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Nationwide Mutual Insurance Co. v. Roth

October 26, 2006


The opinion of the court was delivered by: Judge Conaboy


Here we consider five motions pending before the Court in the above-captioned matter: 1) Motion to Compel Discovery Filed By Defendant/Counter Claim [Plaintiff] Kenneth L. Roth, (Doc. 37); 2) Motion for Summary Judgment of Plaintiff, Nationwide Mutual Insurance Company, (Doc. 46); 3) Motion to Compel Depositions Filed by Defendant/Counter Claim [Plaintiff] Kenneth L. Roth, (Doc. 49); 4) Motion for Protective Order of Plaintiff, Nationwide Mutual Insurance Company, (Doc. 57); and 5) though not officially filed as a motion, the Court has agreed to construe the Brief of Kenneth Roth in Opposition to the Motion for Summary Judgment of Nationwide Mutual Insurance Company, (Doc. 52), as a cross-motion for summary judgment. The underlying issue in this declaratory judgment action is whether Plaintiff/Counter-Claim Defendant Nationwide Mutual Insurance Company ("Plaintiff") properly denied underinsured motorist coverage under a policy of insurance Defendant/Counter- Claim Plaintiff Roth ("Defendant") had with Plaintiff insuring three vehicles when he was injured in an accident while riding his motorcycle which was insured by Plaintiff under a separate insurance policy. For the reasons discussed below, we conclude that Plaintiff properly denied coverage. Therefore, we grant the Motion for Summary Judgment of Plaintiff, Nationwide Mutual Insurance Company, (Doc. 46), deny Defendant's cross-motion, (Doc. 52), and deem the remaining pending motions moot.

I. Background

This declaratory judgment action was filed by Plaintiff in order to clarify the Underinsured Motorists coverage due Defendant. (Doc. 1.) Defendant was injured while riding his Honda motorcycle on June 22, 2002, when he was struck by a vehicle driven by Taza Nelson. (Id.) As a result of this accident, Defendant filed a claim for Underinsured Motorists Benefits with Plaintiff, the company which insured his motorcycle and three other vehicles under a separate policy. (Id.) The policy insuring the motorcycle provided for $50,000 of Underinsured Motorists Coverage and the other vehicle policy provided $150,000. (Id.) Plaintiff acknowledges that Defendant was severely injured in the accident, (id.), and has paid Defendant the $50,000 of Underinsured Motorists Coverage provided in the motorcycle policy. (Doc. 80-1 at 18.)

In Plaintiff's Complaint and subsequent filings, it is averred that Plaintiff does not owe Defendant any additional Underinsured Motorists coverage because the "household exclusion" clause in the policy covering the three vehicles precludes further recovery. (See, e.g., Doc. 1 ¶ 16.) Defendant disagrees with this position, asserting he is entitled to Underinsured Motorists benefits under the three-vehicle policy because he did not waive stacking on that policy. (Doc. 52.) Defendant maintains that Plaintiff has not presented a valid public policy basis to enforce the household exclusion and, under the circumstances of this case, the household exclusion in the policy cannot be enforced because it is in conflict with § 1738 of the Pennsylvania Motor Financial Responsibility Law which allows stacking. (See, e.g., id. at 7-14.)

After Plaintiff filed this action on March 23, 2004, the Court issued an Order setting out the procedure used in declaratory judgment actions and establishing an appropriate briefing and hearing schedule. (Doc. 2.) The hearing originally scheduled in this matter for June 9, 2004, (id.), was continued several times at the request of the parties, (see, e.g., Docs. 18, 21, 30,). Eventually, a hearing was held on March 22, 2006.

As a result of the hearing, the parties were directed to file supplemental briefs pertaining to all pending motions on or before March 31, 2006, (Doc. 69), and the parties did so, (Docs. 70, 71).

On April 20, 2006, the Court issued an Order staying the case and all pending motions because the Pennsylvania Supreme Court's decision in the case of Craley v. State Farm Fire and Casualty Co. was imminent and, given similar issues, the outcome of Craley could be dispositive for our case. Following the Pennsylvania Supreme Court's decision on April 21, 2006 - Craley v. State Farm Fire and Casualty Co., 895 A.2d 530 (Pa. 2006) - at the request of Defendant's counsel, the Court directed the parties to submit briefs addressing the impact of the Craley decision on the pending case on or before May 12, 2006, (Doc. 74). After receiving these briefs, (Docs. 75, 76), the Court ordered further briefing of specific issues, (Doc. 77), and the parties submitted the required supplemental briefs, (Docs. 80, 81).

After reviewing the parties filings, we concluded that the only issue to be decided in the summary judgment motions is whether the household exclusion is applicable. We determined that a supplemental hearing would be beneficial and scheduled a hearing for August 10, 2006. (Doc. 83.) This hearing was continued at Plaintiff's request and eventually was held on October 11, 2006.

II. Discussion

We begin our discussion with consideration of the parties' cross-motions for summary judgment because the resolution of these motions affects the disposition of the remaining motions.

A. Cross-Motions for Summary Judgment

1. Summary Judgment Standard

The standard for granting summary judgment in a declaratory judgment action is the same as for any other type of relief. Cloverland-Green Spring Dairies, Inc. v. Pa. Milk Marketing Board, 298 F.3d 201, 210 n.12 (3d Cir. 2002). Summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." See Knabe v. Boury, 114 F.3d 407, 410 n.4 (3d Cir. 1997)(citing Fed. R. Civ. P. 56(c)). "[T]his standard provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986).

A fact is "material" if proof of its existence or nonexistence would affect the outcome of the lawsuit under the law applicable to the case. Id. at 248; Levendos v. Stern Entertainment Inc., 860 F.2d 1227, 1233 (3d Cir. 1988). An issue of material fact is "genuine" if the evidence is such that a reasonable jury might return a verdict for the non-moving party. Anderson, 477 U.S. at 257. In determining whether a genuine issue of fact exists, a court must resolve all factual doubts and draw all reasonable inferences in favor of the nonmoving party. Conoshenti v. Public Serv. Elec. & Gas Co., 364 F.3d 135, 140 (3d Cir. 2004) (citation omitted).

The initial burden is on the moving party to show an absence of a genuine issue of material fact. The moving party may meet this burden by "pointing out to the district court [] that there is an absence of evidence to support the nonmoving party's case when the nonmoving party bears the ultimate burden of proof." Celotex, 477 U.S. at 325. The non-moving party may not rest on the bare allegations contained in his or her pleadings, but is required by Federal Rule of Civil Procedure 56(e) to go beyond the pleadings by way of affidavits, depositions, answers to interrogatories or the like in order to demonstrate specific material facts which give rise to a genuine issue. Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). When Rule 56(e) shifts the burden of proof to the non-moving party, that party must produce evidence to show the existence of every element essential to its case which it bears the burden of proving at trial. Equimark Commercial Finance Co. v. C.I.T. Financial Services Corp., 812 F.2d 141, 144 (3d Cir. 1987).

The summary judgment standard does not change when the parties have filed cross-motions for summary judgment. Applemans v. City of Phila., 826 F.2d 214, 216 (3d Cir. 1987). When confronted with cross-motions for summary judgment, as in this case, "the court must rule on each party's motion on an individual and separate basis, determining, for each side, whether a judgment may be entered in accordance with the summary judgment standard."

Marciniak v. Prudential Financial Ins. Co. of America, No. 05-4456, 2006 WL 1697010, at *3 (3d Cir. June 21, 2006) (citations omitted) (not precedential). If review of cross-motions reveals no genuine issue of material fact, then judgment may be entered in favor of the party deserving of judgment in light of the law and undisputed ...

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