Vensko, M. v. Encompass Home

• Court: Superior Court of Pennsylvania
• Decided: September 11, 2015
• Docket: 1316 WDA 2014
• Status: Unpublished

Opinion

J-A19041-15

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

MATTHEW JOHN VENSKO, : IN THE SUPERIOR COURT OF : PENNSYLVANIA Appellant : : v. : : ENCOMPASS HOME AND AUTO : INSURANCE COMPANY, : Appellee : No. 1316 WDA 2014

Appeal from the Order entered on July 15, 2014 in the Court of Common Pleas of Fayette County, Civil Division, No. 2243 of 2009 GD

BEFORE: BENDER, P.J.E., JENKINS and MUSMANNO, JJ.

MEMORANDUM BY MUSMANNO, J.: FILED SEPTEMBER 11, 2015

Matthew John Vensko (“Vensko”) appeals from the Order denying his

Petition for Certification of Class Action (hereinafter “Petition for

Certification”), concerning his action against his automobile insurer,

Encompass Home and Auto Insurance Company (“Encompass”). We affirm.

In 2007, Vensko purchased a single-vehicle insurance policy with

Encompass, effective November 13, 2007. Vensko chose a policy whereby

he paid for “stacked”1 uninsured motorist (“UM”) and underinsured motorist

(“UIM”) coverage, pursuant to the Pennsylvania Motor Vehicle Financial

Responsibility Law, 75 Pa.C.S.A. § 1701, et seq. (“the MVFRL”).

Vensko, on behalf of himself and others similarly situated, filed this

class action against Encompass on August 6, 2009. Vensko’s Complaint

1 “Stacking” is the combining of insurance coverages in order to create a greater pool of benefits available for recovery. J-A19041-15

alleged breach of contract based upon deceptive practices by Encompass,2

and a violation of the Consumer Protection Law, 73 P.S. § 201-2, et seq.

Specifically, Vensko claimed that Encompass had deceptively charged him,

and other similarly situated single-vehicle policyholders who chose stacked

UM/UIM insurance coverage with Encompass (hereinafter “the proposed

class members”), higher premiums, but provided them coverage identical to

those single-vehicle policyholders who chose less expensive, non-stacked

UM/UIM insurance coverage. According to Vensko, the policies issued by

Encompass to him and the proposed class members prohibited UM/UIM

stacking.

In June 2010, Vensko filed the Petition for Certification, pursuant to

the Pennsylvania Rules of Civil Procedure pertaining to certification of class

2 We observe that Vensko’s breach of contract count did not identify the contractual provision(s) purportedly breached.

-2- J-A19041-15

actions, including Pa.R.C.P. 1702.3 Therein, Vensko alleged that his action

would adequately represent the proposed class members.4 According to

Vensko, under Rule 1702(3), his claim was “typical” of the claims of the

proposed class members, all of whom would allegedly claim that Encompass

3 Rule 1702 provides as follows:

One or more members of a class may sue or be sued as representative parties on behalf of all members in a class action only if

(1) the class is so numerous that joinder of all members is impracticable;

(2) there are questions of law or fact common to the class;

(3) the claims or defenses of the representative parties are typical of the claims or defenses of the class;

(4) the representative parties will fairly and adequately assert and protect the interests of the class under the criteria set forth in Rule 1709; and

(5) a class action provides a fair and efficient method for adjudication of the controversy under the criteria set forth in Rule 1708.

Pa.R.C.P. 1702. 4 The Petition for Certification defined the proposed class members as follows:

(1) all Pennsylvania citizens on the date of the filing of [Vensko’s C]omplaint; (2) who are named insureds under Encompass insurance policies issued subject to [the] MVFRL; (3) who had only one vehicle insured by Encompass during any term of their policy and which policy, by its terms, prohibited stacking of UM/UIM coverage pursuant to [the] MVFRL; and (4) who paid for stacked UM/UIM coverage at any time during the period from August 1, 2003, to the date of filing the [C]omplaint.

Petition for Certification, 6/28/10, at ¶ 6.

-3- J-A19041-15

deceived them into paying for more expensive, stacked UM/UIM insurance,

but provided coverage identical to those policyholders who paid less for non-

stacked UM/UIM insurance, since the policies allegedly prohibited stacking.

Encompass subsequently filed a Motion for summary judgment, which

the trial court denied. Eventually, the trial court held a class certification

hearing in April 2014. By an Opinion and Order entered on July 15, 2014

(hereinafter “the Opinion and Order”), the Honorable Gerald R. Solomon

(“Judge Solomon”) denied the Petition for Certification, concluding that

Vensko had not established all of the prerequisites of Rule 1702, particularly,

the “typicality” prerequisite of Rule 1702(3). Vensko timely filed a Notice of

Appeal.

Vensko presents the following issues for our review:

I. Did the [trial] court err in concluding that the [Pennsylvania] Supreme Court’s decision in Generette v. Donegal Mutual Insurance Company, [957 A.2d 1180 (Pa. 2008),5] is not to be applied retroactively?

5 In Generette, the insured/plaintiff was injured while riding as a guest passenger in a vehicle that collided with a third-party tortfeasor’s vehicle. Generette, 957 A.2d at 1182. She recovered under the tortfeasor’s liability insurance policy, and under the UIM coverage for the car in which she was riding. Id. Plaintiff sought coverage for her remaining claims under her own UIM policy with her insurer, which denied coverage based upon plaintiff’s waiver of her ability to “stack” UIM coverage under her policy. Id. at 1182- 83. The Supreme Court held that plaintiff’s recovery under her UIM policy was not barred by her waiver because the MVFRL provision relating to stacking and waiver, 75 Pa.C.S.A. § 1738, did not apply to the plaintiff, concluding that she was not an “insured” as defined by the definitions section of the MVFRL, 75 Pa.C.S.A. § 1702. Generette, 957 A.2d at 1190 (observing that the statutory definition of insured does not include guest passengers).

-4- J-A19041-15

II. Did the [trial] court err in relying on the non-precedential [Memorandum] of the Superior Court in LaCaffinie v. The Standard Fire Insurance Company, [55 A.3d 132 (Pa. Super. 2012) (unpublished memorandum),] in violation of the Internal Operating Procedures of the Superior Court regarding unpublished memorandum decisions?

Brief for Appellant at 4 (footnote added; capitalization omitted; issues

renumbered for ease of disposition).

The Pennsylvania Supreme Court set forth our standard of review, and

thoroughly explained the relevant law concerning certification of class

actions, as follows:

Class certification presents a mixed question of law and fact. The trial court is vested with broad discretion in deciding whether an action may be pursued on a class-wide basis and, where the court has considered the procedural requirements for class certification, an order granting class certification will not be disturbed on appeal unless the court abused its discretion in applying them. … The existence of evidence in the record that would support a result contrary to that reached by the certifying court does not demonstrate an abuse of discretion by that court. In deciding whether class action procedural requirements were misapplied[,] or an incorrect legal standard was used in ruling on class certification, we review issues of law subject to plenary and de novo scrutiny.

For the trial court, the question of whether a class should be certified entails a preliminary inquiry into the allegations of the putative class and its representative, whose purpose is to establish the identities of the parties to the class action. Pa.R.C.P. [] 1707 cmt. ([providing that the] certification process “is designed to decide who shall be the parties to the action and nothing more”). As a practical matter, the trial court will decide whether certification is proper based on the parties’ allegations in the complaint and answer, on depositions or admissions supporting these allegations, and any testimony offered at the class certification hearing. See Pa.R.C.P. [] 1707 cmt. …

Pursuant to Pennsylvania’s civil procedure rules, the trial court may allow a representative to sue on behalf of a class if,

-5- J-A19041-15

the class is numerous []; there are questions of law or fact common to the class (“commonality”); the claims of the representative are typical of the class (“typicality”); the representative will fairly and adequately protect the interests of the class []; and a class action is a fair and efficient method for adjudicating the parties’ controversy, under criteria set forth in Rule 1708. Pa.R.C.P. [] 1702. … The class “is in the action until properly excluded” by, e.g., an order of court refusing certification or an order de-certifying the class. Pa.R.C.P. [] 1701(a) & cmt[.]

During certification proceedings, the proponent of the class bears the burden to establish that the Rule 1702 prerequisites were met. The burden is not heavy at the preliminary stage of the case. … It is essential that the proponent of the class establish requisite underlying facts sufficient to persuade the court that the Rule 1702 prerequisites were met.

Samuel-Bassett v. Kia Motors Am., Inc., 34 A.3d 1, 15-16 (Pa. 2011)

(some citations, quotation marks, and brackets omitted).

The typicality prerequisite of Rule 1702(3), which is at issue in the

instant case, requires that “the class representative’s overall position on the

common issues is sufficiently aligned with that of the absent class members

to ensure that [his] pursuit of [his] own interests will advance those of the

proposed class members.” Clark v. Pfizer, Inc., 990 A.2d 17, 24-25 (Pa.

Super. 2010) (citation omitted); see also id. at 24 (stating that the

typicality prerequisite is similar to the commonality prerequisite, which

requires that “there be a predominance of common issues, shared by all the

class members, which can be justly resolved in a single proceeding.”)

(emphasis and citation omitted).

As both of Vensko’s issues relate to Judge Solomon’s rationale in his

Opinion and Order concerning the typicality prerequisite, and his application

-6- J-A19041-15

and analysis of LaCaffinie, supra, and Generette, supra, we set forth

Judge Solomon’s relevant analysis below:

As to the allegations contained in the Complaint, we find persuasive the non-precedential decision of the Superior Court of Pennsylvania in LaCaffinie…,[6] wherein the Court stated:

The argument that [the insurance company] deceived its policyholders into paying for more expensive stacked coverage rather than less expensive non-stacked coverage[,] despite providing identical benefits, is derived from our Supreme Court’s opinion in Generette …. The decision in Generette changed the law by holding [that] waiver of stacked UIM coverage only applied to policies between statutorily defined insureds. While we agree with [plaintiff] that Generette significantly changed the landscape of UIM law, we cannot agree that Generette serves as the basis for a claim that [the insurance company] deceived [this plaintiff] into buying overpriced coverage.

The record reflects that [plaintiff] purchased his insurance policy on July 15, 2008, effective August 11, 2008. ... Generette was not decided until October 23, 2008, more than three months after [plaintiff] purchased his insurance policy. Therefore, it is impossible for [the insurance company] to have deceived [plaintiff] in July[,] on the basis of case law that was not announced until October.

[LaCaffinie, 55 A.3d 132 (unpublished memorandum at 5-6) (footnote added; some brackets omitted).]

As applied here, [Vensko] alleged that he was a single vehicle policyholder with Encompass or its predecessor for over two years from the date of [] filing of the Complaint on August 6, 2009. Although the [r]ecord does not reflect a date of initial

6 In LaCaffinie, the plaintiff/insured appealed the entry of summary judgment against him, and in favor of his automobile insurer, claiming that the insurer charged him for a more expensive stacked UM/UIM, single- vehicle insurance policy, but provided a policy that prohibited stacking. LaCaffinie, 55 A.3d 132 (unpublished memorandum at 1-2).

-7- J-A19041-15

coverage,[7] based on the allegations of the Complaint, [Vensko’s] acceptance of insurance with Encompass occurred prior to the decision of Generette. Therefore, as in LaCaffinie, we also find that it was impossible for Encompass to have deceived [Vensko] when he purchased his policy in 2007, which was prior to the decision in Generette, on the basis of case law that was not implemented until October[] 2008.

Accordingly, we hold that … Vensko[] is not sufficiently aligned with the proposed class members so as to comply with the typicality requirement of Pennsylvania Rule of Civil Procedure 1702(3)[,] and therefore, the Petition for Certification … must be denied.

Trial Court Opinion and Order, 7/15/14, at 4-6 (footnotes and brackets

added).

In his first issue, Vensko argues that the trial court errantly

determined that he had failed to establish the typicality prerequisite of Rule

1702(3) because Generette was decided after the date on which Vensko

purchased his policy with Encompass. See Brief for Appellant at 8-9.

Vensko maintains that the trial court should have applied Generette

retroactively, asserting as follows: “In Pennsylvania, an interpretation of a

statute is applied retroactively. Kendrick v. District Attorney of

Philadelphia County, 916 A.2d 529, 538 (Pa. 2007) …. Accordingly, since

the Supreme Court’s decision in Generette was based on an interpretation

of [the] MVFRL, it was required to be applied retroactively.” Brief for

Appellant at 9.

7 As indicated above, the effective date of Vensko’s policy was November 13, 2007.

-8- J-A19041-15

Though Vensko appears to challenge the trial court’s failure to

retroactively apply Generette, Vensko’s claim actually challenges the

propriety of the trial court’s ruling that Vensko’s claim of Encompass’s

deception was not sufficiently typical under Rule 1702(3) to certify the

proposed class. In determining whether the typicality prerequisite was met,

we must look to the allegations contained in Vensko’s Complaint. See

Samuel-Bassett, supra. Essentially, the Complaint asserts that

Encompass deceived Vensko and the proposed class members into paying

more money for a stacked insurance policy by failing to disclose that, based

on Generette, stacked UM/UIM coverage was allegedly prohibited, and they

therefore received no stacking benefit.

Initially, Vensko does not explain in his Complaint, or on appeal, how

his insurance policy with Encompass allegedly prohibited UM/UIM stacking.

Nor does Vensko explain how the matter of waiver of stacking of UM/UIM

coverage, discussed in Generette, is relevant to the instant case. Even

assuming, arguendo, that the holding announced in Generette applied to

the circumstances of Vensko’s case, Generette was not decided until over

eleven months after Vensko purchased his stacked UM/UIM policy in 2007.8

8 Moreover, the Generette Court did not address whether its holding was retroactive, nor has our research disclosed any case law addressing whether the holding is retroactive. Nevertheless, as the instant case requires us to determine only whether the trial court properly concluded that Vensko failed to establish the prerequisites for class certification under Rule 1702, we decline Vensko’s invitation to address the retroactivity of Generette.

-9- J-A19041-15

Therefore, Vensko could not have a claim of deception based upon

Generette before that case was actually decided.

Turning to the typicality prerequisite of Rule 1702(3), we agree with

Judge Solomon’s conclusion that Vensko failed to establish typicality.

Vensko’s above-described claim of deception at the time of his purchase of

his stacked policy in 2007 differs from the purported claim(s) of the

proposed class members concerning any alleged deception and/or inaccuracy

in Encompass’s stacked UM/UIM insurance policy terms arising from the

change in law announced by Generette. See Clark, supra (stating that, in

order for typicality to be established, the class representative’s overall

position on the common issues must be sufficiently aligned with that of the

absent class members). In other words, Vensko’s claim is not typical of

those of post-Generette proposed class members, who could base an

allegation of deception upon Generette. Accordingly, Vensko’s first issue

does not entitle him to relief.

Next, Vensko contends that Judge Solomon improperly relied on this

Court’s non-precedential Memorandum in LaCaffinie, in violation of the

Superior Court Internal Operating Procedure governing unpublished

memoranda. Brief for Appellant at 8 (citing 210 Pa. Code § 65.37A.

(providing that “[a]n unpublished memorandum decision shall not be relied

upon or cited by a Court or a party in any other action or proceeding[,]”

except under limited circumstances that do not exist here)); see also

Schaaf v. Kaufman, 850 A.2d 655, 658 (Pa. Super. 2004) (applying and

- 10 - J-A19041-15

interpreting section 65.37A.). Vensko urges that we “vacate the denial of

[the Petition for Certification,] as the lower court relied upon the LaCaffinie

decision as its sole authority to deny class certification.” Brief for Appellant

at 8.

We agree with Vensko that Judge Solomon should not have relied

upon the unpublished decision in LaCaffinie, pursuant to section 65.37A.9

See Liberty Mut. Ins. Co. v. Domtar Paper Co., 77 A.3d 1282, 1286 (Pa.

Super. 2013) (stating that the trial court violated section 65.37A. by relying

upon an unpublished memorandum). However, “[i]t is well settled that this

Court may affirm the decision of the trial court if it is correct on any

grounds.” Id. Here, Judge Solomon’s analysis and determination is sound

on its own merits, and supported by the record and the law. See id.

(overlooking the trial court’s violation of section 65.37A. where the court’s

rationale was correct and supported by the record). Accordingly, we will

overlook Judge Solomon’s non-compliance with section 65.37A., and

determine that Vensko’s second issue does not entitle him to relief.

Based upon the foregoing, as we discern no error of law or abuse of

discretion by the trial court in denying Vensko’s Petition for Certification, we

affirm the Order on appeal.

Order affirmed.

9 We acknowledge that Judge Solomon expressly stated that he found LaCaffinie persuasive, and nowhere did he indicate that the non- precedential decision was binding precedent or controlled his ruling. See Trial Court Opinion and Order, 7/15/14, at 4-5.

- 11 - J-A19041-15

Bender, P.J.E., joins the memorandum.

Jenkins, J., files a dissenting statement.

Judgment Entered.

Joseph D. Seletyn, Esq. Prothonotary

Date: 9/11/2015

- 12 -