Lackawanna County Judge Terrence R. Nealon Rules in Favor of Carrier on Coverage Question

Judge Terrence R. Nealon of the Lackawanna County Court of Common Pleas recently handed down a decision granting a declaratory judgment in favor of a carrier on an automobile insurance coverage issue in the case of Safe Auto v. Zater, No. 2009-CV - 5013 (Lacka. Co. June 14, 2011, Nealon, J.).

The coverage dispute in Zater arises from an accident which occurred on October 2, 2008 when a James Manson was operating an Amy Zator’s vehicle and was involved in a multi-vehicle accident. At the time of the accident, Zator was insured by an insurance policy issued by Safe Auto.

According to Judge Nealon's Opinion, the plain language of Safe Auto’s policy excludes liability coverage for any property damage or bodily injury that occurred while Zator’s vehicle was being operated by a resident of her household who was not listed as an additional driver on the declarations page.

The term “resident” is defined in the policy as any person who physically lived in Zator’s household for longer than 14 consecutive days as of the date of the accident. In addition, Safe Auto’s policy also excludes coverage if Zator’s vehicle was being operated without her permission.

Judge Nealon noted that the summary judgment record before him, including the deemed admissions of Zator and Manson to Safe Auto’s requests for admissions, established that Zator and Manson had been residing together continuously for several years. It was also undisputed that Manson was never listed as an additional driver on Safe Auto’s policy at any time prior to the date of the accident. Furthermore, there was no dispute that Manson did not have Zator’s permission to operate her car and that Manson was aware of the fact that he was not permitted to drive Zator’s vehicles.

After providing a thorough summary of the law of contract/insurance policy interpretation, as well as the law pertaining to the duty to defend and/or indemnify, Judge Nealon entered an Order granting the carrier's request for a judicial declaration that it need not provide a defense or indemnification under the facts presented.

Anyone desiring a copy of Judge Nealon's Opinion in the case of Safe Auto v. Zater may contact me at dancummins@comcast.net