Matthews, J. v. Erie Insurance Group ( 2021 )

J-A26006-20
2021 PA Super 6JASON MATTHEWS : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellant :
:
:
v. :
:
:
ERIE INSURANCE GROUP : No. 754 EDA 2020
Appeal from the Order Entered January 24, 2020
In the Court of Common Pleas of Philadelphia County Civil Division at
No(s): No. 190607272
BEFORE: BENDER, P.J.E., LAZARUS, J., and STEVENS, P.J.E.*
OPINION BY BENDER, P.J.E.: FILED JANUARY 12, 2021
Appellant, Jason Matthews, appeals from the trial court’s order
sustaining Appellee’s, Erie Insurance Group (“Erie”), preliminary objections to
venue, and transferring the matter from the Court of Common Pleas of
Philadelphia County to the Court of Common Pleas of Bucks County. 1 We
affirm.
The trial court summarized the background of this case as follows:
This matter arises from an April 15, 2017[] motor vehicle accident.
Appellant … was operating a motor vehicle insured by [Erie],
under a policy issued to Ion Construction, Inc. [Appellant] was a
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* Former Justice specially assigned to the Superior Court.
1 “An appeal may be taken as of right from an order in a civil action or
proceeding changing venue, transferring the matter to another court of
coordinate jurisdiction, or declining to proceed in the matter on the basis of
forum non conveniens or analogous principles.” See Pa.R.A.P. 311(c).
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named insured under the policy.[2] [Appellant] asserts that Ion
Construction, Inc., never rejected underinsured motorist (“UIM”)
coverage, and therefore the policy should be reformed to include
UIM benefits.
The original complaint in this non-jury action was filed [on] June
27, 2019.
On August 22, 2019, a declaratory judgment action relating to this
same matter was filed in the Bucks County Court of Common Pleas
(Case No. 2019-05936).
On November 25, 2019[,] Erie filed timely preliminary objections
to [Appellant’s] Third Amended Complaint, seeking, inter alia,
transfer of the case to the Bucks County Court of Common [Pleas]
due to improper venue.
On January 24, 2020, upon consideration of Erie’s preliminary
objections, [Appellant’s] response thereto, a reply and sur[-
]reply, the court sustained the preliminary objections to venue
and transferred the case to the Bucks County Court of Common
Pleas, reserving the other preliminary objections for determination
by that court.
[Appellant] filed a timely notice of appeal on February 20, 2020.[3]
Trial Court Opinion (“TCO”), 5/22/20, at 1-2.
In sustaining Erie’s preliminary objections as to venue and transferring
the matter to Bucks County, the trial court discerned that reformation of the
contract to provide for UIM coverage must also include the forum selection
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2 This is a misstatement. Appellant “was operating a vehicle listed on a policy
of insurance issue[d] to non-party, Ion Construction, Inc., as the sole named
insured.” Erie’s Preliminary Objections to Third Amended Complaint,
11/26/19, at ¶ 2 (citation omitted); Appellant’s Response to Erie’s Preliminary
Objections, 12/2/19, at ¶¶ 1-8 (admitting this allegation); see also id. at ¶
15 (admitting that the named insured on the at-issue policy was Ion
Construction, Inc., which is headquartered in Bucks County).
3 The trial court did not order Appellant to file a concise statement of errors
complained of on appeal pursuant to Pa.R.A.P. 1925(b).
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provisions that would have accompanied such coverage in the absence of an
invalid waiver. TCO at 2.4 The trial court also considered that a declaratory
judgment action relating to this same matter was being litigated in the Bucks
County Court of Common Pleas, and noted the risk of inconsistent rulings. Id.
at 3.
Presently, Appellant raises a single issue for our review:
[W]hether the trial court erred or otherwise abused its discretion
when it ruled that [Erie] could enforce a forum selection clause to
transfer venue that uncontrovertibly was not contained in the
original insurance contract without any legal authority to support
a reformation of the contract to include such a clause.
Appellant’s Brief at 5.
At the outset, we acknowledge:
[A] trial court’s decision to transfer venue will not be disturbed
absent an abuse of discretion. An abuse of discretion occurs when
the trial judge overrides or misapplies the law, or exercises
judgment in a manifestly unreasonable manner, or renders a
decision based on partiality, prejudice, bias, or ill-will.
Additionally, a plaintiff’s choice of forum is to be given great
weight, and the burden is on the party challenging the choice to
show it was improper[;] … however, a plaintiff’s choice of venue
is not absolute or unassailable. If there exists any proper basis
for the trial court’s decision to grant a petition to transfer venue,
the decision must stand.
Bilotti-Kerrick v. St. Luke’s Hosp., 873 A.2d 728, 729-30 (Pa. Super. 2005)
(internal citations and quotation marks omitted).
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4 Specifically, in Erie’s preliminary objections, it stated that, had Ion
Construction, Inc., elected UIM benefits, a forum selection clause would have
provided that Appellant must bring suit in a court of competent jurisdiction in
the county and state of Ion Construction, Inc.’s legal domicile at the time of
the accident, which was Bucks County. See Erie’s Preliminary Objections to
Appellant’s Third Amended Complaint at 4-5.
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Appellant’s arguments center around 75 Pa.C.S. § 1731, which provides
in relevant part, the following:
(a) Mandatory offering.--No motor vehicle liability insurance
policy shall be delivered or issued for delivery in this
Commonwealth, with respect to any motor vehicle registered or
principally garaged in this Commonwealth, unless uninsured
motorist and underinsured motorist coverages are offered therein
or supplemental thereto in amounts as provided in section 1734
(relating to request for lower limits of coverage). Purchase of
uninsured motorist and underinsured motorist coverages is
optional.
***
(c) Underinsured motorist coverage.--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 therefor from owners or
operators of underinsured motor vehicles. The named insured
shall be informed that he may reject underinsured motorist
coverage by signing the following written rejection form….
(c.1) Form of waiver.--Insurers shall print the rejection forms
required by subsections (b)[, which pertains to uninsured motorist
coverage,] 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. On policies in which either uninsured or
underinsured coverage has been rejected, the policy renewals
must contain notice in prominent type that the policy does not
provide protection against damages caused by uninsured or
underinsured motorists. Any person who executes a waiver under
subsection (b) or (c) shall be precluded from claiming liability of
any person based upon inadequate information.
75 Pa.C.S. § 1731 (emphasis added).
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Appellant argues that reformation of the contract to include UIM benefits
is the sole remedy for failure to comply with Section 1731(c.1), and asserts
that Section 1731(c.1) does not permit Erie to include additional contractual
provisions that had not been contained in the original insurance policy, such
as its forum selection clause. Appellant’s Brief at 13, 14. Appellant contends
that “[t]here is no authority in Pennsylvania whatsoever for the inclusion of
any other language, provisions, clauses or coverages to be retroactively
included in a policy of insurance to remedy the failure of an insurer to produce
a validly signed UIM rejection form.” Id. at 13. In support of his argument,
he cites to the case DeSilva v. Kemper Nat’l Ins. Co., 837 F.Supp. 98 (E.D.
Pa. 1993), explaining that the court in that case rejected the plaintiff’s
argument that, even though the original policy at issue did not have an
arbitration clause, the policy should be reformed to include an arbitration
clause because the defendant’s “standard” provision for UIM coverage would
have contained one. See Appellant’s Brief at 14-15.5 Here, Appellant says
that Erie sets forth an argument similar to the plaintiff’s rejected claim in
DeSilva; that is, because Appellant is seeking reformation of the policy to
include UIM coverage under Section 1731(c.1), venue should be transferred
to Bucks County, as Erie’s standard UIM Endorsement, which was not
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5We are not bound by DeSilva. See, e.g., Efford v. Jockey Club, 796 A.2d
370, 374 (Pa. Super. 2002) (noting that decisions of the federal district courts
are not binding on Pennsylvania courts) (citation omitted).
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contained in the original policy, would have had a forum selection clause
requiring Appellant to file suit in Bucks County. Id. at 15-16.
In addition, Appellant contends that “the trial court’s decision in
essentially reforming the subject contract to include the forum selection clause
… was completely premature since any argument that a UIM endorsement
should be included in the subject contract would only … be ripe once there
was reformation to actually include the UIM coverage.” Id. at 17
(emphasis in original). He claims that, “[s]hould the trial court ultimately
determine that UIM coverage should not be afforded, any argument about the
inclusion of a UIM endorsement is moot. In fact, if there is determination that
there is no UIM coverage, the underlying case is over.” Id. Appellant also
complains that, “[d]espite acknowledging that the requirement for
reformation of an insurance contract in the case of an invalid UIM waiver is
dictated by Section 1731(c.1), the trial court applied common law equity to
its decision to reform the policy to include [Erie’s] proposed forum selection
clause.” Id. He advances that “[a]rbitrarily deciding that common law
reformation to include [Erie’s] proposed forum selection clause is warranted
prior to an actual determination that UIM coverage exists, and using that
clause to form the basis for a transfer of venue to Bucks County[,] is
improper.” Id. at 19. Finally, Appellant maintains that “venue in Philadelphia
County is appropriate as [Erie] regularly conducts business in Philadelphia[,]
and there is no forum selection clause contained in the applicable policy that
would mandate that the case be transferred to Bucks County.” Id.
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In determining that the case should be transferred to Bucks County, the
trial court explained:
Assuming, as we must for the purposes of these preliminary
objections, that [Appellant] is correct that there was no valid
waiver of UIM coverage by Ion Construction, Inc., this case
presents the question of whether reformation of the contract to
provide for such coverage must also include the forum selection
provisions which would have accompanied such coverage in the
absence of a waiver.
While the requirement for reformation of the contract in the case
of an invalid waiver is dictated by statute (75 Pa.C.S. §
1731(c.1)), the remedy of reformation remains essentially an
equitable one: “[A]n action for reformation which calls for the
court to use its equitable powers, not to compel performance of
the existing contract, but to reform the contractual memorandum
to conform to the true intention of the parties…[.]” Turner v.
Hosteler, … 518 A.2d 833[, 836 n.1] (Pa. Super. 1986).
Here, [Appellant] seeks to have his cake of UIM coverage, and eat
it, too, by avoiding the forum selection requirement that would
have accompanied such coverage in the absence of the invalid
waiver. Even accepting the facts averred in [Appellant’s] third
amended complaint as true, there is no basis from which to
conclude that Erie engaged in misconduct regarding the UIM
waiver. Rather, if there was an invalid waiver, it appears to have
been the fruit of conflating policies involving two companies with
similar names and related principles [sic] with the same last name
and intertwined business relationships, served by the same
insurance broker: Ion Construction, Inc., whose single member is
Alexander Matthews ([Appellant’s] son, who was also an
independent contractor for Ion Construction, LLC), and Ion
Construction, LLC, whose single member is Jason Matthews, the
instant [Appellant] (who is also an employee of Ion Construction,
Inc.).
The matter is further complicated by the risk of inconsistent
rulings. There is an existing declaratory judgment action in the
Bucks County Court of Common Pleas, involving the very policy
and UIM coverage at issue in this case.
Under all these circumstances, interaction of the UIM statute, the
principles of reformation and the rules of civil procedure relating
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to venue,1 require restoring the parties to where they would have
been absent the UIM waiver, which is deemed invalid for the
purposes of preliminary objections. That restored status includes
the forum selection clause that would have accompanied the UIM
coverage. Accordingly, transfer to Bucks County was appropriate.
1 Pursuant to Pa.R.C[].P. 1006(e), claims of improper venue
are raised by preliminary objection, which if sustained,
result in transfer to a county of proper venue, if available.
See Pa.R.C[].P. 2179(b).
TCO at 2-3 (internal citation omitted).
In addition to the trial court’s reasoning, we find persuasive Erie’s
argument that,
Appellant’s position strives to provide greater coverage to
individuals that didn’t purchase … UIM coverage than to those that
did. Specifically, Appellant does not dispute that the standard Erie
… UIM endorsement contains a forum choice selection clause that
limits venue to the location where the named insured resides.
Thus, for individuals that do purchase … UIM coverage, venue is
so limited. Appellant’s position urges greater benefits to
individuals that don’t purchase … UIM coverage, but nevertheless
argue, whether successfully or not, that they are entitled to same
because they allegedly requested it and intended for it to be a part
of the policy. This yet again underlines the impropriety of
Appellant’s argument herein, as the trial [c]ourt properly
recognized.
Erie’s Brief at 14-15 (emphasis in original). Erie also discerns that, if
Appellant’s position were accepted, “[t]he policy would simply provide … UIM
coverage without provisions as to whom said coverage is provided, under what
circumstances, within which limitation and subject to what conditions.” Id. at
14. Erie says this position would lead to “unfettered coverage” and absurd
results. Id. at 13. It maintains that “there is no dispute that if the policy
were to be reformed, it would include a forum selection clause which would
require the matter to be litigated in Bucks County[,]” and insists that “if any
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contract is to be reformed, it must be subject to the terms and provisions as
the parties would have intended.” Id. at 7.6 Erie says that, “[g]iven that
Appellant’s position is that he is entitled to … UIM coverage under the subject
Erie policy, he must be bound by the forum choice selection clause associated
with such coverage.” Id. at 17 (emphasis in original).
Pursuant to the applicable standard of review and based on the
arguments before us, Appellant has not convinced us that the trial court
abused its discretion in transferring the case to Bucks County. The trial court
provided a rational explanation for its determination, and Erie proffers
compelling reasons for why the trial court’s decision should stand.
Furthermore, Appellant does not point us to, and discuss, any authority to
demonstrate that the trial court committed legal error in reaching its decision,
aside from Section 1731 and DeSilva, which is not binding on us.7
Section 1731(c.1) sets forth that a non-compliant UIM rejection form is
void and, in the event of an invalid waiver, UIM coverage shall be equal to the
bodily injury liability limits under the policy; thus, nothing on the face of the
statute precludes the trial court from reforming the policy in other ways. Here,
Appellant claims that Ion Construction, Inc., did not validly waive UIM
coverage. As such, the trial court reformed the policy to provide Ion
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6 Erie also discerns that Appellant does not challenge that forum selection
clauses are permitted in insurance policies. Erie’s Brief at 10 n.4.
7 Under the circumstances of this case, we decline to follow DeSilva.
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Construction, Inc., with the UIM benefits it would have otherwise received —
which would have included the at-issue forum selection clause.8
We also reject Appellant’s argument that the trial court’s decision to
transfer venue was premature because it had not yet determined if UIM
coverage should even be afforded to Appellant. Initially, Appellant does not
indicate where he raised this argument below, and our review of the record
does not demonstrate that he did so. See Pa.R.A.P. 2117(c) (requiring, where
an issue is not reviewable on appeal unless raised or preserved below, a
statement of place of raising or preservation of issues); Pa.R.A.P. 2119(e)
(“Where under the applicable law an issue is not reviewable on appeal unless
raised or preserved below, the argument must set forth, in immediate
connection therewith or in a footnote thereto, either a specific cross-reference
to the page or pages of the statement of the case which set forth the
information relating thereto as required by Pa.R.A.P. 2117(c), or substantially
the same information.”); Pa.R.A.P. 302(a) (“Issues not raised in the trial court
are waived and cannot be raised for the first time on appeal.”). “Our appellate
courts have long held that an [appellant] who does not follow Pa.R.A.P.
2117(c) and Pa.R.A.P. 2119(e) waives the related issues due to the defects in
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8 Again, Appellant makes no argument in his brief challenging Erie’s claim that
its standard UIM endorsement contains a forum selection clause that limits
venue to the location where the named insured resides. See In re
M.Z.T.M.W., 163 A.3d 462, 465 (Pa. Super. 2017) (“It is well-settled that this
Court will not review a claim unless it is developed in the argument section of
an appellant’s brief, and supported by citations to relevant authority.”)
(citations omitted).
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his brief.” Young v. S.B. Conrad, Inc., 216 A.3d 267, 274 (Pa. Super. 2019).
“[I]t is not the responsibility of this Court to scour the record to prove that an
appellant has raised an issue before the trial court, thereby preserving it for
appellate review.” Commonwealth v. Baker, 963 A.2d 495, 502 n.6 (Pa.
Super. 2008) (citations omitted). Nevertheless, even if not waived, it makes
sense to transfer the matter now in the interests of judicial economy.
Moreover, Appellant does not address the trial court’s concern about
inconsistent rulings, given that an action regarding the same legal issue is
being litigated in Bucks County.9 Accordingly, based on the foregoing, we
affirm the trial court’s order.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 1/12/2021
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9 See In re M.Z.T.M.W., supra.
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