Fire & Cslty Co CT v. Cook , 155 F. App'x 587 ( 2005 )


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  •                                                                                                                            Opinions of the United
    2005 Decisions                                                                                                             States Court of Appeals
    for the Third Circuit
    11-9-2005
    Fire & Cslty Co CT v. Cook
    Precedential or Non-Precedential: Non-Precedential
    Docket No. 04-2564
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    NOT PRECEDENTIAL
    UNITED STATES COURT OF APPEALS
    FOR THE THIRD CIRCUIT
    No: 04-2564
    FIRE & CASUALTY COMPANY
    OF CONNECTICUT,
    Appellant
    v.
    MASON COOK
    Appeal from the United States District Court
    for the Eastern District of Pennsylvania
    (Civ. No. 02-cv-08409)
    District Judge: Hon. Thomas N. O’Neill, Jr.
    Argued: July 14, 2005
    Before: SLOVITER, McKEE and WEIS, Circuit Judges,
    (Opinion filed: November 9, 2005 )
    ALAN C. MOLOTSKY, ESQ. (Argued)
    TRACEY N. KILCULLEN, ESQ.
    Post & Schell
    1600 J.F.K. Boulevard
    Four Penn Center, 13th Floor
    Philadelphia, PA 19103
    Attorneys for Appellant
    ROBERT W. SCHALL, ESQ.
    PATRICIA D. BUCKLEY, ESQ. (Argued)
    Cooper & Schall
    1760 Market Street, Suite 1100
    Philadelphia, PA 19103
    Attorneys for Appellee
    1
    OPINION
    McKEE, Circuit Judge.
    Fire & Casualty Company of Connecticut appeals the District Court’s ruling that
    Atlantic Express Transportation Group, did not request a reduction of its uninsured
    motorist coverage in accordance with the requirements of Section 1734 of Pennsylvania’s
    Motor Vehicle Financial Responsibility Law (“MVFRL”), 75 P A. C ONS. S T. § 1701 et
    seq. For the reasons that follow, we will affirm.
    I.
    Mason Cook was employed as a driver for Atlantic Express Transportation Group,
    a New York corporation. Atlantic Express was insured under a policy of a multi-state
    commercial automobile insurance, policy AUTO1884, issued by Fire & Casualty. The
    policy provided $1,000,000 in bodily injury liability coverage and, by an unsigned
    endorsement, uninsured and underinsured motorist coverages (hereinafter “UM” and
    “UIM”, respectively)1 in the amount of $35,000 for Pennsylvania-
    1
    “Uninsured motorist coverage shall provide protection for persons who suffer
    injury arising out of the maintenance or use of a motor vehicle and are legally entitled to
    recover from owners or operators of uninsured vehicles.” 75 P A. C ONS. S TAT. § 1731(b).
    “Underinsured motorist coverage shall provide protection for persons who suffer injury
    arising out of the maintenance or use of a motor vehicle and are legally entitled to recover
    damages from owners or operators of underinsured vehicles.” 75 P A. C ONS. S TAT. §
    1731©). An underinsured motor vehicle is “a motor vehicle for which the limits of
    available liability insurance and self-insurance are insufficient to pay losses and
    damages.” 75 P A. C ONS. S TAT. § 1702.
    “A person who recovers damages under uninsured motorist coverage or coverages
    (continued...)
    2
    registered vehicles owned by Atlantic Express.
    On May 1, 2001, while in the course and scope of his employment, Cook was
    operating a motor vehicle insured under the policy when he was involved in an accident
    with an uninsured motorist, and he thereafter made a claim for UM benefits under the
    policy. Fire & Casualty maintained that Cook was entitled to $35,000 in UM benefits.
    However, Cook claimed that he was entitled to UM coverage up to $1,000,000 – the
    amount equal to the bodily injury liability limits under the policy.2
    Under the MVFRL, insurers who issue motor vehicle liability policies in
    Pennsylvania are required to offer their customers UM/UIM coverage in amounts equal
    to the bodily injury limits of the customers’ polices. Motorists Ins. Cos. v. Emig, 
    664 A.2d 559
    , 561 (Pa.Super. 1995) (citing 75 PA. CONS. STAT. § 1791(6)). Indeed, Section
    1731 of the MVFRL “mandates that an insurance company cannot issue a policy in the
    Commonwealth of Pennsylvania unless it provides UM/UIM coverage equal to the
    bodily injury liability coverage, except as provided in § 1734.” Nationwide Ins. Co. v.
    Resseguie, 
    980 F.2d 226
    , 231 (3d Cir. 1992). However, the “[p]urchase of uninsured
    motorist and underinsured motorist coverages is optional.” 75 PA. CONS. STAT. §
    1731(a). An insured can reduce the amount of UM/UIM coverage below the policy’s
    1
    (...continued)
    cannot recover damages under underinsured motorist coverage or coverages for the same
    accident.” 75 P A. C ONS. S TAT. § 1731(d)(1).
    2
    Fire & Casualty has paid Cook the undisputed amount of the UM benefits –
    $35,000.
    3
    bodily injury limits, 75 PA. CONS. STAT. § 1734, or completely reject UM and/or UIM
    coverage. 75 PA. CONS. STAT. §§ 1731(b), ©).
    We are concerned with § 1734 of the MVFRL. That provision is encaptioned,
    “Request for lower limits of coverage,” and it provides:
    A named insured may request in writing the issuance of coverages under
    section 1731 (relating to availability, scope and amount of coverage) in
    amounts equal to or less than the limits of liability for bodily injury.
    75 P A. C ONS. S TAT. § 1734. “On its face, the only requirement of Section 1734 is that the
    insured’s request for reduced coverage be in writing,” Nationwide Mut. Ins. Co. v.
    Heintz, 
    804 A.2d 1209
    , 1215 (Pa.Super. 2002), and it appears that the writing may take
    any form. Leymeister v. State Farm Mut. Ins. Co., 
    100 F.Supp.2d 269
    , 272 (M.D. Pa.
    2002).3
    3
    Unlike the provision for reducing UM/UIM coverage, which requires only a
    writing by the insured, the MVFRL’s provision relating to waiver or rejection of
    UM/UIM coverage is technical. Section 1731(c.1) of the MVFRL requires that an
    insurer must provide forms for the rejection of UM and UIM coverage. It provides, in
    relevant part:
    Insurers shall print the rejection forms required by subsections (b) and (c)
    on separate sheets in prominent type and location. The forms must be
    signed by the first named insured and dated to be valid. The signatures on
    the forms may be witnessed by an insurance agent or broker. Any rejection
    form that does not specifically comply with this section is void. If the
    insurer fails to produce a valid rejection form, uninsured or underinsured
    coverage, or both, as the case may be, under that policy shall be equal to
    the bodily injury liability limits.
    75 PA. CONS. STAT. § 1731(c.1). The Pennsylvania Supreme Court has held that the
    (continued...)
    4
    II.
    Nathan Schlenker is CFO of Atlantic Express and is responsible for securing the
    company’s insurance. Schlenker signed a coverage selection form, dated December 31,
    1999, in which he requested UIM coverage with limits of $35,000 in Pennsylvania for
    Atlantic Express. However, he did not request any reduction in UM limits on the
    coverage selection form. The applicable box to indicate that request was left blank.4
    Schlenker verified that each year he would review policy limits and insurance
    premiums with Atlantic Express’s insurance agent, Bob Lull of Capacity Coverage. More
    specifically, Schlenker reviewed the policy limits and coverages under policies with Lull.
    Fire & Casualty contends that Atlantic Express authorized (or empowered) Lull to act on
    Atlantic Express’s behalf in procuring the policy involved in this dispute. Lull also
    verified that he was the agent involved in the production of the policy and that Atlantic
    Express gave him authority to act on its behalf in placing insurance with Fire & Casualty.
    3
    (...continued)
    technical requirements and remedial prescription of § 1731(c.1) do not apply to requests
    to reduce UM/UIM coverage under § 1734. Lewis v. Erie Ins. Exch., 
    793 A.2d 143
    , 155
    (Pa. 2002).
    4
    The coverage selection form contains boxes that must be checked to indicate the
    type of coverage desired and the amount of coverage. A box indicating that Atlantic
    Express desired liability coverage for bodily injury is checked and the amount of
    coverage desired is listed as $1,000,000. The coverage selection form also contains,
    inter alia, boxes to be checked for UM and UIM coverage and a space for the amount of
    coverage desired for each type of coverage. The box indicating UIM coverage is checked
    and the amount of UIM coverage desired is listed as $35,000. However, the box for UM
    coverage is not checked and there is no coverage amount indicated.
    5
    Fire & Casualty asserts that Lull was deposed in connection with another action related to
    the policy in question and that he there testified that he was Atlantic Express’s insurance
    broker; and thus, its agent.5 Lull verified that, in his capacity as Atlantic Express’s
    insurance agent, he submitted requests for coverage, waited for quotes, evaluated bids for
    the desired coverage, and ultimately secured the coverage Atlantic Express desired and
    requested.
    According to Lull, in the years that he serviced the Atlantic Express account, he
    reviewed the policy limits and insurance premiums with a representative of Atlantic
    Express for each state in which the company was insured, including Pennsylvania. Lull
    verified that it was the usual practice of Atlantic Express to select $35,000 for both its
    UM and UIM coverage in Pennsylvania.
    Fire & Casualty contends that Schlenker was aware Atlantic Express could
    purchase greater amounts of UM/UIM coverage. However, Fire & Casualty alleges that
    Atlantic Express did not want UM coverage in an amount greater than $35,000.
    According to Fire & Casualty, Atlantic Express wanted to keep its commercial
    automobile insurance premiums as low as possible. Accordingly, Atlantic Express did not
    want to pay additional premiums in order to maintain UM/UIM coverage equal to the
    liability coverage offered under the policy.
    5
    That action was Fire & Casualty Ins. Co. of Connecticut v. Ligon, No. 03-1283,
    
    2004 WL 188328
     (3d Cir. Jan. 30, 2004).
    6
    Lull verified that Schlenker signed the coverage selection form dated December
    31, 1999, requesting UIM coverage with limits of $35,000 in Pennsylvania. However, as
    noted, Schlenker did not make any notation on the coverage selection form to reflect that
    Atlantic Express wanted to reduce its UM coverage to $35,000. Fire & Casualty claims
    that Lull nevertheless understood, based on his dealings with Schlenker and Atlantic
    Express, that the company wanted UM coverage identical to its UIM coverage. Fire &
    Casualty further claims that Lull also understood that Atlantic Express’s goal was to keep
    its premiums for auto insurance as low as possible and that the company did not want to
    pay additional premiums to have UM/UIM coverage in amounts that equaled its liability
    coverage.
    In his verification, Schlenker stated that although the coverage selection form does
    not specifically indicate the amount of UM coverage desired, Atlantic Express intended
    for the UM coverage to be identical to the UIM coverage, i.e., $35,000. Fire & Casualty
    alleges that Schlenker informed Lull of the company’s intention in that regard.
    Schlenker’s verification further states that where he and Lull used the terms
    “statutory limits” or “basic limits,” Schlenker understood those terms to mean UM/UIM
    coverage of $35,000. Lull’s verification recites that he too understood that the terms
    “statutory limits” or “basic limits” signified UM/UIM coverage of $35,000.
    Fire & Casualty contends that Lull’s verification that Atlantic Express intended to
    secure $35,000 in UM coverage is further evidenced by a number of documents utilized
    7
    in the preparation of the insurance quote, proposal and binder. The insurance proposal
    prepared by Lull and Capacity Coverage, on Atlantic Express’ behalf, was faxed from
    Capacity Coverage to Schlenker on December 23, 1999. It indicates that the proposed
    policy should carry “statutory” UM coverage. On December 22, 1999, an insurance quote
    was generated for the policy, and was sent from Transportation Writers, Inc., to Capacity
    Coverage. That document quotes a premium of $7.5 million for coverage that would
    include UM coverage “basic per state.” Similarly, the primary pricing worksheet attached
    to Lull’s verification indicates that UM/UIM coverage would be “statutory.” Finally, a
    document sent to Atlantic Express by Matt Simnor, of Capacity Coverage, also indicates
    that “statutory” UM protection would be provided by the policy as issued.
    Fire & Casualty contends that the policy, along with its attendant documentation,
    and the verifications, show that the premiums paid were for UM coverage in the amount
    of $35,000 for Pennsylvania. Lull, in his verification, stated that if Atlantic Express were
    to secure $1 million in UM coverage under the policy, its premiums would increase
    significantly.
    Moreover, Lull executed a verification in connection with another case concerning
    the same policy6 in which he verified that, “[a]t the time the policy in question was issued
    to Atlantic Express, December 1999, it would have cost approximately $75 per vehicle in
    Atlantic Express’ nationwide fleet to increase [UIM] coverage from $35,000 to $1
    6
    See n.6, supra.
    8
    million.” He then calculated the approximate difference: “December 1999, there were
    approximately 5800 vehicles in the nationwide Atlantic Express fleet. Therefore, Atlantic
    Express would have had to pay, approximately, $435,000 in additional premiums in order
    to have increased its UIM coverage from $35,000 to $1 million.”
    Fire & Casualty claims that Atlantic Express never contested the amount of
    UM/UIM coverage provided under the policy. It also claims that neither Schlenker nor
    anyone else at Atlantic Express ever questioned the amount of UM coverage indicated in
    the proposal, quote, binder or policy. Moreover, Fire & Casualty notes that Cook is a
    stranger to the policy and to the negotiations leading to its issuance. Although Cook
    qualifies as an insured under the policy, he had no part in the selection of coverage limits
    under the policy.7 Finally, Fire and Casualty notes that Cook has not presented any
    evidence discrediting or refuting the verifications offered by Lull or Schlenker or the
    deposition testimony offered by Lull.
    III.
    On November 12, 2002, Fire & Casualty filed a complaint seeking a declaration
    7
    As we noted above, Fire & Casualty brought this suit as a declaratory judgment
    action to determine its obligation to Cook under the insurance policy with Atlantic
    Express. Cook, as an additional insured, is a “third-party beneficiary [and therefore]
    bound by the same limitations in the contract as the signatories . . . . [He] cannot recover
    except under the terms and conditions of the contract [of insurance].” See Dissent at 5
    (quoting General Accident Ins. Co. of American v. Sharp, 
    665 A.2d 502
     (Pa. Super.
    1995). Accordingly, Cook clearly has standing to argue the extent of his coverage under
    the terms and conditions of that policy despite the concerns suggested by the Dissent.
    9
    that it is only obligated to provide $35,000 in UM coverage to Cook in connection with
    the May 1, 2001, automobile accident. Cook responded by contending that he is entitled
    to UM benefits in an amount equal to the coverage limits of the policy; $1 million.
    Thereafter, Cook filed a supplemental memorandum of law in support of his
    cross-motion for summary judgment which centered around the Pennsylvania Superior
    Court’s decision in Peele v. Atlantic Express Transportation Group, Inc., 
    840 A.2d 1008
    (Pa.Super. 2003).
    The District Court entered an order denying Fire & Casualty’s request for
    summary judgment and granting judgment in Cook’s favor. The court ruled that Atlantic
    Express had not requested a reduction in UM coverage to $35,000 in writing. Therefore,
    the UM coverage was equal to the policy’s bodily injury limit of $1,000,000.
    After some additional motions, this appeal followed.
    IV.
    As recited above, the District Court held that Atlantic Express had not made a
    “request in writing” to reduce UM coverage as required by § 1734 of the MVFRL.
    Accordingly, the court ruled that UM coverage was equal to the policy’s bodily injury
    limits of $1,000,000. Because there is no reported decision by the Pennsylvania Supreme
    Court addressing the precise issue, the District Court was required to predict how the
    Pennsylvania Supreme Court would interpret § 1734 of the MVFRL under the facts of
    this case. Nationwide Mut. Ins. Co. v. Buffetta, 
    230 F.3d 634
    , 637 (3d Cir. 2000) (citation
    10
    omitted). In making that prediction, “a federal court can . . . give due regard, but not
    conclusive effect, to the decisional law of lower state courts.” 
    Id.
     (citation omitted).
    “The opinions of intermediate appellate state court are not to be disregarded by a federal
    court unless it is convinced by other persuasive data that the highest court of the state
    would decide otherwise.” 
    Id.
     (citation and internal quotations omitted).
    Our review is plenary. See, e.g., Companie des Bauxites de Guinee v. Insurance
    Co. of N. Am., 
    734 F.2d 369
    , 371-72 (3d Cir. 1983). In predicting how the Pennsylvania
    Supreme Court would decide this case, we therefore consider “relevant state precedents,
    analogous decisions, considered dicta, scholarly works, and any other reliable data
    tending convincingly to show how the highest court in the state would decide the issue at
    hand.” McKenna v. Ortho Pharm. Corp., 
    622 F.2d 657
    , 663 (3d Cir. 1980).
    V.
    We consider each of Fire & Casualty’s claims of error separately.
    A. Atlantic Express Intended that the Policy
    Carry only $35,000 in UM Coverage.
    Fire & Casualty concedes that the coverage selection form that Schlenker signed
    does not request a reduction in UM coverage to $35,000 in writing. Given the mandate of
    the MVFRL, that really ends our inquiry. Nonetheless, Fire & Casualty argues that there
    is ample evidence that Atlantic Express intended that the UM coverage be limited to only
    $35,000. Schlenker did state that he intended UM coverage to be identical to UIM
    coverage and that he made Lull, Atlantic Express’s insurance agent, aware of that. In
    11
    Fire & Casualty’s view, “when considering whether an insured made a valid request for
    reduced limits of UM/UIM coverage, the focus is on whether there is any written
    evidence of the named insured’s intention to reduce UM/UIM limits to a specific
    amount.” Fire & Casualty’s Br. at 16. Put another way, Fire & Casualty contends that
    Atlantic Express’s intention to request reduced UM coverage of $35,000 satisfies the
    statutory requirements of § 1734.
    We disagree. As noted, § 1734 of the MVFRL provides that “[a] named insured
    may request in writing” UM coverage that is less than the limits of the policy’s bodily
    injury liability limits. Clearly, Schlenker did not make a written request for reduced UM
    coverage, and nothing in § 1734 allows the insured’s intention to substitute for the
    statute’s requirement that the request be made “in writing.” Moreover, Pennsylvania’s
    Statutory Construction Act prohibits that very result. See 1 P A. C ONS. S TAT. § 1921(b)
    (“When the words of the statute are clear and free from all ambiguity, the letter of it is not
    to be disregarded under the pretext of pursuing its spirit.”). Moreover, the Pennsylvania
    Superior Court has held that in the absence of a written request from the named insured,
    the insured’s alleged selection of reduced UM/UIM coverage is a nullity. Emig, 
    664 A.2d at 569
    . Finally, we note that the Pennsylvania Supreme Court has said, albeit in dicta,
    that “requests for specific limits coverage [under § 1734], in contrast to outright
    waiver/rejection [under § 1731], require not only the signature of the insured, but also an
    express designation of the amount of coverage requested, thus lessening the potential for
    12
    confusion.” Lewis v. Erie Ins. Exch., 
    793 A.2d 143
    , 153 (Pa. 2002).
    Fire & Casualty next argues that even if we must ignore Schlenker’s verification
    of his intent, writings prepared and submitted by Lull have the same effect because Lull
    was acting as Atlantic’s agent. Those writings purportedly consist of: (1) an insurance
    proposal prepared by Lull which indicates that the policy should carry “statutory” UM
    coverage; (2) an insurance quote generated by Transportation Underwriters, Inc., and
    sent to Capacity Coverage,8 which quoted a premium of $7.5 million for coverage that
    would include UM coverage “basic per state”;9 and (3) a primary pricing worksheet
    prepared by Capacity Coverage which indicated that UM/UIM coverage would be
    “statutory.”10 In Fire & Casualty’s view, these three “writings” satisfy the “in writing”
    requirement of §1734.
    Fire & Casualty further argues that both Schlenker and Lull verified that they
    intended the terms “statutory” and “basic” to mean $35,000. Therefore, Fire & Casualty
    argues that, when the three “writings” and Schlenker’s and Lull’s understanding of the
    8
    As noted, Lull worked for Capacity Coverage. Fire & Casualty claims that there
    is a principal/agent relationship between Atlantic Express and Lull.
    9
    Cook contends that since this document was created by Transportation Writers,
    the insurer’s agent, it cannot be considered a writing of Atlantic Express or its agent.
    10
    Cook says that the insurance quote was not prepared by Capacity Coverage.
    Rather, he claims it was prepared by Special Risk Underwriting Managers, Inc., Fire &
    Casualty’s own underwriter. Therefore, the insurance quote cannot be considered a
    writing from Atlantic Express or its agent, Lull. Given our holding, we need not address
    that contention.
    13
    terms “statutory” and “basic” are considered, the requirements of § 1734 are met, and
    UM coverage under the policy must therefore be limited to $35,000.
    We again disagree. Section 1734 plainly says that the “insured may request in
    writing” lower UM coverage. Yet, none of the three “writings” referred to by Fire &
    Casualty are from Schlenker or anyone else from Atlantic Express. Therefore, we do not
    think the Pennsylvania Supreme Court would allow the “writings” here to satisfy the
    statutory requirement that the writing be the insured’s.11
    More importantly, however, Fire & Casualty’s argument ignores Peele v. Atlantic
    Express Transportation Group, Inc., 
    840 A.2d 1008
    , 1013 (Pa.Super. 2003). There, the
    Pennsylvania Superior Court held that the term “statutory” in an insurance binder is
    unambiguous and means that “statutory” UM/UIM coverage is the same as the bodily
    injury limits.12 Therefore, the fact that Lull and Schlenker may have believed that
    11
    Fire & Casualty contends that Lull, in his capacity as Atlantic Express’s agent,
    can make a written request to reduce UM coverage on Atlantic Express’s behalf.
    However, we note that the Pennsylvania Superior Court’s decision in Emig, 
    664 A.2d at 565
    , casts some doubt on whether an agent’s completion of a form satisfies the statutory
    requirement for a written request by an insured.
    12
    The fact that Peele involved a binder and not the policy itself is of no
    consequence. “It is the custom of the insurance industry, and sound public policy, to
    provide on-the-spot temporary insurance coverage in the form of a binder until the
    application information is verified and a formal policy issued.” Klopp v. Keystone Ins.
    Co., 
    595 A.2d 1
    , 4 n.5 (Pa. 1991). Under Pennsylvania law, a “binder constitutes
    evidence that insurance coverage has attached at a specific time, and continues in effect
    until either the policy is issued or the risk is declined and notice thereof given.” Strickler
    v. Huffine, 
    618 A.2d 430
    , 433 (Pa.Super. 1992).
    14
    “statutory” UM coverage means $35,000 is of no consequence. Under the MVIRL, the
    issue is not what the parties actually intended or believed. Rather, the issue is whether the
    insured complied with the statutory prerequisite for reducing its coverage. Therefore, it is
    inaccurate to suggest that the “additional insured, third-party beneficiary” is overriding
    the coverage determination of the named insured or that the additional insured is being
    given “rights superior to those of the named insured.” See Dissent at 8. The insured’s
    coverage determination is not being overriden by Cook, but by the formalistic
    requirements of controlling state law.
    B. The District Court’s Refusal to Consider
    Extrinsic Evidence Was Error.
    For the same reason, we reject Fire & Casualty’s contention that the District Court
    erred by refusing to consider extrinsic evidence that establishes that Atlantic Express
    intended to limit UM coverage to $35,000. According to Fire & Casualty, Pennsylvania
    law supports the use of extrinsic evidence to clarify the intentions of the parties to a
    contract where a term of the contract is ambiguous. Fire & Casualty thus argues that the
    verifications of Lull and Schlenker, and the “writings” referred to above,
    “overwhelmingly supports the conclusion that the parties 13 desired, requested and
    received $35,000 in UM coverage.” Fire & Casualty’s Br. at 31. This is really merely a
    restatement of the argument we have rejected above.
    13
    The “parties” to whom Fire & Casualty refers are Atlantic Express and Fire &
    Casualty.
    15
    Under Pennsylvania law, “[a]n ambiguity exists when the questionable term or
    language, viewed in the context of the entire policy, is reasonably susceptible of different
    constructions and capable of being understood in more than one sense.” J.C. Penney Life
    Ins. Co. v. Pilosi, 
    393 F.3d 356
    , 363 (3d Cir. 2004) (citation and internal quotations
    omitted). However, the policy is not ambiguous. Again, the issue is whether Atlantic
    Express complied with the statutory requirements of § 1734 of the MVFRL to reduce UM
    coverage to an amount less than the policy’s bodily injury liability limits. Atlantic
    Express’s efforts to get us to focus on its intent require us to close our eyes to the
    statutorily prescribed method for expressing that intent. We obviously can not do that.
    Thus, extrinsic evidence of Atlantic Express’s intent is irrelevant.
    C. The District Court Was Not Authorized to
    Reform the Policy.
    Fire & Casualty argues the District Court erred by “reforming” the policy to
    provide UM coverage equal to the policy’s bodily injury limits. According to Fire &
    Casualty, this was error because there is no remedy provided for under the MVFRL for
    noncompliance with § 1734. In making this argument, Fire & Casualty compares § 1734
    with § 1731.14 It says:
    A comparison of the language of § 1734 and § 1731 reveals that the
    legislature treated the outright rejection fo UM/UIM coverage in a
    remarkably different fashion than it treated the option to elect reduced
    limits of such coverage. Section 1734 is a simple one paragraph passage
    14
    See n.4, supra.
    16
    requiring only a generic, non-specific written request by a named insured to
    effectively reduce the UM/UIM coverage afforded by a policy. Section
    1731 stands in stark contrast to § 1734. Indeed, § 1731 includes an express
    directive as to the language that must be issued to waive inclusion of
    UM/UIM coverage in an auto policy issued in the Commonwealth. Section
    1731 also includes a sub-paragraph dedicated to explaining the remedies
    available where an insurer fails to comply with the detailed mandates of §
    1731. Such a provision is conspicuously absent from § 1734.
    Fire & Casualty’s Br. at 38. Fire & Casualty relies on the fact that section 1731(c.1)
    provides that failure to comply with its provisions for rejection results in UM/UIM
    coverage equal to the policy’s bodily injury limits, while § 1734 does not say that failure
    to comply with its results in coverage equal to the policy’s bodily injury limits. Fire &
    Casualty then notes that the MVFRL does not provide a remedy for failure to comply with
    section 1734’s procedure for reducing UM/UIM limits. Consequently, Fire & Casualty
    views the District Court’s ruling as a reformation of the policy to provide that UM
    coverage is the same as the bodily injury liability limits.
    To support that argument, it cites to Lewis v. Erie Ins. Exch., 
    793 A.2d 143
     (Pa.
    2002), where the Pennsylvania Supreme Court held that the “technical and remedial
    prescriptions of Section 1731(c.1), only apply when an insurer attempts to enforce
    outright rejection/waiver of UM/UIM coverage,” but does “not impede enforcement of
    [the insured’s] Section 1734 specific-limits election.”
    However, in making this argument, Fire & Casualty once again ignores Peele v.
    Atlantic Express Transportation Group, Inc., 
    840 A.2d 1008
     (Pa.Super. 2003). There,
    Peele and Sylvester were injured in two separate automobile accidents while employed as
    17
    paratransit drivers for Atlantic Express. Sylvester’s accident occurred on February 22,
    1999 with an uninsured driver. Peele’s occurred on March 22, 1999 with an
    underinsured driver. Sylvester and Peele made claims for UM and UIM benefits,
    respectively, against Kemper Insurance Company, which insured Atlantic Express.
    Kemper tendered $35,000 each to Sylvester and Peele, claiming that was the amount of
    coverage for UM/UIM benefits under the policy issued to Atlantic Express. Sylvester
    and Peele filed a declaratory judgment action in state court seeking a declaration that the
    applicable UM/UIM limits were $2,000,000 for each claimant – the amount of the
    policy’s bodily injury liability limits. Following a non-jury trial, the state trial court held
    that UM/UIM coverage was equal to the bodily injury liability limits.
    On appeal, the Pennsylvania Superior Court began its analysis by reciting the
    relevant facts as found by the state court:
    Atlantic employed AON Risk Services of Missouri [AON], an insurance
    broker, to obtain the commercial insurance. On or about December 22,
    1998, AON presented an Insurance Proposal to Atlantic, which
    summarized the various coverages that would be provided in all states in
    which Atlantic conducted business. For "Business Automobile," the limits
    were listed as $2,000,000 in liability coverage and "statutory" UM/UIM
    coverage. Under "Coverage Modifications... By specific endorsement to the
    policy," there were 16 types of endorsements listed; however none of them
    applied to a reduction or rejection of UM/UIM coverage. Based on the
    coverages outlined in the Proposal, Atlantic authorized AON to bind this
    insurance. On or about December 29, 1998, AON delivered three binders
    to Atlantic at its offices in New York, reflecting placement of Atlantic's
    general liability, worker's compensation and commercial automobile
    insurance for every state in which Atlantic conducted operations. Binder
    No. 11544 applied to Atlantic's business coverage and indicated that
    temporary commercial automobile insurance had been obtained from
    18
    Lumberman's Mutual Casualty in accordance with the Insurance Proposal.
    The binder indicated a liability limit of $2,000,000 and referenced an
    Addendum for additional coverages under the binder. The Addendum
    listed the limits of UM/UIM coverage as "statutory" for every jurisdiction
    in which Atlantic operated, including Pennsylvania. Like the proposal, the
    Addendum contained a section delineating 16 coverage modifications by
    specific endorsement to the policy. None of the 16 endorsements related to
    a rejection of UM/UIM coverage or to a reduction of the limits of this coverage...
    After the binder became effective in December 1998, the Sylvester and
    Peele accidents occurred--in February and March of 1999. On April 21,
    1999, the Chief Financial Officer of Atlantic returned a signed copy of the
    "Final and Accepted Insurance Proposal" to Kemper. At this time, under
    the Policy Specifications, Limits of Liability, Uninsured Motorists, the
    limits of coverage for all states in which Atlantic operated was listed, for
    the first time, as "Minimum Statutory without rejecting (no stacking of
    limits)."
    Finally, on June 24, 1999, AON forwarded to Atlantic various forms in
    connection with the Kemper insurance policy. Among these forms were
    requests to reject or reduce UM/UIM coverage in all states where such
    reduction or rejection was possible, including Pennsylvania. Atlantic
    returned these forms to AON on or after July 20, 1999. For the first time,
    Atlantic indicated in writing a selection of a specific limit of $35,000
    applicable to Pennsylvania UM/UIM coverage. A written request for lower
    UM/UIM coverage limits is authorized in Pennsylvania by 75 Pa.C.S.A. §
    1734.
    840 A.2d at 1010-11 (footnote omitted)(emphasis in original).
    Based on these facts, Kemper argued that the trial court erred in “reforming” the
    policy to provide more than the requested $35,000 UM/UIM coverage limit. It
    contended, inter alia, that the binder’s terms were retroactively lowered by the request
    for lower limits submitted in April and June 1999. Sylvester and Peele argued, inter
    alia, that the lower limits of coverage did not take effect until after their accidents, when
    19
    the final UM/UIM policy revisions were signed and returned to Kemper.
    The Superior Court agreed with Sylvester and Peele. It first quoted the state
    court’s holding approvingly:
    The December 1998 binder in this case provided for “statutory” UM/UIM
    coverage. The trial court held that this term was unambiguous, and referred
    to the statutory language of 75 Pa.C.S.A. § 1731, which requires that
    insurers offer UM/UIM coverage to their insureds, and if such coverage is
    rejected by the insureds, the rejection must be in writing in accordance with
    the forms set forth in the statute. 75 Pa.C.S. § 1731(a), (b), ©).
    Furthermore, the statute provides that if a proper rejection is not obtained by
    the insurer, “uninsured or underinsured coverage, or both, as the case may
    be, under that policy shall be equal to the bodily injury liability limits.” 75
    Pa.C.S. § 1731(c.1). In this case, the bodily injury liability limits were
    $2,000,000. The trial court thus held that, in the absence of a properly
    executed UM/UIM rejection, the initial binder provided “statutory”
    UM/UIM coverage limits of $2,000,000.
    840 A.2d at 1011-12. It next held:
    Furthermore, we note that appellant's argument regarding "minimum"
    statutory limits fails for an additional reason: there are no "minimum" limits
    of UM/UIM coverage in Pennsylvania. Although UM/UIM coverage must
    be offered to insureds, "[p]urchase of uninsured motorist and underinsured
    motorist coverages is optional," as long as it is properly rejected. 75 Pa.C.S.
    § 1731(a).
    Id. at 1012 (emphasis in original). The Superior Court then concluded:
    We therefore reject appellant’s claim that the trial court “reformed” the
    policy in this case. On the contrary, the trial court applied the unambiguous
    terms of the insurance binder, which was in effect at the time of the
    appellees’ accidents, to provide coverage in the amount of the bodily injury
    liability limits. Until June 1999, when Atlantic expressly requested lower
    limits, there had been neither rejection of UM/UIM coverage pursuant to 75
    Pa.C.S. § 1731 nor a written request for lower limits under 75 Pa.C.S. §
    1734, and the terms of the December 1998 binder regarding “statutory”
    limits controlled the amount of UM/UIM coverage available to appellees.
    20
    Id. at 1013.
    Peele thus demonstrates that the District Court did not “reform” the policy at all.
    Rather, that court merely held that the actions that purportedly expressed an intent to
    lower policy limits were legally insufficient to do so under § 1734. Thus, rather than
    reforming the policy, the District Court enforced it as written and held that absent
    compliance with § 1734, the policy limit was the “statutory limit” for bodily injury limits
    in Pennsylvania; $1,000,000.15
    Fire & Casualty appears to suggest that an insured’s failure to request lower UM
    limits in conformity with § 1734 does not mean that the UM coverage is therefore equal
    to the policy’s bodily injury limits. However, that argument ignores Pennsylvania law.
    For example, in Motorists Ins. Co. v. Emig, 
    664 A.2d 559
     (Pa.Super. 1995), the
    Pennsylvania Superior Court quoted approvingly from our decision in Nationwide Ins.
    Co. v. Resseguie, 
    980 F.2d 226
    , 231 (3d Cir. 1992):16
    15
    Our holding does not, of course, mean that Cook receives a “windfall.” He must
    still prove damages. The higher policy limit obviously does not entitle him to
    compensation for damages that he cannot prove.
    16
    In Resseguie, Marian Resseguie was the sole insured under the policy. Her
    husband, who was listed as a driver under the policy but was not listed as the insured,
    orally requested the insurer to reduce UIM coverage from $50,000, the bodily injury
    liability limits, to $15,000. 
    980 F.2d at 228
    . Following the request, a secretary for
    Nationwide’s agent wrote out a customer service request form reflecting Resseguie’s
    husband’s request. 
    Id.
     In response to this form, Nationwide mailed Marian Resseguie a
    new declarations page reflecting the reduction and advised her that a credit for the
    reduction had been applied to the premium balance. 
    Id. at 228-29
    . Marian Resseguie
    continued to pay the premiums reflecting the reduced UIM coverage for four years. 
    Id.
     at
    (continued...)
    21
    [Section] 1734’s language is plain and the Pennsylvania General
    Assembly’s intention is clear. By its terms, a named insured may lower her
    statutorily provided UIM coverage limits by requesting in writing of her
    insurer to do so. The insurance company’s obligation to issue a policy with
    UIM coverage in an amount equal to the policy’s bodily liability coverage
    is not relieved unless it has received such a written request.
    Emig, 
    664 A.2d at 563
    . Moreover, the Pennsylvania Superior Court has reaffirmed this
    principle. It has reiterated that if the request for lower limits is not made in writing, then
    “(1) the lower limits allegedly selected by the insured are a nullity; and (2) UM/UIM
    coverage is deemed to be equivalent to the bodily injury liability limits.”17 Nationwide
    Mut. Ins. Co. v. Heintz, 
    804 A.2d 1209
    , 1216 n.7 (Pa.Super. 2002) (citing Emig).
    16
    (...continued)
    229. However, it was undisputed that Marian Resseguie never personally requested either
    orally or in writing, that Nationwide lower her UIM coverage. 
    Id.
     It was also undisputed
    that she never authorized or directed her husband to do so. 
    Id.
    The husband was killed in an automobile accident with a drunk driver. 
    Id.
     Marian
    Resseguie recovered the limits of the tortfeasor’s liability policy; however, that recovery
    was insufficient to cover her losses or the estate’s losses. 
    Id.
     Therefore, she requested
    the higher UIM limits under the policy. Once Nationwide learned of her request, it
    initiated a declaratory judgment action in the District Court seeking a determination that
    her UIM coverage was limited to $15,000. 
    Id.
    The District Court found that the MVFRL statutory scheme is clear. It held:
    “Section 1734 requires the named insured to request in writing that the limits of her
    coverage be lowered. Short of a written request by Marian Resseguie for the lower
    coverage, . . . Nationwide simply was not authorized to alter her policy.” 
    782 F.Supp. 292
    , 294 (M.D.Pa. 1992).
    We agreed with this holding. However, because the precise issue had not been
    decided by the state’s highest court, we had to predict whether the Pennsylvania Supreme
    Court, if it were deciding the case, would come to the same conclusion. We had no
    difficulty in predicting that it would. 
    980 F.2d at 231-32
    .
    17
    Because Fire & Casualty never received a request in writing from the insured to
    reduce UM coverage to $35,000, it had no authority to issue the endorsement indicating
    that UM coverage was limited to $35,000.
    22
    Undeterred, Fire & Casualty presses on and cites language from a footnote from
    the Pennsylvania Supreme Court’s decision in Lewis:
    Since our present reasoning concerns the non-applicability of the technical
    requirements of Section 1731(c.1) in a specific-limits paradigm, we do not
    consider the availability and extent of a remedy for an actual violation of
    the written-request requirement of Section 1734. We do note, however,
    that such prescription is less technical in nature, and more directly in line
    with the traditional application of ordinary contract principles in the
    consumer insurance area, that Section 1731(c.1)’s separate-page
    requirement.
    Lewis, 793 A.3d at 155 n.17 (citations omitted). In Fire & Casualty’s view, this footnote
    means that the District Court here could only “reform” the policy under traditional
    contract principles.
    The argument is without merit for the reasons we have discussed. The District
    Court did not “reform” the policy at all. Indeed, Cook never asked for reformation.
    Cook simply asked the District Court to apply § 1734 to this policy and determine if
    Atlantic Express satisfied the statutorily prescribed method for reducing its coverage. It
    is clear that Schlenker never asked for reduced UM limits in writing as required by §
    1734. That is all the District Court determined, and under § 1734 that is all it had to
    determine. The District Court simply enforced the contract as written.18
    VI.
    18
    We must confess that we are somewhat hard-pressed to grasp the import of the
    Pennsylvania Supreme Court’s footnote in Lewis because we find it difficult to
    understand how traditional contract principles apply when the issue is one of statutory
    compliance.
    23
    For all of the above reasons, we will affirm the District Court.19
    19
    Fire & Casualty contends that the primary public policy behind the enactment of
    the MVFRL was one of cost-containment and that by enacting the MVFRL, the
    legislature sought to control the spiraling costs of automobile insurance. See, e.g.,
    Burstein v. Prudential Prop. & Cas. Ins. Co., 
    809 A.2d 204
    , 207 (Pa. 2002) (Nothing that
    “[w]hile . . . other public policies may underlie the MVFRL, the legislative concern for
    the spiraling consumer cost of automobile insurance is its dominant and overarching
    public policy.”) (citation and internal quotations omitted). It then submits that when the
    District Court “erroneously reformed the policy,” the District Court essentially gave
    Atlantic Express $965,000 in free UM coverage which will be passed on to all other
    insureds in the Commonwealth. Fire & Casualty’s Br. at 57. In Fire & Casualty’s view,
    this result “flies directly in the face of the public policy underlying the creation of the
    MVFRL.” Id. at 57-58.
    We are unpersuaded by this argument. As we have already held, the District Court
    did not reform the policy. Moreover, a similar public policy argument has been rejected
    by the Pennsylvania Superior Court. See Emig, 
    664 A.2d at 567-568
    .
    24
    Fire & Casualty Company of Connecticut v. Mason Cook, No. 04-2564
    Weis, Circuit Judge, Dissenting.
    This is an unusual case even in the context of the confusing and often
    inconsistent court rulings on the Pennsylvania Motor Vehicle Financial
    Responsibility Law (“MVFRL”), 75 Pa. C.S.A. § 1701 et seq. In this case, a
    fortuitous additional insured seeks to void a coverage declaration in an
    insurance policy. He relies on a formalistic ground that the named insured
    does not espouse but instead, apparently, opposes.
    The case of the additional insured, Mason Cook, rests on two theories.
    First, he contends that the declaration in the policy accepted by the named
    insured, Atlantic Express Transportation Group, setting the limits for
    uninsured motorist coverage of $35,000 is ineffective. He argues that result
    obtains because in negotiations leading to the placement of the policy,
    Atlantic Express did not comply with section 1734 of the MVFRL, which
    allows a named insured to request reduced uninsured coverage. 75 Pa.C.S.A.
    § 1734.
    Second, Cook argues, implicitly, that as an additional insured, he has
    standing to raise the issue of noncompliance by the named insured. I will
    address this contention first.
    25
    Atlantic Express is a sophisticated business enterprise that owns or
    leases approximately 5,800 vehicles in its nationwide fleet. Through its
    broker in New Jersey, Atlantic Express secured a policy from Fire &
    Casualty Company of Connecticut that was delivered to Atlantic Express’
    office in New York.20 Before the broker placed the insurance, an Atlantic
    Express officer signed a printed application form indicating the desired
    coverages. The portion of the form dealing with the amount of underinsured
    coverage indicated that $35,000 was desired. Immediately above was
    another block for uninsured coverage. It was blank; the record does not
    disclose whether that was the result of a typographical error or oversight in
    the process of completing the form.
    The policy as issued provided bodily injury liability coverage in the
    amount of $1 million. Included was a declaration referring to an
    20
    Under Pennsylvania law, an insurance policy should be interpreted in
    accordance with the law of the state where the policy was delivered. Crawford v.
    Manhattan Life Ins. Co., 
    221 A.2d 877
    , 880-81 (Pa. Super. Ct. 2001). Because we sit in
    diversity, we apply the choice of law rules of the forum state. Shuder v. McDonald’s
    Corp., 
    859 F.2d 266
    , 269 (3d Cir. 1988).
    In this instance, the policy was delivered in New York which suggests that New
    York law should be consulted for our inquiry. However, both parties conclude that there
    is no significant difference between New York and Pennsylvania law on contract
    interpretation and construction.
    Because both parties agree that application of the laws of New York and
    Pennsylvania would yield similar results, as the majority has done, I will focus my
    analysis on Pennsylvania’s law. This is appropriate because a Pennsylvania statute is at
    issue.
    26
    endorsement setting uninsured coverage at $35,000. This policy was in effect
    on the date of Mr. Cook’s accident.
    Although the application form contained no information about
    inclusion of uninsured coverage, the District Court found as a fact that the
    parties, Atlantic Express and Fire & Casualty, intended uninsured coverage
    limits of $35,000 to be in effect. Fire Cas. Co. of Conn. v. Cook, 
    2004 WL 945138
    , at *3 (E.D. Pa. Apr. 29, 2004) (noting that “plaintiff has established
    that it was the insured’s intention to request reduced UM coverage limits.”).
    There is no dispute that the policy as written and delivered, conformed to
    Atlantic Express’ desires and Fire & Casualty’s understanding.21
    Fire & Casualty argues that the correspondence between the broker
    and insurance carrier, before the policy was issued, was adequate to
    constitute a request for reduced coverage made by Atlantic Express in
    compliance with section 1734 of the MVFRL. 75 Pa.C.S.A. § 1734. Cook
    denies that those documents met the statutory requirement of a writing signed
    by the named insured; therefore, he argues that the coverage limits defaulted
    to the applicable bodily injury liability limits of $1 million.
    21
    In a deposition, the broker pointed out that if Atlantic Express had
    wanted its uninsured coverage to be the same as its liability limits
    of $1 million, an additional premium of $435,000 would have been
    required.
    27
    Cook does not have standing to challenge the alleged noncompliance
    of the named insured. He had nothing to do with the negotiations for the
    policy. He had nothing to say about the limits of the coverage and would not
    have been consulted if Atlantic Express decided to cease paying the
    premiums, or if it determined to cancel the policy in whole or in part. He had
    no knowledge of the parties’ intent other than the policy declaration setting
    $35,000 as the limit for uninsured coverage. Cook’s accident triggered his
    rights under the policy and those rights were defined by the written terms as
    they existed at that point.
    The status of an additional insured differs from that of a named
    insured. As the Superior Court of Pennsylvania held,
    “an injured person who makes a claim for uninsured motorist
    benefits under a policy to which he is not a signatory is in the
    capacity of a third-party beneficiary . . . third-party
    beneficiaries are bound by the same limitations in the contract
    as the signatories of that contract. The third-party beneficiary
    cannot recover except under the terms and conditions of the
    contract from which he makes a claim.”
    General Accident Ins. Co. of American v. Sharp, 
    665 A.2d 502
     (Pa. Super.
    Ct. 1995).
    28
    The Supreme Court of Pennsylvania expressed the same approach in
    Johnson v. Pennsylvania National Ins. Cos., 
    594 A.2d 296
    , 298 (Pa. 1991),
    concluding that an additional insured is “in the category of a third party
    beneficiary. Historically, this Court has held that third party beneficiaries are
    bound by the same limitations in the contract as the signatories of that
    contract.” See also Been v. Empire Fire & Marine Ins. Co., 
    751 A.2d 238
    (Pa. Super. Ct. 2000) (barring an additional insured’s claim as a result of a
    rejection of coverage by the named insured.); Kimball v. Cigna Ins. Co., 
    660 A.2d 1386
     (Pa. Super. Ct. 1995) (concluding that a daughter who was not a
    named insured at the time her mother requested reduced coverage but who
    subsequently became a named insured was bound by her mother’s election).
    Statutory requirements also affect the relationship between a named
    insured and an additional insured. Before 1990, insurance companies were
    required to provide uninsured coverage, but that mandate was changed to an
    option by amendments to the MVFRL. Act of Feb. 12, 1984, P.L. 26, No.
    11, § 3, repealed by Act of Feb. 7, 1990, P.L. 11, No. 6. 75 Pa.C.S.A. §
    1731(a) now requires only that insurers must “offer” uninsured coverage.
    “Purchase of uninsured motorist and underinsured motorist coverage is
    optional.” 75 Pa.C.S.A. § 1731(a). As the Pennsylvania Supreme Court
    explained, the General Assembly’s decision to make “the purchase of UM
    29
    and UIM coverage optional although insurers remained obligated to offer the
    coverage” was “designed to enhance the ability of insurers to control costs.”
    Lewis v. Erie Insurance Exchange, 
    793 A.2d 143
    , 150-51 (Pa. 2002).
    This statutory shift from mandated to optional coverage is the
    background against which the section 1734 “request in writing” provision
    must be read.
    In Nationwide Ins. Co. v. Buffetta, 
    230 F.3d 634
     (3d Cir. 2000), we
    noted the significant change in the MVFRL; we stated that “Section 1734
    provides that ‘a named insured may request in writing . . .’” reduction below
    the liability limits. 
    Id. at 639
     (emphasis in original). We also noted that
    “the statute, by its terms, does not require anything to be done
    by an insurer to permit the reduction in the amount of UIM
    coverage under a policy. . . . Unlike section 1731 [which
    applies to a complete rejection of coverage], section 1734 does
    not dictate that the opportunity for reduction, or a form to that
    effect be presented when a policy is issued. It merely provides
    that a reduction of this kind may be accomplished, but only by
    a writing which constitutes a request by a named insured.”
    
    Id.
     Further, we stated, “[t]he statute is written in permissive terms leaving it to
    a named insured who may request reduced coverage.” 
    Id. at 641
    .
    30
    Section 1734 does not use the word “shall” or “must,” nor does the
    MVFRL state that in the absence of a writing, the insurer “must” issue
    uninsured coverage at the liability limits. The amendments to the MVFRL
    might have been more specifically drawn, but the optional nature of uninsured
    coverage is clear. The purpose of a writing is to protect both the named insured
    and the insurer against disputes about the uninsured coverage. A writing
    obviously could forestall debate over what coverage was desired or offered.
    In this case, the intention of the parties to the policy is not disputed. It
    is inconsistent for the additional insured, a third-party beneficiary, to have the
    right to override the determination of what coverage the named insured wished
    to provide and pay for. To grant such power in the presence of opposition by
    the named insured gives the additional insured rights superior to those of the
    named insured.
    The Supreme Court of Pennsylvania has a similar view in observing that
    the additional insured “has paid neither premiums nor any consideration for the
    benefits of this insurance policy. As such, it seems inequitable to permit [the
    additional insured] to pick and choose those contract provisions she prefers
    while not granting that same latitude to the named insured.” Johnson, 594 A.2d
    at 299.
    My research has not revealed any appellate case under the MVFRL that
    31
    extends standing to an additional insured to claim coverage for additional
    benefits despite a contrary position taken by the named insured. It is worth
    noting once again that section 1734 is directed only to the “named insured,” not
    an additional insured. To require notice to, or consent by, an additional insured
    under a large fleet policy for coverage decisions made by the named insured
    would be impractical and undesirable.
    In the cases relied upon by Cook, the challenge to compliance with the
    statute was made by the named insured. See Nationwide Ins. Co. v. Resseguie,
    
    980 F.2d 226
     (3d Cir. 1992); Motorists Ins. Cos. v. Emig, 
    664 A.2d 559
     (Pa.
    Super. Ct. 1995); Hayes v. Harleysville Mutual Ins. Co., 
    841 A.2d 121
     (Pa.
    Super. Ct. 2004). In those cases the named insured capitalized on mistakes
    made by the insurer or its agents, or relied on the lack of a signature by the
    named insured. That is not the case here.
    Cook relies heavily on Peele v. Atlantic Express Transportation Group,
    Inc., 
    840 A.2d 1008
     (Pa. Super. Ct. 2003). There, the court held that the word
    “statutory” used in a binder written by an insurance company meant that the
    limits of the uninsured/underinsured coverage were the same as those of the
    liability limits, rather than the lower limits intended by the named insured.
    Peele is distinguishable in several aspects. First, it involved a binder providing
    interim   insurance    that   did   not    specify   the   monetary   limits   on
    32
    underinsured/uninsured coverage. That is a significant difference from the
    situation where a policy was issued, clearly stating the monetary limits. In Peele
    the accident occurred while the binder was in effect and had not yet been
    superseded by the policy. In this case, the policy had been delivered and was in
    effect before Cook’s accident.
    Moreover, the Peele Court did not discuss the fact that the named insured
    had   not      challenged   the   insurer’s   claim    that   lower   limits   of
    underinsured/uninsured coverage were desired. Peele also seemingly did not
    consider that the named insured was a large, highly sophisticated entity, and the
    negotiations for placement of a policy were quite unlike the purchase by average
    individuals.
    I conclude that the stated limits of $35,000 in the policy apply to the
    dispute here and therefore the judgment of the District Court should be reversed.
    As an alternate ground for reversal, I call attention to the Pennsylvania
    Supreme Court cases that held that there is no provision for reformation of a
    policy for certain violations of the MVFRL. See Salazar v. Allstate Ins. Co.,
    
    702 A.2d 1038
     (Pa. 1997); Donnelly v. Bauer, 
    720 A.2d 447
     (Pa. 1998).
    In Salazar, the insurance company failed to give notice to the named
    insured upon renewal of the policy that her previous rejection of uninsured
    33
    coverage would continue. The Court held that section 1791.1 of the MVFRL
    required such notification, but provided no express remedy. Accordingly, the
    insurance company was not required to grant coverage to an additional insured.
    In the Court’s view, the legislature had not provided any enforcement
    mechanism for noncompliance with the statute. Salazar, 702 A.2d at 1044.
    Donnelly was concerned with a statutory notification of full tort and
    limited tort options under section 1791.1 of the MVFRL. Although the insureds
    had selected the limited tort option, they sought to obtain full tort benefits after
    an accident on the ground that the notice they had received was incomplete. The
    Pennsylvania Supreme Court concluded that the notice was not in accord with
    the statute, but that no remedy was available. Donnelly, 720 A.2d at 454.
    The Court explained that its ruling was supported by the policy
    underlying the enactment of the MVFRL to “stem the rising cost of insurance.
    . . .” Id. In originally making their choice, the insureds received a “greater
    reduction in their premiums . . . . If this Court were to fashion a remedy not
    expressly provided for in the MVFRL, this Court would essentially contravene
    the cost containment policy behind the MVFRL because allowing [the insureds
    what] they seek would result in giving [them] something for which no individual
    has paid, which in turn, would result in insurance companies passing on this
    extra cost to all other insureds.” Id.; see also Nationwide Mutual Ins. Co. v.
    34
    Heintz, 
    804 A.2d 1209
     (Pa. Super. Ct. 2002) (concluding that there is no remedy
    for noncompliance with notice requirement of MVFRL section 1791).
    In Lewis v. Erie Insurance Exchange, 
    793 A.2d 143
     (Pa. 2002), the
    named insured and the additional insured contended that a request for reduced
    uninsured coverage had been improperly included on an “outright” rejection
    form. The Court concluded that no specific form for reducing coverage was
    required by the statute. Lewis, 793 A.2d at 155.
    In Peele, the Court granted the additional insured coverage equivalent to
    that of the liability limits. The Court denied that it was “reforming” the policy,
    but was simply applying its terms. That is quite different from the situation here
    where the District Court changed the written term of the policy to substitute “$1
    million for $35,000 coverage.” That is reformation, not simply interpretation.
    The Pennsylvania Supreme Court made clear in Salazar and Donnelly
    that in enacting the MVFRL the Pennsylvania legislature was concerned not
    only with providing the average insurance consumer adequate information to
    make an informed choice, but also with halting the spiraling insurance costs in
    the state that affect everyone. Neither of those objectives will be met in this
    case by a formalistic ruling which imposes terms on the named insured and the
    insurer which they never intended or agreed upon. The Lewis Court stated that
    35
    cost containment has been increasingly significant and the “General Assembly
    has been employing the vehicles of free consumer choice with greater latitude
    and frequency in furtherance of this objective.” Lewis, 793 A.2d at 154. The
    majority’s ruling here does not meet that aim.
    I would reverse the Judgment of the District Court and enter Judgment
    in favor of the plaintiff.
    36