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July 17th, 2024
In Jones v. Erie Insurance Exchange, 2024 PA Super 139 (July 3, 2024), the Pennsylvania Superior Court determined that the “regular use” contractual exclusion contained in the Jones’ personal automobile insurance policy issued by Erie (“Policy”) does not violate Pennsylvania’s Motor Vehicle Financial Responsibility Law (MVFRL).
This case was remanded to the Superior Court following the Pennsylvania Supreme Court’s decision in Jones v. Erie Ins. Exch., 2024 WL 1733705, 253 WAL 2022 (Pa. 2024) (per curiam) (Jones II). The Jones II Court granted Erie’s petition for allowance of appeal of this panel’s prior decision in Jones v. Erie Ins. Exch., 282 A.3d 1139 (Pa. Super. 2022) (Jones I). The Supreme Court vacated Jones I and remanded the matter to this Court for further proceedings consistent with Rush v. Erie Ins. Exch., 308 A.3d 780 (Pa. 2024) (Rush II).
By way of brief history, John Jones was operating his employer’s, Time Warner Cable’s, bucket truck when he became involved in a motor vehicle accident with a third party driver. Jones suffered various injuries due to this accident. The third party driver’s insurer paid the Jones the $100,000.00 maximum allowed under the third party driver’s automobile insurance policy. However, the Jones subsequently filed a supplemental claim for Under Insure Motorists (“UIM”) coverage with their automobile insurance policy (“Policy”) with Erie Insurance (“Erie”), claiming their injuries and damages exceeded the third party driver’s coverage limit. Erie denied the Jones’ UIM claim pursuant to the “regularly used, non-owned vehicle exclusion” (“regular use exclusion”) contained in Policy because Jones was operating his employer’s vehicle, for which the Jones’ had not purchased insurance.
The Jones sued Erie alleging breach of contract. Erie filed a motion for judgement on the pleadings alleging that the Jones’ claim was barred by the regular use exclusion in the Policy. The Jones argued that the regular use exclusion was unenforceable as being contrary to the MVFRL. The trial court granted Erie’s motion citing Burstein v. Prudential Property and Das. Ins. Co., 809 A.2d 204 (Pa. 2002) and Williams v. Geico Government Employees Ins. Co., 32 A.3d 1195 (Pa. 2011), which held that the “regularly used, non-owned vehicle exclusion” is valid and enforceable under the MVFRL and public policy. The Superior Court reversed the trial court, holding that the Policy’s regular use exclusion was unenforceable as violative of Section 1731 of the MVFRL, concluding, Rush v. Erie Ins. Exch., 265 A.3d 794 (Pa. Super. 2021) (Rush I) was controlling. In Rush I, the Superior Court held that the regular use clause of an insurance contract contravenes Section 1731 of the MVFRL. Jones I, 282 A.3d at 1145. However, following the Superior Court’s decision in Jones I, the Supreme Court overruled Rush I, stating, the Superior Court’s conclusion that the regular use exclusion violates the language of the MVFRL was erroneous. Rush II, 308 A.3d at 802. The Rush II Court determined that prior Supreme Court precedent (i.e., Burstein and Williams) controlled the outcome of the appeal. Rush II, 308 A.3d at 791.
Because the Supreme Court unambiguously held regular use exclusions do not violate the MVFRL, constitute “a permissible limitation of UIM coverage,” and comport with prior Supreme Court precedent in Rush II; and in light of the Supreme Court’s directive in Jones II, requiring this Court to apply Rush II to the instant case, the Court concluded the trial court properly granted Erie’s motion for judgment on the pleadings.
The opinion in Jones v. Erie Insurance Exchange, 2024 PA Super 139 (July 3, 2024) can be accessed here.
