Wade Clark Mulcahy LLP

<p style="text-align: justify;">Last Friday, an Eastern District of Pennsylvania judge held in <em><a href="https://www.wcmlaw.com/wp-content/uploads/2020/02/Marella-v.-Allstate-Insurance-Co..pdf">Marella v. Allstate Insurance Co.</a> </em>that Allstate had no duty to fix the underlying mechanical issue that caused an insured’s vehicle to spontaneously accelerate and had caused two accidents because preexisting mechanical issues were not covered under the insurance policy.</p>
<p style="text-align: justify;">In November 2019, Marella’s vehicle spontaneously accelerated causing her to crash into a wall. Allstate covered the cost of the repairs caused by collision but took no action to have the underlying mechanical defect fixed. One month later, the vehicle once again spontaneously accelerated and caused Marella to crash into a store, causing her severe injuries. She then sued Allstate for breach of contract alleging that Allstate failed fix the mechanical issue, or at least very least, warn her that that it would not fix the issue.</p>
<p style="text-align: justify;">Under the insurance policy, Allstate must repair damage caused by collisions, acts of nature, and theft. The Court found that because Allstate repaired the damage caused by the collision with the wall, it had fulfilled its contractual obligation to Marella. Since nothing in the policy required Allstate to make repairs to the vehicle to fix the underlying mechanical issue causing the spontaneous acceleration, the Court granted Allstate’s motion to dismiss. The Court went further to indicate that Marella should have asked for relief under tort law, not contracts, citing to the  Restatement (Second) of Torts § 323, which states that “a defendant may be liable for negligence when it ‘undertakes, gratuitously or for consideration, to render services to another’ and it does not exercise reasonable care in rendering these services.” However, since she did not, and because “[i]n non-civil rights cases, district courts have no obligation to offer leave to amend before dismissing a complaint unless the plaintiff properly requests it”, the Court had no option but to dismiss the case.</p>
<p style="text-align: justify;">Thus, this case illustrates the importance of a close reading of an insurance policy to determine what is actually covered under the policy.</p>
<p style="text-align: justify;">Thanks to Priscilla Torres for her contribution to this post.  Please email <a href="mailto:chayes@wcmlaw.com">Colleen E. Hayes</a> with any questions</p>