Wednesday, August 31, 2011

Judge Cosgrove of Luzerne County Addresses "Regular Use" Exclusion in Auto Policy

In his June 27, 2011 Opinion in the case of Rother v. Erie Insurance Exchange, No. 14656-Civil-2008 (C.P. Luz. June 27, 2011 Cosgrove, J.) Judge Joseph Cosgrove of the Luzerne County Court of Common Pleas addressed a declaratory judgment action involving the question of the application of a “regular use” exclusion under an Erie Insurance policy.

According to the Opinion, the Plaintiff was injured in a motor vehicle accident on March 3, 2007. At that time, he resided with his mother. The vehicle in which the Plaintiff was located in at the time of the accident was owned by his father, who restricted the Plaintiff's use of this vehicle to work or emergency purposes.

The Opinion notes that, while the Plaintiff was admittedly not driving to or from work when the accident occurred, he claimed that he was on his way to help a friend. While on his way to help a friend, the Plaintiff was involved in the subject accident that was caused by an allegedly intoxicated driver.

The tortfeasor’s carrier tendered the policy limits under the liability policy and the Plaintiff pursued an underinsured motorist claim against the Erie Insurance Exchange policy that was issued to the Plaintiff’s mother.

Judge Cosgrove noted that, while Erie acknowledged that the Plaintiff was otherwise covered by a “resident relative” under his mother’s policy, Erie had denied covered pursuant to the “regular use” exclusion in the policy. That exclusion provided that coverage was inapplicable in the following circumstances:

“Bodily injury to….a resident using a non-owned motor vehicle….which is regularly used by [that] resident, but not insured for Uninsured or Underinsured Motorists Coverage under the policy.”

According to the Opinion, the injured party Plaintiff instituted the declaratory judgment action seeking a judicial declaration that the Erie policy should indeed provide UIM coverage. The case came before Judge Cosgrove by way of Erie Insurance’s Motion for Summary Judgment in which the carrier asserted that the “regular use” exclusion precluded any coverage under the facts presented.

In addressing the summary judgment motion, Judge Cosgrove noted that there was no dispute that the Plaintiff’s use of the vehicle was of the type to which the exclusion of issue applied. He additionally noted that there was no dispute that the subject vehicle was not otherwise insured under the Erie policy issued to the Plaintiff’s mother. Nor was there any question that the Plaintiff resided with his mother.

Rather, the sole issue before the Court was whether the Plaintiff “regularly” used the subject vehicle in a way contemplated by the exclusion.

In his Opinion, Judge Cosgrove reviewed the current status of the regular use exclusion under Pennsylvania law, including a reference to the recent Opinion issued by Judge Terrence R. Nealon of the Lackawanna County Court of Common Pleas in the case of Erie Insurance Exchange v. Soroka, No. 09-CIV-1056 (C.P. 2011 Lacka. Co. Nealon, J.). Judge Cosgrove noted that, while it is clear under Pennsylvania law that this “regular use” exclusion is legitimate and not contrary to public policy, the appropriate application of the exclusion was subject to the particular factual situation presented on a case by case basis.

Accordingly, Judge Cosgrove reviewed the facts of the case before him and found that the Plaintiff’s permission to use the subject vehicle was limited by his father such that there were genuine issues of material fact as to whether or not the Plaintiff “regularly” used the vehicle so as to come within the “regular use” exclusion set forth in the Erie Insurance Exchange policy.

As such, Judge Cosgrove denied the carrier’s Motion for Summary Judgment given that he was unable to say, as a matter of law, that the “regular use” restriction at issue precluded coverage under the facts presented.


Anyone desiring a copy of this case may contact me at dancummins@comcast.net.



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