Davis v. Government Employees Insurance

454 A.2d 973, 500 Pa. 84, 1982 Pa. LEXIS 704

• Court: Supreme Court of Pennsylvania
• Decided: December 30, 1982
• Docket: 31 E.D. Appeal Docket, 1982
• Status: Published

Opinions

OPINION OF THE COURT

ROBERTS, Justice.

Under Pennsylvania’s Uninsured Motorist Coverage Law, Act of August 14, 1968, P.L. 909, § 1, as amended, 40 P.S. § 2000 (1971), all automobile insurance liability policies are required to include coverage for injuries to the insured which are caused by “uninsured” motorists. At issue on this appeal is whether a motorist who has the minimum amount of liability insurance required by Pennsylvania’s financial responsibility law is nevertheless an “uninsured” motorist within the meaning of the statute whenever he causes an accident in which his insurance coverage is insufficient to indemnify the injured party for his losses.¹

I

The essential facts are uncontroverted. Appellant Gus Davis and his spouse Clare Davis sustained injuries when their automobile collided head-on with an automobile owned and driven by Michael McFadden.² McFadden, who admitted liability, was insured by Travelers Insurance Company under a liability policy of $35,000, an amount sufficient to meet the financial responsibility requirements contained in Pennsylvania’s No Fault Act, Act of July 19, 1974, P.L. 489, 40 P.S. § 1009.101 et seq. Pursuant to a settlement, Travelers paid $3,863 to the Davises for the damage to their automobile, $6,670 to Clare Davis in full settlement of her personal injury claim, and $24,467 (the balance of the $35,-000) to appellant Gus Davis in partial settlement of his personal injury claim, which alleges damages in excess of $100,000.

At the time of the accident, appellant was insured by appellee Government Employees Insurance Company (GEI-CO) under a policy which provided coverage for three separate vehicles. As required by law, appellant’s policy included uninsured motorist coverage of $15,000 per person and $30,000 per accident for each vehicle. The GEICO policy defined “uninsured automobile” as

“an automobile with respect to the ownership, maintenance or use of which there is, in at least the amounts specified by the financial responsibility law of the state in which the insured automobile is principally garaged, no bodily injury liability bond or insurance policy applicable at the time of the accident with respect to any person or organization legally responsible for the use of such automobile, or with respect to which there is a bodily injury liability bond or insurance policy applicable at the time of the accident but the company writing the same denies coverage thereunder ...”³

Appellant Gus Davis filed an uninsured motorist claim with appellee GEICO under the uninsured motorist provision of his own policy. Appellant’s claim was based on the theory that, because his alleged damages ($100,000) exceeded his recovery from Travelers under the settlement agreement ($24,467), tortfeasor McFadden was an “uninsured” motorist. Appellant claimed that he was entitled to recover $20,533 from GEICO, the difference between the “stacked” value of his uninsured motorist coverage ($45,000), see State Farm Mutual Auto. Ins. Co. v. Williams, 481 Pa. 130, 392 A.2d 281 (1978), and his recovery from Travelers. GEICO denied coverage on the ground that under the policy’s definition of “uninsured automobile” there was no uninsured motorist involved in the accident.

Appellant’s uninsured motorist claim proceeded to arbitration pursuant to the arbitration clause in appellant’s policy.⁴ A majority of a panel of three arbitrators held that, because the tortfeasor maintained a policy of liability insurance in the minimum amount required by Pennsylvania law, appellant had not been injured by an uninsured motorist. Appellant filed a petition to vacate the arbitrators’ award, alleging that the provision of the GEICO policy which defines uninsured automobile is contrary to the Uninsured Motorist Coverage Law. The Court of Common Pleas of Philadelphia denied appellant relief and the Superior Court affirmed. 296 Pa. Super. 198, 442 A.2d 727. We granted allowance of appeal, and now affirm.⁵

II

Section 2000(a) of the Uninsured Motorist Coverage Law provides:

“No motor vehicle liability policy of insurance insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance or use of a motor vehicle shall be delivered or issued for delivery in this State with respect to any motor vehicle registered or principally garaged in this State, unless coverage is provided therein or supplemental thereto in limits for bodily injury or death as are fixed from time to time by the General Assembly in section 1421 of article XIV of ‘The Vehicle Code,’ act of April 29, 1959 (P.L. 58), under provisions approved by the Insurance Commissioner, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness or disease, including death resulting therefrom.”

Appellant contends that the Legislature intended the statutory language “uninsured motor vehicles” to encompass “underinsured motor vehicles,” and that the GEICO policy thus fails to provide the coverage mandated by law. We do not agree.

The Statutory Construction Act of 1972 mandates that “[wjords and phrases shall be construed according to rules of grammar and according to their common and approved usage. ...” 1 Pa.C.S. § 1903(a). Notwithstanding appellant’s assertion that “uninsured” is equivalent to “underinsured,” the only common and approved meaning of the word “uninsured” is “having no insurance,” whether the term applies to a house, a boat, a life, or, as here, a motor vehicle.

Appellant attempts to avoid the plain meaning of “uninsured” by arguing that the adoption of such a “literal” interpretation would frustrate the remedial objectives of the uninsured motorist law. While the uninsured motorist law is to be liberally construed to accomplish its stated objectives, see Harleysville Mut. Cas. Co. v. Blumling, 429 Pa. 389, 241 A.2d 112 (1968), it is inappropriate for this Court, under the guise of liberal construction, to enlarge the scope of the plain language of the uninsured motorist law by equating an uninsured motorist with one whose liability insurance meets statutory requirements but does not satisfy the injured party’s claim. “When the words of a statute are free and clear from ambiguity, the letter of it is not to be disregarded under the pretext of pursuing its spirit.” 1 Pa.C.S. § 1921(b). “Uninsured” simply does not mean “underinsured,” and to hold otherwise would be to contravene the express judgment of the Legislature.⁶

Our interpretation of the Uninsured Motorist Coverage Law is in accord with that of nearly every other jurisdiction which has considered the issue of the scope of uninsured motorist coverage. See, e.g., Wilbourn v. Allstate Ins. Co., 293 Ala. 466, 305 So.2d 372 (1974); Travelers Ins. Co. v. Bouzer, 39 Cal.App.3d 992, 114 Cal.Rptr. 651 (1974); Simonette v. Great Am. Ins. Co., 165 Conn. 466, 338 A.2d 453 (1973); Smiley v. Estate of Toney, 44 Ill.2d 127, 254 N.E.2d 440 (1969); Detrick v. Aetna Cas. & Sur. Co., 261 Iowa 1246, 158 N.W.2d 99 (1968); McMinn v. New Hampshire Ins. Co., 276 So.2d 682 (Miss.1973); DiLuzio v. Home Mut. Ins. Co., 289 N.W.2d 749 (Minn.1980); Brake v. MFA Mut. Ins. Co., 525 S.W.2d 109 (Mo.Ct.App.), cert. denied, 423 U.S. 894, 96 S.Ct. 192, 46 L.Ed.2d 126 (1975); Brack v. Middlesex Mut. Ins. Co., 118 N.H. 72, 382 A.2d 914 (1978) (per curiam); Tucker v. Peerless Ins. Co., 41 N.C.App. 302, 254 S.E.2d 656 (1979); Gorton v. Reliance Ins. Co., 77 N.J. 563, 391 A.2d 1219 (1978); Shelby Mut. Ins. Co. v. Smith, 45 Ohio St.2d 66, 341 N.E.2d 597 (1976); Lund v. Mission Ins. Co., 270 Or. 461, 528 P.2d 78 (1974) (en banc); Ziegelmayer v. Allstate Ins. Co., R.I., 403 A.2d 653 (1979); Strunk v. State Farm Auto. Ins. Co., 90 Wash.2d 210, 580 P.2d 622 (1978). See also Safeco Ins. Co. of America v. Wetherill, 622 F.2d 685 (3d Cir.1980) (applying Pennsylvania law). See generally Widiss, “A Guide to Uninsured Motorist Coverage,” § 2.35(a) (Supp.1981) and Automobile Insurance: What Constitutes An “Uninsured” or “Underinsured” Vehicle or Motorist Within Uninsured Motorist Coverage, 26 A.L.R.3d 883 § 5 (Supp.1982) (citing cases). In each of these cases the court refused to equate “uninsured” with “underinsured,” and we refuse to do so as well.

The cases from those jurisdictions which have allowed an injured party to recover under an uninsured motorist provision where his claims exceed his recovery from the responsible party’s carrier do not support appellant’s expansive interpretation of “uninsured.” For example, in Porter v. Empire Fire and Marine Ins. Co., 106 Ariz. 274, 475 P.2d 258, mod. on other grounds, 106 Ariz. 345, 476 P.2d 155 (1970), which is often cited as the leading case permitting recovery, the injured party sought and received only the difference between the minimum insurance required by state law and his recovery from the tortfeasor’s insurer. Similarly, in Palisbo v. Hawaiian Ins. Co., 57 Haw. 10, 547 P.2d 1350 (1975), and American Mutual Ins. Co. v. Commercial Union Ins. Co., 116 N.H. 210, 357 A.2d 873 (1976), the courts expressly refused to permit recovery of claimed damages in excess of the minimum amount specified in the state’s financial responsibility law.

We recognize the “oft cited anomaly that those in the position of these claimants would find themselves in a better position were the tortfeasor’s vehicle totally uninsured, rather than underinsured.” Gorton v. Reliance Ins. Co., 77 N.J. 563, 570, 391 A.2d 1219, 1223 (1978). This anomaly, however, stems from the fact that the Legislature has chosen not to require insurance coverage for those instances in which a tortfeasor’s insurance is insufficient to satisfy the injured party’s claims.⁷ Our Legislature having chosen not to require such coverage, this Court may not enlarge the scope of the plain meaning of the Uninsured Motorist Law to circumvent the Legislature’s judgment.

Because the responsible party in this accident maintained the statutorily required amount of insurance and thus was not in any respect an uninsured motorist, the order of the Superior Court upholding the denial of appellant’s uninsured motorist claim is affirmed.

Order of the Superior Court affirmed.

HUTCHINSON, J., did not participate in the consideration or decision of this case. LARSEN, J., files a dissenting opinion in which FLAHERTY, J., joins.

1 . This case was reassigned to this writer on December 13, 1982.

2 . Although Clare Davis is named as an appellant in the present case, her claim for personal injuries has been satisfied in full. Thus, “appellant” will refer to Gus Davis only.

3 . This definition is taken verbatim from the definition of “uninsured automobile” promulgated by the Pennsylvania Insurance Commissioner. See 31 Pa.Code § 63.2, Exhibit C.

4 . The arbitration clause of the policy provides:

“If any person making claim hereunder and the company do not agree that such person is legally entitled to recover damages from the owner or operator of an uninsured automobile because of bodily injury to the insured, or do not agree as to the amount of payment which may be owing under this part, then upon written demand of either, the matter or matters upon which such person and the company do not agree shall be settled by arbitration in accordance with the rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. Such person and the company each agree to consider itself bound and to be bound by any award made by the arbitrators pursuant to this part.”

5 . We must reject appellee’s contention that the court of common pleas lacked authority to review the merits of the arbitrators’ award. Where, as' here, a claimant challenges a provision of an uninsured motorist clause as being contrary to a statute, the court of common pleas may exercise jurisdiction over the claim. See United Services Automobile Ass’n Appeal, 227 Pa.Super. 508, 323 A.2d 737 (1978).

6 . Under appellant’s interpretation every motorist, regardless of the amount of his liability insurance coverage, is potentially an “uninsured” motorist. The practical effect of this interpretation is to transform all policies of uninsured motorist coverage issued in this Commonwealth into policies of secondary or excess accident insurance. See Travelers Ins. Co. v. Bouzer, 39 Cal.App.3d 992, 995, 114 Cal.Rptr. 651, 652 (1974); Gorton v. Reliance Ins. Co., 77 N.J. 563, 572, 391 A.2d 1219, 1225 (1978).

7 . Several state legislatures have required the insurer to offer “underinsured motorist coverage.” See, e.g., Me.Rev.Stat.Ann. tit. 24--A § 2902(1) (Supp. 1980-81). Other legislatures have amended their definitions of an “uninsured motor vehicle” to include specifically those motor vehicles whose applicable liability coverage is lower than the limits available to the injured party under his uninsured motorist coverage. See, e.g., Fla.Stat. § 627.722(3)(6) (Supp. 1978); Ga.Code Ann. § 56-407.1 (Supp. 1980); Tenn.Code Ann. § 56-7-1201 (1980).