Monday, November 4, 2019

Regular Use Exclusion Not Defeated by Gallagher v. Geico Analysis


As some auto litigators may be aware, there is a movement afoot in the Plaintiff's bar to try to use the Pennsylvania Supreme Court's decision in Gallagher v. Geico, 201 A.3d 131 (Pa. 2019), in which that court invalidated the Household Exclusion in UM/UIM automobile policies, as a means to attack the Regular Use Exclusion as well.

Under the Regular Use Exclusion, a carrier need not provide coverage to its insured where the insured was involved in an accident while using a vehicle that was regularly available for his or her use.  The rationale is that the carrier did not know of that risk when it assessed its premium to its insured when the insurance policy was sold to the insured. 

Stated otherwise, an insured cannot secure coverage for his or her use of a vehicle regularly available to be driven by that insured if the insured never told the carrier about his or her use of that vehicle and never paid a premium for such coverge.  Simply put, you can't get something (coverage) for nothing (not paying a premium).

One Plaintiff's effort to rely upon the Gallagher v. Geico rationale to defeat a Regular Use Exclusion was rebuffed by the Federal Western District Court of Pennsylvania in the case of Barnhart v. Travelers, No. 2:19-CV-00523-MJH (W.D. Pa. Oct. 28, 2019 Horan, J.).

The Court in Barnhart granted a Defendant carrier's Motion to Dismiss the Plaintiff's Complaint and denied the Plaintiff any right to amend the Complaint as the same would have been futile under the law. 

In this case, the Plaintiff was injured as a result of an accident that occurred while she was a passenger on a motorcycle that was insured by Progressive Insurance.  After the Plaintiff recovered from the tortfeasor, she pursued a UIM claim under a Travelers policy that covered two cars the Plaintiff and her husband owned.

Travelers relied upon the Regular Use Exclusion given that the motorcycle on which the Plaintiff was involved in the accident was regularly available for the Plaintiff's use and was not covered under the Traveler's policy.

The Plaintiff argued that the Regular Use Exclusion was unenforceable under the Gallagher v. Geico analysis.

The Court in Barnhart specifically held that the Pennsylvania Supreme Court's holding in Gallagher "does not extend to invalidate the 'regular use exclusion'" or to overturn caselaw that supports the continued validity of the regular use exclusion.  See Op. at p. 8.

As such, the Defendant carrier's motion to dismiss the Plaintiff's Complaint was granted because the Regular Use Exclusion was found to defeat the Plaintiff's claims.

Anyone wishing to review the Barnhart decision may click this LINK.

I send thanks to Attorneys Brigid Q. Alford and Brooks Foland of the Camp Hill, PA office of Marshall, Dennehey, Warner, Coleman & Goggin for bringing this case to my attention.  I also thank Attorney Sara B. Richman Pepper Hamilton, LLC for notifying me of this decision as well.

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