Friday, February 19, 2021

Reformation of a UIM Policy Found to Also Include the Addition of a Forum Selection Clause

In the case of Matthews v. Erie Insurance Group, 2021 Pa. Super. 6 (Pa. Super. Jan. 12, 2021 Bender, P.J.E., Lazarus, J., and Stevens, P.J.E.) (Op. by Bender, P.J.E.), the court addressed issues of venue in a UIM case.   

According to the Opinion, the Plaintiff was injured in a motor vehicle accident while operating a vehicle insured by the carrier under a policy issued to a construction company.   

The injured party filed suit for UIM coverage under the Erie policy under an argument that the construction company had never validly rejected UIM coverage.  

The carrier filed Preliminary Objections to venue seeking to transfer the case from Philadelphia County to Bucks County.  Those Preliminary Objections were sustained in the trial court and the case was transferred. 

The trial court had ruled that the reformation of the insurance policy to provide UIM coverage must also include the forum selection clause that would have accompanied the policy if it had been properly issued.  

On appeal, the injured party argued that Erie should not be entitled to a forum selection clause that was not included in the original policy and which had been reformed by the court.   The injured party attempted to argue that the reformation should only be with respect to a provision of UIM benefits and should not be expanded to include additional contract provisions such as a forum selection clause.   

The Pennsylvania Superior Court rejected the injured party’s argument and affirmed the trial court’s Order.   The appellate court agreed with the carrier’s position that the injured party’s position would afford greater rights to those insureds that did not select UIM coverage as compared to those customers who did select UIM coverage and, therefore, would be subject to the forum selection clause in the carrier’s UIM coverage provisions.  

The court further found that, if the injured party argues that he is entitled to UIM coverage, it would be just and fair that he should also be subject to the forum selection clause asserted with that coverage. 

Accordingly, the court affirmed the trial court and found that the trial court did not abuse its discretion in applying the terms of a forum selection clause in transferring the case to Bucks County.  

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

Source: “Digest of Recent Opinions.”  Pennsylvania Law Weekly (Jan. 26, 2021).  

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