Third Circuit: Unless An Automobile Insurance Carrier Issues a New Policy, No New UM/UIM Sign Down Forms Are Required

In the case of Geist v. State Farm Mut. Auto. Ins. Co., 49 F.4th 861 (3rd Cir. Sept. 29, 2022 Randel, C.J.), the Third Circuit Court of Appeals addressed the issue of when an automobile insurance carrier may be required to secure updated UM/UIM sign down forms.

In this matter, when the insured had purchased the State Farm policy initially, two (2) vehicles were insured under the policy and the necessary forms were executed. Thereafter, the insured added a third vehicle. At that point in time, the insured did not execute a request for UIM coverage limits below the bodily injury coverage limits.

Thereafter, an insured under the policy was involved in a motor vehicle accident. After settling the tort claim against the Defendant driver, that Plaintiff turned to State Farm for UIM coverage. A dispute arose over the amount of UIM limits available.

The Plaintiff asserted that she should be provided with higher limits because State Farm did not secure a sign down form when another vehicle had been added to the policy. When State Farm disagreed, litigation ensued and eventually resulted in this decision.

The Plaintiff asserted that she was owed higher coverage because State Farm had not followed the requirements of 75 Pa. C.S.A. §1731 and 1734 relative to the forms at issue.

The Third Circuit Court of Appeals, after reviewing the existing case law, ruled that no events in the years prior to the subject motor vehicle accident triggered the obligations under §1731 and 1734 because State Farm had never issued a new policy to the insured. As such, the court found that State Farm was not obligated to seek a new written election for lower UIM coverage limits under the policy.

Rather, the court ruled that the Pennsylvania Motor Vehicle Financial Responsibility Law only required carriers to seek elections of lower UIM coverage limits only when the carriers issue policies. State Farm was found to have satisfied their duties under the law when the secured the forms when the insured had executed the requisite forms when the policy was initially issued.

The court more specifically noted that both §1731 and 1734 expressly state that the requirements contained in those statutes apply, under §1731 when an insurance company is involved in the “delivery or issuance” of a “policy,” and §1734 applied when a carrier “issues a policy.”

The court in Geist went on to note that, once the carrier meets its obligations to secure the UIM sign down forms on a particular policy, the insurance company need not do anymore to fulfill its obligations under §1731 and 1734 during the life of that particular insurance policy.

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

Source of image:  Photo by Olia Danilvoich on www.pexels.com.

Court Rejects Carrier's Argument That Sign Down Forms Secured For One Policy Carried Over to Later Policy

In the case of Woloszyn v. Nationwide Prop. & Cas. Ins. Co., No. 10246 of 2022, C.A. (C.P. Lawr. Co. Oct. 6, 2022 Hodge, J.), the court denied a Defendant carrier’s Motion to Dismiss a Plaintiff’s bad faith insurance claim.

In this matter, which arose out of a motor vehicle accident, the Defendant carrier argued that it was not obligated to provide coverage because the carrier had secured a sign down form from the Plaintiff relative to the Plaintiff’s previous policy with the carrier. The carrier noted that the more recent insurance policy provided to the Plaintiff, which was in effect at the time of the accident, was just a rewriting of the previous policy. As such, the carrier asserted that the securing of another sign down form was not required.

The court in this matter disagreed with the carrier's argument and held that, under 75 Pa. C.S.A. §1731, the carrier was required to secure another sign down form and that, therefore, the Defendant’s argument that the old coverage limits transferred to the new policy failed as a matter of law.

The court noted that, while the Defendant carrier argued that the new policy simply assumed the sign-down provision of the Plaintiff’s previous policy, the court noted that the Defendants had failed to produce a signed copy of the previous rejection form indicating that the Plaintiffs understood that they were rejecting underinsured and uninsured motorist coverage.

Based upon these reasons, the court denied the Defendant’s Motion to Dismiss.

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


Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (Nov. 22, 2022).

Court Upholds Employer's Rejection Of UIM Coverage in a Case Where Employee Sought UIM Benefits

In the Grenell v. Zurich American Ins. Co., No. 2:21-CV-36 (W.D. Pa. Sept. 22, 2022 Cercone, J.), the court addressed challenges to UM and UIM rejection forms.

According to the Opinion, the Plaintiff was involved in a motor vehicle accident in August of 2019.

The Plaintiff settled with the tortfeasor for the liability limits and then secured UIM benefits from his own insurance company, which was the Agency Insurance Company.

The Plaintiff thereafter sought additional UIM benefits on the vehicle that he was operating at the time of the accident and which vehicle was provided to him by his employer. That vehicle was covered under an automobile insurance policy issued by Zurich American Insurance Company.

The record before the court confirmed that the Plaintiff was permitted to use the vehicle for business and personal use. The record also confirmed that the Plaintiff paid taxes on the benefits he received from the personal use of the vehicle.

According to the Opinion, the employer had rejected UIM coverage on the vehicle.

The Plaintiff challenged the validity of this UIM rejection under an argument that he was never notified of the rejection.

Cross Motions for Summary Judgment were filed.

The court held that the UIM rejection form was valid and enforceable. The court noted that the waiver was executed by someone with authority at the employer’s office to reject the coverage on behalf of the employer. As such, the court rejected the Plaintiffs’ arguments in opposition.

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


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

Pennsylvania Superior Court Addresses UIM Coverage Issues Regarding Discrepancies In the Policy Documents

In the case of Hartford Fire Ins. Co. v. Davis, No. 310 MDA 2021 (Pa. Super. May 9, 2022 Olson, J, Kunselman, J., and Stevens, P.J.E.) (Op. by Stevens, P.J.E.), the Pennsylvania Superior Court overturned a trial court’s entry of summary judgment in favor of a carrier in a UIM arbitration matter on issues of whether or not the subject automobile insurance policy had certain UIM coverages available.

This case arose out of a motor vehicle accident that occurred back in 2005. The Plaintiff was injured while operating a vehicle owned by his employer.

The vehicle operated by the Plaintiff was insured by Hartford under a commercial automobile insurance policy. During the annual renewals of the policy up through the time of the Plaintiff’s accident, it has been the practice of the insurance company to obtain a UIM coverage rejection form for each policy term renewal. However, the carrier failed to do so for the policy in question.

At the time of the subject accident, a Pennsylvania UIM coverage endorsement was appended to the subject policy although the policy did not specify any limit of UIM coverage for Pennsylvania.

In entering summary judgment, the trial court found that the UIM policy issued by Hartford for the subject year of the accident did not specify a limit of UIM coverage for Pennsylvania and that, therefore, the coverage limit was $0 and the Pennsylvania UIM endorsement attached to the policy was a nullity. The trial court further held that the employer as effectively waived UIM coverage in Pennsylvania by executing a rejection of UIM protection form a few years before the accident.

On appeal, the Pennsylvania Superior Court found that the trial court erred in finding that the subject policy of insurance issued by the Hartford did not provide for UIM coverage at the time of the accident despite the fact that a UIM coverage endorsement was attached to the policy. The Pennsylvania Superior Court also agreed with the Plaintiff that the trial court had erred in concluding that the rejection of UIM protection form executed by the employer prior to the accident was applicable to the subject policy.

The Superior Court based its decision, in part, on 75 Pa. C.S.A. §1731, which mandates that an insurance company issuing a policy in the Commonwealth of Pennsylvania must provide UM/UIM coverage equal to the bodily injury liability coverage, unless the insured validly rejects UM/UIM coverage or validly requests lower limits pursuant to §1734.

Accordingly, where, as here, the subject policy of insurance provided $2 million dollars in liability coverage at the time of the accident, absent a valid and specific rejection of UIM coverage, the court found that the Pennsylvania UIM coverage limit in this case would also be $2 million dollars. Elsewhere in the Opinion, it was indicated that the Plaintiff had previously secured an Arbitration Award in excess of $2 million dollars on the case presented.

The trial court’s decision was vacated and the case was remanded for additional proceedings consistent with this Opinion.

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


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

UIM Rejection Form for Commercial Auto Policy Found Valid

In the case of Eberly v. Firemen’s Ins. Co. of Washington, D.C., No. 5:20-CV-05471 (E.D. Pa. July 13, 2021 Leeson, J.), Judge Joseph Leeson of the Eastern District Federal Court granted a Defendant carrier’s Motion to Dismiss in a UIM case.

This matter involved a commercial auto policy.  The Plaintiff challenged the UIM rejection form on the basis that the document did not contain a policy number and because the document did not indicate the authority of the signatory to execute the document on behalf of the commercial insured.     

The court found that the form executed by the Plaintiff rejecting equal UIM coverage under a commercial automobile insurance policy was valid where that form was signed by the corporate insured’s owner, who was the only individual who had ever acted as a signatory for the company. 

The court also found the form to be valid where the relevant policy number was listed in an attached schedule to the coverage forms.

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 (July 29, 2021).

Source of image: Photo by Andrea Piacquadio from Pexels.com.

UIM Coverage Election Forms Found To Be Valid

In the case of Eckman v. Encompass Home & Auto Ins. Co., No. 1904038 KSM (E.D. Pa. July 30, 2021 Marston, J.), the court ruled that an insured was not entitled to underinsured motorist coverage equal to the bodily injury liability coverage limits under the subject automobile insurance policy where the statutory coverage election forms, as well as the insured’s initial application for the insurance policy, all provided sufficient evidence under Pennsylvania statutory law to demonstrate that the insured intended to purchase a lower amount of UIM coverage.

As such, the Defendant carrier’s Motion for Summary Judgment was granted and the Plaintiff’s cross Motion for Summary Judgment was denied.

According to the Opinion, the Plaintiff sought to preclude the coverage forms at issue from consideration by the court. However, the Plaintiff also conceded that, if the UM/UIM coverage forms were admissible, then the carrier would indeed be entitled to summary judgment. The court denied the Motion to Preclude the Documents from Consideration.

The court also ruled that, even if the election forms were excluded, the application for insurance itself constituted sufficient evidence for the court to find that the Plaintiff intended to purchase lower UM/UIM coverage limits.

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

The Court's Opinion on the Plaintiff's motion to preclude the admission of copies of the pertinent documents can be viewed HERE.


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

Source of image: Photo by Scott Graham on Unsplash.com.

Carrier's UIM Rejection Forms and Renewal Forms Upheld as Valid

In the case of Keeler v. Esurance Insurance Services, Inc., No. 2:20-CV-00271 (W.D. Pa. July 12, 2021 Kelly, M.J.), Federal Western District Court Magistrate Judge Maureen P. Kelly issued a Report and Recommendation recommending that the court grant the Motion for Summary Judgment filed by the carrier and denied the Motion for Partial Summary Judgment filed by the Plaintiffs in a UIM bad faith litigation.

According to the Opinion, the Plaintiff was involved in a motorcycle accident and recovered against the third party tortfeasor and then pursued a UIM claim against Esurance.

The carrier denied the UIM claim under an argument that the Plaintiff did not purchase UIM benefits when he first obtained the policy and did not add UIM coverage with any subsequent renewal.

The Plaintiffs asserted that the carrier’s UIM rejection form did not comply with the MVFRL because the statutorily required language was not printed in a prominent font or in a prominent location in the carrier’s policy. As such, the Plaintiff asserted that the rejection form was void and that UIM benefits must therefore be provided in an amount equal to the bodily injury liability coverage purchased.

Separately, the Plaintiffs also asserted that the carrier’s policy renewal forms omitted a required reminder notice indicating to the insured that the policy did not provide UIM benefits. The Plaintiffs again asserted that this alleged error on the part of the carrier resulted in the carrier being required to provide UIM coverage.

In response, the carrier asserted that its UIM rejection form complied with Pennsylvania law and that, when the Plaintiff signed that form, he offered up a valid written rejection of the offer of UIM coverage.

With regard to the policy renewals, although the carrier conceded that its form lacked the language required by MVFRL to inform policyholders that UIM coverage is not provided under the policy, the carrier held that the Plaintiffs could not be provided with UIM coverage as a result because the Pennsylvania Legislature had not provided for any remedy in any statute for this scenario.

The carrier sought a judgment in its favor as to the Plaintiff’s bad faith claim under the argument that the carrier had acted reasonably and in good faith given that the Plaintiff had affirmatively rejected UIM benefits.

Based upon the above rulings, the court granted the carrier summary judgment after finding that the carrier had an objectively reasonable basis to deny coverage based upon the Plaintiff’s valid rejection of UIM benefits.

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


I send thanks to Attorney Joseph Hudock of the Pittsburgh office of the law firm of Summers McDonald, Hudock, Guthrie & Rauch, P.C. for bringing this case to my attention.

Third Circuit Court of Appeals Confirms that Any Writing Can Serve as a UIM Sign Down Form

In the case of Gibson v. State Farm Mut. Auto. Ins. Co., No. 20-1609 (3d Cir. Jan. 21, 2021 Hardiman, J., Roth, J., and Pratter, J.) (Op. by Pratter, J.), the court addressed the requirement under §1734 of the Motor Vehicle Code with respect to the valid election for reduced underinsured motorist coverage.

At the outset of its Opinion, the Third Circuit noted that, although basic UIM coverage is typically offered in an amount equal to the bodily injury limits set forth in an automobile insurance policy, an insured in Pennsylvania can reduce premium costs by opting for a lower amount of underinsured motorist coverage. The court noted that, to accomplish this result, the Pennsylvania law requires, under  75 Pa. C.S.A. §1734, that the insured make a “request in writing.” 

The Third Circuit indicated that the statute says “little beyond that. But that silence speaks volumes. As we reiterate today, the statute means what it says: an insured can make that choice “in writing” in any writing as long as the choice is clear.”  See Op. p. at 4.

In this matter, the Plaintiff signed an insurance application with the carrier for bodily injury coverage of $250,000.00 and $100,000.00 in stacked UIM coverage. The Plaintiffs had three (3) cars under the policy.

The court emphasized that the court signed an application that included language that stated “the limits and coverages [in the application] were selected by me.” The application also referenced another “required” document, an acknowledgement of coverage selection form for UIM. The carrier did not supply that form and the Plaintiff did not sign it at that time.

The Plaintiff was seriously injured in a motor vehicle accident shortly after signing the application for the insurance. Three (3) weeks after the accident, the Plaintiff signed an Acknowledgement of Coverage Selection form in which she acknowledged that she had been given opportunity to purchase UIM coverage with limits up to her liability coverage for bodily injury but had instead selected a lower UIM limits.

In the end, the court found that the Plaintiff’s signature on the application, with the language contained in the application, confirmed that the Plaintiff was electing lower UIM limits.


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


Source: “Digest of Recent Opinions.” Pennsylvania Law Weekly (April 22, 2021).

 

Link to Complete Copy of Plaintiff-Favorable Household Exclusion Decision

A few days ago, there was a Tort Talk post on the case of Donegal Mut. Ins. Co. v. Krautsack, No. CI-19-04904 (C.P. Lanc. Co. Aug. 28, 2020 Ashworth, J.), which was a plaintiff-favorable Household Exclusion decision that followed the rationale of the Gallagher decision.

The copy of the decision provided via the Link was missing pages from the Opinion.  Here is a LINK to a complete copy of the decision. 

I apologize for any confusion or consternation caused.

I send thanks to Attorney Scott Cooper of the Harrisburg, PA office of Schmidt Kramer for securing a complete copy for me.

Plaintiff-Favorable Decision Out of Lancaster County Applying Gallagher v. GEICO Decision

Another Plaintiff-favorable Gallagher decision has been uncovered, this one out of the Lancaster County Court of Common Pleas.

In the case of Donegal Mut. Ins. Co. v. Krautsack, No. CI-19-04904 (C.P. Lanc. Co. Aug. 28, 2020 Ashworth, J.), the court granted the Plaintiff's motion for summary judgment and denied the carrier's cross-motion for summary judgment relative to issues surrounding the application of a household exclusion in an automobile insurance policy.

This case arose out of a motorcycle accident and a question of the application of a household exclusion contained in one of multiple policies in a household.

The Plaintiff argued that Gallagher should be read as eradicating the household exclusion across the board.  The carrier asserted that Gallagher should be limited to its facts and that the facts in Gallagher were distinguishable from the facts in this case.

This Lancaster County Court applied the Gallagher v. GEICO decision literally and noted that the Pennsylvania Supreme Court "unequivocally" held that household exclusions are unenforceable as a matter of law as they violate the requirements set forth in Pennsylvania's Motor Vehicle Responsibility Law that a carrier secure a written waiver or rejection of stacked UIM coverage for such waiver or rejection to be valid.

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

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

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. 

Removal of Car From Policy Does Not Require Carrier to Secure New Waiver of UIM Stacking Form

In the case Franks v. State Farm Mut. Ins. Co., 93 Bucks Co. L. Re. 6 (C.P. Bucks Co. Nov. 18, 2019, McMaster, J.), the court ruled in favor of the carrier in a declaratory judgment action involving UIM coverage and stacking issues.

The court noted that the issue before it appeared to involve a case of first impression, that being the issue of whether, under the MVFRL, is there a “purchase” of insurance when an insured removes a vehicle from their policy, thereby reducing the number of cars subject to a stacking requirement.

The court held that, under the Pennsylvania Motor Vehicle Financial Responsibility Law, State Farm was not obligated to offer its insureds the opportunity to waive stacking of underinsured motorist coverage when the insureds removed a vehicle from an already existing policy.

The court noted that, under 75 Pa. C.S.A. §1738(c), an insurance company must offer an insured the opportunity to waive stacking of UIM limits whenever an insured purchases UIM coverage for more than one vehicle under a policy.

The court noted that that the determination of the outcome of this case fell upon the definition of the word “purchase” under the statute.

The court applied the rules of statutory construction that words that are clear and free from all ambiguity to be applied in their ordinary and common usage.

The court reviewed other cases, including Sackett I, and found them not be to directly on point as the prior cases dealt with facts involving the increase of the number of vehicles on a policy or switching out vehicles on a policy.

The court noted that, while affirmatively adding a vehicle to an insurance policy requires the signing of a new waiver, the modification of an already existing policy does not.

In this case, the court indicated that it was dealing with the removal of vehicles from the policy and decreasing policy premiums. The court noted that a removal of a vehicle from the policy constituted a modification of a policy, and not a “purchase” of a new vehicle.

Accordingly, the court held that, removing a vehicle from an already existing policy, should not trigger the requirement that a carrier secure a new waiver of stacking when issuing the revised policy.
As such, in this Rule 1925 Opinion, the trial court recommended to the Superior Court that the Plaintiff’s appeal be quashed or denied.

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

I send thanks to Attorney John K. Shaffer of the Plymouth Meeting, Pennsylvania law offices of Lester G. Weinraub for bringing this case to my attention.

First Named Insured Must Sign Rejection of Stacking Form For It to Be Valid

In the case of Rodriquez v. Penn National Mut. Ins. Co., No. S-203-16 (C.P. Schuylkill Co. Jan. 14, 2020 Goodman, J.), the trial court addressed the issue of the statutory requirement that a first named insured sign a rejection of stacking form in an underinsured motorist context in order for the rejection to be upheld.

According to the Opinion, in this matter, the wife of the first named insured signed the rejection of stacking form.

Thereafter, the wife was involved in a car accident and made claim for stacked UIM coverage, which Penn National denied.

The wife claimed that the rejection of stacking form was invalid under §1738 of the Motor Vehicle Code.

Penn National attempted to argue that the rejection form was still valid because the first named insured’s wife was acting as an agent of first named insured when she signed the rejection of stacking form.

Judge Goodman of the Schuylkill County Court of Common Pleas adopted the plain statute language requiring that a rejection of stacking form be signed by the “first named insured” rendered the rejection form invalid even though it was signed by the wife of the first named insured.

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

I send thanks to Attorney Scott B. Cooper of the Harrisburg, Pennsylvania law firm of Schmidt Kramer, P.C. for bringing this case to my attention.

Superior Court Rules That Employers Need Not Notify Employees of Rejection of UIM Coverage Under Employer's Policy (Non-Precedential)

In the non-precedential decision by the Pennsylvania Superior Court in the case of Derr v. National Fire Ins. Co. of Hartford, No. 1340 EDA 2019 (Pa.Super. Feb. 6, 2020 Nichols, J., Murray, J., and Colins, J.)(Op. by Colins, J.), the appellate court rejected a claim that public policy interests requires notification to all employees regarding an employer's rejection of UIM coverage be valid under the Motor Vehicle Financial Responsibility Law.

Anyone wishing to review this non-precedential decision may click this LINK.

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

Eastern District Court Uses Its Discretionary Power to Punt UIM Issues Back to State Court

The Federal District Courts of Pennsylvania flexed their discretionary muscles in two recent cases in which they punted two cases back to the state court that involved novel and/or unsettled questions under Pennsylvania's Motor Vehicle Financial Responsibility Law (MVFRL).

In the case of Lambert v. State Farm Mut. Auto. Ins. Co., NO.19-0816 (E.D. Pa. Oct. 16, 2019 Slomsky, J.) the Easter District Federal Court of Pennsylvania granted a motion to remand a Declaratory Judgment action involving underinsured motorist (UIM) benefit under Section 1738 of the MVFRL.

The Plaintiff originally filed the case in the Court of Common Pleas of Philadelphia County and State Farm removed it to federal court based upon diversity.

The Plaintiff then filed a motion to remand and argued that the case involved an unsettled and novel issue of Pennsylvania law such that the case should be remanded pursuant to the discretionary nature of the federal Declaratory Judgment Act. State Farm argued that even though the case involved primarily issues of state law, there was no indication the case involves unsettled and novel issues of state law.

The Court noted that the question involved in this case was whether the Section 1738 rejection of stacking form only involves the rejection of intra-policy stacking and not inter-policy stacking as well.

The District Court reviews the motion to remand under the applicable standard of review. The District Court first looked at whether there was a parallel state court proceeding. There was none but the Court noted that was not dispositive.

Then the District Court reviewed a “non-exhaustive” list of factors to be applies as set forth by the Third Circuit Court of Appeals in the case of Reifer v. Westport Ins. Co., 751 F.3d 129 (3d Cir. 2014). Applying of the Reifer factors, the Court found no impediment to request for a remand.

The District Court in Lambert ultimately found that the issue presented did involve an unsettled and novel area of the MVFRL and and as such remanded to case to the state court.

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

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


In another case with a similar result, the District Court for the Eastern District of Pennsylvania also granted a motion to remand in Sherer v. Federated Mut. Ins. Co., NO.19-2530 (E.D. Pa. Oct. 22, 2019 DuBois, J.) involving a motion to remand a Declaratory Judgment action involving underinsured motorist (UIM) benefit under Section 1731 of the Pennsylvania Motor Vehicle Financial Responsibility Law (MVFRL).

The Plaintiff had filed the original case in the Court of Common Pleas of Philadelphia County and the carrier removed the matter to federal court based upon diversity.

The Plaintiff then filed a motion to remand and argued that the case involved an unsettled and novel issue of Pennsylvania law so the case should be remanded pursuant to the discretionary nature of the federal Declaratory Judgment Act.

The carrier argued that even though the case involves primarily issues of state law, there is no indication the case involves unsettled and novel issues of state law.

The issue more specifically involved whether the Section 1731 rejection of underinsured motorist coverage form is valid. Also, another potential issue was what obligation (if any) the Plaintiff's employer had to advise that there was no UIM coverage on the vehicle the Plaintiff was operating at the time of this accident.

In deciding the motion to remand, the District Court primarily reviewed whether there was a parallel state court proceeding currently pending.  The Court found that there no such parellel case but also noted that is not dispositive.

The District Court then looked to “non-exhaustive” list of factors to be applies as set forth by the Third Circuit in Reifer v. Westport Ins. Co., 751 F.3d 129 (3d Cir. 2014). 

Applying of the Reifer factors, the Court found that there was no impediment to remand. The District Court more specifically found that the issue presented is an unsettled and novel area of the MVFRL and that remand of the case to the state court was appropriate.

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

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

Validity of UIM Rejection Form Language in Commercial Auto Policy Upheld (Mem. Op.)

In a memorandum opinion in the case of Rarick v. Federal Services Ins. Co., 2:13-cv-03286-JFL (E.D. Pa. July 10, 2017 Leeson, J.), whch involved an employee who challenged the rejection form signed by his employer on a commercial motor vehicle insurance policy, the District Court held that the employee (as a third party beneficiary) had standing to challenge the validity of the rejection of UM/UIM coverage form.

The court additionally confirmed that rejection forms under Section 1731 of the Pennsylvania Motor Vehicle Financial Responsibility Law apply to commercial policies. 

The District Court in Rarick ultimately held that, as there were only minor deviations in the form as compared to the form language in 75 Pa.C.S.A. Section 1731, the validity of the form was upheld.

Anyone wishing to review this case 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.

Language of UIM Rejection Form Upheld in Commercial Vehicle Setting (Non-Precedential)

In its non-precedential decision in the case of Fatai King v. US Xpress Inc, et al, No. 16-2623 (3d Cir. July 11, 2018), the Third Circuit Court of Appeals affirmed a District Court's finding that an uninsured rejection form in a commercial policy was valid. 

According to a review of the Opinion, there were additional sentences in the rejection language of the form beyond that required by the 75 Pa.C.S.A. Section 1731.

The Fatai King court noted that a verbatim recitation of the statutory language was not required to render a UIM rejection form valid. The court noted that the changes to the form at issue in this case were appropriate to tailor the form to the commercial vehicle context to which it applied.

Anyone wishing to review this case 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.

Court Rules That Rejection of UIM Coverage Forms Not Required Where Vehicle Not Insured for Liability

In the case of Baldridge v. Amica Mut. Ins. Co., No. 2:17-cv-00273-AJS (W.D. Pa. June 30, 2017 Schwab, J.), the Federal Western District Court of Pennsylvania addressed the issue of whether underinsured motorist coverage was available to the Plaintiff for stacking purposes on one of his four personal vehicles which the Defendant insured.  

According to the Opinion, there was no dispute that the Defendant insurance company insured the four (4) personal vehicles of the Plaintiff.  There was also no dispute that the Plaintiff had UIM coverage in the amount of $300,000.00 on three of the four personal vehicles.  

The question before the court was whether the Plaintiff was entitled to UIM coverage on the fourth vehicle, which was noted to be a Mustang.  The more specific question for the court to resolve was whether the Plaintiff had UIM coverage in the amount of $900,000.00 ($300,000.00 multiplied by three vehicles) or $1.2 million dollars ($300,000.00 multiplied by four vehicles).  

The carrier asserted that, because it never provided liability coverage on the Plaintiff’s Mustang, the carrier was never required to also offer the Plaintiff’s UIM coverage on that vehicle.  

The Defendant carrier produced a portion of the insurance policy it issued to the Plaintiff which confirmed that the Mustang was “not covered” for liability.   Rather, that vehicle was covered only for damage to the Mustang for accidents other than collision loss.  

After a review of the waiver/rejection of UIM coverage statutes found at 75 Pa. C.S.A. §1731 and §1734, the court agreed with the carrier’s position and found that, because the Mustang was not insured for liability purposes, the Defendant carrier was never required to offer UIM benefits on that vehicle.   As such, no signed waiver of UIM benefits with respect to the Mustang was required by law.  

Accordingly, the court ruled in favor of the Defendant carrier on the motion presented.  

Anyone wishing to review this decision may click this LINK.


I send thanks to Attorney Joseph Hudock of the Pittsburgh, Pennsylvania law firm of Summers McDonnell, Hudak & Guthrie, P.C., for bringing this case to my attention.  

Eastern District Federal Court Declines to Exercise Jurisdiction Over Sackett Issue That Is Currently Pending Before PA Supreme Court

In the case of Bransfield v. New Jersey Manufacturers Ins. Co., 2017 WL 714036 (E.D. Pa. 2/23/2017) (mem.), the Eastern Federal District Court declined to exercise jurisdiction over an unsettled Sackett-type issue and remanded the case back to state court for a decision.

In Bransfield, the Plaintiffs filed declaratory judgment action in state court asserting that the insurer owed stacked UIM coverage because when the insured/owner added a vehicle to her single-vehicle auto policy, her insurer was required to obtain new UIM coverage forms and new UIM stacking rejection forms.  According to the Opinion, the insured had rejected UM/UIM and stacking prior to the addition of the second vehicle.

The Plaintiff asserted that since the insurer did not secure new UIM coverage forms or new UIM stacking rejection forms, the Plaintiff should be entitled to stacked UIM coverage.

The Bransfield court declined to exercise jurisdiction after finding that, if it did, the court would need to make a threshold determination on an unsettled question of whether the MVFRL requires new UIM rejection forms when new vehicles are added to a policy. 

The court noted that it would have to predict whether stacked UIM is available pursuant to Sackett, which the court noted was an issue before the Pennsylvania Supreme Court in Toner v. The Travelers Home and Marine Ins. Co., 137 A.3d 583(Pa. Super. 2016), appeal granted No. 29 WAP 2016 (Pa. Sept. 8, 2016).  Part of the reason the Bransfield court declined to decide the issue was to avoid a scenario where its decision could end up conflicting with how the Pennsylvania Supreme Court may ultimately rule upon the issue in Toner.

Ultimately, the Branfield court denied the carrier’s request to reconsider the court’s prior Order remanding the matter back to state court.

Anyone wishing to review this unpublished memorandum opinion in Bransfield may click this LINK.


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


UPDATE:  The Toner case refernced above settled just before the Pennsylvania Supreme Court was set to address the stacking issues raised therein.  As such, the Pennsylvania Superior Court's decision in the matter stands.

Pennsylvania Supreme Court Addresses Validity of Section 1731 UM/UIM Rejection Forms

In its recent decision in the case of Ford v. American States Ins. Co., No. 1800 WDA 2014 (Pa. Feb. 22, 2017)(Maj. Op. by Baer, J.), the Pennsylvania Supreme Court addressed the the validity of a Section 1731 uninsured and underinsured rejection form. 

Departing from prior decisions on the issue, the Ford Court held that a de minimis alteration to the form does not render the form void.   In other words, the Supreme Court ruled that the form does not have to be a verbatim recitation of the form contained in the statute. However, the Court further held that an alteration which can render the form ambiguous or confusing will serve to make the form void.

The Majority Opinion written by Justice Baer can be read at this LINK.

The Dissenting Opinion by Justice Donohue can be read HERE 

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