Northampton County Judge Finds Regular Use Exclusion Invalid

A split of authority is developing on the issue of whether the Regular Use Exclusion is a valid exclusion that comports with Pennsylvania's Motor Vehicle Financial Responsibility Law (MVFRL).

In the case of Rush v. Erie Insurance Exchange, No. C-48-CV--2919-01979 (C.P. Northampt. Co. June 29, 2020 Baratta, J.), Judge Stephen G. Baratta of the Northampton County Court of Common Pleas granted partial summary judgment to the injured party Plaintiffs after finding that Erie's Regular Use Exclusion violated the MVFRL.

According to the Opinion, the Plaintiff was a police officer who was injured while driving a police vehicle that was regularly available for his use at work.  With regards to this matter, the Plaintiff was seeking UIM coverage under his personal automobile insurance policy.  The Plaintiff had not executed any UIM coverage or stacking waivers. The carrier that issued that policy denied coverage in reliance upon the Regular Use Exclusion contained in the personal policy.  A declaratory judgment action was filed and the parties eventually filed cross-motions for summary judgment.

The Court found that the Regular Use Exclusion at issue violated the MVFRL in two respects.  First, the court in Rush referred to the Pennsylvania Supreme Court's Household Exclusion decision in Gallagher v. Geico and found that the Regular Use Exclusion in this case was invalid as a "disguised waiver" of UIM coverage when the MVFRL requires the carrier to secure written waivers of such coverage from the insured during the application process or otherwise.

Secondly, under a rationale previously set forth in Slupski v. Nationwide Mut. Ins. Co.801 Fed. Appx. 850 (3d Cir. 2002), the court in Rush found that, because the Plaintiff was entitled to liability/medical coverage of $250,000 for his injuries from the accident, the Regular Use Exclusion was also found to violate 75 Pa.C.S.A. Section 1734, which mandated the carrier to provide UIM coverage equal to the bodily injury coverage available absent a written waiver secured from the insured.

Anyone wishing to review this decision may click this LINK.

With this decision, there is now arising a split of court decisions on the validity of the Regular Use Exclusion in the post-Gallagher v. Geico era.  To view other recent decisions on the validity of the Regular Use Exclusion you can always go to the Tort Talk Blog at www.TortTalk.com, scroll down the right hand side to the "Labels" section and then scroll down alphabetically until you get to the Label of "Regular Use Exclusion" and click on that to see all of the Tort Talk posts on that topic.  Here is a quick LINK to that Label.

I thank Attorney Paul Oven of the Moosic, PA office of the Dougherty, Leventhal & Price law firm for bringing this case to my attention.  I send thanks to Attorney Scott Cooper of the Harrisburg, PA law firm of Schmidt Kramer for providing a copy of the decision.