . -- See premium notice enclosed." App. at 67.*fn2
Marian Resseguie, the named insured, never personally requested, either in writing or orally, that Nationwide lower her UM/UIM coverage limit from $50,000/$100,000 to $15,000/$30,000, nor did she specifically authorize or direct her husband to do so. Furthermore, Nationwide never obtained a written request for the lower limits from Marian Resseguie. However, from 1985 up until 1989 Marian Resseguie received premium notices and paid premiums based on the $15,000/$30,000 UM/UIM coverage.
Richard Resseguie was killed in an automobile accident on January 2, 1989, when a drunk driver hit his car head on. Richard Resseguie was an insured person under Marian Resseguie's policy from Nationwide because he was a listed driver and because he was driving one of two vehicles insured under the policy at the time of his death. Marian Resseguie recovered the limits of the tortfeasor's liability policy; yet, the recovery was insufficient to cover her losses or the estate's loss.
Marian Resseguie notified Nationwide of her intent to request the higher UIM coverage limits on the policy.*fn3 After learning of Marian Resseguie's intention, Nationwide initiated this action in the district court for a declaratory ...