ARTICLE: Pa. High Court Shows Continuing Signs of Moderation With Regular Use Exclusion Holding

The below article of mine was published by the Pennsylvania Law Weekly on February 29, 2024 and is republished here with permission.

Daniel E. Cummins
Cummins Law

Pa. High Court Shows Continuing Signs of Moderation With Regular Use Exclusion Holding

February 29, 2024

By Daniel E. Cummins 

On Jan. 29, the Pennsylvania Supreme Court issued its long-awaited and much anticipated decision in the regular use exclusion case of Rush v. Erie Insurance Exchange, No. 77 MAP 2022 (Pa. Jan. 29, 2024)(Maj. Op. by Donohue, J.)(Concurring Op. by Wecht, J.) and, in doing so, seemed to signal a possible continuing movement away from its previous penchant for advancing plaintiffs’ causes in personal injury matters and toward a more reasoned, moderate approach to civil litigation questions of law.

Over the past five years or so, the Pennsylvania Supreme Court had handed down decision after decision, along with important civil litigation rule changes, that all largely advanced plaintiffs’ abilities to recover more and more compensation in a wider variety of circumstances.

More specifically, the Pennsylvania Supreme Court allowed for more liberal venue Rules of Civil Procedure for medical malpractice actions and also issued rules allowing for increased recoveries on appeals from personal injury arbitration proceedings. The court additionally issued decisions that seemed to relax venue rules for internet-based defamation claims (Fox v. Smith) and other types of personal injury claims. The Pennsylvania Supreme Court also issued decisions that expanded the plaintiff’s ability to recover from governmental entities (Cagey v. PennDOT and Balentine v. Chester Water Authority) and automobile insurance carriers (Gallagher v. Geico).

More recently, however, in 2023 the Supreme Court began to show signs of moderation with its decisions in the civil litigation arena. In the case of Erie Insurance Exchange v. Mione, 289 A.3d 525 (Pa. Feb. 15, 2023), the Pennsylvania Supreme Court, without acknowledging that it was doing so, stepped significantly back from its previous effort in the Gallagher v. Geico case to eradicate the household exclusion found in automobile insurance policies as void and unenforceable across the board. In Mione, the court rejected the argument by the plaintiff that the Gallagher decision should be read as having served to invalidate the exclusion in all cases in Pennsylvania.

In another recent decision evidencing moderation on the part of the court, in the case of first impression of Franks v. State Farm Mutual Automobile Insurance, 292 A.3d 866 (Pa. April 19, 2023) (Op. by Mundy, J.), the court issued a decision that favored insurance carriers by ruling that the removal of a vehicle from a multiple motor vehicle insurance policy, in which stacked coverage had been previously waived through a waiver form executed by the insured, did not require the insurance carrier to secure another written waiver of stacked coverage from the insured under Section 1738(c).

Now, with its January, 2024 decision in the case of Rush, the Pennsylvania Supreme Court has ruled that, as presented in this case, the regular use exclusion contained in motor vehicle insurance policies does not violate the express language of Pennsylvania’s Motor Vehicle Financial Responsibility Law (MVFRL).

The plaintiff in Rush was a police officer who was injured in a motor vehicle accident while driving his police vehicle at work. The plaintiff recovered the liability limits from the tortfeasor’s policy as well as the UIM limits that were available on the police vehicle.  

The plaintiff then sought to obtain additional recoveries from the Erie Insurance policies that covered his personal vehicles at home. Erie Insurance relied upon a regular use exclusion contained in the policy that covered the plaintiff’s personal vehicles to deny coverage on the additional UIM claim.

The trial court and the Pennsylvania Superior Court had ruled, in part, that the regular use exclusion violated the provisions of the MVFRL, and in particular, the terms of 75 Pa.C.S.A. Section 1731.  

More specifically, the lower courts had held that the regular use exclusion conflicted with the language of Section 1731′s mandate requiring the provision of UIM coverage to insureds in that the exclusion limited the scope of the coverage provided by Section 1731 by precluding coverage if an insured is injured while using a motor vehicle that the insured regularly used but did not own.

As noted, in its Rush decision, the Pennsylvania Supreme Court reversed the lower courts’ decisions and upheld the validity and enforceability of the regular use exclusion.

In so ruling, unlike what it did in its Gallagher v. Geico decision on the validity of the household exclusion, the Pennsylvania Supreme Court pointed to prior decisions it had rendered in which it had repeatedly upheld the validity of the regular use exclusion. The court found the plaintiff’s arguments in this Rush case to be a mere recitation of at least one of the same arguments that had been previously rejected by the court in its prior decisions relative to the validity of the regular use exclusion.

The Pennsylvania Supreme Court rejected the plaintiff’s argument that the MVFRL required that UIM coverage must be provided in all circumstances regardless of which vehicle the injured party was located in at the time of the accident. The court noted that, to accept such an argument would render all exclusions invalid.  

The Supreme Court also rejected the plaintiff’s reliance upon the Pennsylvania Supreme Court’s decision in Gallagher v. Geico for the proposition that the regular use exclusion should be eradicated across the board just as the household exclusion had been eradicated in Gallagher as a allowing for a de facto waiver of stacked coverage when the MVFRL instead required the carrier to secure a written waiver of coverage from its insureds.

In this Rush v. Erie Insurance Exchange case, the Pennsylvania Supreme Court confirmed that it had previously clarified and narrowly limited its Gallagher decision in its more recent decision in the case of Erie Insurance Exchange v. Mione.  

Here, in Rush v. Erie Insurance Exchange, the Supreme Court ruled that “if the MVFRL does not require that UIM coverage follow the insured in all circumstances, then the MVFRL cannot be read to prohibit exclusions from UIM coverage.” As such, the court ruled that the terms of the UIM insurance contract between the parties still controlled relative to the scope of the UIM coverage available, or not available, and that, therefore, the regular use exclusion remained enforceable.  

The language utilized by the Pennsylvania Supreme Court seemed to indicate that it had heard the criticisms of some commentators regarding the apparent judicial activism of the court in favor of the plaintiff’s causes to the point where the court was arguably enacting changes in the law that would ordinarily come from the legislative branch of the court. In specifically holding that the regular use exclusion remained a permissible limitation of UIM coverage within the language of the MVFRL, the Pennsylvania Supreme Court wrote in Rush that, “with … no justification to allow this court to depart from decades of established law” that civil litigators had relied upon, the court held that it would maintain its continued course on this issue “unless and until the General Assembly or the insurance department acts in a way that would suggest we do otherwise.” 

Ultimately, contrary to its previous penchant to chart new avenues of recovery for injured plaintiffs regardless of established judicial precedent on the books for decades, the Pennsylvania Supreme Court implicitly acknowledged the continuing validity of the doctrine of stare decisis by stating that it was “bound by our prior decisions” to overrule the lower court decisions and hold that the regular use exclusion remained valid and enforceable.

Having previously shown a willingness to make startling changes in the status quo of civil litigation jurisprudence, but now showing signs of moderation, it will be interesting to see where the Pennsylvania Supreme Court goes from here in its handling of personal injury civil litigation matters.

Daniel E. Cummins is the managing partner of the Clarks Summit law firm of Cummins Law, a civil litigation practice. He also conducts mediations of civil litigation matters through Cummins Mediation Services. Cummins is also the sole creator and writer of the Tort Talk Blog (www.TortTalk.com), which is designed to provide continuing updates on important cases and trends in Pennsylvania civil litigation law.  He can be reached at dancummins@cumminslaw.net.

Reprinted with permission from the February 29, 2024 edition of the Pennsylvania Law Weekly. © 2024 ALM Global Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-256-2472 or asset-and-logo-licensing@alm.com.