Monday, November 9, 2009

Pennsylvania Superior Court Upholds Carrier's Forum Selection Clause in a Post-Koken Case

On November 9, 2009, the Pennsylvania Superior Court issued an opinion upholding Liberty Mutual Insurance Group's forum selection clause in the post-Koken underinsured (UIM) case of O'Hara v. The First Liberty Ins. Corp. d/b/a Liberty Mut. Ins. Group, 2009 Pa.Super. 214 (November 9, 2009, Judges Freedberg, Cleland and Kelly).

According to the opinion written by Judge Kelly, this case involved plaintiffs who lived in Delaware County, Pennsylvania and a motor vehicle accident that occurred in Delaware County. After receiving the tortfeasor's limits, the plaintiff submitted a UIM claim to Liberty Mutual, who denied the claim. The plaintiffs filed suit in Philadelphia County alleging a breach of contract and loss of consortium claims.

Liberty Mutual's policy had a forum selection clause that provided that if suit was filed by the insured, the suit "must be brought in a court of competent jurisdiction in the county and state of your legal domicile at the time of the accident."

After suit was filed in Philadelphia County, Liberty Mutual filed preliminary objections on the basis of improper venue. The trial court granted the preliminary objections and transferred the case to Delaware County. The plaintiff appealed.

On appeal, the Superior Court rejected the plaintiff's claims that the forum selection clause should be deemed void and unenforceable as it conflicts with Pennsylvania law and because it was against public policy.

Finding the clause to be clear and unambiguous, the Superior Court found the clause not to be in violation of Pennsylvania law. In terms of the plaintiff's public policy argument, the Court stated that a clause requiring the plaintiffs to litigate in the county in which they lived and in which the accident happened could hardly be said to be an insurance policy clause that would injure the public or be against the public good.

As such, the Superior Court affirmed the trial court's Order granting the carrier's preliminary objections on improper venue.

Anyone desiring a copy of this case may contact me at

I thank Attorney Bruce Zero of the Scranton, PA law firm of Powell Law for bringing this case to my attention.

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