Friday, October 19, 2012

Regular Use Exclusion Upheld (Again)

In its October 18, 2012 decision in the case of Rother v. Erie Insurance Exchange, No. 1770 MDA 2011, 2012 Pa. Super. 228 (Pa. Super. Oct. 18, 2012 Bowes, Ott, and Straussburger, JJ.) (Opinion by Bowes, J.), the Pennsylvania Superior Court reversed the granting of summary judgment in favor of the Claimant and ordered the entry of summary judgment in favor of Erie Insurance Exchange in a declaratory judgment action involving the applicability of the regularly used, non-owned vehicle exclusion.

In this matter, the Plaintiff was injured in a motor vehicle accident at which time the Plaintiff 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 only to work or emergency purposes. The Plaintiff had only begun to drive the vehicle to and from work a short period of time before the subject accident.

At the time the accident occurred, the Plaintiff was admittedly not driving to or from work. The Plaintiff claimed that he was on his way to help a friend. While on his way to help his 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. The Plaintiff then pursued a UIM claim against the Erie Insurance Exchange policy that was issued to the Plaintiff’s mother.

While Erie acknowledged that the Plaintiff was otherwise covered as a “resident relative” under his mother’s policy, Erie denied coverage 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 Motorist Coverage under the policy.”

The essential question in this case was whether the Plaintiff was “regularly” using the subject vehicle in a way contemplated by the exclusion. The trial court judge had found that the Plaintiff’s position 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 was “regularly” using the vehicle so as to come within this “regular use” exclusion found in the policy.

On appeal, the Pennsylvania Superior Court disagreed. After thoroughly reviewing the law pertaining to the regular use exclusion, including the test for “regular use,” i.e., “whether the use is regular or habitual,” the court ruled that where both parties filed Motions for Summary Judgment and alleged that there no genuine issues of material fact, the coverage question was a question of law for the court to decide.

Erie argued that the Plaintiff’s use of his father’s vehicle to go to and from work constituted regular use even though the Plaintiff had only just begun to use the vehicle in this regard a short period of time before the subject accident.

Comparing the facts of this case with the facts of other regular use exclusion cases, the Superior Court noted that the Plaintiff did routinely and habitually use the vehicle within the scope of his father’s permission to go to and from work four days per week. Despite the use being restricted, the court still found the use to be regular within the meaning of the exclusion.

The Pennsylvania Superior Court further stated that the application of the regular use exclusion to these facts did not violate any public policy grounds. To the contrary, the regular use exclusion has been repeatedly upheld on policy grounds as that exclusion generally promotes the cost containment policy under the MVFRL.

Based upon the above rationale, the Pennsylvania Superior Court reversed the trial court’s decision and remanded the case for the entry of summary judgment in favor of Erie Insurance Exchange.

A copy of this case may be viewed HERE

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