Setting the “Toner” to Grant Allocatur in Pergolese v. The Standard Fire Ins. Co.
Defense Digest, Vol. 23, No. 3, September 2017
By Brooks R. Foland, Esq.*
The Superior Court of Pennsylvania was recently presented with two significant cases regarding automobile stacking waivers, Toner v. Travelers Home & Marine Ins. Co., 137 A.3d 583 (Pa.Super. 2016) and Pergolese v. The Standard Fire Ins. Co., one of the Travelers Insurance Companies, 2017 Pa.Super. LEXIS 243 (Pa.Super. April 11, 2017). The court’s conflicting decisions in Toner and Pergolese have cast doubt as to how these matters should be handled. Particularly, is an insurer required to present the insured with additional stacking waivers when vehicles are subsequently added to an existing automobile policy? Despite the clear ruling and mandates in Sackett II, this question has continued to overwhelm the Pennsylvania court system for the past decade.
In Sackett v. Nationwide Mut. Ins. Co., 940 A.2d 329 (Pa. 2007) (Sackett II), the Supreme Court of Pennsylvania held that where coverage under a particular after-acquired vehicle clause continues in effect throughout the existing policy period, subject only to conditions subsequent, such as notice and the payment of premiums, the after-acquired vehicle clause is continuous in nature and no new stacking waivers are required when vehicles are later added to the policy. Litigants and lawyers throughout this Commonwealth—in both state and federal courts—continue to debate and argue the scope and breadth of the Supreme Court’s holding and how it applies to varying policy language and different factual scenarios. One such case is Toner v. Travelers Home & Marine Ins. Co.
In Toner, the Superior Court found that the policy language at issue gave Toner 30 days in which to inform Travelers of the purchase of a new vehicle, thereby extending the existing coverage. The court emphasized that the 30-day “grace period” provided coverage to the newly acquired vehicle even before Travelers was informed of the acquisition. As long as the insured notified the insurer of the acquisition during that 30-day period, coverage continued uninterrupted. The court distinguished this type of policy language—i.e., continuous—from policies that provide a certain grace period but then require the insured to apply for and obtain additional coverage for the new vehicle—i.e., finite. After examining the clause contained in Travelers’ policy, the court held that it was continuous and, thus, no new stacking waivers were required.
Toner appealed, and the Supreme Court of Pennsylvania granted allocatur last year, certifying the following issue of “[w]hether the Superior Court correctly determined that an insured, who signed a UM/UIM stacking waiver at the inception of a single vehicle policy, was not entitled to stack UM/UIM benefits, even though the carrier failed to obtain stacking waivers when second and third vehicles were added to the policy.” However, the plaintiff in Toner resolved his claim prior to oral argument, and the appeal was discontinued.
On April 11, 2017—just days after Toner had settled—the Superior Court issued its decision in another stacking case, Pergolese v. The Standard Fire Ins. Co. The majority in Pergolese refused to enforce the stacking waivers that the plaintiffs had voluntarily executed for each of their two insurance policies with Standard Fire. Rather, the majority accepted the convoluted theory advanced by the claimants in their effort to circumvent Sackett II and Toner. Instead of examining the after-acquired vehicle language, the majority opined that the amended declarations page, showing the new vehicle, is what “added” the vehicle to the policy. The majority reasoned that this somehow rendered the after-acquired vehicle clause irrelevant and converted the addition of the vehicle into a new purchase of coverage, necessitating execution of a new stacking waiver. The majority distinguished Toner because “[t]he after-acquired vehicle clause [in Toner] was at issue.” In finding that the vehicle was added by way of the amended declarations page—as opposed to the after-acquired vehicle clause—the majority did its best to circumvent both Sackett II and Toner. The Honorable Victor Stabile wrote a lengthy and strongly worded dissent.
In its petition for allowance of appeal, which was filed with the Pennsylvania Supreme Court on May 11, 2017, Standard Fire argued that the majority’s analysis ignores and contradicts the Supreme Court’s express holding in Sackett II, which was not based on the title of the document used to memorialize the addition of a new vehicle to an existing auto policy. On the contrary, the controlling factor under Sackett II was the language of the after-acquired vehicle clause, i.e., whether the clause is continuous or finite in nature. Where the language of the policy only requires the insured to ask that the after-acquired vehicle be added to an existing policy within a certain timeframe, the insurer is not required to obtain new waivers. That is precisely the type of clause in the policy in Pergolese—a clause that is literally identical to the clause at issue in Toner. A clause that the Superior Court had, just months prior, ruled was continuous in nature. Interestingly, the Pergoleses have recently advised the court that they do not oppose the petition.
If the appeal is granted, this case will give the Supreme Court another opportunity to address this significant issue and to harmonize Pergolese with Sackett II and Toner. Absent immediate clarification from the Supreme Court, this issue will likely continue to result in conflicting and contradictory decisions from our trial and intermediate appellate courts and will continue to confound claimants and insurers alike. The previous granting of allocatur in Toner, however, suggests that the state’s highest court may be ready to revisit and reaffirm its important holding from Sackett II.
*Brooks is a shareholder in our Harrisburg, Pennsylvania office who can be reached at 717.651.3714 or firstname.lastname@example.org.
Defense Digest, Vol. 23, No. 3, September 2017. Defense Digest is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2017 Marshall Dennehey Warner Coleman & Goggin. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact email@example.com.