Pennsylvania Court Finds Underinsured Motorist Rejection Void

In John Bielec v. American Int’l Group Inc., et al., the Pennsylvania Court of Common Pleas, Philadelphia County, addressed the validity of an insurer’s rejection of underinsured motorist (“UIM”) coverage.  In brief, the plaintiff was an employee of Verizon Communications, Inc. (“Verizon”), who was involved in an automobile accident during the course of his employment.  At all times relevant, Verizon was insured by National Union Fire Ins. Co. (“National Union”).  Following the accident, the plaintiff attempted to claim UIM coverage under Verizon’s National Union policy.  National Union rejected the plaintiff’s UIM claim contending there was no UIM coverage provided under its policy.  The plaintiff commenced the instant declaratory judgment action seeking UIM coverage under the National Union policy.

In determining whether the plaintiff was entitled to UIM coverage, the court first looked to the requirements of the relevant Pennsylvania statute, i.e. the Motor Vehicle Financial Responsibility Law (“MVFRL”).   Under the MVFRL, Verizon was required to insure its fleet of commercial vehicles under a commercial insurance policy.  However, before obtaining such a policy, its insurer needed to provide Verizon the option of obtaining UIM coverage.  Upon receipt of this offer, Verizon was required to either accept or decline such coverage.  Under the MVFRL, the rejection of such coverage required specific steps to be taken or else the rejection would be deemed void.  Ultimately, Verizon opted to reject UIM coverage.  However, although Verizon opted to reject such coverage, the Verizon representative did not sign and date the UIM Rejection Form in the space immediately below the UIM rejection language.  Conversely, the representative placed a signature and date and the very bottom of the document leaving multiple paragraphs of text in between the UIM rejection language and her signature.

Ultimately, the court concluded that the UIM Rejection Form was void.  Looking to the specific facts of this case, the court noted that although the Rejection Form was signed, the form allowed for at least three paragraphs to intervene between the specific UIM rejection language and Verizon’s signature and date.  Specifically, the court noted that one of the intervening paragraphs allowed for the rejection of stacked limits of UIM coverage, which the court stated voided the validity of Verizon’s attempt to reject UIM coverage.  Moreover, notwithstanding the foregoing, the court also reasoned that Verizon’s failure to notify its employees that it was rejecting UIM coverage also gave rise to a public policy argument as to why Verizon’s rejection was void.  Thus, the court concluded that Verizon’s rejection of UIM coverage was void and not a basis to deny the plaintiff’s claim for coverage.

Consequently, this case illustrates that courts will strictly interpret Pennsylvania statute when it comes to rejecting UIM coverage.  Thus, an insurer needs to be cognizant of the statute’s requirements or else it may find itself providing coverage where it did not intend to do so.

Thanks to Colleen Hayes for her contribution to this post.



Choice of Ways Doctrine Supports Defense Summary Judgment (PA)

Defendants in Philadelphia County successfully asserted a choice of ways doctrine defense to earn a defense summary judgment in a recent slip and fall case.  The choice of ways doctrine bars recovery in a negligence context, when a plaintiff chooses to confront a patently obvious danger.   In Spady v. Acme Mkts., PICS Case No. 16-1530 (C.P. Philadelphia Sept. 8, 2016), Plaintiff brought suit against Acme Markets, FHG Companies, LLC, and DeMasi Landscaping seeking recovery for injuries he suffered as a result of a fall on a pile of snow and ice in an Acme parking lot.  The trial court granted summary judgment for defendants, which Plaintiff appealed on the grounds that, inter alia, there was a genuine issue of material fact as to his contributory negligence, and the court’s application of the choice of ways doctrine.

In February 2014, Plaintiff slipped and fell on a pile of snow and ice while walking in the parking lot of Acme supermarket.  Plaintiff brought a negligence claim against defendants alleging that they failed to remove the snow and warn of dangerous conditions.  However, video surveillance footage showed that the parking lot was clear of snow except for a mound of snow at the end of each row of parked cars.  The footage also showed that Plaintiff parked his car in an area completely clear of snow and that the most direct route from Plaintiff’s car to the entrance of the store was entirely clear of snow.  Despite the presence of a direct and clear route, Plaintiff chose a longer, indirect route in which he walked around another row of parked cars and then climbed over a mound of snow which he would not have encountered had he simply taken the shortest, most direct route from his car.   In his deposition, Plaintiff could not explain why he chose the longer, less direct route, other than that he saw a handicapped parking sign and thought that the route would be clear.  Plaintiff acknowledged that he did not really know why he chose the longer route, and also that, other than the mound at the end of each row of cars, the parking lot was clear of snow.

In its opinion recommending affirmation of the trial court’s decision, the court pointed out that the choice of ways doctrine is defined as:  “where a person, having a choice of two ways, one of which is perfectly safe, and the other of which is subject to risks and dangers, voluntarily chooses the latter and is injured, he is guilty of contributory negligence and cannot recover.”  The court may rule on the choice of ways doctrine as a matter of law and preclude Plaintiff’s recovery if no reasonable minds could disagree that there was:  (1) a safe course; (2) a dangerous course; and (3) facts which would put a reasonable person on notice of the danger or actual knowledge of the danger.

The court concluded that the choice of ways doctrine barred Plaintiff’s recovery because no reasonable minds could disagree that Plaintiff was aware of the safe and clear path that was the shortest and most direct from his car to the store, and he voluntarily assumed the risk of an obvious and known danger by deciding to take a longer, less direct path that encountered a mound of snow.  Thus, the court recommended the affirmation of the trial court’s granting of summary judgment for Defendants.  The court further noted that, although originally established within the framework of a contributory negligence system, the choice of ways doctrine still exists despite Pennsylvania’s shift to a comparative negligence system.  Thanks to Greg Herrold for his contribution to this post.  Please email Brian Gibbons with any questions.



Insured’s Declaratory Judgment Goes Up In Flames (PA)

The Eastern District of PA recently awarded summary judgment to an insurer, as well as $25,000 in damages, for an insured’s material misrepresentation in his insurance application in the case Payne v. Allstate Insurance Co..

On December 31, 2009, the insured, Payne, entered into a homeowner’s insurance agreement with Allstate Insurance Company (“Allstate”) to insure his home located in Philadelphia, PA.  As a prerequisite to obtaining the insurance agreement, Payne had to fill out an insurance application.  On the application, Allstate specifically asked Payne whether he used any alternative or supplemental heating source in his home.  Payne answered “no.”

Unsurprisingly, on February 9, 2010, Payne’s home caught fire.  Thereafter, Payne filed a claim with Allstate.  As part of its claim investigation, Allstate requested that Payne submit to an examination under oath.  During the examination, Payne admitted to using kerosene heaters in the home and that the kerosene heaters may have started the fire.  After the examination, Allstate denied Payne’s claim leading to a declaratory judgment action.  Allstate counterclaimed, suing Payne for breach of contract, breach of common law duty of good faith, and insurance fraud.  Both parties filed motions for summary judgment on the issues.

Upon review, the court found that Payne made a material misrepresentation when he failed to disclose that he used kerosene heaters, an alternative or supplemental heating source, on his insurance application.  Specifically, the court stated that the misrepresentation was material because whether Payne used alternative sources of heat was pertinent to the risk at issue in this case: fire.  Because of Payne’s material misrepresentation regarding the use of an alternative heat source in the house, the court granted summary judgment as to Allstate’s claims for breach of contract, breach of common law duty of good faith, and insurance fraud.  The court also awarded Allstate $25,000 in damages.  Likewise, because of Payne’s material misrepresentation, the court dismissed Payne’s breach of contract claim against Allstate with prejudice.

Thanks to Erin Connolly for her contribution.

For more information, contact Denise Fontana Ricci at


“Hyper-technical” Deviations in Waiver Language are Negligible in PA UIM Case

The Superior Court of Pennsylvania recently affirmed the decision of the Erie County Court of Common Pleas in an underinsured motorist (“UIM”) case on December 14.  The case of Petty v. Federated Mutual Insurance arises out of a car accident that occurred on September 1, 2012.  The plaintiffs were passengers in a car owned by McQuillen Chevrolet-Buick-Pontiac-GMC Truck, Inc. (“McQuillen”) when they were hit by another vehicle driven by Kelley Cooley (“Cooley”).  Cooley was insured by State Farm and settled the resulting suit for the limit of her policy.

The plaintiffs then sought UIM coverage from McQuillen’s auto policy which Federated Mutual Insurance (“Federated”) denied.  Federated asserted that McQuillen had rejected UIM coverage by signing a waiver form.  The plaintiffs then filed a declaratory judgment action against Federated asserting that the waiver form language did not comply with the statutory requirements of 75 Pa.C.S. § 1731(c).  Federated moved for judgment on the pleadings and prevailed.

75 Pa.C.S. § 1731 of Pennsylvania’s Motor Vehicle Financial Responsibility Law requires that any UIM coverage rejection form must state:


By signing this waiver I am rejecting underinsured motorist coverage under this policy, for myself and all relatives residing in my household. Underinsured coverage protects me and relatives living in my household for losses and damages suffered if injury is caused by the negligence of a driver who does not have enough insurance to pay for all losses and damages. I knowingly and voluntarily reject this coverage.


(c.1) Form of waiver.–Insurers shall print the rejection forms required by subsections (b) and (c) on separate sheets in prominent type and location. The forms must be signed by the first named insured and dated to be valid. The signatures on the forms may be witnessed by an insurance agent or broker. Any rejection form that does not specifically comply [emphasis added] with this section is void. If the insurer fails to produce a valid rejection form, uninsured or underinsured coverage, or both, as the case may be, under that policy shall be equal to the bodily injury liability limits. On policies in which either uninsured or underinsured coverage has been rejected, the policy renewals must contain notice in prominent type that the policy does not provide protection against damages caused by uninsured or underinsured motorists. Any person who executes a waiver under subsection (b) or (c) shall be precluded from claiming liability of any person based upon inadequate information.       

Federated’s form was identical to the statute, except the heading was slightly different:

Option 2. Rejection of Underinsured Motorists Coverage

On appeal, the plaintiffs raised whether Federated’s waiver form complied with statutory requirements when it added the phrase “Option 2”, replaced the term “protection” with “coverage”, added an “s” to the end of “motorist”, and boxed a portion of the form.  In addition, they raised whether the court erred in holding that “specific compliance” allowed Federated to deviate from the statutory form, whether the court erred in conducting a substantive analysis of the deviations, and did it err when it considered contract principles.

Thankfully, the Superior Court found that the Federated waiver’s language was a verbatim recitation of the statute.  They also agreed with the lower court’s evaluation that any differences in the heading were “hyper-technical” and do not cause any confusion or an uninformed waiver.  In other words, nice try plaintiffs, but no dice.

This case demonstrates the importance of policy and contractual language when interpreted by a court.  It shows that some courts allow flexibility when interpreting a policy.  That said, underwriters would be well served by adhering to specific statute language to the greatest degree possible.  Thanks to Peter Cardwell for his contribution to this post.  Please email Brian Gibbons with any question.

WCM Obtains No Cause Result in Philadelphia Premises Case.

Partner Robert Cosgrove and associate Erin Connolly recently obtained a finding of “no cause” in a Philadelphia County slip-and-fall case. In Yolanda Jefferson v. Marriott Hotel Services, Inc., the plaintiff alleged that she slipped and fell on snow and ice while exiting a SEPTA bus outside of the Downtown Philadelphia Marriott located at 12th and Market Streets. The plaintiff argued that Marriott negligently maintained its property by failing to clear the snow/ice, causing the plaintiff to fall and sustain injuries. In opposition, WCM argued that Marriott could not be held liable for the plaintiff’s alleged injuries because the plaintiff could not establish that she fell on Marriott property. WCM further argued that the plaintiff (1) failed to establish any evidence regarding the snow and ice and whether it unreasonably obstructed her travel as required under PA law; (2) failed to establish any evidence of Marriott’s notice of the snow/ice; and (3) failed to establish medical causation to the alleged incident. After hearing the evidence, a verdict in favor of WCM’s client was returned.

For more information about this post please e-mail Bob Cosgrove.

Jury Must Decide Whether Release Obtained by Fraud (PA)

A Pennsylvania court recently dealt with whether claims of a language barrier were sufficient to raise issues of fact as to whether a release was obtained by fraud.  In Del Pielago v. Orwig, the defendant failed to stop at a stop sign and struck the plaintiff’s vehicle. As a result of the collision, the plaintiff was injured and underwent surgery for a rotator cuff tear, and trauma induced carpal tunnel to his left wrist, among other injuries. Prior to filing suit, however, plaintiff signed a pre-litigation release, in exchange for payment of $2,857.92.

The defendant filed a motion for summary judgment, which was granted by the trial court. The action was dismissed, and on appeal plaintiff argued that the release should be set aside based on fraud, alleging that twelve days after the accident, an adjuster from Progressive Insurance Company showed up at plaintiff’s home without an interpreter, knowing that plaintiff did not speak or read English. The adjuster presented a check for $2,857.92 and the release, which he scrolled through on an iPad.  Plaintiff claims she signed the release, believed that the payment only covered lost wages.

In granting summary judgment based on the signed release, the trial court relied on the fact that plaintiff’s daughter, who speaks and reads English, was present. On appeal, the Pennsylvania Superior court reversed the trial court’s award of summary judgment, finding that it was clearly an issue for the jury to decide whether the release had been procured by fraud, based on plaintiff’s claims that the adjuster rushed her into signing a release he knew she was unable to understand.

Thanks to Alexandra Perry for her contribution to this post and please write to Mike Bono for more information.

Philadelphia Jury Awards Man $2,729 in Past Medical Costs for Fractured Ankle

A “trial loss” is not always as bad as it sounds. In murray-v-tripoldi, a Philadelphia jury awarded the plaintiff, who fractured his ankle after slipping and falling on an icy residential sidewalk, just $2,729 in past medical expenses.

In February of 2014, the plaintiff slipped and fell on ice accumulation on the defendants’ sidewalk, resulting in a fractured ankle. The plaintiff claimed the ice presence resulted from a snowstorm that occurred days earlier. The defendants argued that plaintiff assumed the risk of traversing the ice-laden sidewalk, as neighbors had shoveled their sidewalks and there were safer alternative routes the plaintiff could have taken. Defendants also argued that the accumulation was an open and obvious condition for which the defendants could not be held liable. The defendants successfully argued these defenses at court-mandated arbitration, which resulted in a no-cause award. The plaintiffs appealed the arbitration award and the case proceeded to trial.

At trial, the plaintiff sought to recover $2,729 in past medical costs to treat the fracture and for physical therapy, plus damages for pain and suffering – especially for pain experienced while dancing. At trial, defendants relied only on their liability defenses and did not challenge the plaintiff’s injuries or medical treatment. The case went to verdict, and the typically plaintiff-friendly Philadelphia jury only awarded the plaintiff the exact amount of his medical expenses.

Though an assumption of risk defense and open and obvious defense are intended to shield defendants from liability altogether, in this instance, it appears that these defenses influenced the jury to cap the plaintiff’s damages at their literal amount. This case demonstrates that taking a case to verdict can yield high rewards for defendants when there are low, undisputed damages, coupled with strong liability defenses that highlight common sense.

Thanks to Rachel Freedman for her contribution to this post.

Pennsylvania Court Lacks Jurisdiction Over Settlement Once it was Discontinued

The Pennsylvania Superior Court recently ruled that it did not have jurisdiction to enforce a settlement agreement.

In Camp Horne Self Storage LLC v. Lawyers Title Ins. Corp., the insured sued its insurer alleging breach of contract, bad faith and wrongful denial of insurance benefits. Eventually, the parties reached a settlement and entered into a settlement agreement.  The agreement contained various terms including, among others, that the insurer would have landscaping work performed on the insured’s property.  Upon entering into said agreement, the insured discontinued its lawsuit against the insurer.

Ultimately, the insured was dissatisfied with the landscaping work that had been performed on its property, pursuant to the settlement agreement, and filed a motion with the court seeking to enforce the settlement agreement.  The court denied the motion holding that it lacked jurisdiction to rule on the motion since the insured had discontinued its action against the insurer, and there was no pending action upon which it could exert jurisdiction.

Therefore, this case reveals a court may not be able to enforce a settlement agreement, if a party fails to act under the agreement, if the lawsuit is discontinued too early following settlement.

Thanks to Colleen Hayes for her contribution to this post.



Gym Exercises Contractual Right Under Waiver of Liability Term (PA)

In Toro v. L A Fitness, the plaintiff found out the hard way that in Pennsylvania a signed waiver clause actually means something. The claim arose out of a slip and fall due to soapy water on the floor of the gym’s locker room.  LA fitness filed a motion for summary judgement on the basis of a broadly worded waiver of liability in the membership agreement the plaintiff signed.  Significantly, above the signature line the agreement stated, “By signing this Agreement, Buyer acknowledges that Buyer is of legal age, has received a filled-in and completed copy of this Agreement[,] has read and understands the entire agreement including but not limited to the . . . Release and Waiver of Liability and Indemnity, and other Additional Terms and Conditions on the reverse side hereof.”

The plaintiff put forward a myriad of arguments why the waiver should not apply: the agreement amounted to a contract of adhesion; the waiver was against public policy; and the waiver language was not conspicuous.  Although his signature was on the agreement, he could not recall if he actually read it prior to signing.  The Pennsylvania Superior Court was not persuaded.   The Court agreed that for a waiver to be valid “the clause must not contravene public policy. Secondly, the contract must be between persons relating entirely to their own private affairs and thirdly, each party must be a free bargaining agent to the agreement so that the contract is not one of adhesion.”

Turning to plaintiff’s adhesion argument, the Court stated that “[a]n adhesion contract is a ‘standard-form contract prepared by one party, to be signed by the party in a weaker position, usu[ally] a consumer, who adheres to the contract with little choice about the terms.” However, the Court found that a waiver involving the “use of a commercial facility for voluntary athletic or recreational activities is not considered a contract of adhesion because ‘[t]he signer is under no compulsion, economic or otherwise, to participate, much less to sign the exculpatory agreement, because it does not relate to essential services.’” Thus, if Toro did not like the LA Fitness’ terms he was not compelled to sign on the dotted line.

In regards to Toro’s public policy argument, the Court noted that Waiver Clauses “violate public policy only when they involve a matter of interest to the public or the state. Such matters of interest to the public or the state include the employer-employee relationship, public service, public utilities, common carriers, and hospitals.” The Superior Court further ruled that an agreement between private individuals or entities that do not address matters of interest to the public or state cannot be said to violate public policy.

Lastly, the Court was not swayed by the plaintiff’s memory lapse as to reading the contract before signing. The Court concluded that a “[f]ailure to read an agreement before signing it does not render the agreement either invalid or unenforceable.”  Moreover, above Toro’s signature was language that stated that by signing he agreed that he read it. WAIVER ENFORCED.

Thanks to Marcus Washington for his contribution.

For more information, contact Denise Fontana Ricci at

Defective Holster Shoots Manufacturer in the Foot (PA)

A Philadelphia jury awarded a police officer plaintiff $2.6 million after he was injured by an allegedly defective gun holster.  Pennsylvania State Trooper, Jesse Oleksza was injured when his gun discharged into his leg, while in his holster.  According to his pretrial memo, Oleksza was getting his gym bag from out of his police car when his Glock 37 pistol went off.  It was held in a Gould & Goodrich holster.

Oleksza alleged that a foreign object had managed to lodge itself in the holster due to a defect and thus caused the pistol to fire.  An internal affairs investigation cleared Oleksza of any wrongdoing and found that an object like a key could discharge the firearm if inserted into the holster and trigger area.  Oleksza contended the holster was defective for failing to properly protect the trigger and sought recovery based on negligence, strict liability, and breach of implied warranties.


Gould & Goodrich contended that warnings on the holster stated that users should ensure that the trigger area is kept clear and to make sure that foreign objects stay out of the holster.  The manufacturer also contended that Oleksza was aware of the danger of letting foreign objects into his holster from his training.  In addition, a state investigation found no holster defect, and they argued that it is impossible to design a holster that prevents all objects from entering it.

Plaintiff’s counsel also presented ten state troopers to testify in the case as to the defectiveness of the holster.  The jury was also shown pictures of other holsters that showed more trigger protection than the Gould & Goodrich one.  The jury was asked to decide whether the defect was a cause of harm under the consumer expectations test and the risk utility test, and they found that the holster was defectively designed and manufactured.

This case displays the potential big payouts of products liability cases, even if there are numerous warnings and training for a product.  We suspect the testimony of the ten other officers were persuasive to the jury.  Thanks to Peter Cardwell for his contribution to this post.  Please email Brian Gibbons with any questions.