Efforts to Use Gallagher v. GEICO Decision Against Validity of Regular Use Exclusion Meets a Dead End

In the case of Nationwide Affinity Ins. Co. of America v. Fong, No. 2:19-cv-02119-CFK (E.D. Pa. April 28, 2020 Kenney, J.), the court granted a carrier’s Motion for Summary Judgment and denied the insured’s Motion for Summary Judgment in a declaratory judgment action seeking a determination of rights and obligations under an automobile insurance policy. 

According to the Opinion, the Nationwide Insurance policy was issued to the injured party’s parents. At the time of the accident, the injured party resided with the named insureds with her husband and was included under the Nationwide policy as a “listed driver.” 

The policy also contained a regular use exclusion and a household exclusion. 

At the time of the accident, the injured daughter was operating a vehicle that she owned and which she and her husband had separately insured through an Allstate Insurance Company policy. It was undisputed that the injured daughter owned the vehicle she was operating at the time of the accident and that that vehicle was available for her regular use. 

According to the Opinion, Allstate denied the injured daughter’s claim for UIM benefits because the daughter and her husband rejected UIM coverage under the Allstate policy. The injured daughter then turned to her parent’s Nationwide Insurance policy for UIM coverage.

Nationwide filed this Declaratory Judgment Complaint seeking a determination of its rights and obligations under the policy. 

In his Opinion, Judge Chad F. Kenney of the Eastern Federal District Court of Pennsylvania upheld Nationwide’s reliance upon the regular use exclusion. 

The court noted that the record before it confirmed that the injured daughter’s claim under the Nationwide policy was for injuries that she suffered while occupying a motor vehicle that the injured daughter owned and which was available for her regular use, and which was not insured under the Nationwide policy. 

The court noted that the language of the regular use exclusion was not ambiguous and that the plain language of that exclusion clearly applied to bar coverage under the Nationwide policy for any UIM coverage to the injured daughter.

The court also noted that the claimants did not present any argument that the regular use exclusion was unenforceable on policy grounds. Regardless, the court noted that the regular use exclusion had been previously upheld by the Pennsylvania Supreme Court’s holding in the case of Williams v. Geico, 32 A.3d 1195, 1209 (Pa. 2011), in which it was held that the regular use exclusion was not void as against public policy 

Notably, the court in this case also stated that the Pennsylvania Supreme Court’s separate decision with respect to the household exclusion in the case of Gallagher v. Geico “does not affect Williams’s precedent, as the facts of Gallagher are wholly distinguishable to the facts in the instant matter, as conceded by the Defendants.” See Op. at 10. 

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.