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Review of Sackett Decision Pending

/ 28.Apr, 2011
In Sackett v. Nationwide Mutual Insurance Company, 4 A.3d 637 (Pa. Super. 2010), the Superior Court held that a new Rejection of Stacking is needed when a new (not substitute) vehicle is added to a policy by means other than a newly acquired vehicle clause. In Sackett v. Nationwide Mutual Insurance Company, 919 A.2d 194 (Pa. 2007) (Sackett I), the Supreme Court held that a new Rejection of Stacking is needed when a new vehicle is added to an existing policy. In Sackett v. Nationwide Mutual Insurance Company, 940 A.2d 329 (Pa. 2007) (Sackett II), the Supreme Court modified its decision, determining that the term of the newly acquired vehicle clause of the policy dictate whether a new stacking waiver is needed. In that case, the Insurance Department had represented to the Supreme Court that most new vehicles are added to policies by way of a newly acquired vehicle clause. This is simply not the case. Based upon this representation, the Supreme Court held that where a vehicle is added to a policy by way of a newly acquired vehicle clause which provides continuous coverage, no new stacking waiver is needed. Where, however, a vehicle is added to a policy by way of a newly acquired vehicle clause which provides only finite coverage, then a new stacking waiver is required. At trial in the Court of Common Pleas on remand, testimony established that the newly acquired vehicle clause was not triggered in adding the new vehicle to the existing policy. Instead, Victor Sackett added the vehicle to the policy in the way in which most vehicles are added to existing policies, namely, he merely called his agent and asked that it be added to the policy and endorsed thereon. The Court of Common Pleas held, therefore, that Sackett II did not apply and instead applied Sackett I. In Sackett v. Nationwide Mutual Insurance Company, 4 A.3d 637 (Pa. Super. 2010) (Sackett III), the Superior Court affirmed the Common Pleas Court decision, finding that since the newly acquired vehicle clause was not triggered, Sackett I, alone, applied, thereby necessitating a new stacking waiver. In so holding, the Superior Court in Sackett III failed to acknowledge that Sackett II actually modified Sackett I. Therefore, of particular importance is not the type of newly acquired vehicle clause in the policy, but rather the manner in which the new vehicle is added to the policy, namely, on a finite or continuous basis. Since Victor Sackett added the new vehicle to his policy on a continuous basis, i.e. by endorsement, no new stacking waiver should be needed. Nonetheless, the Superior Court did not apply the rationale of Sackett II to the facts developed at trial. Accordingly, the Nationwide Mutual Insurance Company has filed a Petition for Allowance of Appeal. The insurer has requested that the Supreme Court again re-visit the issues in Sackett. That Petition for Allowance of Appeal remains pending in the Supreme Court.

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