“Regular Use” Exclusion Upheld, Again

Add another decision to the list of cases upholding the “regular use” exclusion in automobile policies. In Conti v. Castillo-Rodriquez, No. S-269-19 (C.P. Schuylkill Co. Sept. 25, 2020, Russell, J.), the court granted summary judgment in favor of Erie Insurance based upon an application of the regular use exclusion. The court’s opinion thoroughly analyzed Williams v. GEICO, 32 A.3d 1195 (Pa. 2011), and its progeny, and properly determined that the rationale of Williams applied to the “regular use” exclusion as opposed to the Pennsylvania Supreme Court’s holding in Gallagher v. GEICO Indemnity Company, 201 A.3d 131 (Pa. 2019).

The plaintiff, Mr. Conti, is a police officer who was injured in a motor vehicle accident while operating a police car provided to him for his regular use. After collecting policy limits from the third-party tortfeasor, the plaintiff demanded UIM coverage under his personal Erie auto policy. The Erie policy provided for $100,000/$300,000 UIM coverage limits with stacking coverage for two vehicles. Erie denied the claim under the “regular use” exclusion in the policy, which contained the following language: “(t)his insurance does not apply to . . . 11. bodily injury to ‘you’ or a ‘resident’ using a non-owned ‘motor vehicle’ or a non-owned ‘miscellaneous vehicle’ which is regularly used by ‘you’ or a ‘resident’ but not insured for Uninsured or Underinsured Motorists coverage under this policy.”

Erie’s new matter to the plaintiff’s complaint averred that Conti had been working as a police officer for the City of Hazelton and was operating a police vehicle in the regular course and scope of his employment at the time of the accident. The plaintiff did not specifically admit or deny these allegations in his response to new matter. At the summary judgment phase, however, the plaintiff did not contend that an issue of fact existed regarding the ownership of the vehicle or that his use of the police vehicle was “regular use.”

Both parties filed motions for summary judgment. The plaintiff argued that Sections 1731(c), 1731(d), and 1738 of the Pennsylvania Motor Vehicle Financial Responsibility Law and the Gallagher decision render the “regular use” exclusion invalid. Erie argued its “regular use” exclusion was clear and unambiguous and, therefore, the exclusion was valid and enforceable based on appellate court decisions, namely Williams.

The Conti court held that Williams—not Gallagher—governed the outcome before it. The Conti court held that the Pennsylvania Supreme Court “has not abrogated the reasoning set forth in Williams, supra., which is found controlling to the disposition of the case.” It quoted from the Gallagher court’s announcement that its “focus was narrow” and that it was “deciding the discrete issue before the Court” and “offer[ed] no opinion or comment on the enforceability of any other exclusion to UM or UIM coverage or to coverage in general.”

Given that there were no issues of fact to preclude the entry of summary judgment, the Conti court applied the regular use exclusion. It entered summary judgment in favor of the carrier and against the plaintiff.

Besides providing another well-reasoned opinion upholding the “regular use” exclusion, the Conti decision yields a helpful practice tip in defending “regular use” challenges: in new matter, be sure to allege facts showing the claimant was operating a vehicle designated for the claimant’s regular use and take that issue of fact out of contention—by stipulation or other fact discovery—as soon as possible. At least three times, the Conti decision mentions the fact that Conti did not own the vehicle, which was was provided for Conti’s “regular use.” Favorable application of Williams’ rationale became difficult to exclude based on that factual record.

*Brian is an associate in our Harrisburg, Pennsylvania office. He can be reached at 717.651.3529 or bcwauhop@mdwcg.com.

_{Defense Digest, Vol. 27, No. 2, March 2021 is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2021 Marshall Dennehey Warner Coleman & Goggin. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact tamontemuro@mdwcg.com.}