Webb et al v. The Travelers Indemnity Company et al

Filing 113

MEMORANDUM (Order to follow as separate docket entry) re dfts' request to appeal 70 .Signed by Honorable James M. Munley on 10/10/13. (sm)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
HERMAN DOUGLAS and
CYNTHIA R. DOUGLAS,

:
No. 3:08cv1607
:
:
(Judge Munley)
Plaintiffs
:
:
v.
:
:
DISCOVER PROPERTY &
:
CASUALTY INSURANCE
:
COMPANY; THE TRAVELERS
:
INDEMNITY COMPANY; THE
:
TRAVELERS INDEMNITY
:
COMPANY OF AMERICA; THE
:
TRAVELERS INDEMNITY
:
COMPANY OF CONNECTICUT;
:
TRAVELERS PROPERTY AND
:
CASUALTY COMPANY OF
:
AMERICA; THE CHARTER OAK
:
FIRE INSURANCE COMPANY;
:
ST. PAUL TRAVELERS
:
COMPANIES, INC.; THE ST. PAUL
:
TRAVELERS COMPANIES, INC.;
:
THE TRAVELERS COMPANIES,
:
INC.; STANDARD FIRE INSURANCE :
COMPANY OF CONNECTICUT;
:
TRAVELERS INSURANCE GROUP
:
HOLDINGS, INC.; TRAVELERS
:
PROPERTY CASUALTY CORP.;
:
and THE PHOENIX
:
INSURANCE COMPANY,
:
:
Defendants
:
:::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::
MEMORANDUM
Before the court for disposition is defendants’ filing labeled as a
“Request To Amend Order Pursuant to F.R.A.P. 5(a)(3).” Defendants seek
the court’s permission to immediately appeal our summary judgment
opinion. The matter has been briefed and is ripe for disposition.

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Background1
On August 21, 2005, Plaintiff Herman Douglas (hereinafter “plaintiff”)
was injured in an automobile accident. At the time of the accident, plaintiff
was driving a car supplied to him by his employer, Abbott Laboratories.
Abbott maintained a commercial fleet automobile policy with Defendant
Discover Property & Casualty Insurance Company that covered the
automobile.
Plaintiff settled a personal injury claim with the third-party tortfeasor
and sought underinsured motorist (“UIM”) benefits from Defendant
Discover.2 When Abbott purchased the automobile policy, it waived UIM
coverage. Pennsylvania has specific rules that must be followed for a valid
waiver of UIM coverage, including the wording that must be used in the
waiver. See 75 PA. CONS. STAT. ANN. § 1731. Plaintiff filed suit seeking a
declaratory judgment that the UIM waiver was void. The complaint also
asserts of cause of action for bad faith and seeks the appointment of a
special master to adjudicate the claims of the members of a potential class
action.
The parties filed cross-motions for summary judgment in December
2010. The court issued a memorandum and an order on August 12, 2011
1

We have derived these brief background facts from our summary
judgment opinion, which was based on the parties’ stipulation of the facts.
(Doc. 67, Mem. & Order of Aug. 12, 2011). Thus, we have dispensed with
citations to the record.
2

UIM coverage applies when another driver is at fault for injury, but
that driver lacks sufficient insurance to cover all losses caused by the
accident. The insured/injured party can then potentially recover UIM
benefits from his own insurance policy. 75 PA. CONS. STAT. ANN.
§ 1731(c).
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disposing of the motions. We granted summary judgment in plaintiffs’
favor with regard to the declaratory judgment. We found that the waiver of
UIM coverage was null and void. We denied the motion with respect to the
bad faith claim. We also denied the defendant’s motion for summary
judgment.
On August 31, 2011, the defendants filed the instant document
entitled: “Request to Amend Order Pursuant to F.R.A.P. 5(a)(3).” (Doc.
70). The request notes that our summary judgment order is interlocutory
and not subject to immediate appeal. Defendants ask the court to amend
the order to add language that would make it immediately appealable.
Plaintiffs oppose the request, and this matter is now ripe for disposition.
Discussion
Defendants seek to appeal our decision on the summary judgment
motion. Rule 5 of the Federal Rules of Appellate Procedure provides:
If a party cannot petition for appeal unless the
district court first enters an order granting
permission to do so or stating that the necessary
conditions are met, the district court may amend its
order, either on its own or in response to a party’s
motion, to include the required permission or
statement. In that event, the time to petition runs
from the entry of the amended order.
FED. R. APP. P. 5(a)(3).
The defendants move to have the court amend its order on the
summary judgment motion to include language allowing for immediate
appeal. The parties agree that granting an immediate appeal is only
permitted if the requirements of 28 U.S.C. § 1292(b) are met. Section
1292(b) provides that if a judicial order is not otherwise appealable, the
judge may certify it for immediate appeal if the order involves a controlling
question of law over which a substantial ground for difference of opinion

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exists.
The following three criteria must be met for the court to exercise its
discretion to grant an immediate appeal:
(1) the order must involve a controlling question of law;
(2) there must be substantial ground for difference of opinion as to
the order’s correctness and
(3) immediate appeal will materially advance the ultimate termination
of the litigation.
Katz v. Carte Blanche Corp., 496 F.2d 747, 754 (3d Cir. 1974).
The Third Circuit has further explained that “Congress intended that
section 1292(b) should be sparingly applied. It is to be used only in
exceptional cases where an intermediate appeal may avoid protracted and
expensive litigation and is not intended to open the floodgates to a vast
number of appeals from interlocutory orders in ordinary litigation.” Milbert
v. Bison Lab., Inc., 260 F.2d 431, 433 (3d Cir. 1958); Sporck v. Peil, 759
F.2d 312, 315 n.4 (3d Cir. 1985).
In the instant motion, the determinative factor is the second, whether
substantial ground for difference of opinion exists as to the correctness of
our summary judgment decision. The defendants raise several arguments
to establish a substantial ground for difference of opinion. Principally,
defendants contend that the policy waiver was valid under Pennsylvania
law. Second, defendants claim that the policy was neither delivered nor
issued for delivery in Pennsylvania. Third, the defendants argue that
plaintiff lacks standing to reform the insurance policy.3 We will discuss

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The defendants raise several other issues. The issues mentioned in
the body of the memorandum, however, are the ones that the parties have
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these issues in turn.
a. Compliance with statutory language
Our memorandum and order explained that the waiver at issue was
null and void because the insurance company failed to comply with
Subsection 1731(c) of the Motor Vehicle Financial Responsibility Law
(hereinafter “section 1731(c)”). Section 1731 provides the language that
must be used in a waiver of UIM coverage. We found that the policy
language deviated from this language, and the waiver was thus void.
Defendants seek to appeal this issue, but we find no substantial ground for
disagreement on our ruling.
Defendants argue that substantial disagreement does exist on this
issue, based on the case of Robinson v. Travelers Indemnity Co. of
America, 520 F. Appx. 85 (3d Cir. 2013).4 In that case, the insurance
policy at issue inserted a word into the waiver language that is not provided
in the statute. In Robinson the policy provided: “Underinsured Motorists
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.” Id. at *87. The district court
granted summary judgment against the insurance company because the
waiver included the word “Motorists” in “Undersinsured Coverage.” The

addressed most thoroughly, and we focus our analysis on them. We note,
however, that we find no merit to any of the issues defendants raise.
4

Defendants actually cite to the district court opinion in this case, but
since the filing of their motion the Third Circuit has issued an opinion in the
case. We will examine the Third Circuit opinion.
5

statute provided the language to be used in the waiver and the word
“Motorist” was not in it. Instead of “Underinsured Motorist Coverage” the
waiver, according to section 1731 should state “Underinsured Coverage.”
The Third Circuit disagreed with the district court. It found that the
additional language - one word - introduced no ambiguity in the waiver
form and actually made the phrase consistent with the rest of the Motor
Vehicle Financial Responsibility Law. Id. It did not change the meaning or
scope of the coverage or contravene any party’s understanding of the
coverage. Id.
Our case is different. Instead of “Underinsured Motorists Coverage”
or “Underinsured Coverage,” the policy in this case states “Underinsured
Motorists” which results in the following statement in the waiver form:
“Underinsured Motorists 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.” (Doc. 55-1, UIM coverage Selection/Rejection Form, at 48).
Thus, Defendant Discover’s form refers to “Underinsured Motorists,” while
the statutory rejection language in subsection 1731(c) refers to
“Underinsured Coverage.” This substitution renders the form ambiguous.
In Robinson, it is not ambiguous that Underinsured Motorists Coverage is
the same as Underinsured Coverage. In the instant case, “Underinsured
Motorists” does not mean the same as “Underinsured Coverage.” Use of
the term “Underinsured Motorists” renders the waiver unintelligible. Thus,
we are not convinced by the defendants’ argument. We find no
substantial ground for disagreement on this ruling.

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b) Delivered or issued for delivery
Pennsylvania’s requirements regarding section 1731 only apply if the
policy at issue was “delivered or issued for delivery” in Pennsylvania. In
our opinion of August 12, 2011, we determined that the policy was issued
for delivery in Pennsylvania because the vehicle at issue was the plaintiff’s
personal car which was registered in Pennsylvania. Moreover, the policy
itself is replete with references to Pennsylvania law and evinces that it was
created to insure vehicles operating in Pennsylvania. (Doc. 67, at 11-12).
We find that there are not substantial grounds for difference of opinion on
this issue. The absence of substantial grounds for difference of opinion
pertaining to this issue precludes us from granting an immediate appeal.
c) Standing
Defendants also argue that our opinion was incorrect because the
driver in this case lacked standing to reform the insurance policy. As we
explained in our opinion, however, the driver of the automobile is eligible
for such benefits as his employer sought to provide the insurance, and he
is also eligible for those benefits which his employer did not disclaim in
conformance with Pennsylvania law regardless of whether they intended to
provide them or not. Defendants cite to no authority to call this decision
into question.
Conclusion
For the above reasons, we find that defendants have not met their
burden to establish that immediate appeal is appropriate. Accordingly,
their motion will be denied. An appropriate order follows.
Date: Oct. 10, 2013

s/ James M. Munley
JUDGE JAMES M. MUNLEY
United States District Court

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