Tuesday, June 18, 2024

Jurisdiction and Venue Issues Addressed in Insurance Coverage Action

In the case of Franko v. USAA, No. 2023-CV-1996 (C.P. Lacka. Co. May 31, 2024 Nealon, J.), the court addressed a coverage action relative to the theft of an allegedly covered vehicle. After the carrier denied coverage, the insured filed a lawsuit for breach of contract and bad faith liability.

The carrier filed Preliminary Objections asserting a lack of subject matter jurisdiction due to the policy’s form selection clause that limited legal actions to a court and county and state where the covered person resided at the time of the of the accident. The carrier also filed a Preliminary Objection asserting lack of personal jurisdiction based upon the allegations of the Complaint. Also asserted were improper venue objections along with a legal insufficiency of the bad faith claim.

Judge Nealon ruled that the policy’s form selection clause was inapplicable under the language of the policy given that the Plaintiff’s “comprehensive loss” claim arose from the deliberate “theft” of his vehicle, rather than an unintentional “accident.”

The court additionally ruled that, by obtaining a certificate of authority to conduct insurance business in Pennsylvania, the carrier had voluntarily consented to general personal jurisdiction in Pennsylvania.

The court additionally found that the allegations of the Complaint, and the exhibits attached thereto, stated a cognizable bad faith claim against the carrier.

With regards to the venue issue, the court directed the parties to conduct venue discovery and to resubmit the challenge to the court for a decision thereafter.

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

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