556 F. App'x 165
3rd Cir.2014Background
- Grudkowski bought Foremost antique auto policies for a 1991 BMW 318i and a 1972 Mercedes 280 SEL, each with $300,000 UM and $300,000 UIM coverage.
- Under Pennsylvania MVFRL, stacking of UM/UIM across multiple policies is generally allowed unless waived.
- Foremost provided a stacking waiver form, but Grudkowski did not sign it, so she did not waive stacking for either policy.
- The policies limit UM/UIM coverage to accidents involving the covered vehicles, effectively preventing inter-policy stacking.
- Grudkowski asserted illusory coverage and brought claims for breach of contract, UTPCPL, unjust enrichment, and bad faith; the district court dismissed.
- Grudkowski appeals the district court’s dismissal and a motion for reconsideration, and seeks certification to the Pennsylvania Supreme Court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of contract viability | Grudkowski asserts Foremost breached contract by selling stacking-limited coverage. | Foremost argues stacking limits are permissible under MVFRL and policy terms; no breach occurred. | Breach claim dismissed; stacking limitations permissible under MVFRL. |
| UTPCPL viability | Grudkowski relied on Foremost’s representations about stacking. | Misrepresentations about stacking do not state a UTPCPL claim when policy terms disclose limits. | UTPCPL claim dismissed. |
| Unjust enrichment availability | Grudkowski pleads unjust enrichment as an alternative remedy. | Existence of a written contract bars unjust enrichment claims. | Unjust enrichment claim dismissed. |
| Bad faith under § 8371 scope | Bad faith allegations concern the sale of illusory coverage. | § 8371 does not cover claims about marketing or sale of coverage, only defense/indemnification performance. | § 8371 claim dismissed. |
Key Cases Cited
- St. Paul Mercury Ins. Co. v. Corbett, 630 A.2d 28 (Pa. Super. Ct. 1993) (clear policy limitations may deny stacking under MVFRL)
- Williams v. GEICO Gov't Emps. Ins. Co., 32 A.3d 1195 (Pa. 2011) (exclusions/limitations can be reasonable preclusions of coverage)
- Fay v. Erie Insurance Group, 723 A.2d 712 (Pa. Super. Ct. 1999) (UTPCPL claim may fail where policy terms disclose limitations)
- Heller v. Pennsylvania League of Cities and Municipalities, 32 A.3d 1213 (Pa. 2011) (illusory optional coverage distinguished from mandatory coverage)
- Everhart v. PMA Ins. Grp., 938 A.2d 301 (Pa. 2007) (stacking not mandated for certain insurance types)
- Wilson Area Sch. Dist. v. Skepton, 895 A.2d 1250 (Pa. 2006) (unjust enrichment barred where contract exists)
- Ocasio v. Prison Health Servs., 979 A.2d 352 (Pa. Super. Ct. 2009) (breach of contract elements; typical pleading standard)