The Pennsylvania Superior Court has affirmed a lower court’s decision to grant judgment in favor of Erie Insurance Exchange, ruling that an exclusion in a household auto policy validly barred uninsured/underinsured motorist (UM/UIM) coverage for a passenger killed in a motorcycle accident.
The case centered on the fatal 2023 motorcycle crash that killed Elissa J. Kennedy while she was a passenger on a motorcycle owned and operated by her husband, Dennis Kennedy, who also perished in the single-vehicle accident. The central legal fight involved whether Erie’s policy, under which Elissa and Dennis were both insured, provided coverage when the accident involved a vehicle—a motorcycle—owned by a relative but not listed on the Erie policy.
The Facts of the Claim
Elissa Kennedy’s estate (Appellant) sought UM/UIM benefits under an Erie auto policy that covered four household vehicles and provided stacked UM/UIM coverage. The motorcyclist, Dennis Kennedy, was covered by a separate Progressive policy for the motorcycle, which provided liability coverage and non-stacked UM/UIM coverage, limits that were exhausted by a settlement.
When the estate filed a claim with Erie for additional UM/UIM benefits, Erie responded by filing a declaratory judgment action, arguing that its policy’s exclusion applied. This exclusion specifically barred coverage for damages sustained by an insured while “occupying” a “miscellaneous vehicle” owned by a relative if that vehicle was *not* insured for UM/UIM coverage under the Erie policy.
The Erie policy defined “miscellaneous vehicle” in its General Policy Definitions to include “motorcycles.” Since the motorcycle was owned by Dennis Kennedy (a relative) and was not listed as a covered vehicle under the Erie auto policy, Erie contended the exclusion applied, rendering the claim invalid.
The Trial Court and Stacking Law
The trial court agreed with Erie, granting judgment on the pleadings based heavily on the Pennsylvania Supreme Court’s precedent in *Erie Ins. Exchange v. Mione*.
The Appellant argued that this exclusion acted as an impermissible, “disguised waiver” of the stacked UM/UIM benefits they had explicitly purchased under the Erie policy, violating the Motor Vehicle Financial Responsibility Law (MVFRL), specifically Section 1738, which establishes stacked coverage as the default in Pennsylvania.
The Superior Court, however, focused on the distinction between denying coverage outright and invalidating a statutorily required waiver of stacking.
The Critical Distinction: *Mione* vs. *Gallagher*
The court’s analysis hinged on whether the situation involved true “stacking”—the addition of coverage limits from multiple policies or vehicles—or whether it was a case of coverage being unavailable in the first place.
The Appellant relied on cases like *Gallagher*, where a court struck down a similar exclusion because it effectively waived stacked benefits without the proper statutory waiver form, thereby violating Section 1738.
However, the Superior Court determined that the facts here aligned with the Supreme Court’s ruling in *Mione*. In *Mione*, the Supreme Court held that a household vehicle exclusion cannot be deemed an impermissible “de facto waiver of stacking” unless the insured has already received UM/UIM coverage under some other policy for the loss. If there is no existing UM/UIM coverage to stack onto, Section 1738—which governs the *addition* of coverage—is not implicated.
The court found that Elissa J. Kennedy was not an insured under her husband’s Progressive Motorcycle Policy. Since she had no contractual right to UM/UIM benefits under the Progressive policy, there was no coverage for her to “stack on” to the Erie policy.
“Accordingly, this is not a ‘stacking’ case, section 1738 was not implicated, and Appellant is contractually barred by the Erie Policy’s exclusion from receiving UM/UIM benefits,” the opinion stated.
No Ambiguity Found
The Appellant also challenged the validity of the exclusion based on alleged ambiguity, arguing that the motorcycle might also fall under a separate “motor vehicle” exclusion, or questioning whether the motorcycle was covered under Erie’s general definitions.
The court dismissed these arguments. It noted that the policy language was clear: the motorcycle fit the definition of a “miscellaneous vehicle,” and since it was not listed on the Erie Declarations Page, the exclusion applied. The court emphasized that while parties may disagree on policy construction, ambiguity only exists if the terms are subject to more than one reasonable interpretation. Here, the terms unambiguously excluded coverage under the facts presented. Furthermore, the court found no indication that Erie failed to *offer* UM/UIM coverage for the motorcycle, which would be required under Section 1731 of the MVFRL.
Ultimately, the Superior Court concluded that the trial court did not make a clear error of law by granting judgment for Erie, affirming the order.
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