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Koehler v. USAA Casualty Insurance Co.

United States District Court, E.D. Pennsylvania

September 17, 2019



          Goldberg, Judge

         Currently before me in this putative class action is a narrow procedural question: should I decide a motion for partial summary judgment brought by Plaintiff on her individual claim before she has obtained-or even moved for-class certification? Defendant contends that I should not consider Plaintiff's motion, as that would be inconsistent with the policy under Federal Rule of Civil Procedure 23 that class certification be determined “[a]t an early practicable time”-the policy against so-called “one-way intervention.”

         For the reasons set out below, I agree with Defendant, and will deny Plaintiff's motion for partial summary judgment without prejudice pending class certification.


         Plaintiff's general allegation in this putative class action is that Defendant, USAA Casualty Insurance Company, has improperly denied uninsured and underinsured motorist benefits to its insureds based on a type of policy exclusion recently declared invalid by the Pennsylvania Supreme Court.

         The named Plaintiff in this action, Susan Koehler, is the executrix of the estate of her late husband, Philip Koehler, who died from injuries he suffered in a 2015 automobile accident. Following the accident, Plaintiff made a claim to the negligent driver's insurer, Encompass, which settled for the policy's limit. (Compl. ¶¶ 2, 6-18.)

         Plaintiff then sought underinsured motorist coverage from Mr. Koehler's own insurers. First, Plaintiff sought coverage from Progressive, which had issued Mr. Koehler a policy providing coverage for the motorcycle he was driving at the time of the accident. Like the negligent driver's insurer, Progressive settled this claim for the policy's limit. (Compl. ¶¶ 19-21.)

         Plaintiff then turned to Defendant, which had issued Mr. Koehler a policy providing him with “stacked” underinsured motorist coverage for three vehicles-none of which was the motorcycle he was driving at the time of the accident. However, under Pennsylvania's Motor Vehicle Financial Responsibility Law (“the Motor Vehicle Law”), when an insured obtains “stacked” underinsured motorist coverage, the insured can recover up to the “sum of the limits for each motor vehicle as to which the injured person is an insured, ” regardless of whether those vehicles are insured under the policy. 75 Pa. C.S.A. § 1738(a) (emphasis added). In other words, stacked coverage allows an insured to combine-or “stack”-the coverage limits for different vehicles for which he is insured, even if those vehicles are covered under different policies. See generally Gallagher v. GEICO Indem. Co., 201 A.3d 131, 132 n.1 (Pa. 2019) (“‘Stacking' refers to the practice of combining the insurance coverage of individual vehicles to increase the amount of total coverage available to an insured.”); Craley v. State Farm Fire & Cas. Co., 895 A.2d 530, 532 (Pa. 2006) (discussing “inter-policy stacking, the stacking of benefits provided by two or more policies”). (Compl. ¶¶ 26-32, 42-43.)

         While the policy that Defendant issued to Mr. Koehler provides for stacked coverage, it also includes a “household exclusion, ” which excludes injuries “sustained . . . while occupying . . . a motor vehicle owned by [the insured or a family member of the insured] which is not insured for [underinsured motorist coverage] under this policy.” Citing this household exclusion, Defendant denied Plaintiff's claim in December 2015. Presumably, Defendant did so because Mr. Koehler was driving the motorcycle listed in the policy issued by Progressive, and not one of the three vehicles listed in the policy issued by Defendant. If that motorcycle was owned by Mr. Koehler or a member of his family, the household exclusion in Defendant's policy would- at least in 2015-have applied to exclude coverage. (Compl. ¶¶ 35-36, 47-49.)

         But in January 2019-four years after Defendant denied Plaintiff's claim-the Pennsylvania Supreme Court issued a decision declaring invalid a household exclusion in a policy issued by another insurer, GEICO, which is similar to the household exclusion at issue here. See Gallagher, 201 A.3d at 132. The court reasoned that the household exclusion “acts as a de facto waiver of stacked . . . underinsured motorist . . . coverages, ” without requiring an insured to sign the waiver form prescribed by the Motor Vehicle Law. Id. at 132, 137.

         One month after the Gallagher decision, Plaintiff brought this putative class action for breach of contract in the Philadelphia Court of Common Pleas. Plaintiff's Class Action Complaint seeks a declaration of coverage and monetary damages, both individually and on behalf of other insureds who have, since 1990, been denied stacked uninsured or underinsured motorist benefits on the basis of the household exclusion in Defendant's policy.[2]

         Defendant removed the action to this Court and filed an answer, after which I scheduled a Rule 16 Scheduling Conference. In preparation for that conference, the parties submitted a discovery plan, which proposed that the parties would agree to bifurcate discovery, “with discovery relating to class certification and Plaintiff's individual claim to be completed first, and any remaining discovery to be considered after the Court rules on class certification.” The parties further proposed deadlines for, among other things, the close of class discovery, the filing of Plaintiff's class certification motion, and the filing of Defendant's opposition to class certification, “as well as any motion for summary judgment directed to Plaintiff's individual claims.” The proposed deadline for filing any such motion for summary judgment was “90 days after the filing of Plaintiff's Motion for Class Certification.” (Joint Report of Rule 26(f) Meeting and Proposed Discovery Plan 5-8.)

         After the parties submitted their proposed discovery plan, but before the Rule 16 Conference was held, Plaintiff moved for partial summary judgment, solely on her individual claim for declaratory relief. Rather than respond to the substance of that motion, Defendant has moved to strike or stay consideration of it, pending a decision on class certification.

         Defendant argues that deciding Plaintiff's motion for partial summary judgment before Plaintiff has obtained (or even moved for) class certification “violates the well-established rule against one-way intervention.” (Def.'s Mot. to Strike 1.) That rule was the impetus for Rule 23's requirement that a court determine whether to certify a class action “[a]t an early practicable time after a person sues.” Fed.R.Civ.P. 23(c)(1)(A). Plaintiff responds that this language in Rule 23 is flexible and permits a district court to consider a summary judgment motion on the merits before class certification, just as a court may consider a motion to dismiss for failure to state a claim under Rule 12(b)(6) at the outset of the litigation.

         For the reasons discussed below, I agree with Defendant that Plaintiff's partial summary judgment motion should not be decided before class certification.

         II. ...

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