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Scott Cooper
Scott Cooper
Attorney • (800) 232-6301

Pennsylvania District Court Enforces Exhaustion Clause In Underinsured Motorist Case

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Last week, in the Eastern District of Pennsylvania Judge McLaughlin in Irving v. Progressive Speciality Ins. Co., NO. 11-7594, 2012 WL 2912309 (E.D. Pa. July 17, 2012) (mem.) reviewed the enforceability of an exhaustion clause in a motor vehicle insurance policy in a case where a lawsuit was settled for the policy limits of one case but another case was still pending against another driver who was alleged to have been negligent for a "waive on".

Irving settled the first case against a tortfeasor for $15,000 and then sought underinsured motorist (UIM) coverage from his insurer Progressive. Progressive did not object to the UIM claim but argued that it was entitled to a credit of not only the $15,000 but the full $300,000 policy limit on a second tortfeasor that is still pending where Irving sued for negligence in waiving on the other driver.

Judge McLaughlin holds that pursuant to exhaustion clause the UIM insurer is entitled to a credit for the liability limits that were paid on behalf of the striking defendant in lawsuit number one as well as a credit for the available liability limits covering the "waive on" defendant in the ongoing lawsuit number two.

For a copy of the Order and Memorandum feel free to contact Scott Cooper at Schmidt Kramer in Central Pennsylvania at scooper@schmidtkramer.com or 1-800-232-6301.