Insurance

July 23rd, 2019 by Rieders Travis in Insurance

INSURANCE-FINANCIAL RESPONSIBILITY LAW-UNDERINSURANCE MOTORIST COVERAGE-EXHAUSTION REQUIREMENT Cambridge v. Allstate, 2020 U.S. Dist. LEXIS 126094 (E.D. Pa. July 17, 2020) Baylson, J.  Pennsylvania law clearly permits an underlying third-party negligence action and a separate underinsurance motorist claim to exist in separate courts.  Defendant maintains that plaintiff’s underinsurance motorist claim is unripe for adjudication because plaintiff currently has a third-party negligence action pending in state court.  Defendant references an exhaustion clause in plaintiff’s insurance policy.  However, the Pennsylvania Superior Court has repeatedly held that plaintiffs may pursue underinsurance motorist claims against the insurance carriers while third-party tort suits are pending in spite of the existence of contractual exhaustion provisions. INSURANCE-FINANCIAL RESPONSIBILITY LAW-UNDERINSURANCE-HOUSEHOLD EXCLUSION Stockdale v. Allstate Fire and Casualty Insurance, 2020 U.S. Dist. LEXIS 33406 (E.D. Pa. February 27, 2020) Beetlestone, J.  This case addressed the scope of the Pennsylvania Supreme Court’s decision in Gallagher v. GEICO Indemnity Co., 201 A.3d 131 (Pa. 2019). Specifically, it addressed the extent to which Gallagher found the “household exclusion” inconsistent with the Pennsylvania Motor Vehicle Financial Responsibility Law’s (“MVFRL”), 75 Pa. C.S.A. §§ 1701 et seq., requirement that insureds knowingly waive stacked coverage. Defendant argues…

INSURANCE-BAD FAITH-ATTORNEY’S FEES

October 10th, 2018 by Rieders Travis in Insurance

Bernie Clemens, Nicole Clemens v. New York Central Mutual Fire Insurance Company, and/or NYCM Insurance Group and/or NYCM Holdings, Inc., 3d Cir. 2018 (Greenaway, Jr., J.  After a jury awarded him $100,000 in punitive damages under the Pennsylvania Bad Faith Statute, 42 Pa. Cons. Stat. § 8371, Appellant Bernie Clemens submitted a petition for over $900,000 in attorney’s fees from Appellee New York Central Mutual Fire Insurance Company (“NYCM”). The District Court denied this petition in its entirety, reasoning that it was not adequately supported and that the requested amount was grossly excessive given the nature of the case. Finding no abuse of discretion, we will affirm and, in doing so, take the opportunity to formally endorse a view already adopted by several other circuits – that is, where a fee-shifting statute provides a court discretion to award attorney’s fees, such discretion includes the ability to deny a fee request altogether when, under the circumstances, the amount requested is “outrageously excessive.” Brown v. Stackler, 612 F.2d 1057, 1059 (7th Cir. 1980); see also, e.g., Envtl. Def. Fund, Inc. v. Reilly, 1 F.3d 1254, 1258-60 (D.C. Cir. 1993); Fair Hous. Council…

INSURANCE-DEFENSE, DUTY TO PROVIDE-FOUR CORNERS RULE-EXCEPTIONS

September 28th, 2018 by Rieders Travis in Insurance

Insurer's Duty to Defence and Exceptions to the "Four Corners" Rule Lupu v. Loan City, LLC, Nos. 17-1944 & 17-2024 (3d Cir. September 10, 2018) Ambro, C.J.  What is the duty of a real estate title insurer in Pennsylvania to defend the insured party (here the successor to a lender) against claims of the borrower/mortgagor? Its courts, we predict, would not apply the “in for one, in for all” rule (known also as the complete defense rule)1—whereby a single covered claim triggers an obligation for the title insurer to defend the entire action—to a case about that insurer’s duty to defend. To identify a covered claim, we apply Pennsylvania’s rule that potentially covered claims are identified by “comparing the four corners of the insurance contract to the four corners of the complaint.” American & Foreign Ins. Co. v. Jerry’s Sport Center, Inc., 2 A.3d 526, 541 (Pa. 2010). The insured in its briefing used the latter term. As both the District Court and the title insurer refer to the rule by its more colloquial name, we do as well.  Although the Pennsylvania Supreme Court was invited to make an exception…

INSURANCE FINANCIAL RESPONSIBILITY LAW-FIRST PARTY BENEFITS-MEDICAL BENEFITS-CONTRACT BREACH-BAD FAITH-UNFAIR TRADE PRACTICES AND CONSUMER PROTECTION LAW

September 24th, 2018 by Rieders Travis in Insurance

Shea v USAA, 2018, U.S. Dist. LEXIS 234750 (July 25, 2018), Surrick, J.  This case involves failure to pay first party medical benefits. Instead the insurance company demanded peer review. Viewing the allegations in the light most favorable to Plaintiff, the pleading raises a reasonable expectation that discovery will produce evidence that an insurance contract existed between Plaintiff and Defendant, Defendant breached the contract, and that breach caused Plaintiff to incur ascertainable losses. The breach of contract claim survives dismissal. We join the growing majority of federal and state courts that have followed the rationale of Schwartz. “Whenever a general provision in a statute shall be in conflict with a special provision in the same or another statute, the two shall be construed, if possible, so that effect may be given to both.” Schwartz, 1996 WL 189839, at *5 (citing 1 Pa. C.S.A. 1933). Where an insurer has not complied with Section 1797’s specific provisions, there is no reason to limit the damages recoverable from the insurer to those damages set out in Section 1797. Id. In those situations, as alleged here, Section 1797 and Section 8371 are not irreconcilable.…

INSURANCE-FINANCIAL RESPONSIBILITY LAW-SUBROGATION-PENNSYLVANIA STATE POLICE

July 5th, 2018 by Rieders Travis in Insurance

Pennsylvania State Police v. Workers’ Compensation Appeal Board (Bushta), 2018 Pa. LEXIS 2582 (May 29, 2018) Todd, J.  In this discretionary appeal, we consider whether Appellant, the Pennsylvania State Police (“PSP”), is entitled to subrogation of benefits that a trooper—who was injured in a motor vehicle accident—was eligible to receive under the Workers' Compensation Act (“WCA”)  against the trooper's recovery from a third-party tortfeasor pursuant to the Motor Vehicle Financial Responsibility Law (“MVFRL”). For the reasons that follow, we conclude that PSP does not have a right of subrogation. Accordingly, we affirm the order of the Commonwealth Court. The instant appeal involved the interplay between three Pennsylvania statutes—the WCA, the Heart and Lung Act, and the MVFRL. On January 21, 2014, Claimant and his spouse entered into a Settlement and Indemnity Agreement and Release of all Claims (“Settlement Agreement”) with the tractor-trailer driver, the driver's employer, and the other responsible parties (collectively, “third-party tortfeasors”) for $1,070.000.1 The Settlement Agreement provided, inter alia, that Claimant would “reimburse any lien holder, known or unknown, for any liens as a result of the ․ incident.” Claimant further acknowledged that he was “solely responsible for the payment…

INSURANCE-LIQUOR LIABILITY COVERAGE-LIMITS

November 17th, 2017 by Rieders Travis in Insurance

Good v. Frankie & Eddie’s Hanover Inn, LLP, 2017 Pa. Super. LEXIS 727 (September 21, 2017) Musmanno, J.  Florence A. Good (“Good”), individually and as executrix of the Estate of Barry D. Good, deceased (“the Estate”), appeals from the Order denying Good’s Motion for Summary Judgment in a declaratory judgment action against Frankie & Eddie’s Hanover Inn, LLP (“Hanover Inn”), and RCA Insurance Group (“RCA”), on behalf of State National Insurance Company, and denying as moot RCA’s Cross-Motion for Summary Judgment.  We affirm. On April 4, 2012, at approximately 10:56 p.m., Barry D. Good (“the Deceased”) was fatally injured when a Ford F250, driven by Francis Lynch (“Lynch”), collided with the Deceased’s Kawasaki Vulcan Motorcycle. At the time of the accident, Lynch was driving under the influence of alcohol, which had been served to him at Hanover Inn. On the date of the accident, Hanover Inn was covered by a commercial insurance policy (“the Policy”) issued by RCA. The Policy includes a Liquor Liability Coverage Form, which provides for liquor liability coverage with an “Aggregate Limit,” as well as an “Each Common Cause Limit.” The Declarations page of the Policy…

INSURANCE-FINANCIAL RESPONSIBILITY LAW-NAMED INSURED-DRIVER LISTED ON AUTOMOBILE INSURANCE POLICY

November 17th, 2017 by Rieders Travis in Insurance

Safe Auto Insurance Co. v. Guillermo, 2017 Pa. Super. LEXIS 711 (September 18, 2017) Dubow, J.  This appeal arises from the Declaratory Judgment Action that Appellee, Safe Auto Insurance Company ("Safe Auto"), filed in Lehigh County. The trial court granted Safe Auto's Motion for Summary Judgment, finding that Safe Auto was not obligated to provide insurance coverage to Rachel Dixon (“Dixon") because Dixon was driving the policyholder’s car and the policyholder did not list her as a driver on his automobile insurance policy ("Safe Auto Policy"). Appellants, Priscila Jimenez and Luis Jimenez, appealed. After careful review, we affirm. On April 29, 2013, Dixon and another driver were involved in a two-car motor vehicle accident in Allentown, Pennsylvania. Appellant Priscila Jimenez, the passenger in the other vehicle, filed a separate personal injury lawsuit seeking damages against three individuals: Dixon, the owner of the car that Dixon was driving, and the driver of the other car involved in the accident. Dixon was driving a car that her boyfriend, Rene Oriental-Guillermo, (the "Policyholder") owned. He insured his car through Safe Auto. The Safe Auto Policy had an Unlisted Resident Driver Exclusion, which specifically…

INSURANCE-HOMEOWNERS-EXCLUSION-SEWAGE BACKUP

May 31st, 2017 by Rieders Travis in Insurance

Windows v. Erie Ins. Exch., 2017 Pa. Super. LEXIS 309 (May 1, 2017) Moulton, J.  Erie Insurance Exchange ("Erie") appeals from the February 24, 2016 judgment entered in the Allegheny County Court of Common Pleas in favor of Howard Windows, Jr. and Eleanor Windows ("Homeowners"). We reverse and remand for further proceedings. This matter arises from Erie's denial of an insurance claim made by the Homeowners following the infiltration of raw sewage into their home in May 2012. Erie denied the claim, and on May 2, 2013, the Homeowners filed a complaint, alleging that Erie breached its policy. On March 9, 2015, Erie filed a motion for summary judgment, arguing that the policy's "general exclusion for water damage unambiguously excludes coverage for the Homeowners' losses because the back up of raw sewage and water through the Warner Alley sewer system and the drain in the Homeowners' basement contributed to their losses." On summary judgment, Erie argued that the water damage exclusion unambiguously precluded coverage for the Homeowners’ losses.  We disagree. Here, the water-damage exclusion in the Homeowners' insurance policy provides that losses caused by "water or sewage which backs up…