Nationwide Mutual Insurance Company v. Kenneth L. Roth

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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No. 06-4691
No. 06-4692
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NATIONWIDE MUTUAL
INSURANCE COMPANY
v.
KENNETH L. ROTH,
Appellant
____________
On Appeal from the United States District Court
for the Middle District of Pennsylvania
(D. C. Civil No. 04-cv-00612)
District Judge: Honorable Richard P. Conaboy
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Submitted Under Third Circuit LAR 34.1(a)
October 25, 2007
Before: SLOVITER, CHAGARES and HARDIMAN, Circuit Judges.
(Filed: October 30, 2007)
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OPINION OF THE COURT
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HARDIMAN, Circuit Judge.

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In this appeal we consider the validity of a household exclusion clause in an
automobile insurance policy issued by Appellee Nationwide Mutual Insurance Company
(Nationwide). If the clause is valid, then Appellant Kenneth L. Roth cannot recover the
stacked limits of the underinsured motorist (UIM) benefits allowed by the policy.
I.
Roth was severely injured in an accident on June 22, 2002 while operating his
motorcycle, which was insured under Nationwide Policy No. 58 37 C 853255
(motorcycle policy). After Nationwide paid Roth $50,000 in UIM benefits under that
policy, Roth made a claim for UIM benefits in the amount of $150,000 under Nationwide
Policy No. 58 37 B 470260, which covers Roth’s three automobiles (automobile policy).
Nationwide filed a complaint for declaratory judgment that Roth is not entitled to
the additional UIM benefits. Before the District Court, Roth had pending a motion to
compel further discovery when Nationwide filed a motion for summary judgment, basing
its argument on the following household exclusion clause contained in the automobile
policy:
This coverage does not apply to: . . . Bodily injury suffered while occupying
a motor vehicle owned by you or a relative but not insured for Underinsured
Motorists coverage under this policy; nor to bodily injury from being hit by
any such motor vehicle.
On October 26, 2006, the District Court granted Nationwide’s motion for summary
judgment, denied Roth’s cross-motion for summary judgment, and denied as moot Roth’s

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motion to compel discovery and subsequent motion to compel depositions. Roth appeals
from the District Court’s judgment.
II.
The District Court had jurisdiction under 28 U.S.C. § 1332. We have jurisdiction
over the final judgment of the District Court under 28 U.S.C. § 1291. We review the
District Court’s grant of summary judgment de novo and apply the same legal standard
that the District Court should have applied in the first instance. Courson v. Bert Bell NFL
Player Ret. Plan, 214 F.3d 136, 142 (3d Cir. 2000). Summary judgment is required on a
claim when “the pleadings, depositions, answers to interrogatories, and admissions on
file, together with the affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.
R. Civ. P. 56(c); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250-52 (1986).
In making this determination, “a court must view the facts in the light most favorable to
the nonmoving party and draw all inferences in that party’s favor.” Saldana v. Kmart
Corp., 260 F.3d 228, 232 (3d Cir. 2001) (internal citation omitted). The parties agree that
Pennsylvania law applies here.
III.
Under Pennsylvania law, household exclusion clauses – which “exclude[]
coverage for an otherwise insured individual when that person is occupying a separately
owned vehicle that is not insured under the subject” motor vehicle insurance policy – are
not per se invalid. Prudential Prop. & Cas. Ins. Co. v. Colbert, 813 A.2d 747, 751-52

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(Pa. 2002); see also Eichelman v. Nationwide Ins. Co., 711 A.2d 1006, 1010 (Pa. 1998).
Indeed, any such per se rule “has morphed into the minority rule, as most exclusion
clauses have been deemed valid.” Nationwide Mut. Ins. Co. v. Riley, 352 F.3d 804, 808-
09 (3d Cir. 2003) (“While the Pennsylvania Supreme Court has held that the
enforceability of the exclusion is dependent upon the factual circumstances presented in
each case, it has been upheld in nearly all of the cases in which it has been considered.”
(internal citation omitted)); Colbert, 813 A.2d at 754 (“voiding the [household] exclusion
would empower insureds to collect UIM benefits multiplied by the number of insurance
policies on which they could qualify as an insured, even though they only paid for UIM
coverage on one policy” (emphasis omitted)).
Nothing in the factual circumstances of the case at bar precludes the enforcement
of the household exclusion clause in Roth’s automobile policy. In fact, in Alderson v.
Nationwide Mut. Ins. Co., 884 A.2d 288 (Pa. Super. Ct. 2005), appeal denied, 907 A.2d
1100 (Pa. 2006), the Pennsylvania Superior Court upheld a household exclusion clause
when Nationwide issued a motorcycle policy and automobile policies to a named insured
who was injured while operating his motorcycle. The insured sought additional UIM
benefits under his automobile policies despite household exclusion clauses identical to the
clause at issue here. See 884 A.2d at 289-90 (“providing additional UIM coverage to
Alderson under the Nationwide policies that expressly do not apply to the . . . motorcycle
would hold Nationwide responsible for a risk it did not get paid to insure under those
policies”). The court added that “the fact that Nationwide insured all the household

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vehicles does not change the result. The risks appurtenant to the operation of the
motorcycle were rated separately, and a separate premium for specific coverages was
paid.” Id. at 290 (internal citation omitted).
Although we are not bound by Alderson because it is not a decision of the
Pennsylvania Supreme Court, we give careful consideration and significant weight to
decisions of state intermediate appellate courts in attempting to predict how a state’s
highest court will rule. See Jaworowski v. Ciasulli, 490 F.3d 331, 333 (3d Cir. 2007);
Colliers Lanard & Axilbund v. Lloyds of London, 458 F.3d 231, 236 (3d Cir. 2006). This
is especially true where, as here, we find the intermediate appellate court’s decision
persuasive.
As in Alderson, Roth has not established a genuine issue of material fact as to
whether he paid premiums for a benefit that is now being denied. Instead, Roth paid for
the ability to stack the UIM coverage limits of the three automobiles covered by the
automobile policy; had he been injured in one of those vehicles, the UIM coverage limit
on his bodily injury would have been $150,000. By signing an automobile policy that
also contains a household exclusion, Roth is not entitled to the additional benefit of
collecting $150,000 when he is injured while operating a vehicle not covered under the
automobile policy.
Roth attempts to distinguish Alderson by claiming that prior to the accident, he
was unaware that his motorcycle was covered under a policy separate from the one that
covered his three automobiles and that Nationwide effectuated this change unilaterally.

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But the record reveals no genuine issue of material fact on this point. First, Roth paid
premiums on the motorcycle policy annually, whereas he paid premiums on the
automobile policy every six months. Moreover, Roth signed a waiver of stacking of UIM
benefits in his motorcycle policy, whereas there is no waiver of stacking in his
automobile policy. Consequently, we would have to believe that Roth intended to sign
away his ability to stack in the automobile policy – a proposition Roth himself argues is
impossible – in order to conclude that he believed his motorcycle was also covered under
that policy. Against the overwhelming documentary record evidence, Roth cannot rely on
his self-serving affidavit to avoid summary judgment. See Blair v. Scott Specialty Gases,
283 F.3d 595, 608 (3d Cir. 2002); see also Keri v. Bd. of Trustees of Purdue Univ., 458
F.3d 620, 628 (7th Cir. 2006).
We also reject Roth’s argument that “Nationwide cannot use the household
exclusion as a de facto waiver of inter-policy stacking, since Nationwide cannot satisfy
the three requirements established by the Supreme Court in Craley.” The so-called “three
requirements” apply only to waivers of stacking, not to household exclusions. See Craley
v. State Farm Fire and Cas. Co., 895 A.2d 530, 541 (Pa. 2006); id. at 544 (Eakin, J.,
concurring). Roth’s argument that household exclusions have the practical effect of
waiving inter-policy stacking is a red herring because, as we have acknowledged
previously, household exclusions “prohibit[] the ‘stacking’ of uninsured or underinsured
coverage across multiple insurance policies. The claimant may recover under the policy
covering the occupied vehicle, but cannot add coverage provided by the policy containing

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1 Along these lines, we decline to hold that the particular household exclusion at
issue in this case must follow the stacking waiver requirements of 75 Pa. Cons. Stat.
§ 1738. The important differences between household exclusions and stacking waivers
discussed in the main text convince us that the Pennsylvania Supreme Court likely will
not subject the former to the requirements that § 1738 imposes on the latter.
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the exclusion.” Nationwide Mut. Ins. Co. v. Hampton, 935 F.2d 578, 587 (3d Cir. 1991).
Neither this Court nor the Pennsylvania appellate courts have held in a reported decision
that household exclusion clauses should be treated as waivers of stacking as a matter of
law. See, e.g., id. at 590 (household exclusion in policy covering two automobiles
enforceable to bar UIM coverage for bodily injury suffered on uninsured motorcycle,
notwithstanding our earlier pronouncement that household exclusion had the effect of
waiving inter-policy stacking). Moreover, Craley does not alter this result because it
holds that waivers of stacking have both inter- and intra-policy effects; nothing in Craley
suggests that household exclusions, which have only inter-policy effect and are limited to
vehicles owned by a member of the household, automatically transform into waivers of
stacking.1
For the foregoing reasons, we hold that because the household exclusion clause in
Nationwide Policy No. 58 37 B 470260 is valid, the judgment of the District Court must
be affirmed.

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