Erie Ins. Exch. v. Mione, 2023 Pa. LEXIS 172 (February 15, 2023) (Wecht, J.) This case concerns the enforceability of two household vehicle exclusions in a pair of automobile insurance policies. The courts below held that the exclusions were valid and enforceable, citing this Court’s 1998 decision in Eichelman v. Nationwide Insurance Co., 551 Pa. 558, 711 A.2d 1006 (Pa. 1998). Appellants here, husband and wife Albert and Lisa Mione, contend that the lower courts erred in applying Eichelman, arguing that this Court sub silentio overruled that decision in Gallagher v. GEICO Indemnity Co., 650 Pa. 600, 201 A.3d 131 (Pa. 2019). We reject the Miones’ argument, and we affirm. In 2018, Albert Mione (“Mione”) was in a collision while operating his motorcycle. Mione’s motorcycle was insured by Progressive Insurance, under a policy that did not include UM/UIM coverage (“the motorcycle policy”). Albert and his wife Lisa (“the Miones”) jointly owned a car, which was insured by Erie Insurance on a single-vehicle policy that included UM/UIM coverage with stacking (“the automobile policy”). Mione’s adult daughter Angela also lived in the couple’s home, and she too owned a car, which Erie insured on a single vehicle policy (“Angela’s policy”). Both of the Erie policies contained household vehicle exclusions barring UM/UIM coverage for injuries sustained while operating a household vehicle not listed on the policy under which benefits are sought. After Mione’s motorcycle collision, the Miones sought benefits from the at-fault driver’s insurance company, which paid out the policy’s maximum benefit. The Miones then tried to recover UIM benefits from Erie under both the automobile policy and Angela’s policy. Erie denied coverage for both claims, citing the household vehicle exclusions in the policies. The company then filed suit in the Lehigh County Court of Common Pleas seeking a declaratory judgment that it was not required to pay the Miones UIM benefits under either of the policies. Erie eventually filed a motion for judgment on the pleadings, which the trial court granted. The court noted that “the facts in this case are nearly identical to the facts in” Eichelman, where this Court rejected the argument that household vehicle exclusions are per se unenforceable on public policy grounds.
On appeal, our Court unanimously upheld the denial of coverage and rejected Eichelman’s argument that the household vehicle exclusion violated public policy. We explained that the exclusion, by its terms, was unambiguous, and we discerned no clear public policy that would require judicial invalidation of the exclusion. We also stated that the cost-containment rationale underlying the MVFRL weighed in favor of enforcing the household vehicle exclusion.
[U]nderinsured motorist coverage serves the purpose of protecting innocent victims from underinsured motorists who cannot adequately compensate the victims [*5] for their injuries. That purpose, however, does not rise to the level of public policy overriding every other consideration of contract construction. As this Court has stated, “there is a correlation between premiums paid by the insured and the coverage the claimant should reasonably expect to receive.” Hall v. Amica Mut. Ins. Co., 538 Pa. 337, 648 A.2d 755, 761 (Pa. 1994). Here, appellant voluntarily chose not to purchase underinsured motorist coverage. In return for this choice, appellant received reduced insurance premiums.
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Allowing the “household exclusion” language to stand in this case is further bolstered by the intent behind the MVFRL, to stop the spiraling costs of automobile insurance in the Commonwealth. If appellant’s position were accepted, it would allow an entire family living in a single household with numerous automobiles to obtain underinsured motorist coverage for each family member through a single insurance policy on one of the automobiles in the household. If this result were allowed, it would most likely result in higher insurance premiums on all insureds (even those without family members living at their residence) since insurers would be required to factor expanded coverage cost into rates charged for underinsured motorist coverage. Thus, allowing the “household exclusion” language of the two insurance policies at issue to bar recovery by appellant of underinsured motorist benefits is consistent with the intent behind the enactment of the MVFRL. Returning to the case before us, the trial court below reasoned that the household vehicle exclusion in the Miones’ automobile policy was unambiguous and enforceable. Like the Eichelman court, the trial court emphasized that Mione had waived UIM coverage for his motorcycle, meaning that the public policy of cost containment would be furthered by enforcing the household vehicle exclusion.
After Gallagher’s collision, he filed claims under both policies. GEICO paid the $50,000 motorcycle policy claim, but then rejected Gallagher’s claim for stacked benefits under the automobile policy, citing a household vehicle exclusion that barred coverage for injuries sustained while operating a household vehicle “that is not insured for [UIM] Coverage under this policy.” Here, unlike in Gallagher, the Miones are not attempting to stack anything at all. They have not yet received any UIM benefits, but their theory is that one or both of the household policies can provide UIM coverage in the first instance. The problem with that argument is that the policies explicitly exclude UM/UIM coverage for damages sustained while operating an unlisted household vehicle. Those exclusions do not conflict with Section 1738 of the MVFRL. Unlike in Gallagher, the exclusions here do not act as de facto waivers of stacking. In other words, because the Miones are not attempting to stack UIM benefits from the household policies on top of UIM benefits from the motorcycle policy, Section 1738’s rules for waiving stacking—which were the basis for this Court’s decision in Gallagher — are simply not implicated. We reiterate today that the holding in Gallagher was based upon the unique facts before us in that case, and that the decision there should be construed narrowly. The insured in Gallagher was attempting to stack (inter-policy) the coverage limits from his automobile policy on top of the coverage limits for his motorcycle policy. He was also attempting to stack (intra-policy) the coverage limits for each of the two vehicles on his household automobile policy. It was only when confronted with those unique facts that this Court concluded that enforcing the exclusion would be “inconsistent with the unambiguous requirements [of] Section 1738 of the MVFRL[.]” As interpreted in Gallagher, the MVFRL precludes any clause that acts as a disguised waiver of stacking by skirting Section 1738‘s express waiver requirements. In sum, we continue to reject the view that household vehicle exclusions are ipso facto unenforceable. Gallagher did not undermine Eichelman‘s central holding in that regard; it simply held that a household vehicle exclusion cannot conflict with Section 1738 by purporting to take away coverage that the law says is mandatory unless waived using a specific form. In cases where the exclusion does not interfere with the insured’s ability to stack UM/UIM coverage, Gallagher‘s de facto waiver rationale is not applicable. Thus, we conclude that the lower courts correctly distinguished Gallagher and correctly enforced the exclusions in the Miones’ household policies. We affirm.
Attorney Cliff Rieders
Cliff Rieders is a Nationally Board Certified Trial Lawyer practicing personal injury law. A large part of his practice involves multi-district litigation, including cases related to pharmaceuticals, vitamin supplements and medical devices. He is admitted in several state and federal courts, as well as the Supreme Court of the United States. Rieders is the past regional president of the Federal Bar Association and is a life member of the distinguished American Law Institute, which promulgates proposed rules adopted by many state courts. He is a past president of the Pennsylvania Association for Justice, formerly Pennsylvania Trial Lawyers Association. As a founder of the Pennsylvania Patient Safety Authority, he served on the Board for 15 years.
Not only has Rieders held many highly esteemed, leadership positions, he authored legislation related to the Patient Safety Authority and the Mcare Act, which governs medical and hospital liability actions in Pennsylvania. He authored texts upon which both practitioners and judges rely, including Pennsylvania Malpractice Laws and Forms, and Financial Responsibility Law Issues in Pennsylvania, the latter governing auto and truck collisions in Pennsylvania. In addition, he wrote several books on the practice of law in Pennsylvania regarding wrongful death and survivor actions, insurance bad faith, legal malpractice claims and worker rights, among others. Rieders also serves as a resource to practitioners as a regular speaker for Celesq, an arm of the world’s largest legal publisher, Thomson Reuters West Publishing.
As recognition of his wide range of contribution to his profession and of his dedication to protecting the rights of his clients, he received numerous awards, among them the George F. Douglas Amicus Curiae Award, the Milton D. Rosenberg Award, the B’nai B’rith Justice Award, and awards of recognition from the Pennsylvania Trial Lawyers. [ Attorney Bio ]