O’Boyle v. Progressive Preferred Ins. Co., 2023 U.S. Dist. LEXIS 164990 (E.D. Pa. September 18, 2023) (Baylson, J.) Defendant Progressive Preferred Insurance Co. (“Progressive”) seeks summary judgment in this case arising from a dispute over insurance coverage. ECF No. 40. As discussed in more detail below, there do not appear to be any disputes about the material facts of the case.
Plaintiff John M. O’Boyle was injured in an auto accident with a tortfeasor while he was operating a Jeep Wrangler that he owned with his wife, Plaintiff Pamela S. O’Boyle. Plaintiffs’ Jeep Wrangler was insured by an auto insurance policy issued by Goodville Mutual Insurance Company (“Goodville”) that, following the accident, provided the O’Boyles with $250,000 in underinsured motorist (“UIM”) coverage. Plaintiffs also recovered $15,000 from the Allstate policy of the tortfeasor.
At the time of the accident, John O’Boyle was the first named insured of a motorcycle policy issued by Defendant Progressive that insured a 2006 Triumph Speedmaster motorcycle. The Progressive policy insured only that one motorcycle. Asserting that the Goodville and State Farm payouts were insufficient to compensate him fully, the O’Boyles sought to recover additional compensation for O’Boyle’s injuries under the Progressive policy. The declaration page for the Progressive policy provides underinsured motorist coverage in the amount of $100,000 per person and $300,000 per accident.
At the time of the accident, O’Boyle was operating the Jeep Wrangler, which was owned by Plaintiffs and not listed as an insured vehicle under the Progressive policy. John O’Boyle signed a UIM coverage stacking waiver under the Progressive policy.
Progressive has denied Plaintiffs’ claim for UIM coverage based on this waiver and the household vehicle exclusion in Progressive’s policy.
The Progressive policy is in the Second priority since Goodville, which provided UIM coverage for the motor vehicle that O’Boyle was driving at the time of the accident, paid its UIM policy limits in the First priority. Plaintiffs claim that the Progressive policy allows for UIM benefits because the “limit of protection” clause in the 2009 Progressive policy refers to UIM coverage in the Second priority even when nonstacked coverage is selected, and therefore, the policy does not provide the insured a knowing waiver of inter-policy stacked coverage.
Plaintiffs argue that the former 2008 policy language clearly stated that there would be no UIM coverage in the Second priority if nonstacked coverage were selected and if there was recovery in the First priority. Plaintiffs assert that, unlike the 2008 policy, the 2009 policy, at issue in this case, misleads an insured to believe that even if he selected nonstacked coverage under the Progressive policy, he would still be able to recover UIM benefits when Progressive is in the Second priority. Plaintiffs ask the Court to find that the “totality of the Progressive policy does not provide its insured with the necessary information to understand that coverage is being waived.”
The first issue is whether Plaintiffs knowingly waived inter-policy stacking. There are two types of stacking: (1) intra-policy stacking, where a single insured can stack coverage limits on multiple vehicles under a single insurance policy; and (2) inter-policy stacking, where a “single-vehicle” insured can received stacked benefits if he/she is an insured under multiple separate insurance policies that provide stacked UIM benefits. See Gittelmacher v. Travelers Prop. Cas. Ins. Co., 2023 U.S. Dist. LEXIS 53130, 2023 WL 2666065, at *3 (E.D.P.A. March 27, 2023) (Pratter, J.). Plaintiffs had only one motor vehicle, the motorcycle, insured under the Progressive policy. Thus, inter-policy stacking is at issue here.
Under Section 1738 of the MVFRL, when multiple vehicles are insured under one or more policies, UIM coverage is stacked by default. Erie Ins. Exch. v. Mione, 289 A.3d 524, 529 (Pa. 2023). However, the Pennsylvania Supreme Court has held that inter-policy stacking may be waived under Section 1738 of the MVFRL where that waiver is “knowing.” Craley v. State Farm Fire & Cas. Co., 586 Pa. 482, 484, 895 A.2d 530, 540-41 (2006). More specifically, an insured “may waive[ ] stacked coverage limits by signing a written waiver form, the text of which is dictated by Subsection 1738(d).” Mione, 289 A.3d at 529.
The “limit of protection” policy language does not confer UIM stacking coverage when it has been validly waived through the statutory-compliant waiver form. Here, the Progressive policy only insured one motorcycle. O’Boyle signed the statutory waiver form “knowingly and voluntarily reject[ing] the stacked limits of coverage.” Under these circumstances, and in consideration of the household vehicle exclusion discussed below, there is no reasonable interpretation that inter-policy stacking was available to Plaintiffs.
The Pennsylvania Supreme Court examined the enforceability of the household vehicle exclusion in Gallagher v. GEICO Indemnity Co., 650 Pa. 600, 201 A.3d 131 (2019). The insurance policy at issue in Gallagher, as in the case before this Court, contained a household vehicle exclusion. The court in Gallagher concluded that the household vehicle exclusion in Gallagher’s policy violated the MVFRL because it acted “as a de facto waiver of stacked UIM coverage provided for in the MVFRL, despite the indisputable reality that Gallagher did not sign the statutorily-prescribed UIM coverage waiver form.” Id. at 138. Rather, Gallagher “decided to purchase stacked UM/UIM coverage under both of his policies, and he paid [the insurance company] premiums commensurate with that decision.” Id.
The household vehicle exclusion is enforceable here. O’Boyle was operating his Jeep Wrangler, a household vehicle not listed under the Progressive motorcycle policy, at the time of the accident. The household vehicle exclusion does not interfere with Plaintiffs’ ability to stack UIM coverage in this case. Unlike Gallagher, O’Boyle signed a valid stacking waiver form that complies with the language requirements of Section 1738. He received reduced premiums as a result of that waiver. As such, the household vehicle exclusion does not function as a de facto waiver under the facts of this case and is enforceable.
Since Plaintiffs knowingly waived inter-policy stacking and the household vehicle exclusion is enforceable, Defendant’s Motion for Summary Judgment is granted.