Johnson v. Progressive Advanced Ins. Co.

587 F.Supp.3d 277

Cheryl JOHNSON, Plaintiff,

v.PROGRESSIVE ADVANCED INSURANCE COMPANY formerly doing business as Progressive, Defendant.

21cv1916

United States District Court, W.D. Pennsylvania.

Filed February 23, 2022

Douglas J. Olcott, Jason M. Lichtenstein, Jeffrey A. Ramaley, Kathryn C. Monbaron, Edgar Snyder & Associates, LLC, Pittsburgh, PA, for Plaintiff.

Daniel J. Twilla, Kathleen P. Dapper, Burns White LLC, Pittsburgh, PA, for Defendant.

MEMORANDUM OPINION

Arthur J. Schwab, United States District Court Judge

This case arises out of an insurance coverage dispute surrounding the underinsured motorist ("UIM") coverage in the insurance policy issued by Defendant. Before the Court is Defendant's Motion to Dismiss Plaintiff's Complaint. ECF 5. Defendant filed a brief in support of its motion (ECF 6), Plaintiff filed a brief in opposition (ECF 10), Defendant filed a Reply (ECF 11), and a Supplemental Reply Brief.¹ ECF 14. The matter is ripe for adjudication.

I. Factual and Procedural Background

The Complaint alleges that Plaintiff was seriously injured in an automobile accident on January 14, 2018. ECF 1-1. According to the Complaint, the tortfeasor's insurance carrier, Geico Insurance, paid Plaintiff the bodily injury limits of its $15,000 policy. Id. Plaintiff, who lived with her sister, was a regular-user of sister's vehicle, and was driving her sister's vehicle at the time of the accident, claims that she requested UIM benefits through her sister's automobile insurance policy (issued by Defendant), seeking entitlement to the UIM benefits as a "resident relative." Id.

Relevant to this case, the insurance policy issued by Defendant contains the following language in the UIM section:

PART III—UNINSURED/UNDERINSURED MOTORIST COVERAGE

* * *

EXCLUSIONS—READ THE FOLLOWING EXCLUSIONS CAREFULLY. IF AN EXCLUSION APPLIES, COVERAGE WILL NOT BE AFFORDED UNDER THIS PART III.

Coverage under this Part III will not apply:

1. to bodily injury sustained by any person while using or occupying:

* * *

b. a motor vehicle that is ... available for the regular-use of ... a relative, or a rated resident. This exclusion does not apply to a covered auto that is insured under this Part III;

ECF 1-1 at p. 33.

Defendant admits that at time of Plaintiff's accident, Plaintiff was using her sister's insured vehicle, which was made available for Plaintiff's regular-use, without listing Plaintiff on the insurance policy. ECF 6. By way of a letter dated February 13, 2018, Defendant denied Plaintiff's request for UIM coverage, citing the "regular-use" exclusion in the policy. ECF 1-1 at p. 52.

Plaintiff made a second request for UIM coverage under Defendant's insurance policy on November 5, 2021, following Pennsylvania's Superior Court decision in Rush v. Erie Insurance Exchange , which held that "regular-use" exclusions are unenforceable, because they run contrary to Pennsylvania's Motor Vehicle Financial Responsibility Law ("MVFRL"). Rush v. Erie Insurance Exchange, 265 A.3d 794 (Pa. Super 2021). Id. at p. 53-54. Defendant again denied coverage, and Plaintiff brought the instant lawsuit, originally filing in the Court of Common Pleas of Allegheny County, Pennsylvania. Id. at p. 55.

After removing the case to this Court, Defendant filed the instant motion to dismiss, with a brief in support. ECF 5, ECF 6. Plaintiff filed a response in opposition (ECF 10), and Defendant filed a reply brief and a supplemental reply, shortly thereafter. ECF 11, ECF 14. Through is replies, Defendant informed this Court that the Rush decision had been appealed to the Pennsylvania Supreme Court – which has not, as of the date of this Opinion, indicated whether it will grant review of the matter.

Plaintiff filed a Motion to Stay the instant proceedings (ECF 18), in light of the appeal request made by the insurance carrier in Rush , and Defendant filed a Brief in Opposition to the Motion to Stay. ECF 19.

II. Standard of Review

In considering a Rule 12(b)(6) motion, Federal Courts require notice pleading, as opposed to the heightened standard of fact pleading. Fed. R. Civ. P. 8(a)(2) requires only " ‘a short and plain statement of the claim showing that the pleader is entitled to relief,’ in order to ‘give the defendant fair notice of what the ... claim is and the grounds on which it rests.’ " Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (quoting Conley v. Gibson , 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957) ).

Building upon the landmark United States Supreme Court decisions in Twombly and Ashcroft v. Iqbal , 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009), the United States Court of Appeals for the Third Circuit explained that a District Court must undertake the following three steps to determine the sufficiency of a complaint:

First, the court must take note of the elements a plaintiff must plead to state a claim. Second, the court should identify allegations that, because they are no more than conclusions, are not entitled to the assumption of truth. Finally, where there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement for relief.

Connelly v. Steel Valley Sch. Dist. , 706 F.3d 209, 212 (3d Cir. 2013) (citation omitted).

The third step requires this Court to consider the specific nature of the claims presented and to determine whether the facts pled to substantiate the claims are sufficient to show a "plausible claim for relief." Covington v. Int'l Ass'n of Approved Basketball Officials , 710 F.3d 114, 118 (3d Cir. 2013). "While legal conclusions can provide the framework of a Complaint, they must be supported by factual allegations." Iqbal , 556 U.S. at 664, 129 S.Ct. 1937.

This Court may not dismiss a Complaint merely because it appears unlikely or improbable that Plaintiff can prove the facts alleged or will ultimately prevail on the merits. Twombly , 550 U.S. at 563 n.8, 127 S.Ct. 1955. Instead, this Court must ask whether the facts alleged raise a reasonable expectation that discovery will reveal evidence of the necessary elements. Id. at 556, 127 S.Ct. 1955. Generally speaking, a Complaint that provides adequate facts to establish "how, when, and where" will survive a Motion to Dismiss. Fowler v. UPMC Shadyside , 578 F.3d 203, 212 (3d Cir. 2009).

In short, a Motion to Dismiss should not be granted if a party alleges facts, which could, if established at trial, entitle him/her to relief. Twombly , 550 U.S. at 563 n.8, 127 S.Ct. 1955.

III. Analysis

Defendant filed the instant motion to dismiss arguing that the Pennsylvania Supreme Court in Williams v. GEICO Govt. Emp. Ins. Co. , 32 A.3d 1195 (Pa. 2011), barred individuals from obtaining UIM coverage when the policy contains a "regular-use" exclusion.² Plaintiff opposes Defendant's motion, countering that the Pennsylvania Superior Court has more recently determined that the "regular-use" exclusion runs afoul of Pennsylvania's Motor Vehicle Financial Responsibility Law ("MVFRL"), and thus, is unenforceable. Rush , supra . Defendant's reply and supplemental reply suggest that this Court should not rely on the Rush decision, noting that the Rush decision has been appealed to Pennsylvania's Supreme Court.

The Court begins its analysis by reviewing the relevant Pennsylvania case law that governs the issue before the Court.

A. Williams and its antecedents

In Williams , the Pennsylvania Supreme Court stated that it was granting "review to address whether the ‘regular-use’ exclusion contained in a personal automobile insurance policy is valid to preclude payment of underinsured motorist ("UIM") benefits to a police officer injured in the course of employment while operating a police vehicle for which the officer did not have the ability to obtain UIM coverage." 32 A.3d at 1197. However, the Court later in its opinion clarified that in granting Williams’ allowance of appeal, it was limiting its review "to whether public policy requires permitting a police officer to recover UIM benefits under his personal automobile insurance policy, when the recovery would be otherwise precluded by the policy's ‘regular-use’ exclusion." Id. at 1198. The Court stated a second time, "[i]n the instant case, we must determine whether regular-use exclusion, is void as against a public policy that favors protecting first responders." Id. at 1199.

Under the facts of the Williams case, at the time of the automobile accident, police officer Williams was seriously injured while operating a car owned and maintained by the Pennsylvania State Police. Id. at 1197. Officer Williams maintained his own personal automobile insurance with GEICO, which provided UIM coverage limits of $50,000 per person and $100,000 per accident with stacking available. Id. When Williams sought to recover the UIM benefits from GEICO, GEICO denied coverage based on the regular-use exclusion in its policy which indicated that UIM coverage would not apply when Williams was "using a motor vehicle furnished for [his] regular-use, ... which is not insured under this policy." Id.

When GEICO filed a motion for summary judgment based on this exclusion, the trial court granted it, and the Pennsylvania Superior Court affirmed in an unpublished memorandum, finding it was bound by a prior panel decision in in Brink v. Erie Ins. Group , 940 A.2d 528 (Pa. Super. 2008).³ When Williams sought review from the Pennsylvania Supreme Court, the Court began its analysis by noting a recent trend had been for litigants to claim that specific insurance policy provisions violated public policy, and specifically referenced Penna. Nat. Mut. Cas. Co. v. Black , 591 Pa. 221, 916 A.2d 569 (2007), wherein the Pennsylvania Supreme Court held:

"Generally, courts must give plain meaning to a clear and unambiguous contract provision unless to do so would be contrary to a clearly expressed public policy." [ Prudential Prop. And Cas. Ins. Co. v. ] Colbert , 813 A.2d at 750. In recent

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