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Barnhart v. Travelers Home And Marine Insurance Co.

United States District Court, W.D. Pennsylvania, Pittsburgh.

October 28, 2019

MARY BARNHART, Plaintiff,
v.
THE TRAVELERS HOME AND MARINE INSURANCE COMPANY, Defendant,

          OPINION AND ORDER

          MARILYN J. HORAN JUDGE

         Plaintiff, Mary Barnhart (''Barnhart") brings the within action against Defendant, The Travelers Home and Marine Insurance Company ("Travelers"), for Declaratory Relief (Count I), Assumpsit (Count II), and Class Action Allegations (Count III), because Travelers denied Underinsured Motorists ("UIM") Benefits based upon a "regular use exclusion" in its policy. Travelers moves to dismiss the Complaint pursuant to Fed.R.Civ.P. 12(b)(6). The parties provided briefs (ECF Nos. 3, 16, and 17), argued before the Court, and the matter is now ripe for decision.

         For the following reasons, Traveler's Motion to Dismiss will be granted.

         I. Background

         On July 15, 2015, Barnhart was injured while a passenger on a motorcycle operated by her husband, William Barnhart. (ECF No. 1 -2 at ¶ 4). William Barnhart owned the motorcycle and insured it through Progressive Insurance Company. Id. at p. 27.[1] Barnhart recovered the liability limits against the tortfeasor's liability policy. Id. at ¶¶ 5-6. Barnhart avers that her injuries and damages exceeded the liability limits of the tortfeasor's policy, thus she is entitled to UIM benefits under her Travelers's automobile policy. Id. at ¶ 7. She submitted an underinsured (UIM) claim under the policy that she and her husband had purchased from Travelers to cover two automobiles. Id. at ¶¶ 5-6 and p. 14. On March 15, 2019, Travelers denied Barnhart's claim for UIM Benefits based upon the "regular use exclusion" contained within the Barnhart's policy. Id. at ¶ 8. The Traveler's policy excludes UIM Coverage for bodily injury as follows:

[Travelers does] not provide Uninsured Motorists Coverage or Underinsured Motorists Coverage for "bodily injury" sustained:
1. By you while "occupying" or when struck by, any motor vehicle you own or that is furnished or available for your regular use which is not insured for this coverage under this policy. This includes a trailer of any type used with that vehicle.

(ECF No. 1-2 at p. 18). Barnhart's Complaint avers that the "regular use exclusion" is unenforceable pursuant to the Pennsylvania Supreme Court's recent ruling in Gallagher v. GEICO, 201 A.3d 131 (Pa. 2019).

         II. Standard of Review

         When reviewing a motion to dismiss, pursuant to Federal Rule of Civil Procedure 12(b)(6), the court must "accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Bid v. Thompson, 740 F.3d 118, 122 (3d Cir. 2014) (quoting Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir.2008)). "To survive a motion to dismiss a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp, v. Twombly, 550 U.S. 544, 570 (2007)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556); see also Thompson v. Real Estate Mortg. Network, 748 F.3d 142, 147 (3d Cir. 2014). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal, 556 U.S. at 678. "Factual allegations of a complaint must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555. A pleading party need not establish the elements of & prima facie case at this stage; the party must only "put forth allegations that 'raise a reasonable expectation that discovery will reveal evidence of the necessary element[s].'" Fowler v. UPMC Shadyside, 578 F.3d 203, 213 (3d Cir.2009) (quoting Graff v. Subbiah Cardiology Associates, Ltd, 2008 WL 2312671 (W.D. Pa. June 4, 2008)); see also Connelly v. Lane Const Corp., 809 F.3d 780, 790 (3d Cir.2016) ("Although a reviewing court now affirmatively disregards a pleading's legal conclusions, it must still. . . assume all remaining factual allegations to be true, construe those truths in the light most favorable to the plaintiff, and then draw all reasonable inferences from them.") (citing Foglia v. Renal Ventures Mgmt, LLC, 754 F.3d 153, 154 n. 1 (3d Cir.2014)).

         Nonetheless, a court need not credit bald assertions, unwarranted inferences, or legal conclusions cast in the form of factual averments. Morse v. Lower Merion School District, 132 F.3d 902, 906, n. 8 (3d Cir. 1997). The primary question in deciding a motion to dismiss is not whether the Plaintiff will ultimately prevail, but rather whether he or she is entitled to offer evidence to establish the facts alleged in the complaint. Maio v. Aetna, 221 F.3d 472, 482 (3d Cir.2000). The purpose of a motion to dismiss is to "streamline [ ] litigation by dispensing with needless discovery and factfinding." Neitzke v. Williams, 490 U.S. 319, 326-327, (1989).

         III. Discussion

         At the time of oral argument, the parties agreed that the disposition of the defense's Motion to Dismiss depends on whether this Court expands the holding in Gallagher v. GEICO, 201 A.3d 131 (Pa. 2019), which held that a "household exclusion" in an automobile insurance policy to preclude stacking of underinsured coverage is unenforceable to defeat an underinsured insurance claim. Barnhart asks this Court to hold that a "regular use exclusion" in her automobile insurance policy to preclude underinsured coverage is also unenforceable based upon the Pennsylvania Supreme Court's reasoning in Gallagher. Barnhart does not dispute that she cannot recover UIM benefits if the "regular use exclusion" is enforceable. Travelers contends that the Pennsylvania Supreme Court's holding in Gallagher is distinguishable because the issue in Gallagher concerned a household exclusion as applied to a waiver of stacked coverage. The present case concerns a "regular use exclusion" as applied to a waiver of UM/UIM benefits. Travelers argues that Gallagher is distinguishable and that the Pennsylvania Supreme Court case of Williams v. GEICO Gov't Employees Ins. Co., 32 A.3d 1195 (Pa. 2011) controls in the present case. Travelers also argues that neither Gallagher nor any other Pennsylvania Supreme Court case has overturned the Pennsylvania Supreme Court's holding in Williams. The Williams case upheld the enforceability of the "regular use exclusion" to preclude coverage for an underinsured motorist claim.

         In Gallagher, the Pennsylvania Supreme Court held that a motor vehicle insurance policy's "household vehicle exclusion," as applied to preclude stacking of underinsured motorist benefits, violates the Pennsylvania Motor Vehicle Financial Responsibility Law (MVFRL), specifically Section 1738. Gallagher, 201 A.3d at 131. In Gallagher, Brian Gallagher purchased two separate policies from GEICO-one for his motorcycle and one for his automobile. Mr. Gallagher "opted and paid for stacked UM and UIM coverage when purchasing both policies." Id. at 133. Mr. Gallagher was injured when another vehicle struck his motorcycle. Id. Because the tortfeasor was underinsured, he sought UIM stacked coverage under his motorcycle policy and automobile policy. Id. GEICO paid Gallagher's UIM claim under his motorcycle policy, but GEICO denied the UIM claim for the UIM coverage under his automobile ...


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