JANE E. SEILER, Administratrix of the Estate of Robert W. Roberts, deceased v. American International Insurance Company

*Hon. R. Barclay Surrick, U.S. District Judge for the Eastern District of
Pennsylvania, sitting by designation.
NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 01-2156
___________
JANE E. SEILER, Administratrix of the Estate of Robert W. Roberts, deceased
Appellant
v.
AMERICAN INTERNATIONAL INSURANCE COMPANY
___________
On Appeal from the United States District Court
for the Middle District of Pennsylvania
District Court Judge: The Honorable William W. Caldwell
(No. 1-CV-00-1792)
___________
Submitted under Third Circuit L.A.R. 34.1(a)
July 22, 2003
Before: ALITO, FUENTES Circuit Judges,
and SURRICK,* District Judge.
(Opinion Filed: August 21, 2003)

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__________________________
OPINION OF THE COURT
__________________________
FUENTES, Circuit Judge:
Jane Seiler (“Seiler”) appeals from the District Court’s grant of summary judgment
to American International Insurance Co. (“American”) on her breach of contract claim for
failing to pay insurance benefits. The District Court found that an exception in American’s
insurance policy, commonly referred to as a “household exclusion,” did not violate public
policy, and, therefore, that American properly refused payment. Because we agree that the
“household exclusion” applies to Seiler’s claim and does not violate public policy, we will
affirm.
I. FACTUAL AND PROCEDURAL BACKGROUND
On June 13, 1999, Robert W. Roberts (“Roberts” or “deceased”) suffered fatal injuries
when the car he was driving was struck head-on by an underinsured drunk driver, Bryan
Kolsovsky (“Kolsovsky”). At the time of the collision, Roberts was driving a 1990 Mazda
that was owned by his wife, Seiler, because his own car, a 1995 Dodge, was being repaired.
Seiler’s car was insured by State Farm and Roberts’ car was insured by American.
Following the accident and Roberts’ death, Seiler filed suit against Kolsovsky in her
capacity as Executrix of the Estate of Robert Roberts (“the Estate”), and settled for the policy
limit of $50,000. Seiler then obtained the underinsured motorist (“UIM”) benefits provided
by her State Farm insurance policy for her Mazda, which amounted to $15,000. After Seiler

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received UIM benefits from State Farm, she asked American to pay UIM benefits to the
Estate pursuant to a stacked UIM coverage policy of $250,000/$300,000 that Roberts had
purchased for his Dodge. American denied payment contending that the “household
exclusion” foreclosed payment on an accident involving Seiler’s car which was not covered
under the American insurance policy.
Seiler filed suit against American seeking a declaratory judgment that American was
required to pay $250,000.00 in UIM benefits to the Estate. American filed a motion for
summary judgment on the ground that it was not obligated to pay those benefits due to the
“household exclusion.” Seiler cross-moved for summary judgment. The District Court ruled
that the household exclusion applied and that its application in this case does not violate
public policy. The District Court concluded that Seiler was not entitled to receive benefits
from American, and accordingly entered summary judgment in favor of American. This
appeal followed.
II. JURISDICTION AND STANDARD OF REVIEW
Because the jurisdictional requirements were met, the District Court had jurisdiction
over this case pursuant to 28 U.S.C. § 1332. We have jurisdiction over the final order of the
District Court pursuant to 28 U.S.C. § 1291.
The standard of review applicable to an order granting summary judgment is plenary.
Curley v. Klem, 298 F.3d 271, 276 (3d Cir. 2002). We apply the same test employed by a
district court under Federal Rule of Civil Procedure 56(c). See Kelley v. TYK Refractories

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1Because there are no disputed facts in this case and the resolution of the parties’
dispute turns on a legal issue, this matter is particularly suited for summary judgment.
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Co., 860 F.2d 1188, 1192 (3d Cir. 1988). Accordingly, the District Court’s grant of summary
judgment in favor of American was proper only if it appears that “there is no genuine issue
as to any material fact and that the moving party is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(c). In evaluating the evidence, we are required “to view inferences to be
drawn from the underlying facts in the light most favorable to the party opposing the
motion.” Bartnicki v. Vopper, 200 F.3d 109, 114 (3d Cir. 1999) aff’d, 532 U.S. 514 (2000).1
III. ANALYSIS
The insurance policy issued to Roberts by American provides, in pertinent part:
A. We do not provide Underinsured Motorists Coverage for ‘bodily injury’ sustained:
1. By you while ‘occupying’...any motor vehicle you own which is not insured
for this coverage under this policy...
The policy defines “you” as:
1. The “named insured” shown in the Declarations; and
2. The spouse if a resident of the same household.
These provisions comprise the “household exclusion.”
It is undisputed that this policy language is clear and unambiguous. However, Seiler
argues that the policy is inapplicable in her case because its definition of “you,” which
includes spouses, is inconsistent with that of the Pennsylvania Motor Vehicle Code, 75
Pa.C.S.A. §§ 101 et seq. Seiler contends that American’s definition of “you” renders title

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to a vehicle irrelevant by providing that an insured is the owner of any vehicle owned by a
spouse who resides in the same household (even if an insured is not a co-owner of the
spouse’s car). Seiler’s argument is unpersuasive for two reasons. First, Seiler did not raise
this argument in the District Court and thus has not preserved it for our review. Second, even
if Seiler had appropriately raised the argument in the District Court, it would not have
prevailed because our review of the Motor Vehicle Code suggests that the definition used by
American does not conflict with any of the definitions in the relevant chapter of Title 75.
Thus, Seiler’s first contention is meritless.
Seiler’s second and main contention is that the enforcement of the “household
exclusion” in her case violates public policy. She supports her position by arguing that the
several recent cases upholding “household exclusions” as not violative of public policy are
distinguishable from her case. She claims that her situation is unlike those in other cases
because Roberts actually paid for the policy under which Seiler is seeking underinsurance
benefits and because both of the cars in the household had some level of UIM coverage. See
Appellant’s Br., pp. 18-23 (citing Prudential Prop. & Cas. Ins. Co. v. Colbert, 572 Pa. 82,
813 A.2d 747 (2002); Eichelman v. Nationwide Ins. Co., 551 Pa. 558, 711 A.2d 1006 (1998);
Hart v. Nationwide Ins. Co., 541 Pa. 419, 663 A.2d 682 (1995); Windrim v. Nationwide Ins.
Co., 537 Pa. 129, 641 A.2d 1154 (1994)). Because her case presents a distinct factual
scenario, Seiler argues that we are not bound by the prior decisions finding no public policy
violation. Seiler further contends that under the present factual scenario, the application of

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the “household exclusion” is a public policy violation. She identifies the public policy at
stake as, “...that which underlies UIM coverage under the MVFRL [Motor Vehicle Financial
Responsibility Law], that is ‘to protect the insured (and his additional insureds) from the risk
that a negligent driver of another vehicle will cause injury to the insured (or his additional
insureds) and will have inadequate insurance coverage . . . .’” Appellant’s Br., p. 25 (quoting
Paylor v. Hartford Ins. Co., 536 Pa. 583, 587, 640 A.2d 1234, 1235-36 (1994)).
Seiler’s assertion that the present case is factually distinct from prior cases is
incorrect. Indeed, several decisions finding no public policy violation have involved
situations where the insured actually paid for the coverage sought, just as in this case. See,
e.g., Burstein v. Prudential Prop. & Cas. Ins. Co., 570 Pa. 177, 809 A.2d 204 (2002); Old
Guard Ins. Co. v. Houck, 2002 Pa. Super 161, 801 A.2d 559 (2002) appeal denied, 572 Pa.
758, 818A.2d 505 (2003); Nationwide Mut. Ins. Co. v. Ridder, 105 F.Supp. 2d 434 (E.D. Pa.
2000). Furthermore, the District Court correctly determined that Seiler’s argument is
rendered unpersuasive by Troebs v. Nationwide Ins. Co., 1999 WL 79555 (E.D. Pa. 1999).
In that case, the court noted that the same considerations apply to motorists who purchase
insufficient coverage as do to those who fail to purchase any coverage. See id. at 4.
However, even if we found that the case at hand were factually distinct from prior cases, this
would not necessarily lead us to the conclusion that upholding the “household exclusion” in
this case violates public policy.
The standard set by the Pennsylvania courts for determining whether a contract

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provision violates public policy is very high:
It is only when a given policy is so obviously for or against the public health, safety,
morals or welfare that there is a virtual unanimity of opinion in regard to it, that a
court may constitute itself the voice of the community in [declaring what is or is not
in accord with public policy].
Paylor, 536 Pa. at 587, 640 A.2d at 1235 (quoting Mamlin v. Genoe, 340 Pa. 320, 325, 17
A.2d 407, 409 (1941)). Public policy is to “be ascertained by reference to the laws and legal
precedents and not from general considerations of supposed public interest.” Id. at 586-87,
640 A.2d at 1235 (quoting Guardian Life Ins. Co. of America v. Zerance, 505 Pa. 345, 354,
479 A.2d 949, 954 (1984)).
While the Pennsylvania Supreme Court has held that the enforceability of “household
exclusions” is dependent on the facts surrounding each case, courts have routinely upheld
them in the face of public policy challenges. See, e.g., Paylor, 536 Pa. at 595, 640 A.2d at
1240 (finding no public policy violation where insurance company refused to provide
daughter of deceased parents involved in a motor home accident UIM benefits from couple’s
insurance policies that did not cover motor home); Eichelman, 551 Pa. at 567-68, 711 A.2d
at 1010 (finding no public policy violation where insurance company refused to provide
driver without UIM benefits similar benefits under other family members’ policies); see also
Ridder, 105 F.Supp. 2d at 438 (finding no public policy violation where insurance company
refused to provide uninsured motorist benefits from defendant’s policies that did not cover
the motorcycle involved in the accident); Ridley ex rel. Ridley v. State Farm Mut. Auto. Ins.
Co., 745 A.2d 7, 14 (Pa. Super. Ct. 1999) (finding no public policy violation where insurance

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company refused to provide UIM benefits from family policy that did not cover the car
involved in the accident) appeal denied, 572 Pa. 708, 813 A.2d 843 (2002). Thus, as is
required when determining whether a contract provision violates public policy, we must
conclude that there is no unanimity of opinion that “household exclusions” violate public
policy.
We must next examine whether the “household exclusion” is obviously against public
policy. This Court cannot discern how American’s “household exclusion” is so obviously
against the public health, safety, morals, or welfare of Pennsylvania’s citizens as to be
violative of public policy. Seiler has not convinced us that the public policy at stake that she
identifies, that of protecting insureds from the risk of being involved in an accident with an
underinsured person, is obviously violated by upholding the “household exclusion.”
Accordingly, the District Court correctly determined that pursuant to Ridder and other recent
decisions, the application of the “household exclusion” in this case does not violate public
policy.
In reaching that determination, the District Court rightfully focused on laws and legal
precedents surrounding the “household exclusion” rather than general notions of public
interest. In this regard, it is critical that the Motor Vehicle Financial Responsibility Law, Pa.
Stat. Ann. tit. 75, §§ 1701-1799.7 (1996) (“MVFRL”), which requires insurance companies
to offer uninsured motorist (“UM”) and UIM coverage, 75 Pa. C.S.A. § 1731(a), was enacted
out of concern for the “spiralling consumer cost of automobile insurance.” Paylor, 536 Pa.

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at 587, 640 A.2d at 1235.
The District Court also rightfully focused on the Ridder decision because the Ridder
court upheld a “household exclusion” as not violative of public policy in a situation very
similar to the one at hand. In that case, Thomas Ridder’s (“Ridder”) motorcycle collided
with an uninsured vehicle. After receiving the full UM benefits from his motorcycle’s policy
with Nationwide Mutual Insurance Co. (“Nationwide”), he attempted to obtain UM benefits
from the policies covering his other vehicles because they provided significantly higher UM
benefits. The court, in granting Nationwide’s motion for summary judgment, stated:
[W]hile it is clear that the plaintiff here did obtain minimal uninsured motorist
coverage on his motorcycle, he could have elected higher limits. He chose not to
obtain this additional coverage and for this he paid a lower premium. The Nationwide
policies were written for specific vehicles and it was for this coverage that
Nationwide and the defendant bargained and ultimately contracted. To require
Nationwide to pay uninsured motorist benefits on its policies would be to effectively
require it to underwrite a risk of which it likely had no knowledge and for which it
neither contracted nor was paid.
Ridder, 105 F.Supp 2d at 438 (citations omitted).
Just as in Ridder, Seiler chose the benefits for the Mazda that the deceased was
driving at the time of the accident. Like her deceased husband, she could have chosen
significantly higher UIM coverage and accordingly could have paid higher premiums, but
she did not. To require American to pay UIM benefits in this instance would require the
company to underwrite a risk for which it had not contracted. This would allow a policy
holder to receive benefits far in excess of that for which she paid. Consequently, insurers
would be forced to raise insurance costs, thwarting the legislative intent behind the MVFRL.

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See Prudential Prop. and Cas. Ins. Co. v. Colbert, 572 Pa. 82, 813 A. 2d 747, 754 (2002); see
also Rupert v. Liberty Mutual Ins. Co., 291 F.3d 243, 249 (3d Cir. 2002). Such a result
would defeat public policy rather than advance it. Accordingly, we find no public policy
violation in enforcing the exclusion under the facts presented in this case.
III. CONCLUSION
For the reasons set forth above, the District Court was correct in finding that the
household exclusion provision was not violative of public policy. Accordingly, we will
affirm the District Court’s decision in granting summary judgment to American.
______________________________
TO THE CLERK OF COURT:
Kindly file the foregoing opinion.
By the Court,
/s/ Julio M. Fuentes
Circuit Judge

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