Meyers v. Travelers Ins. Co., 2022 U.S. Dist. LEXIS 63752 (E.D. Pa. April 6, 2022) (Beetlestone, J.) In April 2018, Plaintiff Ellen M. Meyers suffered extensive injuries in a car accident in Chester County, Pennsylvania, for which she filed a number of insurance claims. The present action arises out of her dispute with Travelers Home and Marine Insurance Company (“Travelers”) concerning the amount of underinsured motorist benefits she may recover under a car insurance policy issued by Travelers. The Parties filed dueling motions for summary judgment. Meyers seeks a declaratory judgment that certain language in the insurance policy violates Pennsylvania’s Motor Vehicle Financial Responsibility Law, 75 Pa. C.S. §§ 1701 et seq. (the “MVFRL”), and public policy. Travelers seeks a declaratory judgment that its policy is valid, enforceable, and not against public policy. For the reasons that follow, Travelers’ Motion for Summary Judgment will be granted and Meyers’ Motion for Summary Judgment will be denied.
On April 29, 2018, Meyers was driving her Ford Flex in Phoenixville Borough, Chester County, when her car was struck by another vehicle at the intersection of Church Street and Gay Street. Meyers suffered extensive injuries from the accident and filed insurance claims under six different car insurance policies. Meyers first received $100,000 under the other driver’s tort liability policy, but this amount did not cover her injuries. Meyers therefore sought to recover underinsured motorist (“UIM”) benefits, a type of insurance coverage that becomes available when “the tortfeasor lacks sufficient insurance coverage to compensate the insured in full.” Gallagher v. GEICO Indem. Co., 650 Pa. 600, 201 A.3d 131, 132 n.1 (Pa. 2019). At the time of the accident, Meyers was the named insured on four insurance policies that offered UIM benefits. Her first policy, issued by Erie Insurance Exchange (“Erie”), covered her Ford Flex. Erie paid Meyers $100,000, the stacked limit of UIM coverage under the policy. Meyers also held UIM coverage under two policies issued to her by Progressive Preferred Insurance Company (“Progressive”) and one issued to her by AIG Property & Casualty Company (“AIG”). Together, Progressive and AIG paid her an additional $1,500,000 in stacked UIM benefits. Thus, the insurance contracts issued by Erie, Progressive, and AIG all provided stacked UIM benefits. “Stacking” is “the practice of combining the insurance coverage of individual vehicles to increase the amount of total coverage available to an insured,” like building blocks stacked on top of one another to make a tower. Gallagher, 201 A.3d at 132 n.1. Meyers recovered full UIM benefits from Erie, Progressive, and AIG, adding together their coverage to recover for her losses. But there was one more insurance policy on which Meyers could make a UIM claim—a policy that did not provide stacked benefits. This unstacked policy was issued by Defendant to Meyers’ mother, Marie White, with whom Meyers resided at the time of the accident (the “Travelers Policy”). Travelers did not provide stacked UIM benefits because White had waived stacking. Meyers filed a UIM claim under the Travelers Policy. She expected to receive $300,000, the non-stacked UIM limit under the Policy. But Travelers took the position that Meyers was entitled to recover only $85,000, due to the operation of the Travelers Policy’s “Other Insurance” clause. The Other Insurance clause contains two subparts. As relevant to this case, the first subpart explains which insurers will have to pay first if an insured has UIM coverage under more than one policy. A “first priority” insurer is one that covers the vehicle that the insured was occupying at the time of the accident—in this case, Erie. A second priority insurer is one that provides UIM coverage to the insured as a “named insured” or “family member”—here, Progressive, AIG, and Travelers. An insured must exhaust her first priority UIM insurance before she can make any second priority claims (which Meyers did). The second subpart of the Other Insurance clause contains the operative language challenged by Meyers here. It implements the stacking waiver by explaining how much an insured can recover at the second priority level: The maximum recovery under all policies in the Second priority may equal but not exceed the highest applicable limit of liability for any one vehicle under any one policy providing coverage to you or any “family member”. In other words, Travelers’ Other Insurance clause implements the stacking waiver by limiting maximum UIM coverage to the highest limit applicable under any of Meyers’ second priority policies. In effect, this clause limited Meyers’ maximum UIM coverage under the Travelers Policy to $500,000 (AIG’s policy limit), which was the “highest applicable limit of liability for any one vehicle” under any of the second priority policies. Because insurers at an equal level of priority are only responsible for their pro rata share of any claim, 75 Pa. C.S. § 1733(b), and Meyers had already recovered from the other second priority insurers, Travelers offered Meyers $85,000, its 17% pro rata share of the $500,000 maximum. Meyers accepted payment of $85,000 as a partial release of her claim and filed a complaint in the Court of Common Pleas of Philadelphia County challenging the validity and enforceability of the Other Insurance clause. Travelers removed the suit to federal court. In November 2021, the Parties filed their summary judgment motions.
Upon examination of the MVFRL, Pennsylvania public policy, and relevant decisions of the Pennsylvania courts, it is predicted that the Pennsylvania Supreme Court would hold that the Other Insurance clause is valid and enforceable, and does not violate the MVFRL or public policy. Travelers’ Motion for Summary Judgment will therefore be granted and Meyers’ Motion for Summary Judgment will be denied.