In 1998, Kidd purchased an automobile policy with coverage for four (4) vehicles, including one for her son, James Fred Brown, a resident relative of the household. Subsequently, Mr. Brown’s vehicle was moved to a new policy and he executed a sign-down form for lower UM/UIM limits. As part of the application process for the Brown policy, the agent mailed a Sec 1734 sign down form to Brown. That sign down had his mother’s policy number written on it. After it was signed, a scrivener removed the Kidd policy number and placed on the form the Brown policy number.
Plaintiff argued that the sign-down form was inapplicable and ambiguous as Mr. Brown may have thought he was executing a sign-down pertaining to his mother’s policy. He also argued that the form was not sufficiently explained to him. He also argued that because someone allegedly changed the policy number on the form on behalf of the insurer, it was invalid.
The Court noted that form indicated the “coverage selection shall be applicable … to the policy of insurance identified above, on all replacement policies … unless I request in writing a different selection of coverage.” The Court found that the intent of the parties was for Mr. Brown to obtain his own policy and was executing documents in order to do so. Further, the Kidd policy already had a sign-down form executed.
Further, as Mr. Brown was no longer an insured on his mother’s policy, Brown would not be executing changes to Kidd’s coverage, according to the Court’s analysis. The Court noted that the sign-down notice creates a rebuttable presumption, once executed, that Mr. Brown understood his rights and failed to rebut that presumption with any testimony. The Court noted that there was no evidence of foul play regarding the change in the number and that it was standard practice for agents to present such forms at the time of execution. It was noted that policy numbers had not yet been generated for the Brown policy yet and such forms would therefore usually bear the old policy number or none at all. Once the policy number was generated, it would be written on the form by an underwriting service assistant.
The Court pointed out that Section 1734 of the MVFRL contained no requirement that the policy number be included on the sign-down form or other writing.
Additionally, the Court addressed the argument that because Mr. Brown’s fiancée, Misty McNeal, was subsequently added to the policy as an insured after the execution of the form by Brown, she was not bound by the sign-down form. McNeal argued that the reduced coverage requested by Mr. Brown did not apply to her. The Court noted that she was added in 2002 and she and Mr. Kidd received the benefit of reduced policy premiums by that election for a significant period of time and had ample opportunity to revise same.
Any questions regarding this matter can be directed to James W. Watson, Esquire
Kidd, et al. v. State Farm, No. 1:13-cv-2625 (M.D. PA. 2015) (Hon. John E Jones, III).
