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Third Circuit Rules That a Prior Stacking Waiver Will Apply To a Newly Added Insured Vehicle

The United States Court of Appeals for Third Circuit recently upheld a Magistrate Judge’s ruling that held that a waiver of stacking uninsured/underinsured (“UM/UIM”) coverages did apply to a vehicle that was added to an insured’s policy after the insured had already signed a stacking waiver.

In Kuhns v. The Travelers Home and Marine Insurance Company, No. 17-3371 (3rd Cir. January 3, 2019) the appellants, Wayne and Shannon Kuhns had an insurance policy with the appellees, The Travelers Home and Marine Insurance Company that covered three of their vehicles. The Kuhnses signed a stacking waiver at the time of obtaining the policy. The Kuhnses then obtained a fourth vehicle a few months later. This vehicle was added to the already existing policy with Travelers. No new stacking waiver was provided to the Kuhnses by Travelers at the time of adding the new vehicle.

The Kuhnses then sought to allow stacking of their UM/UIM coverages since no new stacking waiver was provided. The issue before the Magistrate Judge was whether the stacking waiver applied to the new vehicle that was added to the policy after the Kuhnses already signed a stacking waiver for that policy. The Magistrate Judge held that the waiver did apply and the Appellate Division agreed. Therefore, the Kuhnses do not get the benefit of stacking their UM/UIM coverages.

Stacking insurance is the ability to combine coverages for multiple vehicles under the same policy to provide an insured with greater coverage than that for a single vehicle. For example, an insured may have three vehicles listed under a single policy and each vehicle has $100,000 in UM/UIM benefits. The insured would be entitled to $300,000 in UM/UIM benefits ($100,000 multiplied by three vehicles) if the insured does not waive stacking. However, the insured would only be entitled to coverage under a single vehicle, or $100,000 under this example, if the insured does waive stacking.

The Magistrate Judge based her ruling on Sackett v. Nationwide Mutual Insurance Company, 919 A.2d 194 (Pa. 2007 (“Sackett I”) and Sackett v. Nationwide Mutual Insurance Company, 940 A.2d 329 (Pa. 2007) (“Sackett II”). Sackett II held that a stacking waiver that was signed before the addition of a new vehicle is applicable to the new vehicle if there is a “continuous after-acquired-vehicle clause.” An after-acquired-vehicle clause allows for coverage of an existing policy to extend to a newly added vehicle if the clause is found to be “continuous.”

The Kuhnses’s policy will automatically extend coverage to a new vehicle if the following three conditions are met: 1) The vehicle was acquired during the policy period; 2) the policy holder asks Travelers to insure it within 30 days; 3) no other insurance policy provides coverage for that vehicle. The Magistrate Judge found these conditions made the after-acquired-vehicle clause “continuous,” thereby extending the stacking waiver to the new vehicle.

The Kuhnses did not contend that they signed a valid stacking waiver, but rather contended that the new vehicle was added to the policy via an amended declaration page and not the after-acquired-vehicle clause. Additionally, the Kuhnses argued that, even if the new vehicle was added via the after-acquired-vehicle clause, this clause was not “continuous” as it required three conditions to extend coverage.

The Appellate Division held that the Magistrate Judge was correct in rejecting these arguments as Sackett II had already clearly ruled that this type of after-acquired-vehicle clause is “continuous” despite the conditions. The Appellate Division also held that the Kuhnses’s declaration page argument failed, because vehicles are generally added to policies by the after-acquired-vehicle clause according to the Pennsylvania Insurance Commissioner as opposed to an amended declaration page.

This ruling is significant as it protects an insurer by limiting coverage only to what an insured had elected. An insurer and insured can rely on a valid after-acquired-vehicle clause to quickly add a new vehicle to an insurance policy without the concern that an insured may be entitled to more coverage than the insured elected. Both parties will get the coverage that each had bargained for.

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A Grocery Store is Not Liable for a Transitory Spill

A court dismissed a plaintiff’s Complaint filed against ShopRite for a fall due to debris in the main walkway of ShopRite’s parking lot in Monroe County, Pennsylvania. Karten v. ShopRite, Inc., No. 4416 CV 2016, (C.P. Dec. 3, 2018). ShopRite’s summary judgment was granted and the case against it was dismissed. The court held that ShopRite had no actual or constructive notice of the condition to find liability as it was a transitory spill.

A possessor of land can be liable for a dangerous condition on its premises if it created the condition, knew of the condition or should have known of the condition by the exercise of reasonable care. Restatement (Second) of Torts §343. A transitory spill is one that was created only moments before causing harm. Therefore, a possessor of land may not be liable for a transitory spill that it did not create, have an opportunity to rectify, or warn invitees of the condition.

In Karten, the plaintiff had just left the ShopRite and was walking on the main walkway of its parking lot when she slipped and fell on what she described as, “dark, slippery and smelled of rotten banana.” The plaintiff was unable to state how the substance got on the ground, or how long it had been there. ShopRite moved for summary judgment arguing the condition was a transitory spill and it had neither actual nor constructive notice to warrant liability.

The plaintiff argued that ShopRite had actual notice of the condition, because it had received prior complaints regarding debris in the parking lot. The court disagreed. The court held that general knowledge of a similar condition is not akin to actual knowledge of a transitory spill.

The plaintiff then attempted to argue that ShopRite had constructive notice of the spill. The plaintiff was also unsuccessful in this argument. The court dismissed any of the plaintiff’s arguments on constructive notice. The court found that the plaintiff had no evidence of constructive notice and the argument was just manufactured in opposition to ShopRite’s motion.

Ultimately, the court granted ShopRite’s motion for summary judgment. The plaintiff was unable to identify sufficient evidence to find that ShopRite had actual or constructive notice of the transitory spill. The plaintiff failed to meet her burden and the Complaint was dismissed.

ShopRite was protected from liability, because the court held that the condition was transitory. The spill could have occurred only seconds before the plaintiff fell. Therefore, it would be unjust for ShopRite to be responsible for something it could not have had control over.

Lack of notice is a powerful defense in a slip and fall case. A possessor of land is not the ultimate insurer of any injury that occurs on its property. The law still requires that a possessor of land be aware of a potential dangerous condition, or should have been aware of it for it to be held liable. Therefore, a possessor of land may not be liable for damage caused by a transitory spill if there is no evidence that could prove how long the condition existed before causing harm. Therefore, proper questioning during discovery is necessary to determine whether a plaintiff is able to prove how long a dangerous condition existed, or if a possessor of land should have been aware of the condition by the exercise of reasonable care.

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A Commercial Truck Driver Who Causes An Accident While Using a Cell Phone May Be Liable For Punitive Damages

The use of a cell phone by a commercial truck driver at the time of a motor vehicle accident may subject the driver to punitive damages.  In Ehler v. Old Dominion Freight Line, No. 2018-00307 (C.P. Lebanon August 30, 2018), filed in the Court of Common Pleas, Lebanon County, Pennsylvania, a commercial truck driver was sued for causing a 64-car accident during a winter storm. The plaintiffs alleged that the truck driver was on his cell phone at the time of the accident.  The plaintiffs sought punitive damages as they alleged that the use of a cell phone by a commercial truck driver under severe weather conditions is reckless. The truck driver filed preliminary objections seeking to strike the allegations of recklessness thus eliminating the possibility of punitive damages. The court overruled the preliminary objections, thereby allowing the plaintiffs to continue to seek punitive damages pending further discovery.

Punitive damages are used to punish a defendant’s behavior and to deter such future conduct. When a plaintiff alleges that a defendant was negligent in causing damages to the plaintiff, the plaintiff is entitled to seek such compensation as lost wages, unpaid medical bills and pain and suffering.  A defendant must be found to have acted recklessly through outrageous or willful misconduct demonstrating an evil motive or reckless indifference to the rights of others in order to pursue punitive damages.  A plaintiff must allege specific facts that demonstrate this type of behavior in a complaint.  A defendant can challenge a plaintiff’s ability to seek punitive damages through preliminary objections.  Preliminary objections are used to strike portions of a plaintiff’s complaint prior to discovery to eliminate irrelevant or inappropriate allegations.

The defendant-truck driver sought to strike the claims for punitive damages by arguing that merely being on the phone while driving does not amount to reckless conduct. However, Pennsylvania’s Distracted Driving Law prohibits commercial truck drivers from using a cell phone while driving except for contacting emergency personnel.  Additionally, it is alleged that snow produced “white-out” conditions at the time of the accident. The court held that under these circumstances it was even more important for a truck driver to take extra precautions while driving in severe weather conditions.

However, since the driver’s estate is proceeding in the defense of this lawsuit, it is unknown who the driver was on the phone with at the time of the accident and even if there was any actual connection between being on the phone and the happening of the accident. Even with these unknown facts, the court held the allegations were specific enough to warrant keeping the possibility of punitive damages alive pending further discovery. The court did hint that these allegations could be stricken in the future if facts are uncovered during discovery that do not support them.

In a time when distracted driving is a major safety concern to anyone on the roads, it is important to thoroughly analyze and scrutinize a plaintiff’s complaint to determine the viability of a plaintiff’s allegations of reckless conduct that could open the door for punitive damages.  Punitive damages can lead to increased jury verdicts as it allows a jury to not only compensate a plaintiff, but to punish a defendant and deter such future behavior.  Therefore, preliminary objections must be strongly considered to challenge these types of allegations during the early stages of litigation.