Opinion
No. 1912 C.D. 2011
04-05-2012
Shawn P. Schenk v. Commonwealth of Pennsylvania, Department of Transportation, Bureau of Motor Vehicles, Appellant
BEFORE: HONORABLE DAN PELLEGRINI, President Judge HONORABLE PATRICIA A. McCULLOUGH, Judge HONORABLE ANNE E. COVEY, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY PRESIDENT JUDGE PELLEGRINI
The Commonwealth of Pennsylvania, Department of Transportation, Bureau of Motor Vehicles (Department) appeals from an order of the Court of Common Pleas of Cambria County (trial court) sustaining the pro se statutory appeal of Shawn P. Schenk (Schenk) from a three-month suspension of his vehicle registration for failure to maintain the required financial responsibility.
The facts of this case are not in dispute. Schenk is the registered owner of a 2005 Ford truck which was insured by Progressive Advanced Insurance Company (Progressive). By letter dated April 28, 2011, the Department informed Schenk that it had received information from Progressive that the insurance policy covering his vehicle was cancelled on April 24, 2011. The letter requested that Schenk provide verification of insurance coverage on the vehicle within three weeks or his vehicle registration might be suspended for three months. Because Schenk failed to provide the requested information, the Department sent him an official notice dated June 14, 2011, informing him that the registration for the vehicle would be suspended for three months effective July 19, 2011, as authorized by Section 1786(d) of the Motor Vehicle Financial Responsibility Law (MVFRL), 75 Pa. C.S. §1786(d). Schenk appealed to the trial court.
Section 1786(a) of the MVFRL mandates that "[e]very motor vehicle of the type required to be registered under this title which is operated or currently registered shall be covered by financial responsibility." 75 Pa. C.S. §1786(a). Section 1786(d)(1) provides for the suspension of registration and operating privilege for failure to maintain the required financial responsibility as follows:
The Department of Transportation shall suspend the registration of a vehicle for a period of three months if it determines 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 operating privilege or vehicle registration) is paid.
At the hearing before the trial court, the Department offered the following documents into evidence in support of its position that Schenk failed to maintain the required financial responsibility on his vehicle: (1) the official notice of suspension of registration dated June 14, 2011; (2) an electronic transmission from Progressive regarding the termination of insurance, titled "Suspension Inquiry Detail 1;" (3) the Department's computer printout of the vehicle's details; (4) the Department's initial letter to Schenk dated April 28, 2011; and (5) the certification of Anita M. Wasko, Director of the Bureau of Motor Vehicles, certifying that all of the Department's submitted documents were true and correct.
In response, Schenk testified that he was unaware that the payment of insurance had not been made because he and his ex-wife had a joint policy on their vehicles. He stated that he gave her money to pay the insurance and apparently she had not made the payments. He further stated that he did not find out about the failure to pay until he got the letter from the Department saying they were going to revoke the registration. During that time, he had been working in Illinois and was there for two weeks and would only come home for a couple of days and then go back out for a few more weeks. He stated that he never received the notice that he didn't have insurance. Schenk stated that the day he got the official notice, he went and obtained his own insurance with 21st Century Insurance without his ex-wife on the policy. Schenk explained that he used his vehicle for work and currently was working in West Virginia for a company in Boswell. He stated that he had worked for them for three years and he needed his vehicle.
The Department admitted that Schenk obtained insurance as soon as he received the Department's letter, but it was over the 30 days from the date of the termination of his policy. The Department also alleged that whether he actually received the notice was not a matter for the trial court to address. Finally, the Department argued that hardship was not a defense.
The trial court entered an order on September 8, 2011, sustaining Schenk's appeal and rescinding the Department's registration suspension. The Department appealed, and the trial court filed an opinion pursuant to Pa. R.A.P 1925(a) in which it found in favor of Schenk because his wife did not provide his mail to him. Additionally, the trial court stated that although the Department met its prima facie burden of proving that Schenk's vehicle was not insured, when the burden shifted to Schenk to prove by clear and convincing evidence that the vehicle was insured at all relevant times finding, "Schenk had rebutted the presumption that the cancellation of his insurance was effective and thus he was insured at all relevant times and while operating the vehicle, because there was no showing that his insurer had mailed notice of the termination to the address listed on the policy. The Court further concluded that because Schenk did not receive notice from [sic] his insurer that his policy was cancelled and had no knowledge of cancellation until PennDOT informed him that it was suspending his registration, there was no legal cancellation of his policy." (Trial court's November 22, 2011 opinion at 4-5.)
The trial court went on to state that it was aware that this Court in Fagan v. Department of Transportation, Bureau of Motor Vehicles, 875 A.2d 1195 (Pa. Cmwlth. 2005), held that the defense of improper policy termination had to be raised in accordance with Section 1786(d)(5) before the Department of Insurance. However, if a vehicle owner could prove by clear and convincing evidence that its insurance carrier failed to send a notice of cancellation, then the trial court could sustain the appeal. Webb v. Department of Transportation, 870 A.2d 968 (Pa. Cmwlth. 2005). An inquiry into the validity of an insurance policy termination was within the province of the Insurance Commissioner when an examination beyond the record on its face was warranted. Id. Because Schenk testified that the requisite notice was not received and the Department did not establish that the notice was sent, the trial court sustained Schenk's appeal. This appeal by the Department followed.
75 Pa. C.S. §1786(d)(5) provides:
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 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.
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." Fagan, 875 A.2d at 1199 (citations omitted).
Our review of a trial court order sustaining an appeal from a registration suspension is limited to determining whether the trial court committed a reversible error or abused its discretion, and whether the necessary findings of fact are supported by substantial evidence. Deklinski v. Department of Transportation, Bureau of Motor Vehicles, 938 A.2d 1191, 1194 n.5 (Pa. Cmwlth. 2007).
On appeal, the Department contends that the trial court erred in determining that Schenk provided clear and convincing evidence that Progressive did not send him a notice of cancellation of his insurance policy. In the alternative, it argues that the trial court should have held the matter in abeyance in order to permit Schenk to appeal the cancellation to the Insurance Commissioner in accordance with 75 Pa. C.S. §1786(d)(5) because he did not present clear and convincing evidence that he maintained financial responsibility on his vehicle. We agree.
We note that Schenk has been precluded from filing a brief in this matter due to his failure to do so within the mandated time frame.
In a registration suspension case arising under Section 1786 of the MVFRL, the Department bears the initial burden of proving that a lapse in the required financial responsibility has occurred. Section 1377(b)(2) provides that "the [D]epartment'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 cancelled or terminated shall also constitute prima facie proof" of a lapse in coverage. 75 Pa. C.S. §1377(b)(2); accord Deklinski (citing Fagan v. Department of Transportation, Bureau of Motor Vehicles, 875 A.2d 1195, 1198 (Pa. Cmwlth. 2005)). Here, the trial court acknowledged that the Department met its prima facie burden, thereby creating a presumption that Schenk lacked the necessary insurance coverage. The burden, therefore, shifted to Schenk to rebut this presumption "by presenting clear and convincing evidence of record 'that financial responsibility was continuously maintained on the vehicle... or that [he] fits within one of the three statutorily defined defenses outlined in Section 1786(d0(2)(i-iii).' " Deklinski, 938 A.2d at 1194 (quoting Fell v. Department of Transportation, Bureau of Motor Vehicles, 925 A.2d 232, 237-38 (Pa. Cmwlth. 2007 (en banc)).
Addressing Schenk's burden of proof during the hearing, all that Schenk did to prove that he did not receive notice from Progressive of the cancellation of his insurance policy was to state that he did not find out his insurance was cancelled until he received the notice from the Department saying it was going to revoke his registration for his vehicle. He also stated that he did not have continuous financial coverage on his vehicle because his wife did not make the premium payments. He stated, "My ex-wife and I had a joint policy on our vehicles. I wasn't aware that it was terminated. I was giving her money for it, apparently she didn't pay it." (Reproduced Record at 12a.) (Emphasis added.) Schenk did not provide any other evidence including an address at which he was currently living or provide his ex-wife's current address. Notably, all of the documents submitted by the Department with Schenk's address were 153 Linden Avenue in Northern Cambria, Pennsylvania. Assuming that address is where his ex-wife lived, because he stated he never received the cancellation notice, Schenk then inexplicably used that same address when he obtained his new insurance from 21st Century Insurance. Therefore, he failed to provide clear and convincing evidence that he did not receive the cancellation notice for his insurance coverage, and the trial court erred in so finding and sustaining his appeal. In order to sustain his appeal, he had to prove that he fit one of the statutory exceptions. Section 1786(d)(2)(i-iii) of the MVFRL outlines these exceptions, in pertinent part, as follows:
This subsection shall not apply in the following circumstances:
(i) The owner or registrant provides 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 had lapsed while the owner or registrant was on temporary, emergency duty and the vehicle was not operated during the period of lapse in financial responsibility...75 Pa. C.S. §1786(d)(2)(i-iii).
(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).
Because Schenk testified that the lapse in insurance was over 30 days from the cancellation date of April 25, 2011, i.e., he did not obtain insurance from 21st Century Insurance until June 12, 2011, (see Reproduced Record at 13a), he does not fit the first exception. There also is no evidence in the record that Schenk is a member of the U.S. armed services or that he maintained only a seasonal registration on the vehicle. Therefore, he could not meet either of the two remaining exceptions. Consequently, Schenk did not present clear and convincing evidence that either financial responsibility was continuously maintained or he met one of the three exceptions.
However, as the Department and the trial court point out, Section 1786(d)(5) of the MVFRL now provides a two-part, parallel system of review. An examination into the validity of an insurer's cancellation of a policy, beyond the record on its face, is properly brought before the Insurance Commissioner, not the trial court. See Webb. It appears from the record that Schenk is attempting to do just that through his appeal - challenge the validity of Progressive cancelling his insurance policy when he allegedly never received the notices of cancellation because he was travelling for work and his ex-wife did not pay the premiums. Because the Department is not opposed and would not be prejudiced by such a ruling, we are inclined to afford Schenk the opportunity to pursue this avenue of review. See Webb, 870 A.2d at 975.
Accordingly, we vacate the trial court's order and remand the matter to the trial court with instructions to hold Schenk's suspension appeal in abeyance pending Schenk's filing of a nunc pro tunc request for review of his insurance policy cancellation and the Insurance Commissioner's review and disposition of this request. Schenk shall have 30 days from the date of this order to file his request.
The Department also contends that the trial court erred in determining that Schenk proved by clear and convincing evidence that Progressive did not send him a notice of cancellation of his insurance policy and the possibility of economic hardship is not a proper basis for sustaining an appeal of a suspension imposed for failure to maintain financial responsibility on a vehicle. Based on how we have decided this case, we need not address these issues. --------
/s/_________
DAN PELLEGRINI, President Judge ORDER
AND NOW, this 5th day of April, 2012, the order of the Court of Common Pleas of Cambria County, dated September 8, 2011, is vacated and the matter remanded to the trial court. The trial court shall hold the appeal in abeyance pending further action by Appellee Schenk.
Within 30 days of the date of this order, Appellee Schenk may file with the Insurance Commissioner an application to appeal nunc pro tunc from the cancellation of his insurance policy. If Appellee Schenk does not file such an application, the trial court shall dismiss the appeal. If Appellee Schenk does file such a nunc pro tunc appeal with the Insurance Commissioner, the trial court shall continue to hold this appeal in abeyance pending notice of final disposition of the appeal to the Insurance Commissioner. Upon notice of the final disposition from the Insurance Commissioner, the trial court shall take appropriate action on Schenk's initial appeal to it from the Department's suspension of his vehicle registration.
Appellee Schenk shall serve on the trial court and the Department a copy of any nunc pro tunc appeal of the cancellation of his insurance policy as well as the Insurance Commissioner's disposition of his appeal, if one is taken.
Jurisdiction relinquished.
/s/_________
DAN PELLEGRINI, President Judge