January 06, 2016

Pennsylvania Insurers: Keep Your Original “Sign-Down” Waivers or You May be Held to Higher Limits

In Schoenberg vs. State Farm, CCP Lackawanna County, No. 2012-CV-5005, the Honorable Carmen D. Minora denied the defendant’s Motion for Summary Judgment on the issue of the amount of UM/UIM limits pertaining to an insurance policy.

The plaintiff survivor filed a UIM action against her insurer as a result of a motor vehicle accident that occurred on November 2, 2010, in which her husband, plaintiff decedent, was thrown from her motor vehicle as the result of the negligence of a third party. The plaintiff filed a Declaratory Judgment Action seeking $400,000 in UIM coverage against State Farm. State Farm filed a Motion for Summary Judgment, arguing that only $60,000 in UIM coverage was afforded to the policy. It appears that it was undisputed, at least for purposes of the court’s opinion, that there were four vehicles and four drivers on the policy, and that stacking applied.

In 1997, the plaintiff decedent applied for an automobile policy with State Farm. The application sought $100,000/$300,000 in bodily injury coverage and $15,000/$30,000 in UM/UIM coverage.

On May 5, 2006, the plaintiff decedent allegedly executed a sign down form in compliance with 75 Pa. C.S.A.§1731 (requiring UM/UIM offered equal to or lower than bodily injury coverage) and §1734 (requiring a signature for UM/UIM with limits lower than bodily injury coverage). This form indicated that the plaintiff decedent elected lower UM/UIM limits in the amount of $15,000/$30,000 . Important to the opinion, the original form with the original signature was not retained. Rather, a copy of the original was produced in the litigation since the original was not located.

In June 2006, Gloria McKee, an underwriter, wrote a memo to the underwriting file that she could not locate a valid UM/UIM sign down form(s) in the file and that if a valid form was not produced within five business days, the UM/UIM coverage would be increased to that equal to the bodily injury coverage in compliance with 75 Pa. C.S.A.§1731. It is unclear in the opinion if a declaration sheet was issued with higher limits.

It is State Farm’s position that Ms. McKee did not become aware of the May 5, 2006, sign down form. It is the plaintiff survivor’s position that her husband’s signature was forged on the form and that, therefore, the plaintiffs did not elect lower UM/UIM limits. The plaintiff testified at deposition that the signature was not that of her late husband’s. A forensic document examiner hired on behalf of the plaintiff reviewed the May 2006 sign down form and determined it was impossible to determine the genuineness of the signature based on the copy and that the original signature would be needed to do so.

Judge Minora agreed with the plaintiff. In denying State Farm’s Motion for Summary Judgment, the opinion indicated it is an issue of fact for the jury to determine if the signature on the sign down form was that of the plaintiff decedent.

1  The opinion states $15,00 per person and $3,000 per accident, which is a typographical error as the limits would be $30,000 per accident.

What It Means to You

Retain the original signatures on all underwriting documents, particularly as they pertain to UM/UIM lower limits so that the best evidence is readily available in the event that the validity of a decedent’s signature is challenged.