Monday, June 12, 2023

Judge Mannion of Federal Middle District Upholds Regular Use Exclusion in the Third Party Liability Coverage Context

In the case of Burton v. Progressive Adv. Ins. Co., No. 3:21-CV-01522-MEM (M.D. Pa. March 20, 2023 Mannion, J.), the court addressed cross-Motions for Summary Judgment based upon a regular use exclusion.

This matter arose out of a motor vehicle accident. At the time of the accident, the Defendant driver was insured by an automobile insurance policy issued by the Defendant, Progressive Advanced Insurance Company. Under that policy, there was a regular use exclusion that precluded coverage to any insured who was operating a vehicle that was furnished or available for an insured’s regular use but which was not covered under the Progressive policy.

In other words, under that provision, Progressive was precluding coverage for accidents involving a vehicle that was regularly available for the insured's use but for which the insured was not paying Progressive any premiums for any insurance coverage.    

More specifically, on the date of the subject accident, the Defendant driver was driving a vehicle that was owned by her brother and which was not covered under the Progressive policy.

According to the record before court, the Defendant driver had her brother’s permission to be driving his vehicle at the time of the accident because she was having mechanical issues with her own vehicle. The Defendant driver noted that she had been driving her brother’s car for about a month or two before the incident. Other evidence in the case indicated that the Defendant driver was using the vehicle at issue on a daily basis and at her discretion.

Progressive denied coverage on the claims presented under an argument that the vehicle that the Defendant driver was operating was not covered under the Progressive policy and given that the vehicle that the Defendant driver was driving was allegedly furnished and available for her regular use and, therefore, fell under the regular use exclusion.

The Plaintiff cited the case of Rush v. Erie Insurance Exchange and asserted that the regular use exclusion should be deemed to be unenforceable under the Pennsylvania Motor Vehicle Financial Responsibility Law (MVFRL).

The Defendant attempted to distinguish the Rush case and other cases as being distinguishable as UIM cases which reviewed the regular use exclusion under §1731 of the MVFRL, which statute governs the scope of UIM claims.

Judge Mannion noted that this case did not involve a UIM claim and that, therefore, §1731 did not apply. Rather, this case involved a request for liability coverage by the Defendant driver.

The court noted that the Plaintiff was requesting the court to extend the holdings of the Rush case, and another case cited in this Opinion, to cover liability claims as well. Judge Mannion noted that there was no support under Pennsylvania law for the requested extension of the law of those decisions to this fact pattern. As such, the Plaintiff’s Motion for Summary Judgment was denied.

The court also rejected the Plaintiff’s more specific factual arguments that the type of use of the vehicle by the Defendant driver was not regular, but rather, was incidental or temporary while the Defendant driver’s car was being repaired. The court rejected this claim after reiterating that the record before the court established that the Defendant driver had free access to use the car at her discretion over an extended period of time.

Anyone wishing to review a copy of this decision may click this LINK.  The Court's companion Order can be viewed HERE.

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