Tuesday, June 16, 2020

Another Court Rules That Gallagher v. Geico Does Not Work to Invalidate the Regular Use Exclusion


Following the steps of two recent Pennsylvania federal district court opinions, a trial court in the Northampton County has declined to extend the Pennsylvania Supreme Court's decision on the Household Exclusion in Gallagher v. Geico, 201 A.3d 131 (Pa. 2019) to apply to the validity of Regular Use Exclusions.  (The Tort Talk blog posts on those other federal court cases, Barnhart and Fong, can be viewed HERE.

In the Northampton County case of Nationwide Prop. and Cas. Ins. Co. v. Stuber, No. C-48-CV-2019-4957 (C.P. Northampt. Co. May 21, 2020 Sletvold, J.), the trial court ruled in favor of the carrier in a declaratory judgment action involving UIM coverage and the application of a Regular Use Exclusion.

According to the Opinion, the injured party was injured while operating a motorcycle upon which there was no insurance coverage whatsoever.

The injured party secured a recovery from the tortfeasor defendant's minimal coverage liability policy and then turned to pursue UIM recoveries.

At the time of the accident, the injured party owned another vehicle which was covered by a Nationwide policy that he had purchased as the named insured.  At the same time, a resident relative of the injured party owned a separate vehicle which was covered by a separate Nationwide policy.  The injured party was an insured under that second policy.  The Plaintiff was seeking UIM coverage under both of these Nationwide policies.

Both of the Nationwide policies contained Household Exclusions as well as Regular Use Exclusions.

In the case before the Court, Nationwide framed the issue as involving whether the Regular Use Exclusions precluded UIM coverage for the injured party under both policies.  Nationwide asserted that the motorcycle that the injured party was operating at the time of the accident was a vehicle that was not insured under the Nationwide policies and that was available for the regular use of the injured party such that the Regular Use Exclusion applied to preclude coverage under the facts presented.

In contrast, the injured party argued that both the Household Exclusions and the Regular Use Exclusions were invalid under the MVFRL and/or public policy arguments.  The injured party pointed to the Pennsylvania Supreme Court's previous decision in the case of Gallagher v. Geico, 201 A.3d 131 (Pa. 2019) for support.

After reviewing the applicable law, including recent Pennsylvania federal court decisions upholding the validity of the Regular Use Exclusion even after the Pennsylvania Supreme Court handed down its decision in Gallagher v. Geico, this court in the Stuber also upheld the validity of the Regular Use Exclusion.

Notably, the court noted that the injured party did not cite to any authority to support the extension of the Gallagher v. Geico decision to support the requested invalidation of the separate Regular Use Exclusion.  Judge Sletvold also noted that her own research failed to reveal any case law to support such an extension of the Gallagher v. Geico decision.  As such, the court found that it need not reach that issue.

Rather, the court concluded its Opinion by noting that the injured party's decision to keep his motorcycle entirely uninsured in the first instance was fatal to his claims.  As such summary judgment was entered in favor of the carrier.

Anyone wishing to review a copy of this decision may click this LINK

I send thanks to Attorney John A. Anastasia of The Mayers Firm, LLC in Plymouth Meeting Pennsylvania for bringing this case to my attention.

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