Tuesday, April 30, 2019

Federal Court Rules that Pennsylvania Supreme Court Decision in Gallagher (Household Exclusion Invalid) Case Applies Retroactively




In the case of Butta v. Geico, No. 19-675 (E.D. Pa. April 19, 2019 Kearney, J.), Judge Mark Kearney of the Eastern District Federal Court of Pennsylvania ruled that the January, 2019 decision by the Pennsylvania Supreme Court in the case of Gallagher v. Geico, in which that Court eradicated the household exclusion under automobile insurance policies, should apply retroactively. 

As Tort Talkers may recall, in the Gallagher case, the Pennsylvania Supreme Court ruled, in a 5-2 fashion, that a household exclusion in a Geico policy violated the Pennsylvania Motor Vehicle Financial Responsibility Law because it served as a “de facto waiver” of stacked coverage.   The Gallagher decision not only applied to that case but also across the board.   Here is a LINK to the prior Tort Talk post on the Gallagher case, along with a link to that decision.

According to an April 24, 2019 article by Max Mitchell in the Pennsylvania Law Weekly entitled "‘Seismic’ Insurance Stacking Decision Applies Retroactively, Federal Judge Rules,” since the Gallagher decision came down, five (5) Class Action lawsuits have been filed aimed at seeking compensation for those who had their stacked benefits previously denied under the household exclusion.   This Butta case is one of those proposed class actions.  

In his Opinion, Judge Kearney analyzed his thoughts on his prediction as to how the Pennsylvania Supreme Court would rule on the issue of whether Gallagher should apply retroactively.   In the end, the Butta court ruled that it should be applied retroactively and analysis that the Opinion in Gallagher did not announce a new rule of law in Pennsylvania.  

Anyone wishing to review a copy of this decision in the Butta case may click this LINK. 

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

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