The below article of mine appeared in the March 27, 2012 edition of the Pennsylvania Law Weekly:
UM/UIM Rejection Form Language Should Be Reviewed Carefully
ByDaniel E. Cummins
Pennsylvania Law Weekly
March 27, 2012
Under Pennsylvania's Motor Vehicle Responsibility Law, there are a number of across-the-board requirements that automobile insurance carriers must follow during an insured's application and purchase of an automobile insurance policy. Among the many requirements are mandated forms, containing specified language, that insurance companies must present to the applicant and secure signatures on during the insured's purchasing of the policy.
For example, the MVFRL mandates that a UIM carrier is required to provide UM and UIM coverage in an amount at least equal to the liability limits selected by its insured unless a valid rejection form, written in accordance with the specific form language mandated by 75 Pa.C.S. § 1731(c), was executed by the insured. Under the separate 75 Pa.C.S. § 1731(c.1), the Pennsylvania Legislature provided that "[a]ny rejection form that does not specifically comply with this section is void."
Litigation over the propriety of these forms typically arises later after the injured party insured has been in a motor vehicle accident and wishes to challenge whether he or she properly rejected or chose reduced UM or UIM coverages under his or her own policy.
A number of recent state and federal court decisions in Pennsylvania have confirmed that the courts of this commonwealth will engage in a strict constructionist approach when reviewing these challenges. From these decisions, it is readily apparent that the even the slightest deviation from the statutorily mandated language will result in the forms and, therefore, the elections of reduced UM or UIM coverages, rendered null and void as a matter of law.
Extra Language Renders Form Void
In its recent decision in the case of Jones v. Unitrin Auto and Home Insurance Co., the Pennsylvania Superior Court had an opportunity to address the propriety of an underinsured motorist's (UIM) benefits rejection form in a declaratory judgment action filed by an injured party insured. The novel question presented in this case of first impression was whether the inclusion of additional, or extra language, by the UIM carrier at the end of its UIM insurance rejection form that was over and above the statutorily mandated language failed to specifically comply with the MVFRL and was therefore void.
The court noted that precedent required it to construe the MVFRL "liberally" to give effect to the recognized goals of that law, one of which was to "afford the injured claimant the greatest possible coverage." The court also recognized that, in cases involving close questions, the courts were required to "interpret the intent of the legislature and the language of the insurance policies to favor coverage for the insured."
Turning to the facts before it, the court in Jones noted that the UIM rejection form utilized by the carrier contained the exact same language required by the statute. However, as noted, the form also had an additional sentence appended to the end of the form that was not found in the mandated form. That sentence read, "By rejecting this coverage, I am also signing the waiver on P. 13 rejecting stacked limits of underinsured motorist coverage."
Prior to the Superior Court's decision in Jones, there were no appellate decisions addressing the effect of additional words on the validity of these types of automobile insurance rejection forms.
The court in Jones did draw guidance from another appellate decision on a similar issue involving the effect of missing words from the form. In its prior decision in the case of American Intern. Ins. Co. v. Vaxmonsky, the Superior Court had ruled that a UIM rejection form that was missing one word mandated by the statute was void for failing to specifically comply with the statutory mandates.
The Superior Court in Jones likewise held that, in deviating from the statutorily mandated language in the form, in this case by adding extra language, the UIM carrier failed to specifically comply with the statutory requirements regarding the UIM insurance rejection form and, as such, the form was void.
With this ruling, the court rejected the trial court's reliance upon the Pennsylvania Supreme Court's 2000 decision in Winslow-Quattlebaum v. Maryland Ins. Group, in which that court held that the UIM rejection form did not have to be on a separate page from the UIM stacking rejection form (but rejections of UM coverages had to be on different pages from rejections of UIM coverages).
Both the trial court judge and the dissenting Superior Court judge in Jones emphasized that, in reaching this ruling, the Winslow-Quattlebaum court wrote in dicta that "[t]here is nothing in the language of Section 1731 (c.1) to suggest that the required rejection statement for UM or UIM coverage must stand alone on a page without any other writing."
The majority in Jones distinguished the Winslow-Quattlebaum decision as focusing on the different issue of what different kinds of coverage rejections could be on the same page as opposed to the exact content of the wording of those rejection forms. The Jones court also noted that the form in the Winslow-Quattlebaum case, unlike the form in the case before it, did comply with the requirement that the form language be immediately followed by the mandated signature line.
In this regard, the Jones court faulted the form before it for also violating the "proximal relationship" between the mandated language and the required signature line following the form. In other words, the form in § 1731(c) did not have anything between the end of the language in the form and the signature line. Any deviation from that setup also failed to specifically comply with the statute in the eyes of the court.
The court emphasized that prior Pennsylvania decisions viewed the legislative intent behind the requirement that UM/UIM rejection forms "specifically comply" with the requirements of § 1731(c) to avoid any need by the courts of Pennsylvania to struggle, on a case-by-case basis, with the issue of whether particular UM/UIM rejection forms seem to substantially comply with the MVFRL. Accordingly, the Pennsylvania Superior Court in the Jones case strictly applied the law and found that, by adding an extra sentence to the form between the required language and the signature line, the Unitrin UIM rejection form did not, as required by § 1731 (c.1), "specifically comply" with the form found in § 1731(c).
In so ruling, the Pennsylvania Superior Court also refused to follow the prior decision of the U.S. District Court for the Middle District of Pennsylvania in the 2005 case of Unitrin Auto and Home Ins. Co. v. Heister, in which that court held that a UIM rejection form identical to the one at issue in this matter did specifically comply with § 1731(c). In addition to noting that federal court decisions were only of persuasive precedent, the Jones court disagreed with the analysis in Unitrin and also emphasized that Unitrin was handed down before the Vaxmonsky decision.
A Similar Result in Federal Court
Another recent case in which a UIM rejection form containing extra language — here only one extra word — was found to be invalid is the post-Vaxmonsky Middle District of Pennsylvania decision by Judge James M. Munley in the 2011 case of Grassetti v. Property and Casualty Insurance Co. of Hartford.
The carrier's form was found by the Grassetti court to deviate from the statutorily required language by only one word. Whereas the statutorily mandated form language made reference to "Uninsured Coverage," the carrier's form at issue in this matter added a word and referred to "Uninsured Motorists Coverage."
The court in Grassetti emphasized that 75 Pa.C.S. Section 1731(c)(1) provided that "[a]ny rejection form that does not specifically comply with this section is void." In so ruling, Munley also found Vaxmonsky persuasive on the issue of interpreting the specific compliance requirements of Section 1731(c)(1).
Take a Closer Look
The recent state and federal court decisions on the propriety of UM/UIM rejection forms should serve to compel both sides of the issue to break out the magnifying glasses to review the form language for strict compliance with the statutorily mandated language. The decisions issued to date confirm that, at least with respect to UM/UIM rejection forms, a deviation of the addition or omission of even a single word could serve to render the form void and thereby result in greater coverage for the injured party insured.
Daniel E. Cummins is a partner and civil litigator with the Scranton law firm of Foley Cognetti Comerford Cimini & Cummins. His civil litigation blog, "Tort Talk," may be viewed at http://www.torttalk.com/.