On April 19, 2023, the Pennsylvania Supreme Court clarified the need for UM/UIM stacking waivers after the removal of a vehicle in Franks v. State Farm Mutual Automobile Insurance Company, No. 42 MAP 2022. In Franks, the claimants originally owned two vehicles on their State Farm household automobile policy and, at policy inception, executed a valid stacking waiver. After adding another vehicle to their policy, the claimants again executed a valid UM/UIM stacking waiver, as required by section 1738 of the Pennsylvania Motor Vehicle Financial Responsibility Law (“MVFRL”) under the Sackett trilogy line of cases. Six months later, however, the claimants removed a vehicle from their policy without executing a new stacking waiver. Following an accident in 2016, the claimants made a claim for stacked UM/UIM benefits, arguing that the removal of a vehicle was also a “purchase” under Section 1738 of the MVFRL required a new UM/UIM stacking waiver.
Justice Mundy, writing for the unanimous Court, analyzed the definition of “purchase” under Section 1738 of the MVFRL. The Court noted that it previously found that section 1738 was unambiguous both in its own right and when viewed in context with the rest of the MVFRL in the case Barnard v. Travelers Home and Marine Insurance Company, 216 A.3d 1045 (Pa. 2019). In Barnard, the Supreme Court also developed a test for what constitutes a “purchase” under Section 1738 and measured the “purchase” requirements by assessing whether the claimant 1) acquired something they did not have before; and 2) paid an additional premium for it. Under this plain meaning, the Supreme Court in Franks found that the term “purchase” could not justify an “expansive interpretation” that would make “purchase” synonymous with “change.”
Instead, the Court found the dissenting viewpoint expressed in the Franks Superior Court en banc panel to be a straining of Section 1738’s language. These dissenting judges found that this issue was one with reasonable disagreement and that courts must liberally construe Section 1738 to favor coverage for the claimant. The Supreme Court, however, found that in reasoning such, these judges “depart from the plain meaning of the language employed by the legislature to reach a result in closer alignment with what they deem to be the underlying purpose of the provisions at issue.” This departure from the plain meaning of the word “purchase” ultimately proved fatal to the claimant’s case. In turn, the Supreme Court held that removal of a vehicle from a policy does not constitute a “purchase” under Section 1738 of the MVFRL and thus does not trigger the need for new UM/UIM stacking waivers.
The Franks decision can be found here.
For additional questions, please contact Glen Shikunov, Esq., Christopher Regan, Esq., and/or Scott Tredwell, Esq.
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