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Court Reverses GEICO’s Win in Regular-Use Exclusion Case

Posted On Behalf of Schmidt Kramer Injury Lawyers on May 13, 2012 in General

Copyright 2010. ALM Media Properties, LLC. All rights reserved.  The Legal Intelligencer.
Page printed from:  The Legal Intelligencer
Gina Passarella 08-10-2010 A Philadelphia trial court improperly granted GEICO’s motion for summary judgment in a case where the plaintiff was denied underinsured motorist coverage because of a regular-use exclusion in his policy, the Superior Court ruled. The panel in Dixon v. GEICO said Lamont Dixon raised a valid question of material fact as to whether the vehicle he was transporting for work was one regularly used by him to the point it would fall under his personal insurance policy’s regular-use exclusion of UIM coverage. The court said whether a vehicle is excluded under a regular-use clause is normally a jury question and can only be decided as a matter of law by the court when the facts are not in dispute and reasonable minds could not differ. Senior Judge John T. J. Kelly Jr. said Dixon, a garage employee of the U.S. Postal Service, had presented evidence to show the vehicle in question was not given to him for regular use. “He had a variety of job duties, many if not most of which did not involve any use of a vehicle,” Kelly said. “He did not have regular or recurring access to this vehicle, or any vehicle from a fleet. In fact, the vehicle in question was not provided for his use at all. He was merely returning it somewhere else.” “His one time ferrying of the mail delivery vehicle in question, after repair, was merely a transport of the restored vehicle back to its primary location in West Philadelphia where someone else would put it to regular use, delivering mail,” Kelly said. Dixon worked at a USPS vehicle repair facility where his duties included washing vehicles, replacing fluids or lights, operating a tow truck, snow removal and transporting vehicles from one location to another. On Dec. 6, 2007, Dixon was in route to drop off a mail truck in West Philadelphia and was driving southbound on Roosevelt Boulevard. He suffered substantial injuries when someone allegedly made an illegal left turn into his lane of travel, Kelly said,. Dixon settled with that Driver’s insurer for the $15,000 in policy limits and then made a UIM claim against GEICO under his personal insurance policy. GEICO denied the claim under the regular-use exclusion in the policy. That exclusion stated in relevant part that coverage does not apply “‘when using a motor vehicle furnished for the regular use of you, your spouse, or a relative who resides in your household, which is not insured under this policy,’” according to the opinion. The trial court granted GEICO’s motion for summary judgment and on appeal, Dixon raised three issues: whether the regular-use clause conflicts with the Motor Vehicle Financial Responsibility Law, whether the vehicle at issue was regularly used and whether the clause violates public policy. The Superior Court ruled the first and third issues were waived on appeal. He would have lost on those claims even if they weren’t waived, Kelly said, because the state Supreme Court has already ruled in the 2002 opinion in Burstein v. Prudential Property and Casualty Insurance Co. that a regular-use exclusion does not violate public policy and is not in conflict with MVFRL. The Supreme Court recently granted allocatur in a similar case, Williams v. GEICO, to determine whether, under MVFRL and Burstein, the exclusion is valid where the insured is a police officer injured while driving a police car for which he didn’t have the option of obtaining UIM coverage. Kelly said the court was bound by existing precedent, even if its future viability is in question. In examining whether the exclusion should apply in Dixon’s case, Kelly said the facts don’t match any controlling case law to the point that the answer is a foregone conclusion. “Notably, this is not a case where [Dixon] was furnished a vehicle for business or personal use,” Kelly said. “Nor is it a case where [Dixon] was regularly assigned a vehicle for business, or a combination of business and personal use. He was not furnished a vehicle from a fleet, either for personal use as a benefit of employment, for commuting back and forth to work, or for the performance of his other job duties, such as police patrol or driving a taxicab.” In her concurring opinion, Judge Paula F. Ott emphasized the issue in the case is how often Dixon drives vehicles from the post office’s fleet and whether the frequency of his driving qualifies as regular use. Ott said it’s undisputed Dixon’s job entails driving vehicles of the post office fleet and that he is not driving any specific or particular vehicle. To the extent the interpretation of the exclusion rests on the fact that Dixon operates vehicles from a fleet of cars, case law would say the exclusion applies, she said. Ott said the record is lacking when it comes to how often he drives the vehicles, making summary judgment inappropriate. Kelly was joined in his opinion by Judge John T. Bender. John C. Capek of Gerson Capek & Voron in Philadelphia and Scott B. Cooper of Schmidt Kramer in Harrisburg represented Dixon. Platte B. Moring III of White & Williams represented GEICO. Cooper said the issue in Williams is whether a person who has no control over UIM coverage for a work vehicle should be excluded from seeking it under their personal policy based on a regular-use clause. If the Supreme Court rules they should not be excluded from coverage, then Cooper said the ruling would apply to Dixon who couldn’t control the coverage of any of the vehicles he drives for work. Cooper said both Williams and Dixon are examples of how insurance companies “went a bit too far with what the regular use exclusion.” Moring said GEICO has no immediate plans to appeal the Superior Court ruling. He said his client didn’t want to comment on the case until its conclusion.