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The Superior Court has refused to award uninsured motorist benefits to the estate of a dead man, even though the insurance company he was covered under could not produce a signed notice form, because the relevant statute doesn’t provide a remedy. The court, citing prior case law, focused on the fact that the section of law requiring the notice provides no remedy if a company fails to comply. Because the man’s father – under whose policy he was covered – signed a waiver of UM benefits and paid lower premiums, the court said it could not suddenly reward the estate with UM benefits absent a specific remedy in the statute. The unanimous panel’s decision in Allstate Insurance Co. v. DeMichele appears to follow prior Superior and state Supreme Court decisions in which the courts have been very reluctant to provide or carve out remedies, even when the insurance companies haven’t followed the statutory requirements. Under the Motor Vehicle Financial Responsibility Law Section 1791, an “important notice” must be signed by the policyholder to signify that any waivers were knowingly and intelligently made, according to the opinion. “Based on our review of the applicable case law, we conclude that the relevant inquiry is whether Section 1791 provides a remedy for a failure to comply with its directives,” Judge Debra M. Todd said in the opinion. “Because we conclude it does not, DeMichele cannot avoid enforcement of his Section 1731 UM rejection based on Allstate’s failure to comply with the requirements of Section 1791.” In Allstate, Albert J. DeMichele waived UM coverage under his policy with Allstate Insurance in 1990. His son was killed in an accident in 2002 when an uninsured motorist struck their car. DeMichele’s claim for UM benefits was denied. DeMichele argued that without the signed “important notice,” he was entitled to the maximum allowable benefits regardless of the fact that he waived UM benefits. Allstate argued the signed waiver was enough to preclude a claim for UM benefits, and said its compliance with Section 1791 was immaterial to the issue of waived coverage. Westmoreland County Common Pleas Court Judge Gary P. Caruso disagreed and awarded summary judgment in favor of DeMichele. The Superior Court reversed. Todd, who was joined by Judges John L. Musmanno and Mary Jane Bowes, relied on several past state and federal court rulings that dealt with Section 1791. In the 1997 case Salazar v. Allstate Insurance Co., Allstate failed to comply with 1791.1, the “disclosure of premium charges and tort options.” The court, in Salazar, agreed with a 1995 and 1996 case from the federal district courts, Estate of Franks v. Allstate Insurance Co. and Maksymiuk v. Maryland Cas. Ins. Co., respectively, Todd said. “While we recognize that Section 1791.1 requires that an insurer must provide specific information to the insured at the time of renewal, the legislature has not provided in the MVFRL any enforcement mechanism regarding this requirement,” the court wrote in Salazar. Todd then looked at two other Superior Court cases. In the 2002 case Nationwide Mutual Insurance Co. v. Heintz, the insureds reduced their benefits, but no evidence existed of a signed notice, Todd said. The insureds placed a claim for the unreduced benefit limits, and were denied. The court based its decision on Salazar and said “[o]ur review of the MVFRL reveals no express remedy for a violations of Section 1791,” according to the opinion. In the 2003 Superior Court case Kline v. Old Guard Insurance Co., the court ruled that it would not rewrite an insurance policy because of failure to sign a notice, Todd said. The opinion, according to Todd, said that after Salazar and Heintz, “we may no longer participate in an analysis of whether the insured had ‘knowingly and intelligently’ waived UIM protection, even where the parties had stipulated that the insured had not received the important notice mandated by Section 1791.” Todd wrote that because of the above-mentioned cases, particularly Kline, the court was constrained to find no remedy for failure to comply with Section 1791. “[W]e may not reform DeMichele’s policy to provide UM benefits contrary to the express effect of his UM waiver.” Todd said. Todd went on to explain how the ruling fell in line with the goals of MVFRL. “[A]ny apparent harshness in this result, which forecloses coverage for DeMichele’s son’s tragic death, is tempered by the fact that, for many years, DeMichele paid no premium for UM benefits,” Todd said. “[R]eforming the Allstate policy after the fact as DeMichele seeks would contravene the cost containment policy of the MVFRL, and force Allstate to pass along uncompensated costs to other insureds.” DeMichele’s attorney, sole practitioner John W. Pollins III of Greensburg, said in an e-mail that before the decision came down Monday, the only thing left in the act requiring notice “that could not be enforced without statutory proof that the insured knew what he was doing was the outright rejections of uninsured motorist coverage.” “In DeMichele v. Allstate, a Superior Court panel pushed this trend to its logical conclusion by reversing Westmoreland County Judge Gary Caruso’s holding that complete rejection of uninsured motorist coverage is not valid unless the insured was informed about what he would be giving up,” Pollins said, ” . . . leaving Pennsylvania residents without any functional remedy for any uninformed illegal rejection or election under the Act.” Pollins added in the e-mail that the decision may allow the state Supreme Court a chance to clarify its Salazar decision. He added that he planned on asking to reargue the case before an en banc panel. A second issue raised in the case was whether the trial court’s opinion could be affirmed on the basis that DeMichele’s rejection of UM benefits were not shown in prominent type on the policy, a stipulation under subsection 1731(c.1) of the MVFRL, according to the opinion. The court agreed that the notice of rejection of UM benefits was written in smaller type than the rest of the policy, according to the opinion. Todd said that, as with the first issue, there is no remedy for a violation of that type. The attorney for Allstate, David J. Obermeier of Dickie McCamey & Chilcote in Pittsburgh, was not available for comment. (Copies of the 16-page opinion in Allstate Insurance Co. v. DeMichele , PICS No. 05-1864, are available from The Legal Intelligencer . Please call the Pennsylvania Instant Case Service at 800-276-PICS to order or for information. Some cases are not available until 1 p.m.)

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