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ZK Result: Attorneys Janine Smith, Dara DeCourcy, and Jeffrey Ramaley obtain a defense win in Federal Court

The United States District Court of the Western District of Pennsylvania granted the motion for summary judgment filed by Attorneys Janine Smith, Dara DeCourcy, and Jeffrey Ramaley in a case that involved a dispute over the amount of Underinsured Motorist (UIM) coverage available under a single-vehicle auto insurance policy. The Plaintiff sought UIM coverage following an accident. At the time of the accident, Plaintiff was an insured under three policies of auto insurance that offered UIM coverage, including the subject policy, all of which were second priority coverages.


When the subject policy was issued, the Named Insured waived stacking of UIM coverage and executed the statutory stacking waiver. The policy contained a clause titled, “Other Insurance,” which limited non-stacked UIM coverage when multiple UIM coverages of equal priority were available to the pro rata share of the highest applicable UIM policy limit. As a result of this provision, the Defendant offered its pro rata share of non-stacked UIM coverage to Plaintiff. Plaintiff filed suit, seeking coverage in the amount of the full UIM policy limit.


Plaintiff first challenged the validity of the executed UIM stacking waiver, arguing that it was not a knowing and voluntary waiver of inter-policy UIM stacking, i.e. stacking of coverage between multiple policies. The Court rejected this argument based upon the Pennsylvania Supreme Court decision in Craley v. State Farm Fire & Casualty Company, which determined that the statutory UIM stacking waiver is a valid waiver of inter-policy stacking on  a single-vehicle policy.


Plaintiff also challenged the validity of the Other Insurance provision, asserting that it violated the Pennsylvania Motor Vehicle Financial Responsibility Law (MVFRL) and public policy for offering “gap” insurance. The Court rejected this argument, finding that the Other Insurance provision did not create gap insurance, but “addresses the interaction of UIM coverages of the same priority.” The Court further found that “this type of provision is necessary to effectuate the waiver of inter-policy stacking,” and that it was consistent with the MVFRL’s cost-containment rationale.