Monday, October 26, 2020

Eastern District Court Remands Motor Vehicle Accident Insurance Coverage Question Back to State Court



In the case of Gibbons v. Mid-Century Insurance Company, No. 20-3381 (E.D. Pa. Sept. 24, 2020 Kenney, J.), the Court granted a Motion to Remand a motor vehicle accident insurance coverage Declaratory Judgment action that was removed to federal court. 

The case arose out of a car accident where the minor children witnessed their father’s death as the family crossed a street as pedestrians. The insurance dispute focused on the ability of the children to receive coverage for claims of emotional distress. 

After the case was removed to federal court by the carrier, the Plaintiff filed a Motion to Remand and argued that the case should be remanded because the issue involved in the case has not been decided by the Pennsylvania Supreme Court and was based exclusively upon state law. 

The carrier argued that the District Court should exercise jurisdiction because there was no other parallel state court case pending.

The District Court noted that, if it retained jurisdiction, it would need to determine “whether Pennsylvania law or public policy precludes an insurance policy from defining emotional distress injuries suffered by a bystander witnessing the death of a close relation as derivative of the injury sustained by the relation.” 

The District Court noted that the Pennsylvania courts have not reached a well-settled conclusion on the issue. As such, the Court exercised its discretion under the Federal Declaratory Judgment Act and chose to abstain from jurisdiction. Accordingly, the insured’s Motion to Remand was granted.

Anyone wishing to review this decision may click this LINK.

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

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