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The Philadelphia Court of Common Pleas has been asked to address "unsettled" issues of insurance law after two lawsuits were remanded from the U.S. District Court for the Eastern District of Pennsylvania.

The two cases, which were both being heard in Philadelphia federal court, were remanded to the Pennsylvania state trial court earlier this month after the judges overseeing the suits determined they raised "unsettled" issues of state law.

The cases are captioned Lambert v. State Farm Mutual Automobile Insurance, which deals with "stacking" coverage for vehicles on separate policies, and Sherer v. Federated Mutual Insurance, which raises the question of whether an employer's failure to notify an employee that the company had waived underinsured motorist (UIM) benefits violates the Motor Vehicle Financial Responsibility Law.

Both rulings relied on the U.S. Court of Appeals for the Third Circuit's 2014 decision in Reifer v. Westport Insurance in determining that the cases, both of which sought declaratory judgments, should be remanded because the state courts were better situated to handle open questions of state law.

U.S. District Judge Jan DuBois of the Eastern District of Pennsylvania ruled Tuesday in Sherer, rejecting Federal Mutual Insurance Co.'s efforts to keep the case in federal court. That ruling came about a week after U.S. District Judge Joel Slomsky denied similar efforts by State Farm to keep Lambert in the Eastern District.

According to Schmidt Kramer attorney Scott Cooper, who, along with James Haggerty of Haggerty, Goldberg, Schleifer & Kupersmith, represented the plaintiff in Sherer, the rulings are an example of the Pennsylvania federal courts, especially in the Eastern and Western districts, increasingly remanding declaratory judgment actions.

"Those two cases show that the federal judges are more and more inclined to remand state law issues when it's a pure declaratory judgment action involving insurance coverage," Cooper said. "Even if there's diversity, the judge still has discretion on whether to take the case or not."

Sherer stems from allegations that plaintiff Jeffrey Sherer was driving a vehicle owned by his employer in April 2017, when it was hit by another vehicle. The other driver involved in the accident tendered their $25,000 policy and Sherer sought UIM coverage. The carrier, however, denied the benefits because Sherer's employer had waived coverage.

Sherer subsequently sued the carrier in the Philadelphia Court of Common Pleas, seeking a declaratory judgment that, among other things, an employer's failure to notify a person about a UIM waiver violates the MVFRL and public policy. The defendant removed the case to the federal court in June.

In Lambert, plaintiff Dawn Lambert was a passenger on a motorcycle that crashed in April 2017. She sought coverage from the driver as well as stacked coverage under three multi-vehicle policies her husband had purchased. The driver's carrier tendered its policy, but one of her husband's carriers denied coverage, saying her husband had rejected stacked coverage. Lambert, however, filed a declaratory judgment action, saying her husband had only rejected "intra-policy" stacking, or stacking coverage within one policy, and had not rejected "inter-policy" stacking, which is stacking between separate policies.

Lambert's case, which was initially filed in Philadelphia court, was also removed to federal court.

In both cases, the plaintiffs sought to have their lawsuits remanded to state court, arguing that their claims posed novel issues wading into "unsettled" questions of state law. Defendants in both cases contested the plaintiffs' decision to file the action as a declaratory judgment, which gives the court discretionary jurisdiction over matters, and argued that the cases did not deal with "unsettled" issues.

In both instances, the courts disagreed with the defendants and said the issues would better be resolved in state court.

"Because Pennsylvania courts have not reached a well-settled conclusion on inter-policy stacking of multi-vehicle policies, this case presents a question of undetermined or unsettled state law," Slomsky said in Lambert. "The Third Circuit has deemed it 'counterproductive for a district court to entertain jurisdiction over declaratory judgment action[s] … which might otherwise be candidates for certification to the state's highest court.'"

Lowenthal & Abrams attorney John Aris, who represented the plaintiff in Lambert, said questions about how to reject inter-policy stacking, rather than intra-policy stacking, were clearly left open in the Pennsylvania Supreme Court's 2006 opinion in Craley v. State Farm.

"I think that the judge correctly decided that the effect of an underinsured motorist stacking rejection on intra-policy, versus inter-policy stacking is a question that the Pennsylvania Supreme Court should decide," Aris said.

White and Williams attorney Konrad Krebs, who represented Federated Mutual Insurance Co., did not return a call seeking comment. David Friedman of Forry Ullman represented State Farm.

"This is not a decision on the merits and State Farm will continue to defend it's position in the Court of Common Pleas," Gina Morss-Fischer, a spokeswoman for State Farm, said.