Gallagher, B. v. Geico Indemnity
352 WDA 2016
| Pa. Super. Ct. | Jan 27, 2017Background
- Brian Gallagher had two GEICO policies: one for a motorcycle and one for two automobiles; he elected and paid for stacked UIM coverage on both policies.
- GEICO issued separate policies for business choice (GEICO’s decision), rather than a single multi-vehicle policy.
- Gallagher was injured in 2012 while operating his motorcycle; GEICO paid the $50,000 UIM limit under the motorcycle policy.
- Gallagher sought additional UIM benefits under the automobile policy; GEICO denied coverage relying on the policy’s household vehicle exclusion.
- The household vehicle exclusion barred coverage for injury involving a vehicle owned by the insured or a relative that is not insured for UIM under the policy, effectively precluding inter-policy stacking.
- The trial court granted GEICO’s summary judgment motion, relying on prior appellate decisions addressing the validity of household exclusions under the MVFRL; Gallagher appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a household vehicle exclusion that prevents stacking between separate policies violates the MVFRL’s stacking/waiver provisions | Gallagher: Exclusion functions as an impermissible, unknowing waiver of stacking; he paid for stacking and did not waive it | GEICO: Exclusion is a valid, unambiguous limitation on coverage that precludes stacking between policies | Court: Upheld exclusion; bound by Ayers and Baker holding that household exclusions validly preclude coverage and are not improper waivers |
| Whether Ayers and Baker control this case where the same insurer issued separate policies | Gallagher: Facts warrant different result because he paid for stacking and did not waive it | GEICO: Ayers and Baker are factually and legally analogous; those precedents permit enforcement of household exclusion | Court: Found Ayers and Baker controlling because policy language and facts are substantially similar |
| Whether the trial court erred in granting summary judgment to GEICO | Gallagher: Material dispute exists regarding statutory rights under MVFRL and premium-paid stacking | GEICO: No genuine issue; legal precedent resolves entitlement against stacking claims | Court: Affirmed summary judgment for GEICO |
| Whether Gallagher should seek further review given fractured precedent | Gallagher: (implicit) seeks reversal from appellate precedent | GEICO: Appellee defends existing precedent | Court: Noted the split nature of authority and evenly divided Supreme Court decisions; suggested Gallagher may pursue Supreme Court review |
Key Cases Cited
- Gov’t Emps. Ins. Co. v. Ayers, 955 A.2d 1025 (Pa. Super. 2008) (Superior Court held household vehicle exclusion precluded inter-policy stacking)
- Gov’t Emps. Ins. Co. v. Ayers, 18 A.3d 1093 (Pa. 2011) (Pennsylvania Supreme Court affirmed by an equally divided court)
- Erie Ins. Exchange v. Baker, 972 A.2d 507 (Pa. 2009) (Supreme Court concluded household exclusion is a valid, unambiguous preclusion of coverage and not an improper statutory waiver)