INSURANCE-FINANCIAL RESPONSIBILITY LAW-STACKING-INTER-COMPANY STACKING

January 11th, 2023 by Rieders Travis in Insurance

Erie Ins. Exch. v. Backmeier, 2022 Pa. Super. LEXIS 514 (December 28, 2022) (Olson, J.)  Appellant, Elizabeth Backmeier, individually and in her capacity as the executrix of the Estate of Andrew J. Backmeier, appeals from a March 7, 2022 declaratory judgment entered in the Court of Common Pleas of Erie County. The judgment awarded $100,000.00 in favor of Appellant, and against Erie Insurance Exchange (“Erie Insurance”), after the trial court granted Erie Insurance’s motion for judgment on the pleadings and denied Appellant’s cross-motion for judgment on the pleadings. We affirm. On September 25, 2020, [Appellant’s son,] Andrew Backmeier, was riding his bicycle when he was struck[ and killed] by the [underinsured motorist’s] vehicle. [Appellant] sought recovery through her insurance carrier[, Erie Insurance,] for underinsured motorist [(“UIM”)] coverage [] provided by her two insurance policies[.] The two [insurance] policies each provided $100,000[.00] in UIM benefits per [person], $300,000[.00] per occurrence, unstacked. [Appellant] executed stacking waivers on both policies. Both [insurance] policies contained a “Limit of Protection” provision which capped total recovery under all household policies at the highest limit available under any single policy. [Erie Insurance] tendered a total of $100,000[.00] of UIM coverage ($50,000[.00] from each policy) pursuant to the “Limit of Protection” clause[.]  It is well-established that Section 1738 permits waiver of intra-policy stacking when the policyholder executes a valid waiver form that conforms to Section 1738(d) and the single insurance policy covers two or more motor vehicles each providing UIM coverage.  Craley, 895 A.2d at 539-540; see also, 75 Pa.C.S.A. 1738.  We conclude that Appellant understood she paid a premium for insurance coverage that included UIM benefits on only one motor vehicle. The waiver form executed by Appellant conformed with the requirements of Section 1738(d). Although Erie Insurance did not supplement the waiver form by including language explicitly waiving inter-policy stacking, Appellant waived inter-policy stacking under the circumstances of the case sub judice because the 622 Policy provided UIM coverage on a single motor vehicle. The 622 Policy did not provide UIM coverage on multiple motor vehicles and, thus, was not a “multi-motor vehicle” insurance policy. Therefore, under the facts of this case, the Section 1738(d) waiver of stacking form could not be understood by a policyholder to waive intra-policy stacking since multiple motor vehicles capable of allowing stacking of UIM coverage were not covered under the 622 Policy. As such, when Appellant executed the Section 1738(d) waiver form in the case sub judice, Appellant knowingly waived inter-policy stacking in exchange for her reduced premiums, since intra-policy stacking was not an option. In addition, Appellant waived inter-policy stacking on the 1042 Policy because (1) the insurance policy covered only a single motor vehicle, and (2) the waiver form conformed with Section 1738(d). Craley, 895 A.2d at 536, 541-542. Similarly, Appellant waived inter-policy stacking on the 622 Policy because (1) the policy covered only a single motor vehicle, and (2) the waiver form conformed with Section 1738(d). Id. Therefore, we concur with the trial court, and the record supports, that Appellant waived stacking under both of her insurance policies. Section 1733(a) sets forth the order of priority by which an injured insured may seek UIM benefits. As caselaw has held, an insurance policy limit of protection clause may not reduce first priority UIM coverage by the amount received from the tortfeasor’s insurance policy. Allwein, 61 A.2d at 746, 758. Similarly, an insurance policy limit of protection clause may not reduce second priority UIM coverage by the amount received from either the tortfeasor’s insurance policy or the first priority UIM coverage policy, or a combination of both. Generette, 957 A.2d at 1191-1192. Neither Allwein, supra, nor Generette, supra, are on all fours with the case sub judice, which asks whether a limit of protection clause may reduce or limit the amount of second priority UIM coverage when more than one second priority UIM coverage policy is applicable. For the following reasons, we find that, under the circumstances of the case sub judice, such a limit of protection clause does not violate the MVFRL’s excess coverage requirement when stacking has knowingly and effectively been waived. See Meyers, supra. First, we note that Section 1733 is silent on whether limitations may be placed on the total recovery received from policies of equal priority when stacking has been waived. See 75 Pa.C.S.A. § 1733. Section 1733 is also silent on the distinction between stacked and unstacked UIM coverage. Id. Rather, Section 1733 simply sets forth the prioritization for recovery of UIM benefits. Therefore, we turn to Section 1738 which deals specifically with the concepts of stacked and unstacked UIM coverage. Because the case sub judice deals with a situation in which there has been a valid waiver of inter-policy stacking, we examine Section 1738(b), which deals with unstacked UIM coverage. Section 1738(b) states that when an injured insured waives stacking of UIM coverage, “the limits of coverage available under the policy for an insured shall be the stated limits for the motor vehicle as to which the injured person is an insured.” 75 Pa.C.S.A. § 1738(b) (emphasis added). Thus, under the circumstances of the case sub judice, a limit of protection clause that caps second priority UIM coverage to the highest limit of liability of any single motor vehicle insured under any one second priority UIM coverage policy merely implements the concept of waiver of stacking and does not create gap coverage in contravention of the MVFRL.

Attorney Cliff Rieders

Attorney Cliff RiedersCliff 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 ]

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