INSURANCE-FINANCIAL RESPONSIBILITY LAW-HOUSEHOLD EXCLUSION-RETROACTIVITY

June 28th, 2019 by Rieders Travis in Insurance

Stockdale vs. Allstate Fire & Cas. Ins. Co., 2019 U.S. Dist. LEXIS 101133, *2.  This Case presents an unresolved question of Pennsylvania law:  What effect should be given to Gallagher vs. GEICO Indemnity Co., 201 A.3d 131 (Pa. 2019).  A Pennsylvania Supreme Court decision that held a particular insurance exclusion – called the “household exclusion” – violated Pennsylvania Motor Vehicle Financial Responsibility Law, 75 Pa. C.S.A. 1701 et. seq. (“MVFRL”)?  Plaintiff argues that, as is generally the case, the holding should e applied to cases brought after Gallagher was decided, but concerning events that predate the decision.  Defendant, however, argues that an exception to that general rule is in order here and that Gallagher should be applied only to cases arising out of events that postdate the decision.  As explained below, no exception warranted here and defendant’s motion to dismiss the Complaint will be denied accordingly.

INSURANCE-FINANCIAL RESPONSIBILITY LAW-EXCLUSIONS-HOUSEHOLD EXCLUSION

June 27th, 2019 by Rieders Travis in Insurance

Gallagher vs. Geico Indem. Co., 201 A.3d 131, *131; 2019 Pa. LEXIS 345, **1 Justice Bear.  This appeal requires the Court to determine whether a “household vehicle exclusion” contained in a motor vehicle insurance policy violates Section 1738 of the Motor Vehicle Financial Responsibility Law (“MVFRL”).  75 Pa. C.S.1738, because the exclusion impermissibly acts as a de facto waiver of stacked uninsured and underinsured motorist (“UM” and “UIM,” respectively) coverages.   We hold that the household vehicle exclusion violates the MVRFL.  Accordingly, we vacate the Superior Court’s judgment, reverse the trial court’s order granting summary judgment in favor of Appellee GEICO Indemnity Company (“GEICO”), and remand to the trial court for further proceedings.   On the morning of August 22, 2012, Appellant Brian Gallagher (“Gallagher”) was operating his motorcycle when William Stouffer (“Stouffer”) failed to stop his pickup truck at a stop sign.  Stouffer’s truck collided with Gallagher’s motorcycle, causing Gallagher to suffer severe injuries.   At the time of the accident, Gallagher had two insurance policies; notably, he purchased both of the policies from GEICO.  One policy, which included $50,000 of UIM coverage insured only Gallagher’s motorcycle (“Motorcycle Policy”). …

INSURANCE-FINANCIAL RESPONSIBILITY LAW-EXCESS COVERAGE-UMBRELLA POLICY-UNDERINSURANCE

April 5th, 2019 by Rieders Travis in Insurance

Warrick v. Empire Fire & Marine Ins. Co., 2019 U.S. Dist. LEXIS 49716 (March 25, 2019) Kenney, J.-Plaintiff Richard Warrick brings an action for breach of contract and bad faith against Defendant Empire Fire and Marine Insurance Company for denying his claim of underinsured motorist coverage following an accident in November 2016 with an allegedly underinsured motorist. Plaintiff claims that Defendant is liable to Plaintiff based on Plaintiff’s purchase of Supplemental Liability Protection from Enterprise Leasing Company of Philadelphia, LLC, to whom Empire Fire and Marine Insurance Company issued an excess policy. Even if Empire had not separately excluded underinsured motorist coverage, it would be excluded from the MVFRL’s requirement that it provide underinsured motorist coverage or that it use the written rejection form because it is an excess policy and not subject to the requirements of the MVFRL. 

INSURANCE-FINANCIAL RESPONSIBILITY LAW-UM/UIM-HOUSEHOLD EXCLUSION

February 6th, 2019 by Rieders Travis in Insurance

Gallagher v. Geico Indem. Co., 2019 S. C. of PA, LEXIS 345 (January 23, 2019) Baer, J- This appeal requires the Court to determine whether a “household vehicle exclusion” contained in a motor vehicle insurance policy violates Section 1738 of the Motor Vehicle Financial Responsibility Law (“MVFRL”), 75 Pa.C.S. § 1738, because the exclusion impermissibly acts as a de facto waiver of stacked uninsured and underinsured motorist (“UM” and “UIM,” respectively) coverages.1 We hold that the household vehicle exclusion violates the MVFRL. Accordingly, we vacate the Superior Court’s judgment, reverse the trial court’s order granting summary judgment in favor of Appellee GEICO Indemnity Company (“GEICO”), and remand to the trial court for further proceedings. The facts underlying this appeal are undisputed. On the morning of August 22, 2012, Appellant Brian Gallagher (“Gallagher”) was operating his motorcycle when William Stouffer (“Stouffer”) failed to stop his pickup truck at a stop sign. Stouffer’s truck collided with Gallagher’s motorcycle, causing Gallagher to suffer severe injuries. At the time of the accident, Gallagher had two insurance policies; he purchased both of the policies from GEICO. One policy, which included $50,000 of UIM coverage, insured…

INSURANCE-MCARE-HOSPITAL 715 STATUS

January 25th, 2019 by Rieders Travis in Insurance

Montgomery Hosp. & Med. Ctr. vs. Bureau of Med. Care Availability & Reduction of Error Fund (MCARE Fund), 2019 Pa. Cmwlth LEXIS 28 (January 4, 2019) Simpson, J.-Hospital seeks a declaration that it is entitled to §715 status and that the MCARE Fund must be a hospital’s defense cost to the third-party action. Section 715 of the MCARE Act deems a third-party claim to have been brought less than four years after the negligent act where the defendant medical provider rendered “multiple treatments or consultations” to third-party plaintiff-patient within the four year period. Claims falling into this latter category are not covered §715 status. The hospital claimed that the radiologist whose liability was sought by plaintiff were independent contractors and not employees of the hospital. The hospital position as to who is responsible for the radiologist is irrelevant since the plaintiff has pled ostensible agency, which is expressly governed by the MCARE Act. The court could not conclude as a matter of law that the hospital could not be liable for vicarious liability in connection with the radiologist’s allegedly negligent treatment of third-party plaintiff during the four year period preceding…

ERISA-GROUP INSURANCE-SUPPLEMENTAL LONG-TERM DISABILITY POLICY-SPECIALITY RATED-DIAGNOSTIC RADIOLOGIST AS OPPOSED TO INTERVENTIONAL RADIOLOGIST AT TIME OF DISABILITY

October 31st, 2018 by Rieders Travis in Insurance

McCann v. Unum Provident, 2018 3d Cir. 2018 LEXIS 29638 (October 5, 2018) Scirica, J.-The Department of Labor has promulgated a safe harbor regulation exempting certain plans from the definition of an “employee welfare benefit plan.” But we conclude Dr. McCann’s then-employer sufficiently endorsed the plan under which his policy was purchased to render the safe harbor inapplicable. ERISA will supply the governing framework. As to the merits, we believe Provident incorrectly defined Dr. McCann’s occupation in administering his disability claim and that the claim must be evaluated in the context of his specialty – interventional radiology. We will remand for the District Court to consider whether Dr. McCann’s medical conditions prevent him from being able to perform his “substantial and material duties” as an interventional radiologist as required by the terms of the policy. 

INSURANCE-COMMERCIAL LIABILITY POLICY-EXCLUSIONS-DESIGNATED ONGOING OPERATIONS-VEHICLE DISMANTLING

October 18th, 2018 by Rieders Travis in Insurance

Tuscarora Wayne Ins. In the Superior Court Co. v. Hebron, Inc., 2018 Superior Ct. LEXIS 1077 (October 3, 2018), Stabile, J.  Fire occurred when truck driver was attempting to pump gas into a flatbed truck in the loading dock outside of the facility. The fire caused damage to the facility. The Superior Court said it was wrong for the lower court to grant summary judgment in favor of the insurance company against the insured. The court reversed. The cause of the fire was completely unrelated to the process of stripping the vehicle of its parts. The fire had nothing to do with designated ongoing operations which in this case was vehicle dismantling operations. The vehicles dismantling operations had ceased and were no more “ongoing operations.” The lower court was wrong. 

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-UNFAIR TRADE PRACTICES AND CONSUMER PROTECTION LAW-FRAUD OR DECEPTIVE CONDUCT

October 10th, 2018 by Rieders Travis in Insurance

Gregg v Armerprise Fin., Inc., 2018 Pa. Super. LEXIS 1009 (September 12, 2018) Kunselman, J.  This is a nonjury verdict finding that insurance company deceitfully profited from business transaction with Gary and Mary Gregg. The court found the insurance company violated that section of the Unfair Trade Practices & Consumer Protection Law, which prohibits anyone who advertises, sells or distributes goods and services from engaging in any fraudulent or deceptive conduct which creates a likelihood of confusion or misunderstanding during a transaction. At issue is the sale of life insurance. The transaction was somewhat complex, but what was of concern was where money was placed that was sent to the carriers. The money was put in a growth account which increased commissions because of a 5.75 surcharge.  Insurance companies argued res judicata and collateral estoppel because a jury found that there was no misrepresentation. It acquitted the insurance companies on the UTPCPL count, argued the insurance companies. The companies believe that the trial court erred when it found them in violation of the UTPCPL after the jury verdict, which they felt was to the contrary. The judge, however, decided distinct…

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

September 28th, 2018 by Rieders Travis in Insurance

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 to the “four corners” rule, it flatly declined, finding “no reason…