Monday, March 2, 2015

Judge Conaboy Addresses Application of Rejection of UIM Stacking Form to Renewal Policies

In the case of Connolly v. Progressive Northern Ins. Co., 3:13-CV-2717 (M.D. Pa. Feb. 4, 2015 Conaboy, J.), Judge Richard P. Conaboy of the Federal Middle District Court for the Middle District of Pennsylvania addressed a carrier's motion for summary judgment in a case involving a challenge to the carrier's rejection of stacking form in an underinsured (UIM) motorists benefits matter.

 Before the court were insurance application documents concerning an underinsured motorist claim (UIM) and the applicability of a rejection of stacking form signed when the policy was first purchased in 1998.   The UIM limits under the policy were $100,000 per person.  The stacking issue was important as there were three vehicles on the policy.

The Plaintiff asserted that, since there was only a rejection of stacking form signed at the inception of the policy, then stacking should apply because the policy numbers were different every time the policy was renewed.  According to the Plaintiff's argument, this represented the creation of a new policy, which, in turn, arguably required the need for the carrier to obtain a new rejection of stacking form. 

The insurance company argued that the last numbers were only changed but that the policy remained the same. 

Judge Conaboy agreed with the defense position that, under the Sackett line of cases, once a valid rejection of stacking form was secured, the carrier need not secure a rejection of stacking form every time the same policy came up for a renewal or when a car was added to the policy.

According to the Opinion, however,  the carrier never explained in its argument why the suffixes were different or why the company periodically modified the final number on the policy.  In other words, the court was unable to state, as a matter of law, that there were not any substantive differences in the policy over the course of the 21 renewals in 10 years.  Simply put, based upon the record before the court, Judge Conaboy could not state that the policy at issue was identical to the one originally issued at the inception of the policy back in 1998 when the rejection form was signed.

As such, the Connolly court ultimately held that.“[d]ue to uncertainty in the record, the Court must deny the Defendant’s Motion for Summary Judgment.”

Judge Conaboy also allowed the Plaintiff's bad faith claim to proceed.

Anyone wishing to read Judge Conaboy's Memorandum Opinion in Connolly v. Progressive may click this LINK.

I send thanks to Attorney Scott Cooper of the Harrisburg, PA law office of Schmidt Kramer for bringing this case to my attention.


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