The opinion of the court was delivered by: Judge James M. Munley United States District Court
Before the court for disposition are the parties' cross-motions for summary judgment. (Docs. 55, 58). Having been briefed, the motions are ripe for disposition.
Plaintiff Herman Douglas was injured in a car accident on August 21, 2005. (Joint Stip. of Facts ¶ 1 (Doc. 55-1)).*fn1 Herman Douglas settled a claim with the third-party tortfeasor and seeks underinsured motorist ("UIM") benefits from Defendant Discover Property & Casualty Insurance, Co. ("Discover"). (Id. ¶ 2). At the time of the accident, Abbott Laboratories ("Abbott") maintained an automobile insurance policy with Discover. (Id. ¶¶ 4, 5). Herman Douglas was driving a car provided to him by Abbott at the time of the accident. (Id. ¶ 6). The car was principally garaged in Pennsylvania at the time of the accident. (Id. ¶ 8).
Beyond the facts stipulated, the defendants state that the policy was "delivered" to Abbott in the state of Illinois. (Defs.' Counterstatement of Material Facts ("CSMF") ¶ 10 (Doc. 63)). The defendants also state that Abbott intended to waive UIM benefits in every jurisdiction permitted, including Pennsylvania. (Id. ¶ 11). The policy was a commercial fleet policy. (Id. ¶ 12). The policy contained a self-funded retention. (Id. ¶ 13).
The plaintiffs filed a declaratory judgment action in the Court of Common Pleas of Luzerne County, Pennsylvania on August 5, 2008. (Compl. (Doc. 1 at 9-28)). Count I of the complaint seeks a declaratory judgment, essentially that the policy's waiver of UIM protection is void under 75 PA. CONS. STAT. ANN. § 1731(c.1), part of Pennsylvania's Motor Vehicle Financial Responsibility Law ("MVFRL"). (Id.) Count II of the complaint raises a claim for bad faith under 42 PA. CONS. STAT. ANN. § 8371. (Id.) Count III of the complaint seeks the appointment of a special master to adjudicate the claims of the members of a potential class action. (Id.) The defendants filed a notice of removal on August 27, 2008. (Notice of Removal (Doc. 1)).
On September 2, 2008 the defendants filed a motion to dismiss the stipulation valid, however, because the defendants cite to the stipulation in complaint. (Doc. 3). The motion to dismiss was denied on September 22, 2009. (Doc. 23).
The plaintiffs filed a motion to remand to state court on September 4, 2008. (Doc. 5). On September 17, 2008 the plaintiffs also filed a motion to limit the defendants' contact with putative class members. (Doc. 11). The plaintiffs' motions were denied on November 24, 2008. (Doc. 18).
The defendants answered the complaint on October 16, 2009 and the parties engaged in discovery. (Doc. 23). On July 9, 2010 the plaintiffs filed an unopposed motion to sever the claims of Plaintiffs Leroy and Anna Webb from those of Plaintiffs Herman and Cynthia Douglas. (Doc. 39). That motion was denied on August 4, 2010. (Doc. 42). On November 12, 2010, the plaintiffs moved for voluntary dismissal of Plaintiffs Leroy and Anna Webb, which the court granted on November 15, 2010. (Docs. 53, 54).
On December 27 and 29, 2010, the remaining plaintiffs and defendants filed their respective cross-motions for summary judgment. (Docs. 55, 58). The motions have been briefed, bringing the case to its present posture.
The plaintiffs are citizens of Pennsylvania and the various defendants are incorporated and have their principal places of business in Illinois, Minnesota, Connecticut, and Delaware. (Notice of Removal ¶ 5). The amount in controversy exceeds $75,000.00. (Id. ¶ 9). Because there is complete diversity of citizenship between the parties and the amount in controversy exceeds $75,000.00, the court has removal jurisdiction over the case. See 28 U.S.C. § 1332 ("district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between . . . citizens of different states[.]"); 28 U.S.C. § 1441 (A defendant can generally remove a state court civil action to federal court if the federal court would have had original jurisdiction to address the matter pursuant to the diversity jurisdiction statute).
As a federal court sitting in diversity, we must apply state law. Chamberlain v. Giampapa, 210 F.3d 154, 158 (3d Cir. 2000) (citing Erie R.R. v. Tompkins, 304 U.S. 64, 78 (1938)). In this case, the relevant state is Pennsylvania. If the state supreme court has not yet addressed an issue before us, we must predict how that court would rule if presented with that issue. Nationwide v. Mutual Ins. Co., 230 F.3d 634, 637 (3d Cir. 2000). In so doing, we must examine the opinions of the lower state courts, and we cannot disregard them unless we are convinced by other persuasive data that the highest court would rule otherwise. Id.
Before the court are the parties' motions for summary judgment. 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).
When considering a motion for summary judgment, the court must examine the facts in the light most favorable to the party opposing the motion. Int'l Raw Materials, Ltd. v. Stauffer Chem. Co., 898 F.2d 946, 949 (3d Cir. 1990). The burden is on the moving party to demonstrate that the evidence is such that a reasonable jury could not return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A fact is material if it might affect the outcome of the suit under the governing law. Id. Where the non-moving party will bear the burden of proof at trial, the party moving for summary judgment may meet its burden by showing that the evidentiary materials of record, if reduced to admissible evidence, would be insufficient to carry the non-movant's burden of proof at trial. Celotex v. Catrett, 477 U.S. 317, 322 (1986). Once the moving party satisfies its burden, the burden shifts to the non-moving party, who must go beyond its pleadings, and designate specific facts by the use of affidavits, depositions, admissions, or answers to interrogatories showing that there is a genuine issue for trial. Id. at 324. DISCUSSION
The parties have filed cross-motions for summary judgment on largely stipulated facts. We will address the competing motions jointly.
A. Necessity and Sufficiency of § 1731 Waiver
The parties dispute several issues regarding section 1731 of Pennsylvania's Motor Vehicle Financial Responsibility Law ("MVFRL"). "The MVFRL requires insurers to offer underinsured motorist and uninsured motorist ("UM") coverage that compensates individuals for damages sustained in accidents with uninsured or underinsured vehicles. Purchase of UM and UIM coverage is optional, although to refuse such coverage, an insured must sign rejection forms whose precise language is dictated by statute[.]" Jackson v. Allstate Ins. ...