IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF PENNSYLVANIA

MERIDIAN SECURITY INSURANCE : 4:14-cv-1532

COMPANY, :

:

Plaintiff, : Hon. John E. Jones III

:

v. :

:

ADAM FLICK and STATE FARM :

MUTUAL AUTOMOBILE INSURANCE :

COMPANY, :

:

Defendants. :

MEMORANDUM

May 26, 2015

This is a declaratory judgment action involving dueling interpretations of

two automobile insurance policies. The matter is presently before the Court on

cross motions for summary judgment. (Docs. 19, 20).

I. BACKGROUND

A. The Accident

On June 29, 2013, Adam Flick was operating a vehicle owned by the

McVickers, and Brooke McVicker was in the passenger seat. The vehicle was

covered by an insurance policy issued to William McVicker Jr. by Meridian

Case 4:14-cv-01532-JEJ Document 31 Filed 05/26/15 Page 1 of 17
Security Insurance Company (“Meridian”).1

 Flick was driving southbound on

Raystown Road in Penn Township, Pennsylvania, when he collided with a PT

Cruiser occupied by Judy Harshbarger, Blaze Bailets, and Mikayla Campbell (the

“Harshbarger claimants”). He also hit a truck operated by Nathan Shaw. The

Harshbarger claimants and Brooke McVicker suffered bodily injuries as a result of

the accident.

At the time, Flick was insured under a liability policy issued by State Farm

Automobile Insurance Company (“State Farm”) to Amy Boyer, Flick’s mother

with whom he resided.

The Harshbarger claimants demanded indemnification for bodily injury from

Flick. 

In a letter dated December 23, 2013, State Farm advised Flick that there was

a question as to whether State Farm was obligated to pay, indemnify, defend, or

otherwise perform under the policy based on Flick’s alleged failure to cooperate in

the investigation of the accident. (Doc. 20-10, p. 2). The letter stated that any

further actions on the part of State Farm would not waive any of the terms or

conditions of the insurance policy or Flick’s rights under the policy. (Id.). In

1

 The Complaint and various of the memoranda refer to Plaintiff as “State Auto.” 

However, the parties have stipulated that any such reference should be taken to refer to

Meridian. (Doc. 23).

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addition, the letter specified that State Farm did “not intend, by this letter, to waive

any policy defense in addition to those stated above, but specifically reserves its

right to assert such additional policy defenses at any time.” (Id.).

On March 20, 2014, Brooke McVicker filed a negligence action against

Flick in the Court of Common of Blair County, requesting compensatory and

punitive damages.2

Soon after the commencement of the state suit, on March 25, 2014, State

Farm sent a letter to Flick withdrawing its reservation of rights pertaining to the

cooperation issue and advising that it would “extend coverage without reservation

for all exposures.” (Doc. 19-1, p. 116). The correspondence also clarified that

State Farm did “not intend, by this letter, to waive any of the policy defenses of

which you were previously advised” and that State Farm “specifically reserve[d

its] right to assert such additional policy defenses at any time.” (Id.). 

Meridian sent Flick a letter dated June 23, 2014, confirming that it would

provide excess liability coverage over any other collectible insurance. (Doc. 19-4,

pp. 1-3). Therein, Meridian stated its position that State Farm should be

considered the first tier of coverage for Flick, or that State Farm must contribute in

equal shares for Flick’s defense and indemnity up to the limits of the State Farm

2

 The case is docketed as McVicker v. Flick, 2014-GN-803.

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policy.

On June 25, 2014, State Farm informed Meridian of its position that the

Meridian policy is primary and the State Farm policy is excess. (Doc. 20-13, p. 2).

B. The Policies

The relevant Meridian insurance policy issued to William McVicker Jr. was

a 12-month policy and had an effective date of October 27, 2012. (Doc. 20-5, pp.

7, 22). The policy provided for a bodily injury liability limit of $500,000 per

person/per accident. (Id. at p. 22). The parties agree that Flick was an “insured” as

defined by the policy, as a driver using a “covered auto.” (Id. at pp. 27-28). 

Pertinently, the policy contained an “other insurance” clause, which reads as

follows:

If there is other applicable liability insurance, we will

pay only our share of the loss. Our share is the

proportion that our limit of liability bears to the total of

all applicable limits. However, any insurance we

provide for a vehicle you do not own, including any

vehicle while used as a temporary substitute for “your

covered auto”, shall be excess over any other collectible

insurance. Any insurance we provide for use of “your

covered auto” by any person other than “you” will be

excess over any other collectible insurance, selfinsurance or bond.

(Id. at p. 44).

The State Farm insurance policy in effect on June 29, 2013, was issued to

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Amy Boyer, Flick’s mother.3

 The policy provided for liability coverage limits in

the amount of $100,000 per person/$300,000 per accident. (Doc. 20-9, p. 3). It is

undisputed that Flick was insured under the policy as a “resident relative” of Ms.

Boyer and the driver of a covered “non-owned car.” (Id. at p. 7). The policy

contained the following relevant provision:

If Other Liability Coverage Applies

***

2. The Liability Coverage provided by this policy

applies as primary coverage for the ownership,

maintenance, or use of your car or a trailer attached to it.

a. If:

(1) this is the only Car Policy issued to you and any

resident relative by the State Farm Companies that

provides Liability Coverage which applies to the accident

as primary coverage; and

(2) liability coverage provided by one or more sources

other than the State Farm Companies also applies as

primary coverage for the same accident,

then we will pay the proportion of damages payable as

primary that our applicable limit bears to the sum of our

applicable limit and the limits of all other liability

coverage that apply as primary coverage.

b. If:

(1) more than one Car Policy issued to you or any

resident relative by the State Farm Companies provides

3

 The policy that has been made part of the record shows a policy period of July 10,

2012, through September 2, 2012. (Doc. 20-9, p. 3). However, a State Farm agent has certified

that the same policy was in effect at the time of the accident on June 29, 2013. (Id. at p. 2).

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Liability Coverage which applies to the accident as

primary coverage; and

(2) liability coverage provided by one or more sources

other than the State Farm Companies also applies as

primary coverage for the same accident,

then the State Farm Companies will pay the proportion

of damages payable as primary that the maximum

amount that may be paid by the State Farm Companies as

determined in 1. above bears to the sum of such amount

and the limits of all other liability coverage that apply as

primary coverage.

3. Except as provided in 2. above, the Liability Coverage

provided by this policy applies as excess coverage.

a. If:

(1) this is the only Car Policy issued to you or any

resident relative by the State Farm Companies that

provides Liability Coverage which applies to the accident

as excess coverage; and

(2) liability coverage provided by one or more sources

other than the State Farm Companies also applies as

excess coverage for the same accident,

then we will pay the proportion of damages payable as

excess that our applicable limit bears to the sum of our

applicable limit and the limits of all other liability

coverage that apply as excess coverage.

b. If:

(1) more than one Car Policy issued to you or any

resident relative by the State Farm Companies provides

Liability Coverage which applies to the accident as

excess coverage; and

(2) liability coverage provided by one or more sources

other than the State Farm Companies also applies as

excess coverage for the same accident,

then the State Farm Companies will pay the proportion

of damages payable as excess that the maximum amount

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that may be paid by the State Farm Companies as

determined in 1. above bears to the sum of such amount

and the limits of all other liability coverage that apply as

excess coverage.

(Id. at p. 10 (emphasis in original)).

II. PROCEDURAL HISTORY

Meridian filed this action on August 5, 2014. (Doc. 1). In Count I of the

Complaint, it requests declarations that State Farm waived its right to provide only

excess coverage to Flick, that the coverage provided by State Farm is primary, and

that Meridian is not required to defend and/or indemnify Flick for any judgment

against him stemming from the accident unless and until coverage under the State

Farm policy is exhausted. (Id. at p. 8). In Count II, as an alternative to its waiver

argument, Meridian seeks declarations that the two insurance policies’ respective

excess clauses are not mutually repugnant, that State Farm occupies the first tier of

coverage for Flick, and that Meridian is not required to defend and/or indemnify

Flick for any judgment against him originating from the accident unless and until

coverage under the State Farm policy is exhausted. (Id. at p. 9). Lastly, in Count

III, Meridian sets forth a third alternative, requesting that, if the Court determines

the excess clauses to be mutually repugnant, a declaration should be entered

directing that State Farm and Meridian owe coverage on an equal shares basis. (Id.

at p. 10).

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State Farm and Flick (collectively, Defendants) filed an Answer and

Affirmative Defenses on September 30, 2014. (Doc. 10). They seek declarations

that the coverage by Meridian is primary with regards to Flick, that Meridian

occupies the first tier of coverage, that the State Farm policy is excess to the

Meridian policy, and that State Farm is not required to defend and/or indemnify

Flick for any judgment until the coverage afforded under the Meridian policy has

been exhausted. (Id. at pp. 3-5).

The parties thereafter filed cross-motions for summary judgment, with

Defendants filing their motion on December 26, 2014 (Doc. 19), and Meridian

filing its motion on January 2, 2015 (Doc. 20). The parties filed memoranda in

support and in opposition (Docs. 19, 21, 22, 24) and advised of their agreement

that reply briefs were unnecessary and would not be submitted (Doc. 26).

III. STANDARD OF REVIEW

Summary judgment is appropriate if the moving party establishes “that there

is no genuine dispute as to any material fact and the movant is entitled to judgment

as a matter of law.” FED. R. CIV. P. 56(a). A dispute is “genuine” only if there is a

sufficient evidentiary basis for a reasonable jury to find for the non-moving party,

and a fact is “material” only if it might affect the outcome of the action under the

governing law. See Sovereign Bank v. BJ’s Wholesale Club, Inc., 533 F.3d 162,

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172 (3d Cir. 2008) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248

(1986)). A court should view the facts in the light most favorable to the nonmoving party, drawing all reasonable inferences therefrom, and should not evaluate

credibility or weigh the evidence. See Guidotti v. Legal Helpers Debt Resolution,

L.L.C., 716 F.3d 764, 772 (3d Cir. 2013) (citing Reeves v. Sanderson Plumbing

Prods., Inc., 530 U.S. 133, 150 (2000)).

Initially, the moving party bears the burden of demonstrating the absence of

a genuine dispute of material fact, and upon satisfaction of that burden, the nonmovant must go beyond the pleadings, pointing to particular facts that evidence a

genuine dispute for trial. See id. at 773 (citing Celotex Corp. v. Catrett, 477 U.S.

317, 324 (1986)). In advancing their positions, the parties must support their

factual assertions by citing to specific parts of the record or by “showing that the

materials cited do not establish the absence or presence of a genuine dispute, or

that an adverse party cannot produce admissible evidence to support the fact.” 

FED. R. CIV. P. 56(c)(1).

A court should not grant summary judgment when there is a disagreement

about the facts or the proper inferences that a factfinder could draw from them. 

See Reedy v. Evanson, 615 F.3d 197, 210 (3d Cir. 2010) (citing Peterson v. Lehigh

Valley Dist. Council, 676 F.2d 81, 84 (3d Cir. 1982)). Still, “the mere existence of

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some alleged factual dispute between the parties will not defeat an otherwise

properly supported motion for summary judgment.” Layshock ex rel. Layshock v.

Hermitage Sch. Dist., 650 F.3d 205, 211 (3d Cir. 2011) (quoting Anderson, 477

U.S. at 247-48) (internal quotation marks omitted).

IV. DISCUSSION

We rely on well settled principles of contract interpretation in examining

insurance policy provisions. See Madison Const. Co. v. Harleysville Mut. Ins. Co., 

735 A.2d 100, 106 (Pa. 1999). “The polestar of our inquiry . . . is the language of

the insurance policy,” and where the language is clear and unambiguous, we must

give effect to it. Id.; see also Harleysville Ins. Cos. v. Aetna Cas. & Sur. Ins. Co.,

795 A.2d 383, 386-87 (Pa. 2002).

Meridian lodges three ostensibly alternative arguments. First, it argues that

State Farm’s coverage should be exhausted before Meridian’s policy is reached as

excess coverage. Meridian asserts that its “other insurance” clause provides that it

is excess “over any other collectible insurance” while State Farm’s coverage

provides that it is excess only “if other liability coverage applies.” Second,

Meridian asserts that State Farm has waived its right to rely on its “other

insurance” provision and provide coverage as excess only. Third, Meridian poses

that, if the Court should find that the two “other insurance” provisions are

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irreconcilable, both insurance carriers should provide coverage on an equal shares

basis.

Defendants argue that the Meridian policy occupies the first tier of coverage

while the State Farm policy occupies the second tier, providing only excess

coverage. State Farm notes that Meridian’s “other insurance” provision

contemplates proportional payment where there is “other applicable insurance,”

and asserts that, accordingly, Meridian has “conceded that it is not ‘excess

coverage[.]’” (Doc. 19, p. 16). As additional support, State Farm observes that

other Pennsylvania cases have ultimately held that the insurance attached to the

involved vehicle – rather than the permissive driver – should be exhausted first. It

also cites the provision of the Pennsylvania Motor Vehicle Financial

Responsibility Law (“MVFRL”) pertaining to priority of recovery in accidents

involving uninsured and underinsured motorists. See 75 Pa.C.S. § 1733. 

We appropriately begin our analysis by examining the plain language of the

policies, noting as we do that the parties do not dispute that Flick was insured by

both insurance companies; rather, the dispute is confined solely to the priority of

coverage. We find that the Meridian policy’s excess clause applies here, because

Flick was driving a vehicle covered by the McVicker policy and was not a named

insured. Meridian’s excess clause relevantly states that “[a]ny insurance we

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provide for use of ‘your covered auto’ by any person other than ‘you’ will be

excess over any other collectible insurance.” (Doc. 20-5, p. 44). State Farm’s

“other liability coverage” provision also contains an excess clause applicable here,

because Flick was driving a vehicle not insured under his mother’s policy. The

State Farm policy states that coverage “applies as excess coverage” except where

“[t]he Liability Coverage provided by this policy applies as primary coverage for

the ownership, maintenance, or use of your car . . ..” (Doc. 20-9, p. 10) (emphasis

omitted).4

Having determined that both “other insurance” clauses are excess clauses

and activated here, we next must decide whether the provisions are reconcilable or

mutually exclusive. Policy provisions are reconcilable where a court can give

effect to both provisions at once. See Am. Cas. Co. of Reading, Pa. v. PHICO Ins.

Co., 702 A.2d 1050, 1054 (Pa. 1997). Conversely, such clauses are mutually

repugnant where “by following the express dictates of one policy, we would be in

direct conflict with the dictates of the other.” Id. In the latter instance, we must

4

 As recounted supra, specifically, the excess provision states “if this is the only Car

Policy issued to you or any resident relative by the State Farm Companies that provides Liability

Coverage which applies to the accident as excess coverage; and . . . liability coverage provided

by one or more sources other than the State Farm Companies also applies as excess coverage for

the same accident, then we will pay the proportion of damages payable as excess that our

applicable limit bears to the sum of our applicable limit and the limits of all other liability

coverage that apply as excess coverage.” (Id. (emphasis omitted)).

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disregard the excess clauses, deeming them as stricken, and order the insurers to

share the loss. See Allstate Ins. Co. v. Tokio Marine & Nichido Fire Ins. Co., Ltd.,

464 F. Supp. 2d 452, 463 (E.D. Pa. 2006). Pennsylvania courts apportion the loss

using the equal shares approach, under which “each insurer match[es] dollar for

dollar payments up to the limits of the lower policy, . . . with any remaining portion

of the loss being paid from the larger policy up to its limits.” Am. Cas. Co., 702

A.2d at 1053; Hoffmaster v. Harleysville Ins. Co., 657 A.2d 1274, 1277 (Pa. Super.

1995). See generally 14A SUMM. PA. JUR. 2d Insurance § 23:5 (2d ed.).

Both parties centrally cite Harleysville Insurance Companies v. Aetna

Casualty and Surety Insurance Company, 795 A.2d 383 (Pa. 2002), in arguing that

the two insurance policy provisions may be given effect. Harleysville involved an

automobile accident where three liability policies were in play. See id. at 384. 

One of the insurers tendered its policy limits. See id. The other two insurers,

Harleysville and Aetna, disputed the priority of coverage between their respective

policies. See id. at 385. The “other insurance” clause in the Harleysville policy

relevantly stated that “[t]he insurance afforded by this policy shall be excess

insurance over any valid and collectible primary insurance[.]” Id. The “other

insurance” clause in the Aetna policy stated that its pertinent coverage “shall be

excess over any other collectible insurance.” Id. The Pennsylvania Supreme Court

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found that the two provisions in issue were compatible and could be

simultaneously effectuated, holding that the limits of the Harleysville policy must

be exhausted before the Aetna policy was triggered. See id. at 387. The Court

reasoned that the Harlesyville policy specifically made its coverage excess to

“collectible primary insurance,” while the Aetna policy more broadly sought to

provide excess insurance over “any other collectible insurance,” specifically noting

that the Aetna policy did not provide primary coverage. Id.

Harleysville is not directly on point. Here, the “other insurance” clauses in

issue both purport to apply as excess coverage without defining that such coverage

is excess, e.g., over primary insurance coverage. Unlike in Harleysville, we cannot

say that one policy has priority of coverage over the other. That Meridian’s policy

specifies that it is “excess over any other collectible insurance” does not cure the

problem, as State Farm’s policy clarifies that it is only collectible as excess.5

Plainly stated, the two “other insurance” provisions in issue purport to

provide the same type and scope of coverage and, and we cannot give effect to

both policies at the same time. Put another way, “[i]f literal effect were given to

5

 Accord State Farm Mut. Auto. Ins. Co. v. Bogart, 717 P.2d 449, 454 (Ariz. 1986) (en

banc) (remarking that “the problem of circularity is especially applicable to cases, such as the

one before us, in which there actually is no primary insurance coverage at all” and that “the

clauses here chase each other through infinity”), superseded by statute on other grounds as

stated in Consol. Enterprises, Inc. v. Schwindt, 833 P.2d 706 (Ariz. 1992).

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both ‘excess insurance’ clauses of the applicable policies, neither policy would

cover the loss and such a result would produce an unintended absurdity.” 

Hoffmaster, 657 A.2d at 1277 (citation and internal quotation marks omitted). 

Accordingly, we find the clauses irreconcilable and mutually repugnant.

State Farm’s argument is unavailing that Pennsylvania courts often hold that

the coverage of the involved vehicle must be exhausted before the coverage of the

permissive driver is reached. This is a red herring and a secondary consequence

that does not drive our analysis. The Pennsylvania Supreme Court has clearly

directed that the language of the insurance policies is the touchstone of our inquiry,

not which liability policy belongs to which actor. See Harlesyville, 795 A.2d at

387. Similarly, citation to the MVFRL, 75 Pa.C.S. § 1733, does not aid State

Farm, since that provision applies exclusively to uninsured and underinsured

motorist coverage, which is not in issue here.

In addition, we reject Meridian’s position that State Farm has waived its

right to rely on its excess clause. Such contention was based on State Farm’s

statement that it would “extend coverage without reservation for all exposures”

upon withdrawing its reservation of rights pertaining to the cooperation issue. 

(Doc. 20-11, p. 2). In the same missive, State Farm also clarified that it was not

waiving any of the policy defenses of which Flick had been previously advised,

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and Meridian highlights that State Farm never previously advised Flick of its

“right” to provide coverage as excess only. (Doc. 21, p. 11). It would strain

credulity to interpret State Farm’s letter extending coverage as overriding the plain

terms of the State Farm insurance policy, which explicitly defines that coverage

applies as excess in certain circumstances relevant here.6

Having found the “other insurance” provisions mutually repugnant, we

follow the plain pronouncement of the Pennsylvania Supreme Court and direct that

Meridian and State Farm owe liability coverage on an equal shares basis as

described in American Casualty Company of Reading, Pa. v. PHICO Insurance

Company, 702 A.2d 1050 (Pa. 1997).

V. CONCLUSION

For the reasons herein stated, we grant Meridian’s Motion for Summary

Judgment only insofar as it seeks a declaration that the relevant excess clauses are

mutually exclusive and that the insurers owe coverage on an equal shares basis; in

all other respects we deny Meridian’s Motion. State Farm’s Motion for Summary

Judgment is denied in its entirety. 

An appropriate Order shall issue.

6

 Further, from a policy perspective, the Court would be loath to find that an insurer had

waived its right to rely on the clear terms of its insurance policy by providing a defense to an

insured.

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