First Liberty Insurance v. Paul McGeehan

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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No. 19-2012
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THE FIRST LIBERTY INSURANCE CORPORATION
v.
PAUL MCGEEHAN; ROSANNE MCGEEHAN, HUSBAND AND WIFE;
ADAM MCGEEHAN; LAURA MCGEEHAN, HUSBAND AND WIFE,
Appellants
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On Appeal from the United States District Court
for the Western District of Pennsylvania
(D.C. No. 1-16-cv-00199)
District Judge: Hon. Susan Paradise Baxter
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Submitted Under Third Circuit L.A.R. 34.1(a)
January 28, 2020
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Before: CHAGARES, RESTREPO and BIBAS, Circuit Judges.
(Filed: April 21, 2020)
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OPINION
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RESTREPO, Circuit Judge.

This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7
does not constitute binding precedent.
In November 2013, husband and wife Adam and Laura McGeehan were injured in
a car accident, in a vehicle covered by Adam’s parents’ insurance. The McGeehans
claim that First Liberty Insurance Corporation owes them additional coverage for their
injuries pursuant to their automobile insurance policies. The McGeehans appeal the
District Court’s order granting summary judgment in favor of First Liberty. We will
affirm the District Court’s order.
I
On a Thanksgiving weekend visit to Erie, Pennsylvania in 2013, Adam and Laura
McGeehan were injured in an automobile accident. The accident occurred blocks away
from Adam’s parents’ house, where he and Laura were staying. At the time, Adam and
Laura lived together in Virginia and both worked there as teachers. A few days prior,
they had driven from Virginia to Erie in a 2004 Chevrolet Trailblazer, the vehicle
involved in the accident, which was covered by Adam’s parents’ insurance policy.
Adam’s parents, Paul and Rosanne McGeehan, had two insurance policies with First
Liberty—a “Four-Vehicle Policy” and a “Lincoln Navigator Policy” (the Policies). App.
156, ¶ 2–3. The Trailblazer was listed on the Four-Vehicle Policy, which included Adam
as a driver.
The Four-Vehicle Policy includes an “Underinsured Motorists Coverage-
Pennsylvania (Stacked) Endorsement” (UIM Endorsement). App. 526, ¶ 9. This
provision provides “stacked” coverage, whereby the $300,000 limit per vehicle can be
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multiplied by up to four—because the policy covers four vehicles—providing up to $1.2
million in potential coverage for injuries sustained in an accident. First Liberty paid
Adam and Laura the $300,000 bodily injury limit for the Trailblazer but refused to apply
stacked coverage. It also rejected their claim under the Lincoln Navigator Policy’s UIM
Endorsement, which provides $300,000 in coverage.
First Liberty denied both stacked coverage under the Four-Vehicle Policy and
coverage under the Lincoln Navigator Policy based on its determination that Adam and
Laura were not “family members” of Paul and Rosanne, a designation required for the
disputed coverage. The parties’ dispute over whether Adam and Laura were “family
members,” as defined by the Policies, is the issue on appeal.
On August 2, 2016, First Liberty initiated a declaratory judgment action in the
District Court for the Western District of Pennsylvania, asking the court to determine its
responsibilities under the two Policies. The McGeehans counterclaimed for the disputed
insurance proceeds. The parties filed cross-motions for summary judgment, and the
District Court granted First Liberty’s motion for summary judgment and denied the
McGeehans’ motion for partial summary judgment. The Court found that Adam and
Laura were not “family members” of Paul and Rosanne. The McGeehans timely
appealed.
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II
The District Court had jurisdiction pursuant to 28 U.S.C. § 1332(a), and we
exercise jurisdiction pursuant to 28 U.S.C. § 1291. We review a district court’s grant of
summary judgment and its legal interpretation of contractual language de novo. Viera v.
Life Ins. Co. of N. Am., 642 F.3d 407, 418 (3d Cir. 2011). We apply the same summary
judgment standard as the District Court and will affirm summary judgment where,
viewing the facts in the light most favorable to the nonmoving party, 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” if “a reasonable jury could return a verdict
for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A
fact is “material” if it “might affect the outcome of the suit under the governing law.” Id.
The parties agree that Pennsylvania law governs our analysis of the Policies’ language.
This case turns on whether Adam and Laura are “family members” of Paul and
Rosanne, as defined by the Policies. If Adam and Laura qualify as “family members,”
First Liberty would owe them stacked benefits under the Four-Vehicle Policy and
coverage for bodily injury under the Lincoln Navigator Policy. Both Policies contain
identical language limiting liability for bodily injury resulting from one accident:
If “bodily injury” is sustained in an accident by you or any
“family member”, our maximum limit of liability for all
damages in any such accident is the sum of the limits of
liability for Underinsured Motorists Coverage shown in the
Schedule or in the Declarations applicable to each vehicle.
Subject to the maximum limit of liability for all damages, the
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most we will pay for “bodily injury” sustained by an
“insured” other than you or any “family member” is the
limit of liability shown in the Schedule or in the Declarations
applicable to the vehicle the “insured” was “occupying” at the
time of the accident.
App. 54 (Four-Vehicle Policy) (emphasis added), 103 (Lincoln Navigator Policy) (same).
Both Policies define “family member” as “a person related to you by blood, marriage or
adoption who is a resident of your household.” App. 35 (Four-Vehicle Policy), 81
(Lincoln Navigator Policy).
A
First Liberty claims that Adam and Laura do not qualify as “family members”
because they do not reside with Paul and Rosanne. The McGeehans counter that the
Policies’ definition of “family member” is ambiguous based on its use and omission of
commas. And their preferred interpretation is that relatives through “blood” or
“marriage” automatically qualify as family members, regardless of where they live, while
those related through “adoption” are only covered if they reside in the policyholders’
household.1
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The McGeehans also argue that First Liberty failed to include “facts regarding
the issue of Adam and Laura McGeehan’s residency” in its “Concise Statement of
Material Facts” before the District Court, in violation of the Western District of
Pennsylvania’s Local Rule 56(b)(1). Appellants’ Br. 25. But because First Liberty filed
a Concise Statement of Material Facts, and this rule does not require perfection in this
regard, we do not find relief warranted on this basis. See United States v. Eleven
Vehicles, Their Equip. & Accessories, 200 F.3d 203, 215 (3d Cir. 2000) (holding that
district courts have discretion to “waive a requirement of its local rules in appropriate
circumstances”).
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“Under Pennsylvania law, an insurance contract is ambiguous where it: ‘(1) is
reasonably susceptible to different constructions, (2) is obscure in meaning through
indefiniteness of expression, or (3) has a double meaning.’” Viera, 642 F.3d at 419
(quoting Lawson v. Fortis Ins. Co., 301 F.3d 159, 163 (3d Cir. 2002)). “Straightforward
language in an insurance policy should be given its natural meaning.” Lawson, 301 F.3d
at 162. Parties’ disagreement on the proper construction of a provision does not render it
ambiguous. Trombetta v. Raymond James Fin. Servs., Inc., 907 A.2d 550, 562 (Pa.
Super. Ct. 2006). Whether a contract is ambiguous is a question of law for the court to
decide. Id. at 561–62; Thomas Rigging & Constr. Co., Inc. v. Contraves, Inc., 798 A.2d
753, 755 (Pa. Super. Ct. 2002). We agree with the District Court’s well-reasoned
conclusion that the Policies’ definition of “family member” is not ambiguous and
requires that an insured individual, however related to the policyholders, reside in the
policyholders’ household.
First, we reject the McGeehans’ argument that the “last antecedent rule” confirms
the definition’s ambiguity and supports their reading of it. “Th[is] rule provides ‘that
qualifying words, phrases, and clauses are to be applied to the words or phrase
immediately preceding and not to others more remote.’” Viera, 642 F.3d at 418 (quoting
Stepnowski v. Comm’r of Internal Revenue, 456 F.3d 320, 324 (3d Cir. 2006)). This rule,
however, is “not an absolute and can assuredly be overcome by other indicia of
meaning.” J.C. Penney Life Ins. Co. v. Pilosi, 393 F.3d 356, 365 (3d Cir. 2004) (quoting
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Barnhart v. Thomas, 540 U.S. 20, 26 (2003)). And “[w]here the meaning of the contract
language is clear, the last-antecedent rule should not be used to create ambiguity.” Viera,
642 F.3d at 419. When the words of the modifying phrase apply “as much to the first and
other words as to the last,” the language plainly applies to all elements of the series.
Midboe v. State Farm Mut. Auto. Ins. Co., 433 A.2d 1342, 1347 (Pa. 1981) (quoting
Commonwealth v. Rosenbloom Fin. Corp., 325 A.2d 907, 909 (Pa. 1974)).
As First Liberty points out, “[t]he clause ‘who is a resident of your household’
references the word ‘person,’ which in turn denominates a ‘[f]amily member.’”
Appellee’s Br. 26. Therefore, “who is a resident of your household” most naturally and
unambiguously applies to all relations in the series. In other words, as First Liberty
rightly frames the analysis, the modifying phrase, “who is a resident of your household”
cannot grammatically only modify the last antecedent, “adoption.” Appellee’s Br. 26.
We thus “refrain from torturing the language of a policy to create ambiguities where none
exist.” Pilosi, 393 F.3d at 363 (quoting McMillan v. State Mut. Life Assur. Co. of Am.,
922 F.2d 1073, 1075 (3d Cir. 1990)).
We agree with the District Court that even assuming the McGeehans are correct—
that placing a comma after “marriage” and before “or adoption” and another comma after
“adoption” and before “who is a resident” would clarify the definition’s meaning—“it
does not necessarily follow that the language as presently written is ambiguous as a
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matter of law.” First Liberty Ins. Corp. v. McGeehan, 381 F. Supp. 3d 478, 483 (W.D.
Pa. 2019).
We also reject the McGeehan’s “plausible rationale” for their interpretation—that
“[r]equiring adopted family members to also reside in the insured’s household provides
insurance carriers with an additional safeguard against potential exploitation of the
otherwise laudable adoption process, aimed solely to provide coverage to an individual
who might otherwise have no coverage, irrespective of any real closeness in
relationship.” Appellants’ Br. 20. As noted by the District Court, “[i]t seems unlikely . .
. that individuals will undertake the time-consuming and costly process of legal adoption
– along with all of the potential ensuing expenses and responsibilities related to legal
guardianship – merely for the hypothetical benefit of expanding the adoptee’s access to
insurance benefits.” McGeehan, 381 F. Supp. 3d at 485. We also agree with the District
Court’s analysis and conclusion that the McGeehans’ expert testimony is inadmissible
under Federal Rule of Evidence 702 because “questions of ambiguity or contractual
meaning . . . are questions of law for th[e] Court to resolve.” Id.
We thus will affirm the District Court’s holding that the Policies’ definition of
“family member” is unambiguous and that all categories of people it describes must be
residents of the policyholders’ household.
B
Next, we must determine whether Adam and Laura were “residents” of Paul and
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Rosanne’s household and thus “family members.” The Policies do not define a
“resident,” so we must look to Pennsylvania common law. In Amica Mutual Insurance
Co. v. Donegal Mutual Insurance Co., the Pennsylvania Superior Court interpreted the
word “resident” in a materially identical auto insurance provision. 545 A.2d 343, 344 n.1
(Pa. Super. Ct. 1988) (“‘[F]amily member’ means a person related to you by blood,
marriage or adoption who is a resident of your household. This includes a ward or foster
child.” (quoting auto insurance policy)). In that case, the driver was a child of divorced
parents, and the insurance policy belonged to her father. Id. at 345. During the relevant
time period, she lived primarily with her mother, and her visits to her father’s house were
“sporadic.” Id. She nonetheless kept “a closet or two full of clothes at her father’s house,
approximately forty pairs of shoes, books, cosmetics, stuffed animals, tennis equipment,
and a pet rabbit,” and she received mail there. Id. In prior years, she had spent more
time at her father’s house, and she planned to live with him during the upcoming
summer, before starting college. Id.
The Superior Court interpreted “family member” to include only those “who
actually reside in the household of the insured.” Id. at 346. It found that the child’s
belongings were at her father’s house “for convenience and did not evidence that she
physically lived there.” Id. The court held that “as a matter of physical fact,” the driver
resided at her mother’s house at the time of the accident. Id.; cf. Krager v. Foremost Ins.
Co., 450 A.2d 736, 737 (Pa. Super. Ct. 1982) (finding residency established under an
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analogous policy where the plaintiff lived with his mother from April through November,
including at the time of the accident).
Unlike a person’s domicile, which is a “matter of intention,” one’s residence is “a
physical fact.” Laird v. Laird, 421 A.2d 319, 321 (Pa. Super. Ct. 1980). Residency
requires “at the minimum, some measure of permanency or habitual repetition.” Wall
Rose Mut. Ins. Co. v. Manross, 939 A.2d 958, 965 (Pa. Super. Ct. 2007) (quoting Erie
Ins. Exch. v. Weryha, 931 A.2d 739, 744 (Pa. Super. Ct. 2007)). Here, the physical facts,
as set forth by the parties and as evidenced by the record (including Adam and Laura’s
deposition transcripts), do not demonstrate that Adam and Laura were “residents” of Paul
and Rosanne’s household. As in Amica, Adam’s past residency at the home, intended
future visits, maintenance of many belongings, and receipt of mail do not establish
residency. See 545 A.2d at 345–46. Nor do his and Laura’s periodic visits or other ties
to the Erie area. We thus will affirm the District Court’s conclusion that Adam and Laura
are not “family members” under the Policies because they do not reside in Paul and
Rosanne’s household.
III
For the foregoing reasons, we will affirm the District Court’s order granting
summary judgment in favor of First Liberty.
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