McGuire v. Nationwide, 2024 U.S. Dist. LEXIS 163290 (U.S. Dist. Ct. for W. Dist. of Pa., September 11, 2024) (Ranjan, J.)
J. Nicholas Ranjan, United States District Judge
Pennsylvania law allows policyholders to “stack” the number of limits of uninsured (UM) or underinsured (UIM) motorist coverage in an automobile insurance policy based on the number of vehicles the policy insures. After a motor vehicle accident with an underinsured driver, Plaintiff Eric McGuire, Jr. sought to do exactly that. But Mr. McGuire had a problem. His father, who was the named insured on the automobile policy issued by Defendant Nationwide, had previously waived stacked coverage. When Nationwide refused to pay stacked coverage on that basis, Mr. McGuire sued, bringing a two-count complaint for breach of contract (Count I) and statutory bad faith (Count II).
The parties have filed cross-motions for summary judgment. Mr. McGuire doesn’t contest that his father waived stacked coverage. He instead argues that the waiver applies to an earlier policy, not the policy he seeks coverage under now. Nationwide disagrees, asserting that the operative policy is merely a “renewal” of that prior policy to which the stacking waiver applied.
After comparing the two policies, the Court concludes that the operative policy of automobile insurance isn’t a “renewal” policy. So the Court will grant Mr. McGuire’s motion and hold that Nationwide has breached its contract by denying stacking based on his father’s prior waiver. Since Mr. McGuire has effectively withdrawn his bad-faith claim, the Court will grant Nationwide’s motion on the bad-faith claim only and will otherwise deny it.
As framed by the parties, the present dispute centers on whether the Nationwide One Product policy was a new policy, or a renewal of the prior policy. ECF 34, pp. 9-10; ECF 37, p. 1. The parties agree that if it’s a renewal, then Pennsylvania law doesn’t require a stacking waiver. But if it’s a new policy—in other words, with reduced types or limits of coverage—then the parties again agree a new waiver is required.
As is evident from the above description of the controlling cases, the cases concerning the issue of what constitutes a “purchase” arise generally in the context of adding and removing vehicles on a policy or modifying the limits under the policy. None of them concern a situation where, as argued here by Mr. McGuire, the conditions governing the scope of coverage are reduced by a subsequent policy. But applying the logic of the Pennsylvania Supreme Court’s prior decisions, obtaining a policy with a different scope of coverage—even if it’s the result of a reduction in coverage—is the “purchase” of something the policyholder didn’t already possess, i.e., an entirely new policy. Conversely, obtaining a renewal of a policy, where the scope of coverage is the same, isn’t a “purchase.”
In sum, the dispute centers on whether the One Product policy reduced the scope of coverage, or whether it was just a renewal—an issue to which the Court next turns.
UM/UIM coverage is reduced under the One Product policy’s version of the exclusion, meaning the One Product policy isn’t a renewal of the 5437E346960 policy.
The One Product policy thus reduces coverage from the 5437E346960 policy based on this exclusion, too.
For the above reasons, the Court hereby grants Mr. McGuire’s motion for summary judgment (ECF 36). It also grants Nationwide’s motion for summary judgment with respect to the bad faith claim only; Nationwide’s motion is otherwise denied.
