In their recent decision in the case of Van Divner v. Sweger, No. 1129 MDA 2020 (Pa. Super. June 24, 2021), the Pennsylvania Superior Court held a UIM forum selection clause to be unambiguous and upheld transfer of that action to another county. However, the reasoning for that holding was not asserted by the trial court or the party seeking the transfer.
Plaintiffs Van Divner and Collins brought an action for negligence against Defendant/Tortfeasor Sweger and a breach of contract/Underinsured Motorist Benefits (“UIM”) action against Progressive Advanced Insurance Company. The suit was filed in Perry County where the accident happened. Progressive filed preliminary objections asserting that Plaintiffs improperly filed the UIM action in Perry County when the forum selection clause within Van Divner’s policy required a UIM action to be brought in the county of her residence, Juniata County.
The specific language of the forum selection clause in the UIM policy read as follows:
Any action brought against us pursuant to coverage under Part III-Uninsured/Underinsured Motorist Coverage must be brought in the county in which the person seeking benefits resides, or in the United States District Court serving that county.
Before the trial court, Progressive claimed the policy required transfer of venue to Juniata County because the forum selection clause must be read to permit venue only in the county of an insured’s residence at the time of the accident. Because both Van Divner and Collins resided in Juniata County at the time of the accident, Progressive argued transfer was appropriate. Plaintiffs argued that the forum selection clause was ambiguous and, therefore, unenforceable, as one could just as easily construe the time of residency to be at policy formation or at the filing of the UIM action.
The trial court ultimately granted Progressive’s preliminary objections and entered an order severing the negligence claim against Seger, which was to remain in Perry County, and transferring the UIM claims to Juniata County. Plaintiffs appealed.
Plaintiffs’ appeal focused on the alleged ambiguous nature of the forum selection clause in the UIM policy rendering it unenforceable. Plaintiffs argued on appeal that the forum selection was ambiguous “because it does not specify when residency is determined.”
The Superior Court disagreed that the clause was ambiguous but did so on different grounds from the trial court. The Superior Court determined that the subject forum selection clause, even without a modifier for the timing of residency, clearly tied the relevant time of residency to when one commences the action. The court found that the clause, “provides simply and plainly that an action must be brought in the county where one resides.” There is nothing ambiguous about this language. It matches present-tense “must be brought” with present tense “in the county in which the person seeking benefits resides.” (emphasis in original).
Although the Superior Court reached the same result as the trial court, the Superior Court noted that their reasoning for upholding the transfer to be different than the trial court and Progressive’s reasoning. The appellate court found that the forum selection clause defined residency at the time of filing the action. As a consequence, the court remanded the case back to the trial to transfer the UIM claims to the county of residence of Plaintiffs at the time when their Complaint was filed.
The decision in this case provides guidance in the future to interpreting UIM forum selection clauses that do not contain a specific modifier as to when residency shall be determined. Given the language in the Progressive clause, residency is to be determined at the time of filing of the action as opposed to the time of the accident.
Questions regarding this matter can be referred to David Friedman.
