According to the Opinion, following a fatal motor vehicle accident, the Plaintiff asserted that the decedent was an insured under three (3) separate policies, i.e., one policy issued to the decedent’s father by Safeco Insurance Company, which was stacked, a policy issued to the decedent’s mother and his mother’s sister by Erie Insurance, which was non-stacked, and the Progressive policy issued to the decedent’s mother that provided for $50,000.00 in UIM coverage. The decedent’s mother had signed a “waiver-of-stacking form” under the Progressive policy.
After the accident, Safeco and Erie Insurance tendered the full limits while Progressive offered $20,000.00, which the Plaintiff accepted, after Progressive took the position that its policy’s “Other Insurance” clause limited its exposure to its pro rata share of the largest applicable single vehicle UIM policy.
Thereafter, the Plaintiff filed suit alleging claims for breach of contract and bad faith based upon Progressive’s failure to tender its $50,000.00 in UIM benefits.
The federal court reviewed the stacking issue under the Pennsylvania Supreme Court’s decision in the case of Craley v. State Farm Fire and Cas. Co., 895 A.2d 530, 539 (Pa. 2006).
In applying Craley, the court rejected the Plaintiff’s argument that the insured did not understand the waiver of stacking forms she was signing. The court also ruled that, because the insured had waived stacking, the “Other Insurance” clause applied.
The court in this Costa case also went on to distinguish the case before it from the case of Generette v. Donegal Mut. Ins. Co., 957 A.2d 1180 (Pa. 2008).
As noted, the federal court in Costa ultimately granted summary judgement in favor of Progressive finding that Progressive had properly paid out UIM limits under its policy under the policy provisions applicable to the case presented.
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I send thanks to Attorney Patrick Sweeney of the Philadelphia law firm of Sweeney and Sheehan for bringing this case to my attention.