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Nationwide Mutual Insurance Co. v. Riley

December 18, 2003

NATIONWIDE MUTUAL INSURANCE COMPANY,
v.
PAMELA RILEY, APPELLANT



Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. Civil Action Nos. 99-cv-05141) District Judge: Honorable Thomas N. O'Neill, Jr.

Before: Ambro, Becker and Stapleton, Circuit Judges

The opinion of the court was delivered by: Ambro, Circuit Judge

PRECEDENTIAL

Argued May 13, 2003

OPINION OF THE COURT

Nationwide Mutual Insurance Company ("Nationwide") filed suit for a declaratory judgment to determine its obligation, if any, to pay underinsured motorist benefits to Pamela Riley under her father's insurance policy. As we conclude that Nationwide is not so required, we affirm the District Court's decision to grant summary judgment to Nationwide.

I. Facts and Procedural History

In July 1997 insurance agent P. Kowalewski issued Arthur Riley, Pamela Riley's father, a personal automobile insurance policy with Nationwide that provided underinsured motorist benefits*fn1 in the amount of $100,000 per person and $300,000 per accident. In September of that year the same agent issued Pamela a personal automobile insurance policy with Nationwide for her 1991 Volkswagon Jetta, which provided underinsured motorist benefits in the amount of $25,000 per person and $50,000 per accident.*fn2

One month later a third party's vehicle ran a stop sign and struck Pamela's Jetta, resulting in her injury. She recovered $15,000—the liability limit of the third party's insurer (TICO)—as well as the maximum ($25,000) in underinsured motorist benefits under her own policy with Nationwide.

Pamela also claimed but was denied underinsured motorist benefits from Nationwide under her father's policy. The basis for her claim was the clause included in that policy providing that Nationwide "will pay compensatory damages including derivative claims, which are due by law to you or a relative from the owner or driver of an underinsured motorist vehicle because of bodily injury suffered by you or a relative." Nationwide denied her claim, stating that the household exclusion clause in her father's policy barred the recovery that would otherwise have been available to Pamela. That clause (with emphasis supplied) provided:

This coverage does not apply to:

[b]odily injury suffered while occupying a motor vehicle owned by you or a relative but not insured for Underinsured Motorist coverage under this policy; nor to bodily injury from being hit by any such motor vehicle.

Nationwide filed suit in October 1999 seeking a declaratory judgment to the effect that it was not required to pay underinsured motorist benefits to Pamela under the insurance policy issued to her father. The District Court ordered cross-motions for summary judgment to be filed. In May 2000 the District Court granted summary judgment to Nationwide, concluding that, by the terms of the household exclusion clause, Pamela was not entitled to recover under her father's policy. This appeal followed.*fn3

We stayed the appeal pending the resolution of Prudential Property & Casualty Insurance Company v. Colbert, in which we certified to the Pennsylvania Supreme Court the question of the validity, under similar circumstances, of a household exclusion clause. On December 31, 2002, the Pennsylvania Supreme Court issued its opinion. Prudential Prop. & Cas. Ins. Co. v. Colbert, 813 A.2d 747 (Pa. 2002). Having considered the supplemental ...


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