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Pennsylvania Superior Court Holds That Insurance Company May Pay Deductible Pro Rata
Attached is a link to the Pennsylvania Superior Court opinion from May 24, 2010 in Jones v. Nationwide Prop. & Cas. Ins. Co. where the appellate court affirms the dismissal of an insurance class action but on different grounds. This case involves the allegation that the insurance company was not allowed to pay back deductibles to insured's from car accidents on a pro rata basis, even though there is a regulation in the Pennsylvania Code under Title 31 section 146.8 allowing for it. The trial court dismissed the case holding that the trial court did not have jurisdiction because the Plaintiffs failed to exhaust their administrative remedies.
The Superior Court holds that the trial court erred in holding that the Plaintiffs had to exhaust any administrative proceedings because the claims were not brought under the Unfair Insurance Practices Act but affirms on a different basis. The Court relies upon a federal court decision in Harnick v. State Farm Mut. Ins. Co., 2009 U.S. Dist. LEXIS 43126 (E.D. Pa. March 6, 2009) and holds that the Insurance Department Regulation was allowed under the Department's delegated authority and that the regulation does not violate the "made whole" doctrine. Thus, there is no viable cause of action, even though the trial court erred.
http://www.pacourts.us/OpPosting/Superior/out/a05017_10.pdfScott B. Cooper
scooper@schmidtkramer.com
717-232-6300
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