Judge Gibbons of Lackawanna County Reaffirms That MVFRL Does Not Apply to Excess or Umbrella Policies

In his recent Opinion in the case of Ranocchia v. Erie Insurance Exchange, No. 2014-CV-4555 (C.P. Lacka. Co. Nov. 25, 2015 Gibbons, J.), Judge James A. Gibbons of the Lackawanna County Court of Common Pleas granted summary judgment in favor of Erie Insurance in a declaratory judgment matter on the issue of whether the Pennsylvania Motor Vehicle Financial Responsibility Law applies to and provides underinsured motorists benefits under and excess insurance policy containing both and expressed exclusion of such UIM benefits and legally deficient waivers of UIM benefits.  

In this matter, the Defendant carrier asserted that the MVFRL simply does not apply to excess insurance policies.   The Defendant carrier also asserted that, even if the Pennsylvania law does allow for UIM benefits under an excess liability policy, a provision in the excess policy expressly excluding UIM benefits prevents the Plaintiff from recovering any UIM benefits under that policy.  

The Plaintiffs countered with an argument that the waivers of UIM coverage provided by the Defendant relative to the excess liability policy created and ambiguity thereby requiring a reformation of the policy.  Stated otherwise, the Plaintiffs asserted that UIM benefits should be considered to be a part of the excess liability policy until waivers of UIM coverage were secured.  The Plaintiffs asserted that, because the waivers in this matter were invalid, the Plaintiffs were entitled to recover UIM benefits under the excess liability policy.  

In his decision, Judge Gibbons ruled that, while this precise issue “[w]hile this precise issue has never been addressed by our appellate courts, we are persuaded by existing case law regarding the MVFRL’s inapplicability to excess insurance policies that Defendants are entitled to summary as a matter of law.”  

In his Opinion, Judge Gibbons primarily rested his decision on the settled law that the MVFRL does not apply to excess or umbrella policies.  As such, there are no UIM requirements applicable to excess or umbrella policies.  

Where the excess policy, as here, clearly provided that it did not apply to UIM coverage, the inclusion of UIM rejection forms, although inconsistent with the expressed language of the policy indicating that there was no UIM coverage, did not create an ambiguity.   Accordingly, the court granted the Defendant carrier’s Motion for Summary Judgment.  

Anyone desiring a copy of Judge Gibbons' decision may click this LINK.

The Plaintiff has filed a Notice of Appeal from this decision.