C. D. Kropp, Jr. v. Bureau of Motor Vehicles (Majority Opinion)

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IN THE COMMONWEALTH COURT OF PENNSYLVANIA Clarence D. Kropp, Jr. v. Commonwealth of Pennsylvania, Department of Transportation, Bureau of Motor Vehicles, Appellant BEFORE: : : : : : : : : No. 821 C.D. 2007 Submitted: November 30, 2007 HONORABLE BERNARD L. McGINLEY, Judge HONORABLE ROCHELLE S. FRIEDMAN, Judge HONORABLE JIM FLAHERTY, Senior Judge OPINION NOT REPORTED MEMORANDUM OPINION BY SENIOR JUDGE FLAHERTY FILED: March 7, 2008 The Commonwealth of Pennsylvania, Department of Transportation, Bureau of Motor Vehicles (Department) appeals from a decision of the Court of Common Pleas of Schuylkill County (trial court) which sustained the appeal of Clarence D. Kropp, Jr. (Kropp) and reversed the Department s suspension of Kropp s registration privileges. We reverse. On September 17, 2006, State Auto National Insurance Company (State Auto) terminated a policy of motor vehicle liability insurance issued to Kropp that covered a 1994 Chevrolet sedan, title number 46947704 and bearing Pennsylvania tag number FLX0609. As required by the Motor Vehicle Financial Responsibility Law (MVFRL), 75 Pa. C.S. §§1701-1799.7, State Auto reported the termination of that liability insurance policy to the Department.1 As a result, the Department, by official notice dated and mailed November 21, 2006, notified Kropp that the registration of his 1994 Chevrolet sedan was being suspended for three months, effective December 26, 2006, as mandated by 75 Pa. C.S. §1786(d). Pursuant to 75 Pa. C.S. §1377(a), relating to judicial review, Kropp filed a timely statutory appeal of the registration suspension with the trial court. On February 27, 2007, the trial court conducted a de novo hearing. Without objection, the Department admitted into evidence a packet of documents which had been duly certified under seal pursuant to 42 Pa. C.S. §6103 and §6109 1 Section 1786 of the MVFRL provides in pertinent part as follows: 1786. Required financial responsibility *** (d) Suspension of registration and operating privilege. (1) 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. (2) ¦This subsection shall not apply in the following circumstances: (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. 75 Pa. C.S. §1786. 2 and 75 Pa. C.S. §1377(b). The packet contained: (1) the official notice of suspension, dated November 21, 2006; (2) an electronic transmission from State Auto, entitled Suspension Inquiry Detail (SID Form); (3) a Department computer printout of the vehicle s details; (4) the Department s initial letter to Kropp, dated October 18, 2006; and (5) a registration record that appears in the Kropp file in the Bureau of Motor Vehicles, Harrisburg, Pennsylvania.2 The Department rested. Kropp testified on his own behalf that he always paid his insurance at the Tamaqua Insurance Company. Kropp further testified that he made a payment around September 18 or 19, but that the payment was due on September 16. After making such payment, Kropp received the insurance cards for his three vehicles in the mail. On October 18, 2006, Kropp received the Department s notice about his insurance. Kropp asked his wife if they had received anything from State Auto. Kropp testified that she had not received anything, so Kropp called State Auto. A representative of State Auto informed him that as of September 19, 2006, his insurance was cancelled. Kropp informed the State Auto representative that he had not received anything in the mail and he was told to contact Tamaqua Insurance Company. Kropp contacted Tamaqua Insurance Company and was told that a notice had been sent to him. Kropp further testified, in pertinent part, as to what he did after he received the notice from the Department: A. I called the insurance company. I told them that I made a premium, you know, of $238. It s already been, 2 In addition to the documents described, the Department also submitted the certification of Kurt Myers, Director of the Bureau of Motor Vehicles of the Pennsylvania Department of Transportation, certifying that all of the submitted documents are true and correct. Reproduced Record (R.R.) Exhibit 1 at 21a-31a. 3 you know, 30 days. I didn t receive any premium back. Okay? It wasn t until October 28th that I received my premium back. So I had to wait until my payday. And I got insurance on October 31st. I sent the Department ¦ sent me a letter asking me to sign a statement stating that no one drove my vehicle during the time of, of insurance lapse. Okay? I signed that. I gave them a copy of my, my insurance card stating that I did have insurance. Okay? To the best of my knowledge, I had insurance. And that no, no one did drive my vehicle because I carpool. I drive once every three weeks. Q. So your assertion is that during that period of suspension, no one operated that vehicle at all? A. No. No, because I, I had a Mazda truck, okay, that I did everything else with. *** Q. What was the effective date of the new insurance? A. ¦October 31st. Notes of Testimony, February 27, 2007, at 7-8; Reproduced Record (R.R.) at 15a16a. The trial court determined that: Kropp s testimony provided the clear and convincing evidence that the vehicle was insured at all relevant times required to overcome the presumption that the vehicle lacked the required insurance coverage. See §1786(d)(3)(ii); Fagan [v. Department of Transportation, Bureau of Motor Vehicles, 875 A.2d 1195 (Pa. Cmwlth. 2005)], supra. Additionally, this is clearly a cancellation case for nonpayment of premium and, accordingly, falls within the 15-day prior notice requirement pursuant to 40 P.S. §991.2004(1). The record is devoid of any evidence suggesting that the State Auto gave Mr. Kropp prior notice that the policy was to be cancelled before he received the notice of cancellation and the refund of his premium from State Auto on October 28, 2006. Thus, if 4 there was not prior notice of cancellation, a fact we find credible based upon the testimony of Mr. Kropp, the cancellation was not in effect at the time of the Department s action and the Appellant had insurance in effect under the original State Auto policy. At best, based on the uncontradicted testimony of Mr. Kropp, the earliest that Mr. Kropp became aware that his insurance policy was cancelled was when he received the inquiry notice from the Department shortly after October 18, 2006. The insurance law requires notification before termination with a 15-day grace period. By all accounts, the earliest that the policy should have been terminated, based upon the Commonwealth s proof, would have been 15 days after the Appellant was aware of the cancellation or at least 15 days after October 19, 2006, which would be November 3, 2006. By this time, the Appellant had new insurance, which he secured with another company on October 31, 2006. By securing a new policy of insurance effective October 31, 2006, the Appellant at no time had a vehicle which was operated during any period of effective cancellation of the policy. We thus believe that the Appellant has met his burden of proof in demonstrating that insurance was in effect during the period of cancellation alleged by the Department as it pertains to suspension of registration, and that, therefore, the actions of the Department in suspending the registration must be reversed. On April 9, 2007, the trial court sustained Kropp s appeal and reversed the Department s suspension of Kropp s registration privileges. The Department now appeals to our court.3 The Department contends that the trial court erred and exceeded its limited scope of review when it ruled that, because Kropp testified that he had not 3 Our review is limited to determining whether the trial court s findings are supported by substantial evidence and whether it committed an error of law or abused its discretion. Department of Transportation, Bureau of Driver Licensing v. Moss, 605 A.2d 1279 (Pa. Cmwlth.), petition for allowance of appeal denied, 532 Pa. 648, 614 A.2d 1144 (1992). 5 received a notice of cancellation from State Auto, the cancellation was not in effect at the time of the Department s action and Kropp had insurance in effect under the original State Auto policy. In cases like the one presently before us, the Department has the initial burden of showing that a registrant s vehicle is registered or is a type of vehicle that must be registered and that the Department received notice that the registrant s financial responsibility coverage was terminated. Fagan v. Department of Transportation, Bureau of Motor Vehicles, 875 A.2d 1195, 1198 (Pa. Cmwlth. 2005) (citing 75 Pa. C.S. §1786(d)(3)). The Department s certification of its receipt of documents or electronic transmissions from an insurance company which informs the Department that the person s coverage has either lapsed, been canceled or terminated, shall constitute prima facie proof of such termination. 75 Pa. C.S. §1377(b)(2); Fagan. Once the Department meets its burden, a presumption arises that the registrant lacked the necessary financial responsibility coverage. Fagan, 875 A.2d at 1198. The registrant may rebut this presumption by presenting clear and convincing evidence that he has maintained financial responsibility continuously on the vehicle as required by Section 1786(a) of the MVFRL, 75 Pa. C.S. §1786(a), or that the vehicle owner fits within one of the three statutorily defined defenses outlined in Section 1786(d)(2)(i-iii).4 4 Section 1786(d)(2)(i-iii) of the MVFRL sets forth the three statutorily defined defenses as follows: (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. (Footnote continued on next page ¦) 6 The trial court found that Kropp overcame this presumption, by proving that his vehicle was insured at all relevant times. Trial court decision at 5; R.R. at 56a. The trial court further determined that: this is clearly a cancellation case for nonpayment of premium and, accordingly, falls within the 15-day prior notice requirement pursuant to 40 P.S. §991.2004(1). The record is devoid of any evidence suggesting that the State Auto gave Mr. Kropp prior notice that the policy was to be cancelled before he received the notice of cancellation and the refund of his premium from State Auto on October 28, 2006. Thus, if there was not prior notice of cancellation, a fact we find credible based upon the testimony of Mr. Kropp, the cancellation was not in effect at the time of the Department s action and ¦[Kropp] had insurance in effect under the original State Auto policy. Trial court decision at 6; R.R. at 57a. However, under the current statutory system, a challenge to an insurance policy cancellation may only be brought by a timely request to the Insurance Commissioner. Webb v. Department of Transportation, Bureau of (continued ¦) (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 ¦. (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). 75 Pa. C.S. §1786(d)(2)(i-iii). 7 Motor Vehicles, 870 A.2d 968, 972 (Pa. Cmwlth. 2005). In the present controversy, the trial court made its decision based upon its determination that the insurance policy was not cancelled, a determination that the trial court cannot make. Any question as to whether a policy was improperly cancelled is an issue that is within the province of the Insurance Commissioner, not the trial court. Fell v. Department of Transportation, Bureau of Motor Vehicles, 925 A.2d 232 (Pa. Cmwlth. 2007). In establishing whether insurance coverage is continuous or whether the lapse in such coverage falls within one of the exceptions, the registrant must present clear and convincing evidence [which] is defined as [evidence] that is so clear, direct, weighty, and convincing as to enable the trier of fact to come to a clear conviction, without hesitancy, or the truth of the precise facts in issue. Fagan, 875 A.2d at 1199 (quoting Matter of Larsen, 532 Pa. 326, 332, 616 A.2d 529, 532 (1990)). Whether such evidence meets this standard is a question of law. Fagan. In Fell, our court reversed the trial court s determination that William H. Fell, III had presented clear and convincing evidence that his automobile was insured on May 14, 2005, and continuously thereafter, as required by the MVFRL. Before the trial court, the Department presented the certification of its receipt of documents or electronic transmissions from an insurance company which constituted prima facie proof of termination of Fell s insurance. Thus, the Department had met its burden and a presumption arose that the registrant lacked the necessary financial responsibility coverage. Fell admitted that he had made his payment late. Fell then presented a financial responsibility insurance card, the 8 cancelled check that payment was accepted and various other items. The trial court found that Fell met his burden. The Department appealed to our court. Our court reversed, determining that Fell failed to present any evidence that he maintained coverage on the cancellation date of May 14, 2005 and continuously thereafter. Fell, 925 A.2d at 239. We determined that uncorroborated testimony is insufficient to meet the strict evidentiary standard required to overcome the statutory presumption. Id. (citing Fagan, 875 A.2d at 1199). We further determined that none of the items Fell presented indicated that a payment was, among other things, timely made. Fell, 925 A.2d at 239-240. Our court found that: [i]f he had maintained continuous coverage, he could have shown that [he had maintained coverage] simply with a letter from his agent or the insurance company. DOT s letter of July 14, 2005, which Fell offered into evidence, clearly directed him to obtain such a letter of coverage from his insurer. For whatever reason, he did not do so. Accordingly, because DOT unquestionably met its burden that Fell s insurance was terminated by AIG, and because Fell did not present clear and convincing evidence to rebut that presumption, Fell s appeal must be denied. Id. 925 A.2d at 240. In the present controversy, Kropp failed to present any evidence that he maintained coverage on the date his insurance was cancelled and continuously thereafter. Like Fell, Kropp admits that he made his payment late. Kropp, thereafter, testified that he did not know that his insurance was cancelled. However, like in Fell, Kropp received a letter from the Department which indicated that his insurance was cancelled and that, if such information was incorrect, Kropp should provide a letter from his agent or insurance company 9 indicating that he has maintained continuous coverage. Kropp failed to produce such letter. Thus, Kropp failed to present clear and convincing evidence to rebut the Department s presumption. Accordingly, we must reverse the decision of the trial court. JIM FLAHERTY, Senior Judge 10 IN THE COMMONWEALTH COURT OF PENNSYLVANIA Clarence D. Kropp, Jr. v. Commonwealth of Pennsylvania, Department of Transportation, Bureau of Motor Vehicles, Appellant : : : : : : : : No. 821 C.D. 2007 ORDER AND NOW, this 7th day of March, 2008 the Order of the Court of Common Pleas of Schuylkill County in the above-captioned matter is reversed. JIM FLAHERTY, Senior Judge

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