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A federal district court in Pennsylvania has denied an insured's motion to remand his action for underinsured motorist benefits against his insurance carrier to state court, rejecting the insured's contention that remand was required because the insurer had waived its right to remove under the insurance policy's forum selection clause.

The Case

After Christopher Pisanchyn sued his insurer, Progressive Direct Insurance Co., in a Pennsylvania state court in an effort to recover underinsured motorist benefits to which he claimed he was entitled, Progressive removed the action to the U.S. District Court for the Middle District of Pennsylvania.

Pisanchyn moved to remand. Among other things, he argued that a forum selection clause in the Progressive policy waived Progressive's right to remove.

The Progressive Policy

The Progressive policy provided:

“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. ”

The District Court's Decision

The district court denied Pisanchyn's motion.

In its decision, the district court decided that the forum selection clause in the Progressive policy “simply” provided that a suit may be brought in the county in which Pisanchyn resided, i.e., Lackawanna County, or the federal district court serving that county, i.e., the Middle District of Pennsylvania. According to the district court, nothing in the clause contractually bound Progressive to submit to the jurisdiction selected by Pisanchyn, nor did it indicate that Progressive consented to litigate in Pisanchyn's chosen forum.

The district court explained that the policy provided that Pisanchyn could file for underinsured motorist benefits in federal court or, as he did, in the state court in the county he resided. Once he filed in state court, the district court concluded, Progressive was well within its contractual right to remove the action to federal court.

The case is Pisanchyn v. Progressive Direct Insurance. Attorneys involved include: for Pisanchyn, Michael J. Pisanchyn Jr. and Tyler S. Setcavage of Pisanchyn Law Firm; for Progressive, Daniel J. Twilla and Kathleen P. Dapper of Burns White.

Analysis

Other courts have reached the same conclusion.

The U.S. District Court for the Western District of Pennsylvania in Smith v. Progressive Specialty Insurance previously rejected the argument that the insurer waived its right to remove pursuant to a forum selection clause identical to the one in Pisanchyn. In denying the plaintiff's motion to remand, the Smith court explained:

“The policy does not state that Progressive contracted to 'submit' to the jurisdiction chosen by plaintiff. It also does not indicate that Progressive consented to litigate this matter in 'any court' at the request of plaintiff. And it does not include any agreement for Progressive to comply with certain requirements necessary to give a particular court jurisdiction. Rather, it provides that a suit may be brought in the county in which the person seeking benefits resides (i.e., Allegheny County) or in the United States district court serving that county (i.e., the Western District of Pennsylvania). Progressive meets the jurisdictional requirements to invoke this court's diversity jurisdiction, and therefore, the court has no basis to remand this action in the absence of a valid contractual waiver. ”

A forum selection clause similar to that in Smith and Pisanchyn also was found not to waive the insurer's right to remove in Schutte v. GEICO Casualty. The forum selection clause there provided that “the dispute shall be resolved in a court of competent jurisdiction in the county or federal district where the insured resided at the time of the accident.” The district court found that that clause did not constitute a removal waiver because no language was included that the insurer “at the request of plaintiff” agreed or consented to “submit” to “any court” of competent jurisdiction. The policy language, as summarized by the court, “does not state that defendant agreed to submit to the jurisdiction chosen by plaintiffs, nor could the operative language be reasonably construed to find that defendant consented to litigate this matter 'in any court,' selected by plaintiffs. Rather, the clear and unequivocal language of the policy provides that plaintiffs may file suit in either federal or state court in which they reside. Plaintiffs have done so, and defendants were well within their contractual rights to remove this dispute to this court.”

Steven A. Meyerowitz is the director of FC&S Legal, the editor-in-chief of the Insurance Coverage Law Report, and the founder and president of Meyerowitz Communications Inc. As FC&S legal director, Meyerowitz, a member of the team that conceptualized FC&S Legal, provides daily analysis and commentary on the most significant insurance coverage law decisions from courts across the country and news regarding legislative and regulatory developments. A graduate of Harvard Law School, Meyerowitz was an attorney at a prominent Wall Street law firm before founding Meyerowitz Communications Inc., a law firm marketing communications consulting company.