PHILADELPHIA – A plaintiff’s attempt to return his vehicle insurance case to state court has been deemed unsuccessful, due to the proper separation of his claims for declaratory judgment and breach of contract.

On March 30, Judge Harvey Bartle III denied a motion to remand the lawsuit brought by plaintiff Matthew Schodle to the Philadelphia County Court of Common Pleas, its point of origin.

Schodle first brought this action in state court against his insurer, defendant State Farm Mutual Automobile Insurance Company, an action removed to federal court pursuant to the court’s diversity jurisdiction (Schodle is a citizen of Florida, while State Farm is incorporated in and has its principal place of business in Illinois). Further, the contested amount of damages exceeds $75,000, without interest and costs.

Schodle’s complaint contained two claims for relief, one for declaratory judgment and the second for breach of contract, due to claims originating from a March 23, 2014 motor vehicle accident during which Schodle was injured, while he was a passenger in a vehicle operated by Jason Keyser.

“Schodle settled with Keyser for Keyser’s policy limits. Schodle now seeks additional compensation pursuant to the underinsured provisions of his parents’ State Farm personal automobile insurance policies under which he is an insured,” Bartle said.

Bartle explained there were two State Farm personal automobile insurance policies in effect at the time of the accident, with the first policy having been issued to the plaintiff’s father, Robert H. Schodle, and the second policy having been issued to the plaintiff’s father and mother, Robert H. Schodle and Rita Marie Schodle.

“According to the complaint, the plaintiff’s father had also executed a form entitled “Pennsylvania Underinsured Motorist Coverage (Acknowledgment of Coverage Selection). This form purports to limit the amount of coverage available to an insured with regard to one of the two insurance policies. However, the section of the form identifying which of the two policies it references appears to be illegible,” Bartle said.

Per the complaint, State Farm argued that the form signed by the Schodle’s father limits recovery to $130,000.

“In Count One of his complaint, Schodle seeks a declaratory judgment that he is entitled to recover $215,000 in underinsured motorist benefits under the insurance policies. In Count Two, Schodle asserts a claim for breach of contract in which he seeks an award of compensatory damages under the insurance policies,” Bartle stated.

Schodle argued the U.S. District Court should remand the instant case to the Philadelphia County Court of Common Pleas, contending it “should decline to exercise jurisdiction over this cause of action, because his complaint includes a claim seeking a declaratory judgment that he is entitled to recover up to $215,000, in addition to a claim for breach of contract seeking $215,000 in damages.”

State Farm countered that the first count of Schodle’s complaint is not a proper claim for declaratory judgment and that remand is not appropriate because the District Court is required to exercise jurisdiction over the breach of contract claim. 

“Turning to the case before us, the motion to remand must be denied. The non-declaratory breach of contract claim is independent of the declaratory judgment claim inasmuch as it is alone sufficient to invoke subject matter jurisdiction and can be adjudicated even if the claim for declaratory judgment was to be dismissed. The breach of contract claim is the essence of this lawsuit. The insured surely wants monetary relief, not simply a declaration of his rights,” Bartle said.

Bartle added it was “unusual” that it was the insured, not the insurer, who sought declaratory relief here and that it added nothing to his case.

“There is no concurrent state court proceeding, the federal forum does not unduly inconvenience the parties, and this litigation will not proceed in a piecemeal fashion. Accordingly, the motion of plaintiff [Matthew] Schodle to remand this action to the Philadelphia County Court of Common Pleas will be denied,” Bartle concluded.

The plaintiff is represented by James C. Haggerty of Haggerty Goldberg Schleifer & Kupersmith, in Philadelphia.

The defendant is represented by Jeffrey W. McDonnell of Bennett Bricklin & Saltzburg, also in Philadelphia.

U.S. District Court for the Eastern District of Pennsylvania case 2:17-cv-00407

From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nickpennrecord@gmail.com

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