JUNE 2015 BAD FAITH CASES: CHOICE OF FORUM PROVISION ENFORCEABLE AS TO EITHER COURT LISTED IN THE ALTERNATIVE; AND IT DID NOT PROVIDE THE INSURED WITH ABSOLUTE RIGHT TO CHOOSE AMONG THE LISTED JURISDICTIONS (Western District)

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In Smith v. Progressive Specialty Insurance Company, the insured’s motion to remand breach of contract and bad faith UIM claims was denied.  The motion focused on the policy’s forum selection clause.

The policy stated that coverage claims must be brought in the state court county of residence or in the U.S. District Court serving that county.  The insured asserted this language waived the insurer’s right of removal from a Court of Common Pleas, once chosen by the insured as the litigation venue.

The court rejected this argument, relying upon a body of prior case law concluding that the insurance policy language at issue was neither an agreement to “submit” to either jurisdiction subject to the insured’s choice, nor a consent to submit to the jurisdiction of “any court” on the insured’s request.  Rather it provided that any one of two courts was amenable to litigating disputes between the parties, as reflected in the policy’s use of the word disjunctive “or” when listing the courts in the alternative.

Date of Decision: May 29, 2015

Smith v. Progressive Specialty Ins. Co., 2:15-cv-528, 2015 U.S. Dist. LEXIS 69717 (W.D. Pa. May 29, 2015) (McVerry, J.)

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