The Pennsylvania Superior Court Determines Spouse had Constructive Notice of Stacking Waiver in Reversing Trial Court’s Decision
In the case of Golik v. Erie Insurance Exchange, No. 1110 WDA 2022 (Pa. Super. Aug. 7, 2023), the Pennsylvania Superior Court concludes that the Pennsylvania Motor Vehicle Financial Liability Law only requires the stacking waiver to be signed by the insured who purchased the insurance policy.
Mr. Golik purchased an automobile insurance policy (“the Policy”) from Erie Insurance (“Erie”) through the Fisher Agency (“Fisher”). He was the only insured on one vehicle, and he signed a stacking waiver. Mr. Golik married Mrs. Golik and added her as a named insured, and her vehicle to the Policy. Mr. Golick did not receive any stacking waivers or discuss stacking insurance with their agent at this time. Years later, Fisher mailed stacking waivers to Mr. Golik, which he signed. Mrs. Golik denied having knowledge of the stacking waiver.
Years later, Mrs. Golik was severely injured in a motor vehicle accident when an uninsured motorist made an errant turn into the path of her vehicle. She subsequently filed a claim with Erie for uninsured motorist (UM) benefits, believing at the time that the Policy provided $100,000 per accident in UM coverage. Erie responded with a copy of the stacking waiver, and subsequently tendered a $50,000 payout per the Policy. Mrs. Golik did not accept payment, and instead filed suit.
Mrs. Golik claimed Erie violated § 1738 of the Pennsylvania Motor Vehicle Financial Liability Law (“MFVL”) in failing to present her with the opportunity to stack limits of UM and underinsured motorist (UIM) coverage, and therefore she was entitled to $100,000 in stacked UM coverage. The trial court analyzed 75 Pa.C.S. § 1738, and Pennsylvania case law, and determined that there was no relevant binding case law interpreting § 1738. Moreover, the trial court determined that § 1738 was ambiguous in its use of “named insured” and “first named insured,” neither term being defined in the statute. Accordingly, the trial court concluded that Erie was required to obtain the consent of both named insureds, and entered a verdict in favor of Mrs. Golik in the amount of $100,000.
Erie appealed the trial court’s decision, arguing the trial court erred in determining Mrs. Golik could recover “stacked” UM benefits despite the presence of a “stacking waiver.” The Superior Court acknowledged that there was no case directly on point however, it cited to Rupert v. Liberty Mut. Ins. Co. [Rupert I], 781 A.2d 132 (Pa. 2001) for guidance. In Rupert I, the Supreme Court was split in its decision, but Justice Zappala posited that for purposes of Section 1738, the signature of the first named insured on a valid waiver at the inception of the policy is evidence that each named insured under the policy was fully aware of the options regarding stacked policy limits. The Supreme Court also acknowledged § 1738’s alternating use of the terms “first named insured” and “named insured,” but found no resulting ambiguity. Ultimately, the 3rd Circuit Court of Appeals adopted Justice Zappala’s reasoning, and holding that § 1738 did not explicitly require the valid waiver form be signed by the current first named insured. Rupert v. Liberty Mut. Ins. Co. [Rupert II], 291 F.3d 243, 246 (3d. Cir. 2002). Additionally, the Superior Court in reviewing Pennsylvania law determined that the courts have held third parties, drivers, and named insured are bound by the decisions of the first named insured. The court also determined that a named insured, even when subsequently added to a policy, is presumed to have known about available options and is bound by the first named insured’s election of lesser coverage, unless the insured takes an affirmative step to change the coverage. Finally, the Superior Court concluded that § 1738 was not ambiguous since the term “each named insured” is modified by the word “purchasing,” therefore for the stacking waiver to be valid it only need be signed by the insured who purchased the policy.
The opinion in Golik v. Erie Insurance Exchange, No. 1110 WDA 2022 (Pa. Super. Aug. 7, 2023) can be accessed here.