Summary Judgment Entered for UIM Carrier Where Plaintiff Did Not Fall Under Definition of a "Covered" Person

In the non-precedential decision in the case of Miller v. USAA General Ind. Co., No. 23-1934 (3d Cir. Jan. 2025 Chagares, C.J., Chung, J., and Fisher, J.) (Op. by Fisher, J.), the court affirmed summary judgment that had been granted by Judge Christopher C. Conner of the Federal Middle District Court in favor of the carrier in a UIM case.

According to the Opinion, a UIM Plaintiff sought coverage under a policy that was issued to the grandmother of the Claimant’s daughter. Both the Claimant and the daughter were living with the grandmother at the time of the accident.

The grandmother was the only named insured on the policy. The Claimant and the grandmother were not related by blood, marriage, or adoption.

The Claimant argued that her daughter was a named insured because she was listed as an “operator” on the declarations page for the applicable policy and that, therefore, the Claimant also qualified as an insured under that policy.

The Claimant additionally argued that the limitation of UIM coverage to the named insured and family members of the named insured, as defined by the policy, violated the Pennsylvania Motor Vehicle Financial Responsibility Law and the related stacking provisions. In this case, the Claimant invoked the case of Gallagher v. Geico and its precedent.

The Third Circuit Court of Appeals dismissed the Claimant’s arguments. The Third Circuit confirmed that the Claimant did not qualify as an insured under the policy and that, therefore, no UIM benefits were owed to the Claimant.

The Court noted that the issue in this case was not whether the named insured had waived UIM benefits.  Rather, the issue, and the finding, was that the Plaintiff was simply not a "covered" person under the terms of the policy.   

Moreover, the court found that, since the Claimant was not even an insured under the policy, no duty of good faith was owed to her by the carrier.

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


I send thanks to Attorney Christopher W. Woodward of the Camphill office of Marshall Dennehey for bringing this case to my attention.

Court Addresses Coverage Issue Regarding Permissive Use in a Motor Vehicle Accident Case

In the case of Motorist Mutual Insurance Company v. Barnes, No. CV19-01-813 (C.P. Lyc. Co. Oct. 13, 2023 Linhardt, J.), the trial court reviewed a declaratory judgment action on a coverage issue of whether an Defendant motorist was owed coverage under an argument that the driver was operating a vehicle with the permission of the owner of the vehicle.

This matter involved a fatal motor vehicle accident. At the time of the accident, the Defendant driver was operating a company car that his father had from his employer.

The question presented was whether there was permissive use of the vehicle by the Defendant driver such that the insurance policy that covered the vehicle was implicated for liability coverage.

After reviewing the record before it, the trial court concluded that there was no evidence that the employer who owned a company vehicle had granted any permission to its employee to allow anyone other than the employee to drive the vehicle. As such, the court found that there was no evidence of any express permission to operate the vehicle that was granted to the Defendant driver.

The trial court additionally found that there was no evidence of any implied permissive use to operate the vehicle either.

Judge Lindhardt reviewed the law in this regard. Under Pennsylvania law, permission to drive a vehicle may be implied by virtue of the relationship of the parties or by virtue of a course of conduct in which the parties have mutually acquiesced.

The court noted, however, that the Pennsylvania Superior Court has stated that “‘permission’ requires something more than mere sufferance or tolerance without taking steps to prevent the use of the automobile, and permission cannot be implied by possession and use of the automobile without the knowledge of the named insured.”

The Pennsylvania Superior Court has also noted that the “critical question” will always be whether the named insured said or did something that warranted the belief that the ensuing use was with his consent.

In this case, there was no evidence that the employer had impliedly allowed its company vehicle to be used by anyone other than the employee. Also, according to the record before this court, there are indications that the Defendant driver had taken his father’s vehicle while his father was sleeping or otherwise unaware of the use of the vehicle.

In the end, the court found that there was no evidence to suggest that any expressed or implied permission had been granted to the Defendant driver to be using the vehicle at the time of the subject fatal accident. As such, the trial court granted the summary judgment motion filed by the carrier given that there was no genuine issue of material fact as to whether or not the carrier had any obligation to provide insurance coverage for the accident under the insurance policy.

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

Source of image: Photo by Lazaro Rodriguez, Jr. on www.pexels.com.

Trial Court Rejects Carrier's Request To Intervene To Put Coverage Question On Verdict Slip

In the case of Hannibal v. Solid Waste Serv., Inc., Feb. Term, No. 01172 (C.P. Phila. Co. Dec. 29, 2022 Shreves-Johns, J.), the court found that the Defendant’s liability insurance company could not intervene in this premises liability action for the limited purpose for submitting Interrogatories in aid of determining whether the Plaintiff’s accident was excluded under the insurance company’s insurance policy.

This case arose out of an incident during which the Plaintiff was working at a state prison when he was injured in an accident in a work-related event.

The trial court denied the Defendant’s insurance company’s Petition to Intervene after finding that the insurance company’s liability was uncertain and that the insurance company did not have a legally enforceable interest in the case at hand.

The court issued its ruling after reviewing the categories of permissible intervenors as defined under Pa. R.C.P. 2327.

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


Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (Feb. 28, 2023).

Source of image:  Photo by Oleksandr Pidvalnyi on www.pexels.com.

With Regards to An Insurance Policy's Definition of 'Residency,' Court Rules That An Insured May Have More Than One Residence

In the case of Isenberg v. State Farm Fire & Cas. Co., No. 21-CV-1147 (W.D. Pa. May 27, 2022 Schwab, J.) (Mem. Op.), the court addressed issues of insurance coverage in the context of a house fire.

In this case, the carrier asserted that it was entitled to summary judgment because the Plaintiff was not using the house as a residence at the time of the fire.

According to the facts of the case, the Plaintiff had purchased the house in 2018, and continued to live in her apartment during the renovations at the house, which renovations turned out to the more extensive than anticipated. Then, in 2020, a fire destroyed the home. The Plaintiff filed a claim under her homeowner’s policy.

The carrier rescinded the policy, alleging that the Plaintiff was not using the house as a residence.

The Plaintiff filed suit in state court and the carrier removed the case to federal court. After discovery was completed, the Defendant carrier moved for summary judgment.

As noted, the carrier asserted that was not using the property as a residence at the time of the fire. The insurance company additionally argued that a person could only have one “residence.”

The court ruled in favor of the Plaintiff.  In part, the court found that Pennsylvania courts and federal courts applying Pennsylvania law had agreed that a person was not limited to only being able to have one residence.

Rather, the case law suggested that residency was a question of physical fact and not the policyholder’s intention.

In this case, the record before the court revealed that the Plaintiff was physically present at house on an almost daily basis. There was also evidence that she had meals there, slept at the house on occasion, and had personal belongings in the house during the course of the renovations.

As such, the carrier’s Motion for Summary Judgment was denied.

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


Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (June 14, 2022).

Source of image:  Photo by Jeffrey Czum on www.pexels.com

Microorganism Exclusion Found to Preclude Coverage for Business Shut Down by COVID-19 Pandemic Closure Order

 

In the case of Big Red Management Corp. v. Zurich Amer. Ins. Co., No. 2:20-CV-02113-KSM (Jan. 7, 2022 Marston, J.), the court ruled that a restaurant was not entitled to coverage for business losses allegedly caused by COVID-19 governmental closure orders where the insurance policy in question contained a microorganism exclusion.

The court also noted that coverage was properly denied by the carrier in that there had been no evidence of any direct physical damage or loss to the insured’s property. The court additionally held that coverage was properly denied because the governmental closure orders did not completely prohibit access to the restaurant since the restaurant was permitted to continue to offer takeout and delivery services.

As such, the court granted the Defendant’s Motion to Dismiss.

Anyone wishing to review a copy of this decision may click this LINK.  The Court's companion Order can be viewed HERE.

Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (Feb. 3, 2022).

Coverage Found Under a Homeowner's Policy For a Drug Overdose at a House Party

In the case of Kramer v. Nationwide Prop. & Cas. Ins. Co., No. 726 EDA 2021 (Pa. Super. Dec. 2, 2021 Lazarus, J., Dubow, J., and Pellegrini, J.), the Pennsylvania Superior Court addressed an insurance coverage action arising out of an incident during which the insured’s son hosted a house party at his parents’ home while they were out of town. Early in the morning thereafter, the decedent partygoer was found dead and a coroner later determined that the cause of death was a drug overdose.

The decedent’s mother filed a wrongful death and survival action against the homeowners and their son. The Plaintiffs asserted that the son who hosted the party was negligent in supplying the decedent with the drugs that caused his overdose. The Plaintiffs also allege in both the survival and wrongful death claims that the homeowners were negligent in allowing their son to use the home in such regard.

At the time of the incident, Nationwide was the insurance company for the parents at whose house the party was held. Nationwide denied coverage under the case presented.

According to the Opinion, the insurane policy at issue provided that Nationwide must “pay damages and insured is legally obligated to pay due to an occurrence resulting from negligent personal acts or negligence arising out of the ownership, maintenance, or use of real or personal property.”

In asserting that it did not have to provide a defense, Nationwide relied upon coverage exclusions in the policy which applied when certain damages arise from criminal conduct or the use of controlled substances.

The trial court had ruled that Nationwide had a duty to defend and the Pennsylvania Superior Court affirmed this decision.

Although the Pennsylvania Superior Court addressed the policy exclusion noted above, it ruled, in part, that the carrier was required to defend its insured in this suit arising from an alleged accidental drug overdose death because the damages under the Wrongful Death Act did not implicate the term “bodily injury” under the policy definitions.

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

I send thanks to Attorney Matthew D. Vodzak of the Philadelphia office of Fowler Hirtzel McNulty & Spaulding, LLP for bringing this case to my attention.

Federal Judge Denies Motion For Summary Judgment Filed by Carrier on Coverage Issues Related to Alleged Fraternity Hazing Death

In the case of Nationwide Gen. Ins. Co. v. Dibileo, No. 3:19-CV-01003 (M.D. Pa. July 20, 2021 Brann, J.), the court denied a carrier’s Motion for Summary Judgment in its Declaratory Judgment Action regarding issues of coverage under a homeowner’s insurance policy arising out of alleged actions by fraternity students in an alleged hazing death.   

The court found that the action filed by the decedent’s parents stated a claim for negligence.  The court found that policy provisions in the homeowner’s policy excluding coverage for criminal and intentional acts did not serve to insulate the carrier from the negligent claims asserted by the plaintiff in the underlying personal injury action. 

Anyone wishing to review a copy of this decision may click this LINK. The companion Order can be viewed HERE.

Source:  “Digest of Recent Opinions.”  Pennsylvania Law Weekly (Aug. 17, 2021). 

Insured Loses Fight for Coverage for a Fight

In the case of State Farm Fire and Cas. Co. v. Simone, No. 2:20-CV-00908-RJC (W.D.P. Jan. 28,2021 Colville, J.) County Court addressed a Motion for Judgment on the Pleadings filed by the liability insurance company seeking a declaratory judgment that the carrier did not have a duty to defend or indemnify the defendant with respect to allegations set forth in an underlying complaint arising out of an altercation during which the insured punched the injured party after they bumped into one another on a walkway at a crowded concert. 

After comparing the allegations in the Plaintiff’s complaint against the terms of the policy in question, the court ruled that the allegations in the complaint described a willful physical assault and an intentional tort for which there was no coverage under the policy. 

As such, the carrier’s motion for judgment on the pleadings was granted.

Anyone wishing to review this decision may click this LINK.

Claim Against Insurance Agent For Failing to Sell Insurance That Would Cover Business Interruption Claims Caused by COVID-19 Allowed to Proceed

In the case of Brown’s Gym, Inc. v. The Cincinnati Insurance Company, No. 20-CV-3113 (C.P. Lacka. Co. Dec. 18, 2020 Nealon, J.), Judge Terrence R. Nealon of the Lackawanna County Court of Common Pleas overruled an insurance agent’s Preliminary Objections filed in a case in which a gym and fitness center, which was required to close its premises and cease its business operations in compliance with the government orders issued in response to the COVID-19 pandemic.

In addition to suing its commercial insurer under a declaratory judgment action seeking coverage for its pandemic related losses under an “all risk” policy, the gym also sued its insurance agent under claims of negligence and negligent misrepresentation for failing to provide the gym with the insurance coverage it allegedly requested. 

Based upon a review of the allegations of the Complaint, the court noted that the insurance agent arguably breached its duty to exercise reasonable care, skill, and judgment in securing and providing insurance coverage that was specifically requested by the gym. The court additionally ruled that the insurance agent need not be a named party to the insurance contract in order for the gym to state valid claims of negligence against the agent.

As such, the court overruled the Preliminary Objections in the nature of a demurer filed by the insurance agent.


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

Injured Plaintiff's Desire To Recover on Defendant's Liability Coverage Not Sufficient to Support Intervention in a Coverage Action

In the case of Crum & Forster Specialty Ins. Co. v. American Diamond Builders, Inc., No. 20-1608 (E.D. Pa. July 31, 2020 Joyner, J.), the court denied a personal injury Plaintiff’s Motion to Intervene in a declaratory judgment action on coverage.

The court ruled that a personal injury Plaintiff with a potentially large claim against an insured Defendant does not have a cognizable legal interest in the insured Defendant’s insurance coverage that can support the Plaintiff’s effort to intervene in a coverage dispute between the liability carrier and its insured Defendant.

The court otherwise noted that the fact that a lawsuit may impede a Plaintiff’s ability to recover in a separate litigation is not a sufficient basis to support an intervention in the coverage action.

Anyone wishing to review a copy of this decision may click this LINK.  Here is a LINK to the companion Order.

I send thanks to Attorney James M. Beck of the Philadelphia office of the Reed Smith law firm for bringing this case to my attention.

Plaintiff's Bid to Prevail in Defendant's Coverage Action with Liability Carrier Rejected

In the case of State Farm Fire & Cas. Co. v. Worontzoff, No. 2:20-CV-839-GAM (E.D. Pa. Aug. 6, 2020 McHugh, J.), the court granted an insurance company’s Motion to Strike an injured party’s Motion for Summary Judgment in the carrier’s declaratory judgment action seeking to establish that it was not obligated to provide coverage to its insured for injuries allegedly caused to the injured party.

The court found that the injured party’s interest, that is a plaintiff's interest, in seeking the availability of insurance proceed was not sufficient to warrant intervention as a right under F. R.C.P. 24 or as a necessary party under F. R.C.P. 19(a)(1)(2). 

The court ruled that, where an interested party only had a merely financial interest in the action and not a “legally protected interest” that party could not seek to join in the case under F.R.C.P. 19(a)(1)(B). 

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

Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (Aug. 24, 2020).

Issues of Fact Preclude Summary Judgment on Excess Coverage Issue

In the case of Farber v. Erie Insurance Exchange, No. 19-CV-2302 (C.P. Lacka. Co. July 8, 2020 Nealon, J.), the court addressed coverage issues pertaining to whether an excess/umbrella policy was precluded by an exclusion. In the end, after finding that the insurance company had not established its position in a fashion that was free and clear from any doubt, the carrier’s Motion for Summary Judgment on the issues presented was denied. 

By way of background, a boat owner, who had been sued in a wrongful death lawsuit involving the use of his motorboat, instituted a coverage action against his excess/umbrella carrier asserting claim for breach of contract, declaratory judgment, bad faith, and violations of the Unfair Trade Practices and Consumer Protection law. 

According to the Opinion, the excess/umbrella policy contained a watercraft exclusion that provided temporary insurance coverage for watercraft “acquired during the policy period,” but that liability coverage “ceases” to exist, if notice is not given [by the insured] within thirty (30) days” of “the date of acquisition” of the watercraft.

According to the record before the court, the insured gained possession of the motorboat on August 5, 2017 and paid the seller for its purchase on August 18, 2017. 

The Commonwealth of Pennsylvania issued title to the boat in the insured’s name on September 6, 2017. 

The fatal motorboat accident occurred on September 26, 2017. 

The carrier filed a Motion for Summary Judgment arguing that the insured has “acquired” the motorboat when he took custody of it on August 5, 2017 and asserted that, as such, the excess/umbrella coverage was allegedly precluded by the watercraft exclusion since the thirty (30) day temporary coverage purportedly lapsed on September 4, 2017, which would have been several weeks before the subject incident. 

Judge Nealon noted that the carrier had drafted the policy in utilized words such as “acquired” and “acquisition,” rather than words like “possessed” or even “purchased,” in establishing the dates for commencement and cessation of temporary liability coverage for watercrafts. 

The court also noted that the terms utilized by the carrier in the policy were not defined within the policy. 

Turning to ordinary dictionary definitions of the undefined words led the court to conclude that the words used by the carrier mean gaining “ownership” or the “power of disposal” of the watercraft. 

The court also noted that the state regulations indicate that a purchaser of a boat becomes the lawful owner upon obtaining title to the boat. 

Since the court found that different interpretations of the terms at issue gave rise to an ambiguity, and since Pennsylvania law requires that all ambiguities be construed in favor of the insured, Judge Nealon found that the carrier had not established, in a fashion that was free and clear from doubt, that the carrier was entitled to judgement on the question of coverage. As such, the Motion for Summary Judgment filed by the carrier was denied. 

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

First Substantive Decision in the Nation (out of Michigan) on a Covid-19 Business Interruption Coverage Question Favors the Carrier (Donegal)

Here is a LINK to a blog post reporting on what is noted to be the first substantive decision across the nation on a Covid-19 Business Interruption Coverage question.

The decision was handed down by a Michigan state court on July 1, 2020 and favored the carrier, which was a division of Donegal Insurance, by dismissing the Complaint as a matter of law.

According to the blog post, the court in Michigan found that "direct physical loss of or damage to property" requires mor than mere loss of use or access; rather, some tangible alteration or damage that impacts the physical makeup of the premises is required in order to implicate the coverage.

According to other articles on the case, the matter arose out of Donegal's denial of $650,000 of business interruption claims by a restaurant.

Interestingly, the decision of the court was issued verbally.   A link to the Youtube post with the decision is included in the blog post that can be accessed at the above Link.

I send thanks to my contacts at Tuscarora-Wayne Insurance Company for bringing this decision to my attention.

CUMMINS LAW is an insurance defense firm that, in addition to defending all sorts of liability claims, also handles insurance coverage questions, including Covid-19 business interruption coverage questions.  Cummins Law can be contacted at 570-319-5899 or by emailing dancummins@CumminsLaw.net.