William Dunleavy, IV v. Mid Century Insurance Co
Opinion
NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
No. 20-2100
WILLIAM DUNLEAVY, IV; ERIN E. FRANCIS, Appellants
v.
MID-CENTURY INSURANCE COMPANY, doing business as FARMERS INSURANCE COMPANY, INC.; FARMERS INSURANCE GROUP
On Appeal from the United States District Court for the Western District of Pennsylvania (D.C. No. 2-19-cv-01304)
District Judge: J. Nicholas Ranjan
Submitted under Third Circuit L.A.R. 34.1(a)
March 18, 2021
Before: SHWARTZ, MATEY, and TRAXLER, Circuit Judges.*
(Filed: March 18, 2021)
OPINION**
*
The Honorable William Byrd Traxler, Jr., United States Circuit Judge for the Court of Appeals for the Fourth Circuit, sitting by designation.
**
This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not constitute binding precedent.
SHWARTZ, Circuit Judge.
William Dunleavy and Erin Francis (“Plaintiffs”) were injured in a motorcycle accident and sought underinsured motorist coverage under their automobile policy with Mid-Century Insurance Company (“Mid-Century”). Because the District Court correctly held that the Mid-Century policy excluded underinsured motorist coverage for Plaintiffs’ motorcycle, we will affirm the order granting Mid-Century’s motion for judgment on the pleadings.
I
Plaintiffs were riding on Dunleavy’s motorcycle when they crashed with a car.
Plaintiffs were injured. The car’s insurance policy contained a $100,000 liability limit, which was paid to Plaintiffs, but the amount did not fully compensate them for their injuries. Because the car was underinsured, Dunleavy sought compensation based upon other coverage.
Dunleavy’s motorcycle was insured by Progressive, but he rejected underinsured motorist coverage on that policy. As a result, Plaintiffs sought underinsured motorist coverage under their Mid-Century automobile policy. The Mid-Century policy did not list the motorcycle and excluded underinsured coverage for “bodily injury sustained by you or any family member while occupying or when struck by any motor vehicle owned by you or any family member which is not insured for this coverage under any similar form.” App. 67 (emphasis omitted). Based on this exclusion, Mid-Century disclaimed coverage, explaining that Plaintiffs were not entitled to underinsured coverage because “the vehicle [Plaintiffs] were occupying is owned by [them], [they] did not list it on
[their] Mid-Century policy and [they] did not elect Uninsured/Underinsured Motorist Coverage on [their Progressive motorcycle policy].” App. 86.
Plaintiffs sued Mid-Century, alleging breach of contract, bad-faith insurance practices, and violations of the Pennsylvania Unfair Trade Practices and Consumer Protection Law (“UTPCPL”). Mid-Century counterclaimed for a declaratory judgment, seeking a declaration that its denial decision was appropriate, and filed a motion for judgment on the pleadings. The District Court granted Mid-Century’s motion and entered a declaratory judgment in its favor. Plaintiffs appeal.
II1
When interpreting insurance contracts, “[t]he proper focus regarding issues of coverage . . . is the reasonable expectation of the insured.” Frain v. Keystone Ins. Co., 640 A.2d 1352, 1354 (Pa. Super. Ct. 1994). To determine those expectations, “courts must examine the totality of the insurance transaction involved.” Id. “In most cases, the
language of the insurance policy will provide the best indication of the content of the parties’ reasonable expectations.” Liberty Mut. Ins. Co. v. Treesdale, Inc., 418 F.3d 330, 344 (3d Cir. 2005) (quoting Reliance Ins. Co. v. Moessner, 121 F.3d 895, 903 (3d Cir. 1997)). Thus, an insured typically “may not complain that his or her reasonable expectations were frustrated by policy limitations which are clear and unambiguous.” West v. Lincoln Ben. Life Co., 509 F.3d 160, 169 (3d Cir. 2007) (quoting Frain, 640 A.2d at 1354).
Plaintiffs’ Mid-Century policy unambiguously excludes underinsured coverage for “any motor vehicle owned by you or any family member which is not insured for this coverage under any similar form.” App. 67. Dunleavy rejected underinsured motorist coverage for his motorcycle and thus it did not have underinsured coverage.2 Thus, Mid- Century’s underinsured provision did not cover the motorcycle and Plaintiffs could not have reasonably expected coverage.3
Eichelman v. Nationwide Insurance Company, 711 A.2d 1006 (Pa. 1998), supports this conclusion. In that case, the plaintiff—like Plaintiffs here—had motorcycle insurance but did not have underinsured motorist coverage under his motorcycle policy when his motorcycle was struck by a pick-up truck. Id. at 1007. After that accident, the plaintiff sought coverage under the underinsured provision in his mother’s and her husband’s automobile policies. Id. Those automobile policies, however, contained a clause excluding underinsured coverage for “a motor vehicle owned by you or a relative not insured for Underinsured Motorists coverage under this policy.” Id. The Court determined that
a person who has voluntarily elected not to carry underinsured motorist coverage on his own vehicle is not entitled to recover underinsured motorist benefits from separate insurance policies issued to family members with whom he resides where clear and unambiguous ‘household exclusion’
language explicitly precludes underinsured motorist coverage for bodily injury suffered while occupying a motor vehicle not insured for underinsured motorist coverage.
Id. at 1010.4 Here, as in Eichelman, Dunleavy waived underinsured motorist coverage in his motorcycle policy and Plaintiffs tried to secure underinsured coverage through a separate policy. In both cases, the policy under which coverage was sought clearly stated that the coverage was unavailable if the vehicle in which the accident occurred did not itself have underinsured motorist coverage. Based on such language, the parties here and in Eichelman had no reasonable basis to expect coverage.
Moreover, the lack of premium payments supports applying the exclusion. See id.
(“[T]here is a correlation between premiums paid by the insured and the coverage the claimant should reasonably expect to receive.” (quoting Hall v. Amica Mut. Ins. Co., 648 A.2d 755, 761 (Pa. 1994))). Plaintiffs did not list their motorcycle on the Mid-Century policy and did not pay a premium to any insurer to secure underinsured coverage for it.5
Had Mid-Century known about the added risk of Dunleavy’s motorcycle, it could have adjusted the underinsured coverage premiums to account for that risk. Cf. id. (denying coverage in part because insurer did not know of the plaintiff when it issued policies and because his mother’s and her husband’s premiums did not show their intent to provide underinsured motorist coverage to him). As a result, Plaintiffs could not have reasonably expected that the Mid-Century policy provided underinsured coverage for the motorcycle.
III
For the reasons stated above, we will affirm.
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