IN THE COMMONWEALTH COURT OF PENNSYLVANIA Douglas Gilghrist : : v. : : Commonwealth of Pennsylvania, : Department of Transportation, : Bureau of Motor Vehicles, : No. 726 C.D. 2014 Appellant : Submitted: October 24, 2014 BEFORE: HONORABLE BERNARD L. McGINLEY, Judge HONORABLE ROBERT SIMPSON, Judge HONORABLE ANNE E. COVEY, Judge OPINION NOT REPORTED MEMORANDUM OPINION BY JUDGE McGINLEY FILED: January 6, 2015 The Pennsylvania Department of Transportation (DOT) contests the order of the Court of Common Pleas of Lawrence County (trial court) which sustained the appeal of Douglas Gilghrist (Gilghrist) from a three-month vehicle registration suspension of his 2005 Pontiac Coupe (the Vehicle ), pursuant to Section 1786(d)(1) of the Vehicle Code (Code), 75 Pa.C.S. 1786(d)(1). 1 1 Section 1786(d)(1) of the Code provides: (1) The Department of Transportation shall suspend the registration of a vehicle for a period of three months if it determined the required financial responsibility was not secured as required by this chapter and shall suspend the operating privilege of the owner or registrant for a period of three months if the department determines that the owner or registrant has operated or permitted the operation of the vehicle without the required financial responsibility. The operating privilege shall not be restored until the restoration fee for operating privilege provided by section 1960 (relating to reinstatement of operation privilege or vehicle registration) is paid.
By official notice dated November 27, 2013, DOT informed Gilghrist that the registration for the Vehicle was to be suspended for three months effective January 1, 2014, because the insurance policy covering the Vehicle was terminated on August 28, 2013. Gilghrist appealed to the trial court. At a de novo hearing on March 27, 2014, DOT introduced into evidence a packet of documents that established Gilghrist s violation of Section 1786(d) of the Code, 75 Pa.C.S. 1786(d), and, also, that he was notified of the suspension. Gilghrist testified that although DOT listed his termination date as August 28, 2013, he asserted his policy was not actually canceled until October 24, 2013: They have me listed as the termination date as August 28 th, but my policy actually didn t get canceled until October 24 th and they backdated the effective date to August 28 th, which would have been the policy renewal date. On October 8 th, they sent out a cancellation notice stating that if I didn t make my payment by October 24 th, then my policy was going to be canceled, so I contend that if my policy was already canceled, they wouldn t have sent out a cancellation notice, so I still had coverage up until the date that they canceled my insurance on October 24 th. And on October 24 th, I did obtain new insurance because I was not able to pay the amount of money that was owed on my Geico insurance, so I contend that there was no lapse in coverage. Even in the meantime between... August 28 th and October 24 th, I even got pulled over and got a speeding ticket and they didn t make any reference of me not having insurance, so I obviously still had insurance up until the cancellation date of October 24 th. Now, why they backdated the effective date, I m not sure. 2
Notes of Testimony, March 27, 2014, (N.T.) at 4-5; Reproduced Record (R.R.) at 10a-11a. On cross-examination, Gilghrist explained that he had a premium payment due September 19, 2013, but he was permitted to postpone the payment until October because he did not have the money when the payment was initially due. Gilghrist did not make the payment due in October. He received the notice of cancellation and obtained insurance on the cancellation date with another insurer. N.T. at 9; R.R. at 15a. He admitted that he drove the vehicle between August 28 and October 24, 2013. N.T. at 9-10; R.R. at 15a-16a. DOT s attorney argued that if Gilghrist had any dispute with his insurance company, his remedy was with the Insurance Commissioner. N.T. at 7-8; R.R. at 13a-14a. By order dated April 3, 2014, the trial court granted Gilghrist s appeal and ordered that the case be remanded to DOT for DOT to rescind the suspension. The trial court made the following relevant findings: 4. A review of the Geico account summary reveals that on August 28, 2013, a check payment was applied to the account. Subsequent to said payment a one dollar ($1.00) service charge was posted on September 17, 2013. Another recurring check payment was scheduled for October 7, 2013, but the scheduled payment was postponed on September 19, 2013. On October 8, 2013, a Cancellation Notice was sent with a payment amount due on October 24, 2013. Subsequently, it was not until October 31, 2013, that the policy was cancelled and the effective date of the cancellation was retroactive to August 28, 2013. From a review of the Geico account 3
summary, although the insurance policy was cancelled effective August 28, 2013, it remained in effect until October 31, 2013, when Geico took action to terminate the policy retroactively. By this time, Petitioner [Gilghrist] had obtained other insurance for the vehicle. A review of the account summary indicates that the policy was in effect until October 31, 2013, and that the Petitioner [Gilghrist] had insurance until that date when it was then cancelled retroactively as Petitioner [Gilghrist] was making no more payments as he had obtained alternate insurance. 5. The Court finds that the Petitioner [Gilghrist] had insurance covering the vehicle in question through Geico Indemnity Company until he obtained new insurance. (emphasis added). Trial Court Opinion, April 4, 2014, Paragraph Nos. 4-5 at 2; R.R. at 33a. DOT contends 2 that where it satisfied its prima facie burden of proof for imposing a suspension on the registration of the Vehicle as a consequence of a 2 It is worth noting that the trial court in its opinion issued pursuant to Rule 1925(a) of the Pennsylvania Rules of Appellate Procedure agrees with DOT s reasoning: This raises several issues concerning the validity of the termination of the Petitioner s [Gilghrist] insurance policy which includes the following: whether sufficient notice of termination was provided as the Petitioner [Gilghrist] did not receive notice of termination until October 8, 2013, yet Geico claims his policy was terminated on August 28, 2013, how was the termination date affected by the postponed payment on September 19, 2013, and whether the insurance policy was actually terminated on August 28, 2013, or was the Petitioner s [Gilghrist] vehicle still covered under the policy until October 23, 2013. 4 These are significant issues concerning the validity of the termination of insurance coverage by Geico. In accordance with 75 Pa.C.S.A. [sic] 1786(d)(5) and the subsequent case law, those issues must be decided by the Insurance Commissioner as this Court s inquiry is limited to deciding whether the vehicle is of the type required to be insured and (Footnote continued on next page )
lapse of financial responsibility, the trial court exceeded the scope of its review by making a determination that Geico s cancellation of Gilghrist s insurance policy was ineffective. 3 DOT has the initial burden of proof in a vehicle registration suspension proceeding pursuant to Section 1786(d)(3) of the Code, 75 Pa. C.S. 1786(d)(3). In order to shoulder this burden, DOT must establish that the vehicle is registered or of a type that is required to be registered under this title, and either that DOT received a notice of a lapse, termination, or cancellation in the financial responsibility coverage or that the owner, registrant or driver was requested to provide proof of financial responsibility to DOT, a police officer or another driver and failed to do so. See Fell v. Department of Transportation, Bureau of Motor Vehicles, 925 A.2d 232 (Pa. Cmwlth. 2007). (continued ) whether the Department received a notice of termination from an insurance company. The Insurance Commissioner is the entity that is authorized to decide issues related to the validity of the insurance provider s termination of an automobile insurance policy. Thus, this Court erred when it rendered a decision on this matter without the validity of the termination of the insurance policy being decided by the Insurance Commissioner first. Trial Court Opinion, June 6, 2014, at 7-8; R.R. at 55a-56a. 3 This Court s review is limited to a determination of whether necessary findings of fact are supported by substantial evidence of record, whether the trial court committed an error of law, and whether the trial court abused its discretion. Todd v. Department of Transportation, Bureau of Driver Licensing, 723 A.2d 655 (Pa. 1999). 5
To establish its initial burden of proof for a vehicle registration suspension, DOT must submit the necessary documentation as set forth in Section 1377(b)(2) of the Code, 75 Pa. C.S. 1377(b)(2). 4 Here, DOT introduced a packet of documents which established prima facie proof that 1) the vehicle was required to be registered in the Commonwealth; and 2) DOT received a notice of a cancellation in the financial responsibility coverage. To successfully defend an appeal of a vehicle registration suspension once DOT establishes its prima facie burden of proof, a vehicle owner must prove that financial responsibility was continuously maintained on the vehicle, see Section 1786(d)(3)(ii) of the Code, 75 Pa.C.S. 1786(d)(3)(ii), or that the vehicle owner fits within one of the three statutorily defined defenses outlined in Section 1786(d)(2)(i-iii) of the Code, 75 Pa. C.S. 1786(d)(2)(i-iii). 5 4 Section 1377 of the Code, 75 Pa. C.S. 1377, provides: (b) DOCUMENTATION. (2) In a proceeding relating to the suspension of the registration of a motor vehicle imposed under section 1786 (relating to required financial responsibility), the department s certification of its receipt of documents or electronic transmission from an insurance company informing the department that the person s coverage has lapsed, been canceled or terminated shall also constitute prima facie proof that the lapse, cancellation or termination of the policy of insurance described in the electronic transmission was effective under the laws of this Commonwealth. 5 The three statutorily defined defenses set forth in Section 1786(d)(2) of the Code, 75 Pa. C.S. 1786(d)(2), are: (Footnote continued on next page ) 6
The burden then shifted to Gilghrist to rebut the proof by clear and convincing evidence. 6 Gilghrist attempted to satisfy his burden of proof when he testified that Geico allowed him to postpone the payment of his insurance premiums and that even though Gilghrist never paid the required premium, his insurance was not cancelled on August 28, 2013, but on October 24, 2013. Further, Gilghrist testified that on October 24, 2013, he obtained insurance on the Vehicle from another insurer. This testimony by Gilghrist was uncorroborated and did not meet the clear and convincing standard. See Fell; Fagan v. Department of Transportation, Bureau of Motor Vehicles, 875 A.2d 1195 (Pa. Cmwlth. 2005). (continued ) (i) The owner or registrant proves to the satisfaction of the department that the lapse in financial responsibility coverage was for a period of less than 31 days and that the owner or registrant did not operate or permit the operation of the vehicle during the period of lapse in financial responsibility. (ii) The owner or registrant is a member of the armed services of the United States, the owner or registrant has previously had the financial responsibility required by this chapter, financial responsibility has lapsed while the owner or registrant was on temporary, emergency duty and the vehicle was not operated during the period of lapse in financial for 30 days after the owner or registrant returns from duty as long as the vehicle is not operated until the required financial responsibility has been established. (iii) The insurance coverage has terminated or financial responsibility has lapsed simultaneously with or subsequent to expiration of a seasonal registration, as provided in section 1307(a.1) (relating to period of registration). 6 Clear and convincing evidence is defined as testimony that is so clear, direct, weighty, and convincing as to enable the trier of fact to come to a clear conviction without hesitancy, of the truth of the precise facts in issue. Matter of Larsen, 616 A.2d 529, 532 (Pa. 1992). 7
DOT does not argue that the trial court erred when it based its decision on uncorroborated evidence. Rather, DOT argues that the trial court exceeded its scope of review when it determined the date of termination of the insurance coverage. 1786(d)(3)(i-ii), provides: Section 1786(d)(3)(i-ii) of the Code, 75 Pa.C.S. An owner whose vehicle registration has been suspended under this subsection shall have the same right of appeal under section 1377 (relating to judicial review) as provided for in cases of the suspension of vehicle registration for other purposes. The filing of the appeal shall act as a supersedeas, and the suspension shall not be imposed until determination of the matter as provided in section 1377. The court s scope of review in an appeal from a vehicle registration suspension shall be limited to determining whether: (i) the vehicle is registered or of a type that is required to be registered under this title; and (ii) there has been either notice to the department of a lapse, termination or cancellation in the financial responsibility coverage as required by law for that vehicle or that the owner, registrant or driver was requested to provide proof of financial responsibility to the department, a police officer or another driver and failed to do so. Notice to the department of the lapse, termination or cancellation or the failure to provide the requested proof of financial responsibility shall create a presumption that the vehicle lacked the requisite financial responsibility. This presumption may be overcome by producing clear and convincing evidence that the vehicle was insured at all relevant times. 8
provides: In addition, Section 1786(d)(5) of the Code, 75 Pa.C.S. 1786(d)(5), 7 (5) An alleged lapse, cancellation or termination of a policy of insurance by an insurer may only be challenged by requesting review by the Insurance Commissioner pursuant to Article XX of the act of May 17, 1921 (P.L. 682, No. 284), known as The Insurance Company Law of 1921. Proof that a timely request has been made to the Insurance Commissioner for such a review shall act as a supersedeas, staying the suspension of registration or operating privilege under this section pending a determination pursuant to section 2009(a) of The Insurance Company Law of 1921 or, in the event that further review at a hearing is requested by either party, a final order pursuant to section 2009(i) of The Insurance Company Law of 1921. In Dinsmore v. Department of Transportation, Bureau of Driver Licensing, 932 A.2d 350 (Pa. Cmwlth. 2007), Robert Dinsmore, Jr. and Patricia Dinsmore (the Dinsmores) owned a 1993 Ford station wagon (Ford) that was previously insured by Progressive Specialty Company (Progressive). On March 10, 2006, Progressive terminated the Dinsmores motor vehicle liability insurance policy for nonpayment of premium. Progressive notified DOT of the termination. On May 15, 2006, DOT notified the Dinsmores that their vehicle registration on the Ford was suspended for three months effective June 19, 2006. The Dinsmores appealed to the Court of Common Pleas of Somerset County (common pleas court). Dinsmore, 932 A.2d at 351-352. 1278. 7 Subsection 5 of Section 1786 was added by the Act of December 9, 2002, P.L. 9
Before the common pleas court, DOT established its prima facie case. Patricia Dinsmore testified that she did not receive notification of her insurance termination from Progressive until April 14, 2006, more than thirty days after the purported termination of March 10, 2006. Patricia Dinsmore also testified that after she received the notice from Progressive, she obtained new insurance the next business day. The common pleas court sustained the Dinsmores appeal and rescinded the suspension. The common pleas court found that Progressive failed to provide timely notice of the insurance cancellation as required by Section 2006 of The Insurance Company Law of 1921, 40 P.S. 991.2006. 8 The common pleas court opined that because the cancellation was facially defective it would be a waste of time and effort to require the Insurance Commissioner to review the Dinsmores dispute as required by Section 1786(d)(5) of the Code, 75 Pa.C.S. 1786(d)(5). Dinsmore, 932 A.2d at 352-353. DOT appealed to this Court and argued that the common pleas court exceeded its scope of review and committed an error of law when it determined that the insurance termination was facially defective because the common pleas court did not have the authority to consider an insurance company s failure to give timely notice or whether the termination of insurance was effective. Dinsmore, 932 A.2d at 353. This Court reversed and remanded the case to the common pleas court to hold in abeyance the suspension pending the Insurance Commissioner s review 8 Act of May 17, 1921, P.L. 682. This Section was added by the Act of June 17, 1998, P.L. 464. 10
and disposition of Patricia Dinsmore s nunc pro tunc request for review of her insurance policy cancellation: This Court addressed a similar situation in Webb v. Department of Transportation [Bureau of Motor Vehicles], 870 A.2d 968 (Pa. Cmwlth. 2005). In Webb, the registrant appealed his suspension, pro se, arguing that he had not received any notice of his insurance policy termination until he received notice of his registration suspension from the Department. The trial court found that the registrant s insurance termination had not been effected because the insurance company did not give him the advance written notice required by Section 2006 of the Insurance Company Law, 40 P.S. 991.2006. On appeal, we explained that a trial court does not exceed its scope of review to the extent that a court reviewing a Department registration suspension appeal may certainly examine the record before it to determine whether an insured s evidence has overcome the applicable presumption established by [the Department.] Id. [Webb] at 974. This Court found that an inquiry into the validity of an insurance policy termination is within the province of the Insurance Commissioner when an examination beyond the record on its face is warranted. However, we also noted that the Department s own suspension notice does not state specifically that such appeals are to be brought to the Insurance Commissioner, which makes it understandable that the registrant would bring such an issue to the trial court hearing the suspension appeal. We concluded that in such circumstances it is appropriate to allow the registrant to seek nunc pro tunc review of his insurance policy cancellation from the Insurance Commissioner. The Dinsmores present the same challenge as that brought by the registrant in Webb. The suspension notice provided by the Department states: You have the right to appeal this suspension to the Court of Common Pleas of the county of your residence within thirty (30) days of the mail date of this letter. R.R. 32a. This notice makes no mention of the Insurance Commissioner or that the 11
correct procedure for appealing the validity of the insurer s cancellation is before the Insurance Commissioner and not before the Court of Common Pleas.... We are bound by Webb. The Dinsmores are entitled to review of their insurance policy cancellation by the Insurance Commissioner. (Footnote omitted). (Emphasis added). Dinsmore, 932 A.2d at 354-355. The present case differs from Dinsmore in one key respect. In contrast to Dinsmore, DOT s notice to Gilghrist stated If you believe your insurance coverage was terminated in error or you did not receive proper notice of your insurance termination, you should file a complaint with the Pennsylvania Insurance Department, Bureau of Consumer Services. (Emphasis added.) Official Notice, November 27, 2013, at 2; R.R. at 25a. Although Gilghrist received this notice from DOT concerning the procedural avenue to challenge the termination before the Insurance Commissioner, Gilghrist failed to follow the instruction. Gilghrist chose to proceed to the trial court without filing a request for review with the Insurance Department. Under the Code, the trial court is not authorized to make judgments based on the validity of the insurance policy termination. Gilghrist s recourse was to the Insurance Commissioner with respect to the confusion regarding the cancellation date of the policy. 12
991.2008(a), 9 provides: Section 2008(a) of The Insurance Company Law of 1921, 40 P.S. Any insured may, within thirty (30) days of the receipt by the insured of notice of cancellation or notice of intention not to renew and of the receipt of the reason or reasons for the cancellation or refusal to renew as started in the notice, request in writing to the Insurance Commissioner that the Insurance Commissioner review the action of the insurer in cancelling or refusing to renew the policy of such insured. It would appear to this Court that the time to request the Insurance Commissioner s review of the cancellation of the insurance policy by Geico has long passed. However, in its brief, DOT requests that this Court vacate the trial court s order and remand this case to the trial court in order to permit Gilghrist to file a request for review of the policy cancellation with the Insurance Commissioner. Critically, the trial court admits that it erred when it ruled on issues that related to the cancellation of the policy. 10 As in Dinsmore, this case will be remanded to the trial court to hold in abeyance the suspension as per DOT s request until the Insurance Commissioner disposes of Gilghrist s nunc pro tunc review of the cancellation of his insurance coverage. In 2012, this Court admonished DOT in at least two published opinions for not providing in its notice that a licensee must appeal to the Insurance Commissioner if the cancellation of the insurance is at issue and the licensee desires the matter to be reviewed. See McGonigle v. Department of 9 10 This Section was added by the Act of June 17, 1998, P.L. 464. Gilghrist did not file a brief with this Court. 13
Transportation, Bureau of Motor Vehicles, 37 A.3d 1273 (Pa. Cmwlth. 2012); Roscioli v. Department of Transportation, Bureau of Motor Vehicles, 37 A.3d 1278 (Pa. Cmwlth. 2012). DOT s notice provides If you believe your insurance coverage was terminated in error or you did not receive proper notice of your insurance termination, you should file a complaint with the Pennsylvania Insurance Department, Bureau of Consumer Services. This notice does not comport with Section 1786(d)(5) of the Code, 75 Pa.C.S. 1786(d)(5), which states that [a]n alleged lapse, cancellation or termination of a policy of insurance by an insurer may only be challenged by requesting review by the Insurance Commissioner. (Emphasis added). A complaint is not necessarily the same as requesting review. Further, the notice does not explain that a timely request to the Insurance Commissioner would stay a suspension pending the Insurance Commissioner s decision. Accordingly, this Court vacates the trial court s order and remands this case to the trial court for a stay to permit Gilghrist to file a request for nunc pro tunc review with the Insurance Commissioner. BERNARD L. McGINLEY, Judge 14
IN THE COMMONWEALTH COURT OF PENNSYLVANIA Douglas Gilghrist : : v. : : Commonwealth of Pennsylvania, : Department of Transportation, : Bureau of Motor Vehicles, : No. 726 C.D. 2014 Appellant : O R D E R AND NOW, this 6 th day of January, 2015, the order of the Court of Common Pleas of Lawrence County in the above-captioned matter is vacated. This case is remanded to the Court of Common Pleas of Lawrence County and the suspension is held in abeyance pending the filing of the nunc pro tunc review with the Insurance Commissioner of the issues regarding the cancellation of Douglas Gilghrist s insurance coverage on the 2005 Pontiac Coupe and the Insurance Commissioner s disposition of the review. Douglas Gilghrist must file the nunc pro tunc request for review within sixty days of the date of this order. Should he fail to do so, the Court of Common Pleas of Lawrence County is directed to reinstate the suspension of the registration of the 2005 Pontiac Coupe. Jurisdiction relinquished. BERNARD L. McGINLEY, Judge