Federal – eNotes: Liability – April 2025

SIGNIFICANT CASE SUMMARIES

Federal Case Summaries

Miller v. USAA Gen. Indem. Co.
United States Court of Appeals for the Third Circuit
No. 23-1934

Decided: January 5, 2025

Summary judgement entered for UIM carrier where Plaintiff did not fall under definition of “covered” person.

Background

Melanie Miller suffered injuries after a motorist turned into oncoming traffic and stuck a vehicle in which she was a passenger. Miller sought underinsured motorist (“UIM”) benefits under a USAA auto policy held by her daughter’s grandmother, Tammy Halverson. The policy provided UIM coverage but limited it to “covered persons,” defined in the policy as the named insured (Tammy), family members residing in the same household, and individuals occupying covered vehicles. Miller, however, was not related to Tammy by blood, marriage, or adoption, nor was she occupying a covered vehicle at the time of the accident. However, she argued that she was a “covered person” because her daughter, Kayleigh Halverson, was listed as an “operator” under the policy. Miller contended she should be considered covered as Kayleigh’s relative. USAA denied the claim, stating that Miller did not meet the policy’s criteria for coverage.

Miller then filed this summary judgement action against USAA for breach of contract and bad faith, alleging she was entitled to the full stacked UIM benefits. The District Court for the Middle District of Pennsylvania ruled in favor of USAA and granted their motion for summary judgement. The Court concluded that Miller was not a covered person under the policy’s UIM provisions as she was not related to the named insured, Tammy Halverson, by blood, marriage or adoption. The Court also found that Miller did not meet other coverage criteria outlined in the policy. Miller also contended that the policy’s limitations conflicted with Pennsylvania’s Motor Vehicle Financial Responsibility Law (“MVFRL”), which governs UIM coverage and stacking requirements. However, the Court found that the policy’s exclusions were enforceable and did not violate the MVFRL.

Holding

The Court affirmed the District Court’s entry of summary judgment in favor of USAA. It held that Miller was not a “covered person” under the UIM provisions of the USAA policy because she did not meet the policy’s definition of a “family member” of the named insured, Tammy Halverson. The Court rejected Miller’s argument that her daughter’s status as an “operator” on the policy made her a named insured, emphasizing that the policy clearly distinguished between “Named Insured” and “Operator.” Additionally, the Court found no violation of the MVFRL, as the policy’s exclusions were enforceable and did not constitute an improper waiver of UIM stacking requirements. Regarding the bad faith claim, the Court ruled that USAA did not owe Miller a duty of good faith because she was not an insured under the policy, and its post-claim investigation into her eligibility was not evidence of bad faith.

Questions about this case can be directed to Jhanvi Jamindar at (717) 441-7056 or jjamindar@tthlaw.com.

Long v. Progressive Advanced Ins. Co.
United States District Court for the Eastern District of Pennsylvania
No. 2:24-CV-01735-JDW

Decided: December 11, 2024

Plaintiff permitted to obtain UIM claims evaluation documents in discovery.

Background

In February 2022, Plaintiff was involved in a car accident. Progressive had issued an insurance policy to cover her at the time, and she notified Progressive of the accident the day that it happened. After she settled with the other driver in 2023, Plaintiff made a claim for UIM benefits against Progressive pursuant to her policy. Plaintiff’s lawyer sent a demand package to Progressive, demanding that Progressive tender its policy limits if it wanted to avoid litigation. At that point, Progressive had not evaluated the claim. It did so a few days later and redacted information from the claims notes asserting work product grounds. These redactions covered both the overall valuation of Plaintiff’s claim and an analysis of specific elements of her claim.

Plaintiff made numerous efforts to obtain said information. In response to the latest Motion, the Judge ordered Progressive to submit unredacted versions of the claim notes to him for in camera review. This decision is based on the Judge’s review of said documents and consideration of the parties’ arguments concerning the applicability of the work product doctrine.

Holding

The work product doctrine shields from discovery materials prepared in anticipation of litigation, unless certain exceptions apply. The party claiming work product protection bears the burden of showing that the materials in question were prepared in the course of preparation for possible litigation. Progressive has not carried its burden to show that it created the redacted claims entries in anticipation of litigation. Insurers have a duty to investigate, evaluate, and decide on claims that insureds make. Progressive had not fulfilled that duty when it created the redacted claims notes. Even if the demand letter prompted the evaluation, there was a separate, business-related obligation to conduct said evaluation. When an insurance company continues its evaluation of a claim after receiving a demand letter, work product protection does not attach to the documents reflecting that evaluation.

Questions about this case can be directed to Gabrielle Martin at (610) 332-7003 or gmartin@tthlaw.com.