eNotes: Liability – June 2022 – Pennsylvania

SIGNIFICANT CASE SUMMARIES

PA CASE SUMMARIES

Hartford Fire Ins. Co. v. Davis
Pennsylvania Superior Court
No. 310 MDA 2021, 2022 Pa. Super. LEXIS 200

Decided: May 9, 2022

Insured is entitled to underinsured motorist coverage when insurer’s policy does not comply with the requirements of 75 Pa.C.S. § 1731.

Background

This case arises from an appeal by Plaintiff from the Trial Court’s ruling that Defendant did now owe underinsured motorist coverage. Defendant filed a declaratory judgment action seeking a ruling that the subject policy did not include UIM benefits. At the time of the accident, Plaintiff was insured under a Hartford policy. The policy in question contained Hartford’s “Pennsylvania UIM Coverage Endorsement” with coverage limits of zero. Despite Defendant’s policy, which contained UIM rejection forms for each policy term renewal, the last rejection form was signed and dated in 2003.

Holding

The Court, in holding that UIM coverage was owed, emphasized the language of the Pennsylvania Motor Vehicle Financial Responsibility Act (“MVFRL”). Specifically, the Court noted that the MVFRL requires UIM coverage to be offered on all policies. Further, the MVFRL requires that, in cases where UIM coverage is rejected, the insurer (1) obtain a UIM rejection form compliant with the statute, and (2) include on policy renewals language indicating the policy does not provide UIM coverage. The Court, in analyzing Hartford’s policy, found that Hartford had failed to comply with Pennsylvania requirements in the policy issued to Plaintiff. Specifically, the Court noted that (1) the policy contained a UIM Coverage Endorsement, and (2) Hartford had failed to comply with its own policies and procedures in obtaining a new UIM rejection form for each policy period. The Court reversed the Trial Court’s decision and remanded for further proceedings.

Questions about this case can be directed to Katherine Prudente at (267) 861-7571 or kprudente@tthlaw.com.

Erie Ins. Exch. v. Colebank
Pennsylvania Superior Court
No. 1244 WDA 2021, 2022 Pa. Super. Unpub. LEXIS 951

Decided: April 20, 2022

“Household” exclusion enforceable as controlled by Eichelman and Mione, when the insured waived stacking on the involved vehicle.

Background

This case arises from an appeal by the Colebank Defendants of a Trial Court’s decision granting Plaintiff Erie Insurance’s Motion for judgment of the pleadings, holding that Erie had no duty to provide underinsured motorist benefits to the insureds’ son when he was driving a vehicle (1) not insured under the Erie policy, and (2) on which he had waived underinsured motorist coverage. Plaintiff Erie filed a declaratory judgment action seeking a judgment that Erie did not owe underinsured motorist coverage to Defendant. In the subject accident, the son of an Erie insured was operating a motorcycle insured by State Farm. Under the State Farm policy, the insureds’ son had validly waived UIM coverage. The insureds maintained an auto insurance policy with Erie, which had stacked UIM coverage. The insureds’ son’s motorcycle was not insured under the Erie policy.

Holding

The Court upheld the Trial Court’s decision, holding that the “household” exclusion is valid when an individual seeking coverage waived UIM coverage under his or her own policy and subsequently sought UIM coverage under a family auto policy providing UIM coverage. The Court emphasized the “unclear” nature of UIM law, while finding the decisions in Eichelman v. Nationwide and Erie v. Mione controlling. The Court noted that Eichelman and Mione both involved individuals waiving UIM coverage under their own policy and then seeking UIM coverage under a family policy. The Court emphasized the Eichelman rationale (an individual who voluntarily elects not to carry UIM coverage on his own policy is not entitled to recover UIM coverage under a separate policy issued to a family member) and the Mione rationale (an individual is not entitled to UIM benefits after waiving coverage on his own policy, as there is then no underlying policy on which to “stack” the UIM benefits). The Court then distinguished Gallagher v. Geico, noting that Gallagher only held the “household” exclusion invalid “where it acts as a de facto waiver of stacked coverage in the absence of a valid rejection form.”

Questions about this case can be directed to Katherine Prudente at (267) 861-7572 or kprudente@tthlaw.com.

Hausmann v. Bernd
Pennsylvania Superior Court
No. 1024 EDA 2021, 271 A.3d 486

Decided: February 27, 2022

Preliminary Objections raising improper venue in Philadelphia County affirmed where corporate defendant only generated .27% of total revenue from Philadelphia.

Background

This lawsuit arises out of a 2019 motor vehicle accident in Montgomery County, Pennsylvania. Plaintiffs alleged that Defendant driver was acting in the scope of his employment with Defendants Good Plumbing/Kratz Enterprises. The Complaint alleged that Plaintiffs lived in Montgomery County and Defendants Good Plumbing/Kratz Enterprises share a business address in Montgomery County. Plaintiffs alleged, for venue purposes, that Defendants Good Plumbing/Kratz Enterprises “conducted business within Philadelphia County,” making Philadelphia County an appropriate venue. Based on this, Plaintiffs filed their Complaint in Philadelphia County. Defendants Good Plumbing/Kratz Enterprises filed Preliminary Objections to Plaintiffs’ Complaint raising, among other arguments, improper venue in Philadelphia County.

Defendants asserted that venue in Philadelphia was improper because the revenue they derived from Philadelphia was “simply too small upon which to base venue.” In support, they attached an Affidavit that averred that their revenue in Philadelphia County from 2016 to 2019 represented .27% of their total revenue. The Court allowed the parties to conduct discovery on the venue issue. Plaintiffs, after discovery and in response, argued that Defendants Good Plumbing/Kratz Enterprises had a “pattern of regularly conducting business in the City of Philadelphia from 2016 to the present, including the generation of substantial revenue and more than 100 business transactions through the relevant time period.” The Trial Court granted the Preliminary Objections and transferred the matter to the Montgomery County Court of Common Pleas.

Holding

Plaintiffs, in support of their appeal, relied on Hangey v. Husqvarna, a case in which the Superior Court found venue to be proper in Philadelphia, despite the defendant company only deriving .0005% of sale revenue from Philadelphia County. The Court, here, noted that Hangey instructs that percentage of sales is but one factor to consider in a venue analysis and simply because Defendants have a higher percentage of sales than the defendant in Hangey, that is not determinative. The Court then focused on the number of deliveries by Defendants during the year in which the incident happened (2019), which was 24, and total sales of only $31,562.21. Plaintiffs did not provide any contrary evidence to demonstrate proper venue in Philadelphia County; thus the transfer of venue was affirmed.

Questions about this case can be directed to Michael Weinert at (610) 332-7025 or mweinert@tthlaw.com.

Bean Sprouts LLC v. LifeCycle Constr. Servs. LLC
Pennsylvania Superior Court
270 A.3d 1237, 2022 Pa. Super. 28

Decided: February 17, 2022

Court lacked personal jurisdiction over Defendant despite its long-term relationship with Plaintiff.

Background

Plaintiff Bean Sprouts sued Defendant LifeCycle seeking payment for work pursuant to a contractor/subcontractor relationship between the parties. LifeCycle, a Virginia company, would subcontract Bean Sprouts on construction projects on military bases and mail checks to Bean Sprouts’ office in Pennsylvania. LifeCycle received verbal information on new orders for two military projects in the South and agreed to stop work. Bean Sprouts, however, continued their work as planned. LifeCycle stopped payment following the verbal change in the projects. Bean Sprouts sued LifeCycle in Pennsylvania for the funds owed under the two contracts. LifeCycle filed Preliminary Objections claiming they did not have the requisite minimum contacts in Pennsylvania, and therefore there was no personal jurisdiction.

The Trial Court agreed with LifeCycle, granted the objection and dismissed the Complaint without prejudice. LifeCycle was not incorporated, organized, or registered to do business in Pennsylvania; LifeCycle’s members, managers, and officers live and work in Virginia; and LifeCycle did not target or solicit any residents of Pennsylvania for any work. Aside from general nationwide subcontractor internet solicitation, LifeCycle did not engage in any advertising targeted to Pennsylvania residents. Further, no in-person meetings between the parties occurred in Pennsylvania. Bean Sprouts appealed.

Holding

The Superior Court affirmed. The Court held that Bean Sprouts failed to show that LifeCycle had a relationship with Pennsylvania in any meaningful way which would avail itself to Pennsylvania as a forum. At most, LifeCycle advertised to Bean Sprouts specifically to bid on a project, and any work done in Pennsylvania related to the project was incidental. The Superior Court identified this as “perhaps the slightest possible contact.” The Court held that despite the two parties’ longstanding relationship, the Trial Court did not err in finding that Bean Sprouts failed to establish that LifeCycle had the necessary minimum contacts to make personal jurisdiction fair and reasonable.

Questions about this case can be directed to Logan Nagle at (717) 255-7234 or lnagle@tthlaw.com.