Allstate Property & Casualty Insurance v. Squires
667 F.3d 388
3rd Cir.2012Background
- Squires was injured Oct. 20, 2008, when he swerved to avoid a cardboard box on State Highway 51; box dropped by an unidentified vehicle.
- Allstate denied Squires UM benefits and filed for declaratory judgment; Squires counterclaimed for breach of contract and insurance bad faith.
- Squires’s policy covers bodily injury arising from ownership, maintenance, or use of an uninsured auto; MVFRL requires UM coverage for injuries from use/maintenance of an uninsured vehicle.
- District Court granted judgment on the pleadings, concluding the box was not the vehicle causing the accident and thus no UM arising-out connection.
- Court held PA statute/insurance contract interpretation governs; question is whether unidentified vehicle’s use caused the accident under the policy and PA law.
- This appeal seeks reversal and remand for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the accident arise out of ownership, maintenance, or use of an uninsured auto? | Squires argues the unidentified vehicle’s use caused the accident. | Allstate contends only the vehicle itself can be the instrumentality; box is incidental. | Yes; accident arose out of the use of an uninsured vehicle. |
| Is the unidentified box dropped from an uninsured vehicle within MVFRL coverage? | Squires relies on Goodville causation standard applying but-for nexus. | Allstate argues Smith-style distinction applies; box not vehicle-related. | Unidentified vehicle’s use satisfies causation under Goodville framework. |
| Should the court apply Goodville and related case law to interpret ‘arising out of’? | Squires should receive liberal construction in favor of coverage. | Allstate asserts narrower, vehicle-centric interpretation. | Pennsylvania caselaw would favor coverage in this context. |
| Is U.S. Underwriters controlling distinguishable from this case? | N/A | U.S. Underwriters is distinguishable but supportive of causation in this set of facts. | Distinguishable; the box-dropping scenario supports coverage here. |
Key Cases Cited
- Manufacturers Cas. Ins. Co. v. Goodville Mut. Cas. Co., 403 Pa. 603, 170 A.2d 571 (Pa. 1961) (establishes but-for causation standard for ‘arising out of’)
- Smith v. United Servs. Auto. Ass'n, 572 A.2d 785 (Pa. Super. Ct. 1990) (vehicle not causal when injury caused by third party action (hay))
- Fox v. State Auto. Mut. Ins. Co., 314 Pa. Super. 559, 461 A.2d 299 (Pa. Super. Ct. 1983) (vehicle use linked to injuries where nexus with vehicle is strong)
- U.S. Underwriters Ins. Co. v. Liberty Mut. Ins. Co., 80 F.3d 90 (3d Cir. 1996) (distinguishable from cases with stronger vehicle nexus; but inform reasoning)
- Lucas-Raso v. Am. Mfrs. Ins. Co., 441 Pa. Super. 161, 657 A.2d 1 (Pa. Super. Ct. 1995) (injury not arising from use when nexus to vehicle is lacking)