Motor Vehicle Financial Responsibility Law; Household Exclusion Language in Automobile Insurance Policies
Erie Insurance Exchange v. Mione, 253 A.3d 754 (Pa. Super. 2021), allocatur granted Nov. 30, 2021, appeal docket 89 MAP 2021
While operating his motorcycle, Albert Mione was involved in a motor vehicle accident with Cory Huff. Albert recovered from Huff’s tort liability insurer in an amount that maxed-out Huff’s policy limits. Albert’s motorcycle was insured under a Progressive Insurance Company policy that did not include underinsured motorist (UIM) benefits. At that time, Albert, Lisa Mione, and Angela Mione all resided together, and Albert sought to recover UIM benefits from (1) an Erie Auto Policy issued to Albert and Lisa and (2) an Erie Auto Policy issued to Angela. Neither Erie policy listed Albert’s motorcycle as a covered vehicle.
Erie sought declaratory judgment that the Miones are precluded from recovering UIM benefits under the Erie Auto Policies because they each contained household exclusion language. The trial court granted Erie’s motion for judgment on the pleadings, declaring that Albert was precluded from recovering UIM benefits under the Erie polices “because Albert rejected UIM benefits on his Progressive Motorcycle Policy, which means that there is no underlying policy to ‘stack’ the Erie Auto Policy benefits onto.” Slip op. at 6. In doing so, the trial court relied on Eichelman v. Nationwide Ins. Co., 711 A.2d 1006 (Pa. 1998), which held that “a person who has voluntarily elected not to carry UIM coverage on his own vehicle is not entitled to recover UIM benefits from separate insurance policies issued to family members with whom he resides where clear and unambiguous ‘household exclusion’ language [in the family members’ policies] explicitly precludes UIM coverage for bodily injury suffered while occupying a motor vehicle not insured for UIM coverage.” Slip op. at 9. The trial court distinguished Albert’s case from Gallagher v. GEICO Indem. Co., 201 A.3d 131 (Pa. 2019), which invalidated certain household exclusion language in insurance policies for failure to abide by the requirements of Section 1738 of the Motor Vehicle Financial Responsibility Law, which requires that waivers of UIM coverage follow a specific form for the sake of consumer protection.
Albert appealed to the Superior Court. In considering Albert’s appeal, the Superior Court recognized the need to unify and clarify the line of relevant case law: Eichelman, Gallagher, and their progeny. The Superior Court held that “Gallagher does not seem to invalidate household exclusions in all cases, despite [Albert’s] suggestions to the contrary. Instead, Gallagher has been interpreted by this Court to hold that a household exclusion cannot be used to evade Section 1738’s explicit requirements for waiving stacking.” Slip op. at 19. The court also determined that because Albert’s Progressive policy did not have UIM coverage on which to stack the Erie policies’ UIM benefits, Gallagher does not apply to his case. Instead, Eichelman applies and, therefore, the household exclusions in the Erie policies are enforceable to preclude Albert from recovering UIM benefits from the Erie policies.
The Pennsylvania Supreme Court granted allocatur to consider the following issue:
Did the Superior Court err as a matter of law in determining that the seminal decision of the Court in Gallagher v. Geico, 201 A.3d 131 (Pa. 2019), which invalidated household exclusions in auto policies in Pennsylvania, did not apply to the underinsured motorist (“UIM”) claims of Albert Mione under his Personal Auto Policy merely because the policy insuring the motorcycle he was operating at the time of the accident did not provide UIM coverage?