A Pennsylvania court is scrutinizing Progressive’s handling of a UIM claim after allegations that its adjuster interfered with a client’s settlement talks.
On Sept. 24, the Pennsylvania Superior Court issued a decision in the case of Robert Mark Winner v. Progressive Advanced Insurance Company, Margaret Mary Burke, and Brian Haeflein. The dispute centers on Winner’s claim that Progressive and its adjusters intervened in his third-party settlement negotiations, allegedly to avoid paying out underinsured motorist (UIM) benefits.
Winner, who held a Progressive auto policy with UIM coverage, was injured in a car accident in 2021. After bringing a personal injury lawsuit against the at-fault driver and entering settlement negotiations, Winner’s attorney contacted Progressive to open a UIM claim. According to the court record, Progressive’s adjuster, Margaret Mary Burke, then contacted the opposing attorney in the personal injury case – without Winner’s or his lawyer’s consent – and disclosed that Winner had been involved in a subsequent, unrelated car accident. Winner alleged this was an attempt to influence the settlement in a way that would limit Progressive’s UIM exposure.
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Following Burke’s communication, settlement talks paused, and the opposing attorney requested more time for discovery regarding the second accident. Winner’s attorney reached out to Progressive and its adjusters for clarification and to request that they stop communicating with the third-party attorney but received no response.
Winner filed suit in Philadelphia County, alleging bad faith, breach of contract, and violations of Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (UTPCPL). Progressive sought to enforce a forum selection clause in the policy, which required UIM-related lawsuits to be brought in the county where the policyholder resides. The trial court agreed, transferring the case to Chester County and dismissing Winner’s UTPCPL claim.
On appeal, the Superior Court upheld the transfer of venue, finding the policy’s forum selection clause clear and enforceable. The clause stated: “Any action brought against us pursuant to coverage under Part III – Uninsured/Underinsured Motorist Coverage must be brought in the county in which the person seeking benefits resides, or in the United States District Court serving that county.” The court determined that Winner’s claims, including those for bad faith and unfair trade practices, were sufficiently related to the UIM coverage to fall under this provision.
However, the Superior Court vacated the dismissal of the UTPCPL claim, noting that the factual circumstances – an insurance adjuster allegedly interfering in a third-party settlement to avoid a UIM claim – were unique and had not been previously addressed in Pennsylvania case law. The court also found that, after transferring the case, the trial court lacked authority to rule on any remaining preliminary objections, including those related to the UTPCPL claim. The case was remanded to the Chester County Court of Common Pleas for further proceedings.
This decision highlights the importance of clear policy language and careful conduct by insurance professionals during settlement negotiations. The outcome also underscores that courts are attentive to how insurers and their representatives handle claims, especially when actions could impact a policyholder’s rights. As the case returns to Chester County, insurance professionals will be watching for further developments on the boundaries of insurer involvement in third-party settlements.
