Judge Manion of the Middle District of Pennsylvania recently upheld the stacking rejection under a Progressive motorcycle policy after the addition of a newly acquired vehicle when the insured had waived stacking at the policy’s inception.
In Mitchell v. Progressive Preferred Ins. Co., 14-cv-00384 (M.D.Pa. September 29, 2015), the Court held that Mitchell was not entitled to stacked underinsured motorist benefits under his Progressive motorcycle policy for a UIM claim after an April 27, 2013 motorcycle accident. Mitchell had purchased the Progressive policy in 2011 and signed a valid waiver of stacking under Sec. 1738 at the time of the application. In 2012, he had added a second motorcycle which he was operating at the time of the accident. Plaintiff claimed that he was entitled to stacked UIM benefits, despite the 2011 rejection, because he had not signed a new Sec. 1738 stacking rejection after adding the second motorcycle in 2012. Plaintiff alleged that adding the second motorcycle triggered a need for a new stacking rejection form under the Sackett trilogy of cases. Defendant Progressive disagreed and Plaintiff Mitchell filed a breach of contract action against Progressive.
Defendant Progressive filed a Motion for Summary Judgment. In granting the motion, Judge Manion referred to the Sackett trilogy of cases as well as Seiple v. Progressive, 568 Fed. App. 183 (3d. Cir. 2014) which dealt with the exact same policy form as in Mitchell. Judge Manion stated that Sackett II was most applicable to the instant case. The Court stated that a new stacking waiver was not required when a vehicle is added by a continuous “newly-acquired” or “after-acquired” clause. If the policy clause is finite, a new stacking waiver would be required. Sackett v. Nationwide Mutual Ins., 940 A.2d 329 (Pa. 2007)(Sackett II).
Defendant Progressive noted that the Third Circuit had already decided this coverage question in Seiple v. Progressive. In Seiple, which also involved adding a newly-acquired motorcycle to a policy with rejected stacking, the Court held that the applicable Progressive policy’s after-acquired clause was continuous and not finite. Progressive also noted the recent Eastern District case, Powell v. Allstate Prop. And Cas. Ins. Co., 13-cv-5721 (E.D.Pa. July 21, 2014), in which the court found that the defendant insurer was not required to obtain a new stacking waiver because extending coverage to a newly-acquired vehicle was not equivalent, for stacking purposes, to purchasing new coverage. Defendant Progressive argued that under the reasoning in Seiple and Powell, the newly-acquired vehicle clause in Mitchell’s policy was also continuous, such that no new stacking waiver was required.
Plaintiff Mitchell attempted to argue that the second motorcycle was added by “endorsement” and not by a continuous newly-acquired vehicle clause. Plaintiff also argued that the after acquired vehicle clause in the Progressive policy was finite and not continuous. Judge Manion rejected Plaintiff’s arguments. The Court was compelled by the reasoning in Seiple and granted Defendant Progressive’s summary judgment motion. Judge Manion stated that the after-acquired clause in the Progressive policy was continuous, such that a new stacking waiver was not required. Plaintiff’s claim for breach of contract was dismissed.