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[J-70-2007] IN THE SUPREME COURT OF PENNSYLVANIA EASTERN DISTRICT CAPPY, C.J., CASTILLE, SAYLOR, EAKIN, BAER, BALDWIN, FITZGERALD, JJ.

JAY BLOOD, Appellee

v.

OLD GUARD INSURANCE COMPANY, Appellant

: : : : : : : : : : :

No. 2 WAP 2007

Appeal from the Order of the Superior Court filed March 2, 2006 at 2250 WDA 2003

ARGUED: September 10, 2007

OPINION MADAME JUSTICE BALDWIN In this automobile insurance case, we determine how an insured's decision to reduce the limits of his or her liability coverage affects a previous election of uninsured/underinsured motorist ("UM/UIM") coverage at a level less than the liability limits established prior to the reduction. For reasons explained below, we reverse the decision of the Superior Court. When Michael and Sharon Blood, Appellee's parents, applied to Appellant Old Guard Insurance Company ("Old Guard") for automobile insurance in 1986, they requested $500,000 in liability coverage. While they were therefore eligible for an equal amount of UM/UIM coverage, they elected to reduce their UM/UIM coverage to only

$35,000, albeit with the stacking option. There is no dispute here that execution of the sign-down was proper. The Bloods later decided to lower their liability coverage limits from $500,000 to $300,000. To this end, on June 16, 2000, the Bloods executed a "coverage selection form," and indicated their desire for $300,000 in liability coverage with an "X" in the space next to that amount. The only other marks on the form included a similar "X" indicating rejection of income loss benefits coverage, and the Bloods' signatures, which they dated. R.78a. Although the form included choices to select UM/UIM coverage

options, the Bloods indicated no selections.1 On August 19, 2000, Appellee Jay Blood was injured in a motor vehicle accident and suffered serious injuries. The vehicle in which he was riding was driven by the owner, Jay Soltis, who was insured by State Farm. Appellee was paid the applicable limits of the Soltis policy, which amounted to $25,000. Appellee then sought coverage under the policy issued by Appellant Old Guard. Old Guard paid $105,000 to Appellee, which, according to Old Guard's interpretation of the policy, represented the limit of stacked underinsured coverage available to Appellee, i.e. $35,000 multiplied by the Bloods' three vehicles. R.14a.

Appellee then filed a declaratory judgment action in which he claimed that the limit of coverage was $900,000, i.e. $300,000 multiplied by the three vehicles on the Bloods' policy. R.5a. The basis of Appellee's declaratory judgment action is that

Pennsylvania's Motor Vehicle Financial Responsibility Law ("MVFRL"), 75 Pa.C.S.

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