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Robert E. Hall and Pamela Hall v. Safeco Insurance Company of Indiana

March 24, 2011

ROBERT E. HALL AND PAMELA HALL,
PLAINTIFFS
v.
SAFECO INSURANCE COMPANY OF INDIANA, DEFENDANT



The opinion of the court was delivered by: James Knoll Gardner, United States District Judge

OPINION

This matter is before the court on Defendant Safeco Insurance Company of Indiana's Motion for Partial Summary Judgment, which motion was filed March 24, 2010. Plaintiffs Robert E. Hall and Pamela Hall's Answer to Defendant's Motion for Partial Summary Judgment was filed on March 29, 2010. On February 19, 2010 the parties filed a Stipulation of Undisputed Facts.

Oral argument on defendant's motion was held before me on April 5, 2010.

For the reasons articulated in this Opinion, I grant Defendant Safeco Insurance Company of Indiana's Motion for Partial Summary Judgment. I dismiss the portion of Count I of plaintiffs' Complaint seeking first-party benefits for plaintiff Robert E. Hall's wage loss and medical benefits; and I enter judgment in favor of defendant and against plaintiffs on that portion of Count I of the Complaint.

JURISDICTION

Jurisdiction in this case is based upon diversity of citizenship pursuant to 28 U.S.C. § 1332.

VENUE

Venue is proper pursuant to 28 U.S.C. § 1391(b) because the events or omissions giving rise to the cause of action allegedly occurred in, Lehigh County, Pennsylvania, which is in this judicial district.

PROCEDURAL HISTORY

On July 2, 2009 plaintiffs Robert E. Hall and Pamela Hall filed suit against defendant Safeco Insurance Company of Indiana ("Safeco") in the Court of Common Pleas of Lehigh County, Pennsylvania in Case No. 2009-C-3390. Plaintiff's four-count Complaint alleges state-law claims for breach of contract (Count I); bad faith liability pursuant to 42 Pa.C.S.A. § 8371 (Count II); unfair trade practices and consumer protection law violations pursuant to 73 P.S. §§ 201-1 through 201.9.3*fn1 (Count III); and fraud and misrepresentation (Count IV).

On August 3, 2009 Safeco filed a Notice of Removal of the Lehigh County action and removed the case to this court. On September 11, 2009 defendant filed its Answer and Affrimative Defenses. On January 7, 2010 I conducted a Rule 16 Status Conference by telephone and set a deadline for defendant to file the within motion and a date for oral argument.*fn2 As noted above, defendant filed its motion for partial summary judgment on March 24, 2010

FACTS

Based upon the pleadings, record papers, exhibits and the Stipulation of Undisputed Facts filed by the parties on February 8, 2010, the pertinent facts for purposes of Safeco's partial motion for summary judgment*fn3 are as follows:

This matter arises from a November 25, 2005 motor vehicle accident involving plaintiff, Robert E. Hall. On that date Mr. Hall left P.J. Whelihan's bar in Allentown, Lehigh County, Pennsylvania, and was involved in a vehicle accident with Anthony Severo. Mr. Severo was killed instantly as a result of the collision. Mr. Hall was also injured as a result of the accident.

At the time of the accident, the alcohol concentration in Mr. Hall's blood or breath ("blood alcohol content") was at least 0.10% but less than 0.16%, as charged in the police criminal complaint. See 75 Pa.C.S.A. § 3802(b). Mr. Hall was cited for numerous violations including: (1) Involuntary manslaughter in violation of 18 Pa.C.S.A. § 2504 (subsequently withdrawn); (2) Homicide by vehicle in violation of 75 Pa.C.S.A. § 3732; and (3) Homicide by vehicle while driving under influence in violation of 75 Pa.C.S.A. § 3735(a).

Mr. Hall ultimately pled guilty to charges relating to the accident including Homicide by vehicle (a felony); Homicide by vehicle while driving under influence (a felony); Driving under influence of alcohol or controlled substance in violation of 75 Pa.C.S.A. § 3802 (a misdemeanor); and Recklessly endangering another person in violation of 18 Pa.C.S.A. § 2705 (a misdemeanor of the second degree).

At the time of the accident, plaintiff's vehicle was covered by a Safeco personal automobile insurance policy, Policy No. K1814412.

The Estate of Anthony Severo commenced a lawsuit against Mr. Hall and P.J. Whelihan's seeking damages for Mr. Severo's wrongful death in the Court of Common Pleas for Lehigh County, Pennsylvania, Case Number 2007-C-4285. In response to the lawsuit, Safeco provided both indemnification and a defense to Mr. Hall. Safeco assigned the defense of the third-party claim brought by the Estate of Anthony Severo to Lois Shenk, Esquire.

On April 12, 2007 Safeco entered into a partial release with the Estate of Anthony Severo in the amount of $178,571.42. Subsequently, Safeco tendered its full policy limit of $250,000. On December 1, 2009 Safeco entered into a full and final general release in that amount with the Estate of Anthony Severo. On December 28, 2009 Lehigh County Common Pleas Judge Michelle A. Varricchio entered a decree approving the settlement of the wrongful death and survival claims brought by the Estate of Anthony Severo.

The Safeco insurance policy with Mr. Hall provided for first party benefits (wage loss and medical benefits). On April 19, 2006, Mr. Hall submitted an application for first party benefits under the Safeco policy. On July 6, 2007 Safeco issued a formal denial of Mr. Hall's application for wage loss and medical benefits.

The insurance contract between the parties was issued in the names of both Robert E. Hall and Pamela Hall. However, a review of plaintiffs' Complaint does not indicate any claim by Pamela Hall for first party benefits.

STANDARD OF REVIEW

In considering a motion for summary judgment, the court must determine whether "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Federal Home Loan Mortgage Corporation v. Scottsdale Insurance Company, 316 F.3d 431, 433 (3d Cir. 2003). Only facts that may affect the outcome of a case are "material". Moreover, all reasonable inferences from the record are drawn in favor of the non-movant. Anderson, supra.

Although the movant has the initial burden of demonstrating the absence of genuine issues of material fact, the non-movant must then establish the existence of each element on which it bears the burden of proof. See Watson v. Eastman Kodak Company, 235 F.3d 851, 858 (3d Cir. 2000).

Plaintiff cannot avert summary judgment with speculation or by resting on the allegations in its pleadings, but rather must present competent evidence from which a jury could reasonably find in its favor. Ridgewood Board of Education v. N.E. for M.E., 172 F.3d 238, 252 (3d Cir. 1999); Woods v. Bentsen, 889 F.Supp. 179, 184 (E.D.Pa. 1995).

CONTENTIONS OF THE PARTIES

Contentions of Defendant

Defendant contends that the plain and unambiguous terms of the Safeco policy provides in pertinent part: "We do not provide First Party Benefits Coverage for bodily injury suffered by any insured:...[w]hile committing a felony,".*fn4 Defendant argues that this policy exclusion expresses the public policy mandate of 75 Pa.C.S.A. ยง 1718 that an ...


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