C&W Attorneys Richard Yost and Darren Harrison recently obtained Summary Judgment for their insurance carrier client from the Court of Common Pleas of Lancaster County, PA on an issue purportedly of first impression in state court: whether an insurance company must obtain a new § 1734 “sign down” form for lower underinsured motorist benefits when another vehicle is added to an existing multi-vehicle policy. The Court agreed with our arguments and granted the Motion for Summary Judgment, holding the carrier is not required to obtain new sign down forms under such circumstances.
The relevant facts are as follows: On February 25, 2012, Karen McNear, the first named insured under the Goodville Mutual Casualty Company Policy, signed a § 1734 Election of Lower Limits of Underinsured Motorist Coverage, electing $50,000.00 Each Person/$100,000.00 Each Accident in stacked underinsured motorist coverage for three (3) vehicles. Vehicles were added and removed from the policy over the years. Goodville did not obtain any new § 1734 Election of Lower Limits of Underinsured Motorist Coverage from the McNears after February 25, 2012. The McNears never requested any changes to the coverage amounts for liability coverage, uninsured motorist coverage or UIM coverage under the Goodville Policy after February 25, 2012.
On October 21, 2018, Mallory McNear was injured in a motor vehicle accident, which resulted in a UIM claim by Mallory McNear under the Goodville policy. Goodville paid Mallory McNear $150,000.00 in UIM coverage, representing the $50,000.00 limit stacked for three vehicles as set forth in the Declaration page. However, Mallory McNear argued that the addition of new vehicles to the Goodville Policy after February 25, 2012 required Goodville to obtain a new § 1734 Election of Lower Limits of Underinsured Motorist Coverage. The McNears asserted that Goodville was required to obtain a new § 1734 Election of Lower Limits of Underinsured Motorist Coverage with the addition of new vehicles to the Goodville Policy, as adding vehicles to the policy qualifies as a “purchase” of coverage (similar to arguments regarding the failure to obtain new waiver of stacking forms under § 1738). They argued that Goodville’s failure to do so requires that the limit of UIM coverage be reformed and they are entitled to UIM benefits in the amount equal to the liability coverage of $250,000 Each Person/$500,000 Each Accident, for a total of $750,000 in UIM coverage for the subject UIM claim.
To the contrary, Attorneys Yost and Harrison argued that Goodville was not required to obtain a new § 1734 Election of Lower Limits of UIM coverage when new vehicles were added to the Goodville Policy after the first named insured, Karen McNear, executed the § 1734 Election at the inception of the policy. The Court agreed and granted the Motion for Summary Judgment, holding that since the McNears never requested increased limits of UIM benefits, they are bound with their initial election and Goodville has no further obligation under the policy with respect to the UIM claim.
The Lancaster County Court of Common Pleas followed the analysis of the Third Circuit in Geist v. State Farm Mutual Automobile Insurance Company, 49 F.4th 861 (3d Cir. Sep. 29, 2022), and, while not binding precedent, for now, represents a victory for insurance companies. As the McNears have appealed this decision to the Pennsylvania Superior Court, it remains to be determined how the Superior Court will decide this issue on appeal.
If you have any questions regarding this case, or any coverage issue, please do not hesitate to contact Richard Yost, Esq. at ryost@c-wlaw.com or Darren Harrison, Esq. at dharrison@c-wlaw.com or by phone at (610) 567-0700.
A COPY OF THE OPINION AND ORDER IS ATTACHED.