Northern Insurance Company of New York v. Resinski

Transcription

1 MONTGOMERY COUNTY LAW REPORTER MBA 30 Northern Ins. Co. of New York v. Resinski [140 M.C.L.R., Part II Northern Insurance Company of New York v. Resinski APPEAL and ERROR Motion for Summary Judgment Preliminary Objections Declaratory Relief CONTRACTS Interpretation AUTOMOBILES Underinsured motorist benefits Defendant appeals denial of her Cross-Motion for Summary Judgment to Compel Arbitration and the granting of Plaintiff s Motion for Summary Judgment involving Defendant s claim for underinsured motorist benefits. 1. Whether to grant declaratory relief is purely a matter within the discretion of the trial court. 2. In considering preliminary objections to a petition for a declaratory judgment, all averments of fact made in the petition must be accepted as true. 3. A motion for summary judgment is appropriate in declaratory judgment proceedings. 4. Ambiguous language is to be interpreted against the drafter. 5. To determine preliminary objections the court accepts as true all well-pled material facts set forth in the complaint along with all reasonably deducible inferences from those facts. 6. A demurrer or a request for a dismissal of the complaint asks the question whether on the facts averred, the law says with certainty that no recovery is possible. When there is any doubt the question should be resolved by refusal to sustain the objections. 7. The Superior Court has held that preliminary objections should not be sustained solely on the ground that the preliminary objections are uncontested or unopposed. 8. The lack of a response to preliminary objections does not alter the court s function to review the complaint and to determine whether it is legally sufficient. 9. After the relevant pleadings are closed, but within such time as not to unreasonably delay trial, any party may move for summary judgment in whole or in part as a mater of law: 1) whenever there is no genuine issue of any material fact as to a necessary element of the cause of action or defense which could be established by additional discovery or expert report, or (2) if, after the completion of discovery relevant to the motion, including the production of expert reports, an adverse party who will bear the burden of proof at trial has failed to produce evidence of facts essential to the cause of action or defense which in a jury trial would require the issues to be submitted to a jury. (Appealed to Superior Court December 23, 2003.) (Appeal Docketed by Superior Court January 3, 2003.) C. P. Montgomery County, Civil Division. No Northern Insurance Company of New York v. Alfreda Resinski. James J. Haggerty, for Northern Insurance Company of New York. Roman J. Koropey, of Harvey, Pennington, Cabot, Griffith & Renneisen, Ltd., for Alfreda Resinski. CORSO, J., February 6, 2003

2 MONTGOMERY COUNTY LAW REPORTER ] Northern Ins. Co. of New York v. Resinski 2003 MBA On March 1, 2000, the Plaintiff, Northern Insurance Company of New York, filed Civil Action-Complaint for Declaratory Relief 1 against the Defendant, Alfreda Resinski 2 involving her claim for underinsured motorist benefits which Plaintiff had denied. Pursuant to the parties Amended Procedural Stipulation, the court considered and decided the Motion for Summary Judgment of the Plaintiff, Northern Insurance Company of New York, and Cross-Motion of Defendant Alfreda Resinski For Summary Judgment To Compel Arbitration. By Order dated November 26, 2002, the court granted Plaintiff s motion and denied the Defendant s cross-motion, declaring: a. Northern Insurance Company of New York, has no obligation to provide underinsured motorist benefits to or on behalf of the defendant, Alfreda Resinski, under the Business Auto Policy issued to DA-Tech Corporation in connection with injuries sustained by her in the February 10, 1996 motor vehicle accident; and b. The Defendant, Alfreda Resinski, is hereby enjoined from maintaining any claim for recovery of underinsured motorist benefits against the plaintiff, Northern Insurance Company of New York, under the Business Auto Policy issued to DA-Tech Corporation in connection with injuries she sustained in the February 10, 1996 motor vehicle accident. On December 30, 2002, the Defendant filed a Notice of Appeal. Pursuant to Rule of Appellate Procedure No. 1925(b), the Defendant filed a concise statement of matters complained of on appeal: 1. The Court erred as a matter of law by granting Plaintiff s Motion for Summary Judgment and decreeing that Plaintiff has no obligation to provide underinsured motorist benefits to her and by enjoining Alfreda Resinski from maintaining a claim for the recovery of such benefits, rather than granting Defendant s Cross-Motion for Summary Judgment, dismissing Plaintiff s Complaint and ordering the Plaintiff to proceed to arbitration. The Court s ruling and interpretation of the arbitration provisions of Plaintiff s Underinsured Endorsement is contrary to decisions of the Superior Court and Supreme Court interpreting similar arbitration clauses in Brennan v. General Accident Fire and Life Assurance Corporation, Baverso v. State Farm Insurance Company, and Borgia v. Prudential Insurance Company, all of which directed coverage issues to be arbitrated pursuant to such clauses. (citations omitted). 2. The Court erred as a matter of law by denying Defendants Preliminary Objections to Plaintiff s Complaint for the reasons stated in No. 1 above and where no answer to the Preliminary Objections was even filed by the Plaintiff. 1 Plaintiff s filed the complaint pursuant to the Uniform Declaratory Judgments Act, 42 Pa. C.S et. seq. 2 The Defendant, Lawrence Resniski is deceased and the parties have stipulated that he is dismissed from this litigation.

3 MONTGOMERY COUNTY LAW REPORTER MBA 30 Northern Ins. Co. of New York v. Resinski [140 M.C.L.R., Part II 3. The Court erred as a matter of law by granting summary judgment in Plaintiff s favor when there were significant genuine issues of material fact concerning the automobiles and drivers covered by the Underinsured Endorsement as averred in paragraph 34 of Defendant s Response to Plaintiff s Motion for Summary Judgment. These Issues should have been subject to resolution by arbitration, or if the matter were not arbitrable, subject to an evidentiary herein in the declaratory judgment action. 4. The Court erred as a matter of law by granting summary judgment in Plaintiff s favor and not ordering Plaintiff to proceed with arbitration of the coverage issue where the named insured under Plaintiff s policy, DA-Tech Corporation, had made written demand for arbitration. As the policy holder which paid premiums for the Underinsured Endorsement, DA-Tech corporation is entitled to a determination of whether its principal s wife was covered with regard to her bodily injury claim, especially since DA-Tech, being, a corporation, could not itself suffer bodily injury. Plaintiff stipulated that it had received the demand for arbitration signed by DA-Tech s Chief Executive Officer and Plaintiff failed to reply to Defendant s Answer and New Matter to Plaintiff s Complaint regarding DA-Tech s demand, thereby being deemed to have admitted DA-Tech s right to arbitration. The parties entered into Amended Procedural Stipulation, and Stipulation of Facts 3 setting forth the undisputed facts, which are attached and incorporated herein. DISCUSSION [1], [2] Whether to grant declaratory relief is purely a matter within the discretion of the trial court. 4 In considering preliminary objections to a petition for a declaratory judgment, all averments of fact made in the petition must be accepted as true. 5 A motion for summary judgment is appropriate in declaratory judgment proceedings. 6 The Defendant relies on three cases in support of her claims. Specifically, the Defendant asserts in Claim 1 that the court s ruling was contrary to the Superior and Supreme Court s decisions in Brennan, Baverso and Borgia that interpret similar arbitration clauses, and all of which directed coverage issues to be arbitrated pursuant to such clauses. In the court s opinion, the instant case is factually and legally distinguishable, and therefore, the Defendant s reliance thereon is misplaced. Attached to the complaint is a commercial business insurance policy that defines the term insured. In clear and unambiguous language, the arbitration clause of the Business Auto Endorsement states that only the insured may raise a claim of the insured for arbitration. Unlike the Defendant, the claimants in the aforesaid trio of cases were seeking arbitration of underinsured/uninsured motorist coverage claims under personal automobile insurance policies. They asserted a right to arbitration as either the named insured or a child resident in the household of a named insured on the policy. Several coverage issues arose as a result of ambiguous language or failure to define terms in the policies. 3 Exhibts not attached. 4 Presbyterian-University of Pennsylvania Medical Center v. Keystone Ins. Co., 380 A.2d 381, 251 Pa. Super. 71 (1977), Greenberg v. Blumberg, 206 A.2d 16, 416 Pa. 226 (1965). 5 Melnick v. Melnick, 25 A.2d 111, 147 Pa. Super. 564 (Pa. Super. 1942). 6 Pennsylvania Public Utility Commission Bar Ass n v. Thornburgh, 434 A.2d 1327, 62 Pa. Cmwlth. 88, Cmwlth.1981, affirmed 450 A.2d 613, 498 Pa. 589.

4 MONTGOMERY COUNTY LAW REPORTER ] Northern Ins. Co. of New York v. Resinski 2003 MBA The Supreme Court summarized the relationship among the trio of cases as follows: [T]he focus of this Court s analysis in Brennan was on what issues may be submitted to arbitration, in Baverso v. State Farm Ins. Co., (citations omitted), the Superior Court relied on Brennan to decide an issue concerning who may submit issues to arbitration. In Baverso, the claimant demanded arbitration pursuant to a clause in a State Farm policy providing that, in the case of a disagreement as to whether the insured was legally entitled to collect damages from the owner or driver of an uninsured motor vehicle, or as to the amount of such damages, either the insured or State Farm could demand that the issue be decided by statutory arbitration. In [Borgia], the issue to be decided is whether, under the terms of the arbitration clause Borgia s claim to the status of a covered person who may demand arbitration is, in itself, arbitrable. Borgia v. Prudential Insurance Company, 561 Pa. 434, 445, 750 A.2d 843, 849 (Pa. 2000). [3] To resolve the issue in Borgia, the Supreme Court applied the contractual principle that ambiguous language is to be interpreted against the drafter. The Court found that the issue was arbitrable as a result of policy ambiguity. Specifically, that the arbitration clause was in conflict with Pennsylvania Motor Vehicle Responsibility Law, 75 Pa. C.S.A. 1702, et. seq., with respect to the term covered person. That is not this case. In this case, the Defendant is not an insured entitled to arbitrate any claims under the policy. In Claim 2. the Defendant contends that the court erred when it denied preliminary objections in the nature of a demurrer. The preliminary objections asserted that the court lacked jurisdiction. Again, in support of the claim, she relies on the Court s decisions in Brennan, Baverso and Borgia, and asserts that since the Plaintiff did not respond to Defendant s preliminary objections, the court is required to dismiss the complaint. This claim is devoid of merit. [4] To determine preliminary objections: [T]he court accepts as true all well-pled material facts set forth in the complaint along with all reasonably deducible inferences from those facts. [The court s] inquiry assesses the legal sufficiency of the complaint. Schuylkill Navy v. Langbord, 728 A.2d 964, 968 (1999)(citations omitted). [5], [6] A demurrer or a request for a dismissal of the complaint, asks the question whether, on the facts averred, the law says with certainty that no recovery is possible. When there is any doubt the question should be resolved by refusal to sustain the objections. DeMary v. Latrobe Printing and Publishing Company, 762 A.2d 758, 761 (Pa.Super. 2000)(citations omitted). [7] The Superior Court has held that: Schuykill Navy, at 965. [P]reliminary objections should not be sustained solely on the ground that the preliminary objections are uncontested or unopposed. [8] The lack of a response to preliminary objections does not alter the court s function to review the complaint and to determine whether it is legally sufficient.

5 MONTGOMERY COUNTY LAW REPORTER MBA 30 Northern Ins. Co. of New York v. Resinski [140 M.C.L.R., Part II The court ascertained from a review of the complaint, and the attached policy, that the insured is a business and the policy covered business property used in its operation. The motor vehicle accident involving the Defendant did not involve a business auto owned by DA-Tech or insured by NIC under the Business Auto Policy. It did not occur on property owned by DA-Tech or insured by NIC. Based upon the complaint, including the language of the attached policy, the court could not conclude that no recovery was possible. As such, the court did not err when it denied the preliminary objections. In Claim 3., the Defendant argues that the court erred as a matter of law by granting summary judgment since there are material issues in dispute that require arbitration or an evidentiary hearing. Pennsylvania Rule Civil Procedure , Motion for Summary Judgment, states: [9] After the relevant pleadings are closed, but within such time as not to unreasonably delay trial any party may move for summary judgment in whole or in part as a matter of law (1) whenever there is no genuine issue of any material fact as to a necessary element of the cause of action or defense which could be established by additional discovery or expert report, or (2) if, after the completion of discovery relevant to the motion, including the production of expert reports, an adverse party who will bear the burden of proof at trial has failed to produce evidence of facts essential to the cause of action or defense which in a jury trial would require the issues to be submitted to a jury. Pursuant to the Procedural Stipulation, the court reviewed the entire record to determine the motion and cross-motion for summary judgment. The parties agreed to submit a Stipulation of Facts and that, in lieu of other motions or evidentiary hearings, the parties would orally argue their respective positions on the motions for summary judgment. The facts are undisputed. The Defendant was the wife of a principal shareholder, director and secretary of DA-Tech. The record indicates that at the time of the accident, Defendant was driving her husband s car and that it was insured by a personal auto insurance policy that provided for $200, underinsured motorist benefits, which she has collected. It is undisputed that the commercial business property insurance policy attached to the complaint is the policy at issue. Based on a review of the entire record, the court ascertained that no evidence was adduced to raise a disputed factual issue as to whether the Defendant was insured under the policy. She was plainly not an employee of DA-Tech, not listed as a driver under the policy, and there was no allegation that at the time of the accident the Defendant was driving or accompanying her husband in his automobile for DA-Tech business purposes. As such, the record does not support the claim that the court erred because it did not conduct an evidentiary hearing or the claim that there are genuine issues of material fact that preclude this court from determining that Plaintiff s are entitled to summary judgment, and therefore, declaratory relief. The Defendant s claim designated as 4. that arbitration is mandatory because the insured, DA-Tech, made a demand for a determination of whether its principal s wife was covered under the Business Auto Policy is devoid of merit. To reiterate, the court has determined that the policy in plain, unambiguous language defines insured, and the arbitration clause unambiguously states that only the insured is entitled to demand arbitration for claims of the insured. The Defendant is not insured under the policy and the insured, DA-Tech, did not submit any claims under the policy. Therefore, the court is not compelled to enforce such a demand for arbitration. In this court s opinion, it would cause an absurd result to order the parties to arbitrate a non-issue.

6 MONTGOMERY COUNTY LAW REPORTER ] Northern Ins. Co. of New York v. Resinski 2003 MBA CONCLUSION Based on the foregoing, the court respectfully requests the Court to affirm the Order of November 26, 2002, for summary judgment and for declaratory relief. (Appealed to Superior Court December 23, 2003.) (Appeal Docketed by Superior Court January 3, 2003.)