Eastern District Court Applies Gallagher Household Exclusion Decision

In the case of Stockdale v. Allstate Fire and Casualty Insurance Company, No. 2:19-cv-00845-WB (E.D. Pa. Feb. 27, 2020 Beetlestone, J.), the Court followed the Pennsylvania Supreme Court's sweeping decision in Gallagher and likewise held that the household exclusion was eradicated across the board.

The court in Stockdale rejected the insurance company's argument that the Pennsylvania Supreme Court Opinion in Gallagher v. GEICO, 201 A.3d 131 (Pa. 2019) should limited to its facts. The additional argument by the insurance company that the exclusion is valid when an insured rejected stacking was not accepted by the Court.

In this decision, the Eastern District Federal Court held that Gallagher applies in all household exclusion cases.

The Court also noted that the focus on the rejection of stacking question is not based upon actions of the insured, but instead based upon the policy under which coverage is sought.

The Court in Stockdale also ruled that the Gallagher decision applied to cases even where different insurance companies are involved.

In the end, Judge Beetlestone granted the insured's Motion for Partial Summary Judgment and denied Allstate’s Motion for Summary Judgment.

Anyone wishing to review a copy of this decision may click this LINK.

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

UPDATE:  In an Opinion and Order dated April 8, 2020, the same Court denied a F.R.C.P. 54 Motion by the carrier seeking to have the issue presented certified as a final judgment so as to allow for an appeal of the issue to the Third Circuit.  As this Motion was denied, the plaintiffs were able to continue with their plan to certify a class action suit based upon the Household Exclusion issue.

Anyone wishing to review the Court's April 8, 2020 Opinion may click this LINK.  The companion Order denying the Motion can be viewed HERE.