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2024 PA Super 139

JOHN JONES AND TANYA JONES

Appellants

v.

ERIE INSURANCE EXCHANGE :

:

:

:

:

:

:

:

: IN THE SUPERIOR COURT OF

PENNSYLVANIA

No. 690 WDA 2020

Appeal from the Judgment Entered June 30, 2020

In the Court of Common Pleas of Erie County

Civil Division at 11527

- 2019

BEFORE: STABILE, J., MURRAY, J., and McLAUGHLIN, J.

OPINION BY MURRAY, J.: FILED: JULY 3, 2024

In this underinsured motorist (UIM) automobile insurance action, John

Jones and Tanya Jones (Appellants) appeal from the judgment entered against

them and in favor of Erie Insurance Exchange (Erie) , following the trial court’s

grant of Erie’s motion for judgment on the pleadings

. At issue is whether the

“regular use” contractual exclusion

, contained in Appellants’ personal

automobile insurance policy issued by Erie (Policy)

, violates Pennsylvania’s

Motor Vehicle Financial Responsibility Law (MVFRL)

. 1 This case returns to us

_________________ __________ ______ ____ _______

1 T he MVFRL

, 75 Pa.C.S.A. § 1701, et seq.

, “ is comprehensive legislation governing the rights and obligations of the insurance company and the insured under liability insurance policies covering motor vehicles.” Sayles v. Allstate

Ins. Co. , 219 A.3d 1110, 1124 (Pa. 2019) (citation omitted)

. As our Supreme

Court recently explained in the pivo ta l case, Rush v. Erie Ins. Exch. , 308 A.3d 780 (Pa. 2024) ( Rush II )

, the “ provisions of the MVFRL pertaining to the required scope of coverage and content of automobile insurance policies,

and benefits payable thereunder, impose mandatory obligations applicable to all automobile insurance providers ” in Pennsylvania

. Id. at 790 ( citation
(Footnote Continued Next Page)J

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on remand

, following the Pennsylvania Supreme Court ’s decis ion in Jones v.

Erie Ins. Exch. , 2024 WL 1733705, 253 WAL 2022 (Pa. 2024) ( per curiam )

( Jones II ). T he 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 )

. 2 The Supreme Court vacated Jones I and remanded

the matter to th is C ourt “ for further proceedings consistent with Rush [ II

. ]”

Jones II ; see also generally Rush II

. Consistent with Jones II and Rush

II , w e affirm.

_________________ __________ ______ ____ _______

omitted ) ; see also 75 Pa.C.S.A. § 1731 (c) (governin g the availability and

scope of UIM coverage

, and content of the contractual UIM rejection provision ).

2 This Court in Jones I reversed the trial court’s order granting Erie’s motion for judgment on the pleadings

, and remanded for further proceedings

. See generally Jones I , 282 A.3d 1139

. We conclud ed the trial court erred as a matter of law in failing to apply then

- existing precedent ( i.e.

, the predecessor

of Rush II

, supra )

. See id. (applying Rush v. Erie Ins. Exch

. , 265 A.3d 794 (Pa. Super. 2021) ( Rush I ) (overruled by Rush II , 308 A.3d at 802 (concluding “ r egular use ” automobile insurance policy exclusion s constitute “a permissible limitation of UIM coverage

, ” and are not violat ive of the MVFRL or public policy ) ). Specifically, th e panel in Jones I held the Policy’s regular use

exclusion was unenforceable as violative of Section 1731 of the MVFRL, concluding , “ Rush [ I ] is controlling.” Jones I , 282 A.3d at 1145; see also

id. (“[ U ] ntil the Supreme Court overrules Rush [ I ]

, [that] decision is the

law of this Commonwealth.” (citation and internal quotation marks omitted; emphasis added)). T hus, we “ conclude[d] the trial court erred in granting Erie’s motion for judgment on the pleadings, as its right to succeed was not

certain.” Id. at 1149.

We further note that the trial court did not have the benefit of Rush I

at the time of its grant of Erie’s motion for judgment on the pleadings

, and subsequent filing of its Pa.R.A.P. 1925(a) opinion

. See generally Trial Court Opinion, 9/11/20; O rder and O pinion , 6/17/20

.J

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A detailed factual history is unnecessary to address the legal issue

presented on remand

. Briefly

,

[t] his case stems from a motor vehicle accident wherein [a]ppellant John Jones [(Jo nes )] 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 to [Appellants] the $100,000.00 maximum allowed under the third party driver’s [automobile insurance] policy. However, Appellants subsequently filed a supplemental claim for ... [UIM] co verage with [Erie], their own personal automobile

insurer [, claiming their injuries and damages exceeded the third party driver’s coverage limit ] . [Erie] denied Appellants’ UIM claim pursuant to the “regularly used, non

- owned vehicle exclusion” [(regular use exclusion) 3 ] contained in Appellants’ [P] olicy because ... Jones was operating his employer’s vehicle, for which Appellants had not purchased insurance.

Trial Court Opinion, 9/11/20, at 1

- 2 (footnote added) ; see also id. at 2 ( “T he

material facts ... are not in dispute

, ” including that Jones regularly used the

vehicle for work )

.

On August 30, 2019, Appellants filed a complaint against Erie assert ing

one count of breach of contract. Erie filed an answer, new matter, and

counterclaim on October 4, 2019. Erie filed its motion for judgment on the

pleadings on February 3, 2020 , claiming “pursuant to Pennsylvania law ...,

[Appellants’ UIM] claim is barred by the ‘regular use’ exclusion

. ” Motion for

_________________ __________ ______ ____ _______

3 The regular use exclusion limited the scope of UIM coverage under the Policy

. Specifically, it provid ed that UIM insurance coverage would not apply to, “bodily injury to ‘you’ ... using a non

- owned ‘motor vehicle’ ... which is regularly used by ‘ you ’ ... but not insured for U ninsured or U nderinsured M otorist s C overage under this [P] olicy.” Complaint , 8/30/19, Ex. 1 ( P olicy UIM/UM Coverage Endorsement at p. 3 ) ( emphasis omitted).J

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Judgment on the Pleadings, 3/3/20, ¶ 29. Appellants filed a response , arguing

the regular use exclusion was unenforceable as being contrary to the MVFRL

and public policy

. See generally Brief in Opposition, 3/ 2 / 20

.

After a hearing

, by order an d opinion entered June 17, 2020

, the trial

court granted Erie’s motion for judgment on the pleadings

. Judgment was

entered in Erie ’s favor on June 30, 2020. A ppellants timely filed a notice of

appeal

. Appellants and the trial court complied with Pa.R.A.P. 1925

.

In its Rule 1925(a) o pinion, t he trial court rejected Appellants’ claims

and determin ed it properly granted judgment on the pleadings, reasoning in

relevant part :

In Pennsylvania, the “ regularly used, non

- owned vehicle

exclusion ” has been held by the [Pennsylvania] Supreme Court to

be valid and enforceable under the MVFRL and public policy. See

Bur [] stein v. Prudential Property and Cas. Ins. Co. , 809 A.2d 204 (Pa. 2002); Williams v. Geico Government Employees

Ins. Co. , 32 A.3d 1195 (Pa. 2011)[.]

Trial Court Opinion, 9/11/20, at 6

. 4

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4 The trial court a dditionally distinguish ed the primary authority upon which Appellants relied, Gallagher v. Geico Indem. Co. , 201 A.3d 131 (Pa. 2019)

. See Trial Court Opinion, 9/11/20, at 7

- 11; Order and Opinion, 6/17/20, at 3, 4 (concluding

, “ the Gallagher case does not apply to the regularly used, non

owned vehicle exclusion to []UIM automobile insurance coverage in Pennsylvania,” or implicate MVFRL Section 1731 (internal quotation marks omitted)). The Gallagher Court held a different automobile insurance policy exclusion, the “household vehicle exclusion,” was unenforceable as violat ive

of a section of the MVFRL not implicated in the instant appeal

, 75 Pa.C.S.A. §

1738

. See Gallagher

, 201 A.3d at 138

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Following proceedings not relevant to this appeal, this panel issued our

opinio n in Jones I on September 7, 2022. See generally Jones I

, 282 A.3d

1139

. As mentioned above, in reversing the grant of Erie’s motion for

judgment on the pleadings, we concluded Rush I was controlling. 5 Id. at

1145 ; see also id. at 1143

- 4 5 (discussing Rush I , and the parties’ respective

arguments concerning Rush I and MVFRL Section 1731 )

.

As our Supreme Court explained,

[i] n [ Rush I ]

, the Superior Court observed that Section 1731 of

the MVFRL governs the scope of UIM coverage in Pennsylvania. [ Rush I

, 265 A.3d ] at 796 (citing 75 Pa.C.S. § 1731). Specifically,

it highlighted that Section 1731(c) provides that “ absent a rejection of coverage, insurers shall provide UIM coverage that

‘ protect[s] persons who suffer injury arising out of the

maintenance or use of a motor vehicle and are legally entitled to

recover damages therefor from owners or operators of

underinsured motor vehicles. ’” Id. (citing 75 Pa.C.S. § 1731(c)).

Based upon this language, the Superior Court concluded that

Section 1731(c) “ mandates ” insurers to provide coverage when

the insured: (1) suffers injuries arising out of the maintenance or

use of a motor vehicle, (2) is legally entitled to recover damages

from the at

- fault underinsured driver; and (3) has not rejected

UIM benefits by signing a valid rejection form. Id. at 796

- 97.

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5 In Jones I , we additionally cited

, as persuasive

, the federal district court’s

decision in Johnson v. Progressive Advanced Ins. Co.

, 587 F. Supp. 3d 277 (W.D. Pa. 2022). See Jones I , 282 A.3d at 1145

- 48; see also id. at 1145 n.4 (“ Pennsylvania Courts may look to federal case law for

its persuasive value.” ( citation and quotation marks omitted)). The Johnson Court stated, “ [B ] ecause the Superior Court in Rush [ I ]

... held that the regular use clause of an insurance contract contravenes Section 1731 of the
MVFRL, [the federal court] is bound by that decision, as it is the most current body of law governing this discreet issue .” Johnson

, 587 F. Supp. 3d at 285

- 86 ( footnote and hyphen omitted) ; see also id. at 286 n.5 (stating the Court was not “convinced” that the highest Court of this Commonwealth might eventually decide contrary to Rush I ).J

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- The [ Rush I ] Court further emphasized that Section 1731

defines the scope of UIM coverage broadly, as such coverage is required whenever an insured suffers injuries “ arising out of the

... use of a motor vehicle. ” Id. at 797 (quoting 75 Pa.C.S. § 1731(c)) (emphasis in original) (internal quotations omitted). According to the court, Section 1731 considers neither the owner of the vehicle nor the frequency with which the insured uses it.

Id. The Superior Court concluded that the “ regular use ” exclusion

conflicts with the broad language of Section 1731(c) ’ s coverage mandate because it limits “ the scope of UIM coverage required by

Section 1731 by precluding coverage if an insured is injured while using a motor vehicle that the insured regularly uses but does not

own. ” Id.

Rush II , 308 A.3d at 783

- 84 (footnote omitted ).

In Rush II , the Supreme Court overrul ed Rush I

, stating, “t he Superior

Court’s conclusion that the regular use exclusion violates the language of the

MVFRL is erroneous.” Id. at 802 (internal quotation marks omitted)

. The

Rush II Court determined that prior Supreme Court precedent ( i.e.

, Burstein

and Williams ) 6 “ control [s] the outcome of this appeal. ” Rush II , 308 A.3d

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6 In Burstein

, the plaintiffs were injured while occupying an employer

- owned

vehicle , which they regularly used. Burstein

, 809 A.2d at 205. The plaintiffs

filed a UIM claim with their personal automobile insurer/defendant

. Id. The

defendant denied coverage under the regular use exclusion of the plaintiffs’ insurance policy. Id. The plaintiffs filed an action claiming the regular use exclusion was unenforceable as violative of public policy. Id. at 205

- 06. The trial court agreed

, and this Court later affirmed. Id. at 206. However, our Supreme Court reversed, concluding the regular use exclusion “ comport [ s ] with the underlying policies of the MVFRL ” and is enforceable

. Id. at 210. The Supreme Court reasoned that invalidating regular use exclusions would

force insurers “to increase the cost of insurance , which is precisely what the public policy behind the MVFRL strives to prevent.” Id. at 208.

In Williams , our Supreme Court “ reaffirm[ed] Burstein and h[e]ld that the regular use exclusion is not void as against public policy.” Williams , 32
(Footnote Continued Next Page)J

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at 791 ; see also id. at 791

- 79 5

, 796

- 800 (exhaustively analyzing Burstein

and Williams )

.

There is no doubt that this Court held in both Burstein and

Williams that the regular use exclusion is permissible under

the MVFRL , and that the interpretation has persisted for two

decades without a legislative response.

Id. at 795 (internal quotation marks omitted ; emphasis added ) ; see also

Burstein

, 809 A.2d at 20 8

- 10 ; Williams , 32 A.3d at 1 206

.

The Rush II Court opined

,

[i] f 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. Consequently, the insurance contract controls the scope of UIM coverage and the regular use exclusion is enforceable.

Rush II , 308 A.3d at 801 (internal quotation marks omitted)

.

The Rush II Court concluded

,

because we find that Burstein and Williams resolved the issue presented in this appeal, we continue to hold that the regular

use exclusion is a permissible limitation of UIM coverage under the MVFRL

. With decades of reliance by insureds and insurers, and no justification to allow this Court to depart from decades of established law, we maintain our course unless and until the General Assembly or the Insurance Department acts in a way that would suggest we do otherwise

.

Id. at 802 (footnote and internal quotation marks omitted ; emphasis added ).

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A.3d at 1206 (hyphen omitted) . The Supreme Court further rejected the appellant’s claim that regular use exclusions violate MVFRL Section 1731. Id.

at 1207

- 08. The Court reason ed, “ to preclude long

- standing exclusions to UIM coverage on public policy grounds would violate” the rule of stare decisis

, which “ requires adherence to prior decisions interpreting specific statutory language.” Id

. at 1208.J

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Following Rush II

, our Supreme Court decided Jones II o n April 23,

2024

. The Jones II Court vacated this Court’s decision in Jones I , and

remanded the matter “for further proceedings consistent with Rush [ II

. ]”

Jones II , 2024 WL 1733705

.

In their appellate brief

, 7 Appellants present three issues:

A. Whether the “regular use” exclusion may not be enforced

because to do so would conflict with this Court’s decision in

Rush [ I ] ?

B. Whether the “regular use” exclusion may not be enforced

because it operates to limit the scope of underinsured motorist coverage required by the MVFRL?

C. Whether the “regular use” exclusion is unenforceable because it is contrary to public policy articulated in the MVFRL?

Appellants’ Brief at 3

- 4 (c itation and some c apitalization modifi ed).

We simultaneously address Appellants ’ related issues . In applying Rush

II

, and addressing the pure question of law before us, our scope of review is

plenary and our standard of review is de novo

. Rush II , 308 A.3d at 789

- 90

(citing Generette

, 957 A.2d at 118 9)

. Moreove r, a “motion for judgment on

the pleadings will be granted where, on the facts averred, the law says with

certainty that no recovery is possible.” Ins. Fedn. of Pa., Inc. v.

Commonwealth , 970 A.2d 1108, 1114 (Pa. 2009) (citation omitted).

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7 Following the Supreme Court’s remand in Jones II

, this Court did not direct the parties to file new briefs

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The Supreme Court’s holding in Rush II is clear

. Rush II

unambiguously held r egular use exclusions do not violate the MVFRL,

constitute “a permissible limitation of UIM coverage

, ” and comport with prior

Supreme Court precedent

. Rush II , 308 A.3d at 802 ; see also id. (“ [W] e

are bound by our prior decisions in Burstein and Williams in upholding the

‘regular use’ exclusion as a permissible limitation of UIM coverage. ”). Equally

clear is the Supreme Court’s directive in Jones II

, requiring this Court to

apply Rush II to the instant case. 8 Jones II , 2024 WL 1733705

.

A s stated above, the trial court in this case correctly opined that regular

use exclusion s “ ha [ve] been held by the Supreme Court to be valid and

enforceable under the MVFRL and public policy. ” Trial Court Opinion, 9/11/20,

at 6 (citing Burstein and Williams ) ; see also Rush II , 308 A.3d at 802.

Accor dingly, we conclude the trial court properly grant ed Erie’s motion for

judgment on the pleadings , as “ the law says with certainty that no recovery

is possible.” Ins. Fedn. of Pa. , 970 A.2d at 1114; see also generally Rush

II

.

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8 The parties did not have the benefit of Rush II when they filed their briefs

in this Court in 2022

. Appellants rel y on the overruled Rush I decision to support their claim s of trial court error in granting Erie’s motion for judgment on the pleadings

. See

, e.g. , Appellants’ Brief at 6, 10

- 14, 18

- 19, 2 2 ; Appellants’ Reply Brief at 1

- 4. Erie correctly counter s that Rush I is contrary

to established Supreme Court precedent, namely, Williams and Burstein

. See Appellee’s Brief at 31

- 33, 35. Erie claims Rush I was “improperly decided

... and is in discord with the rest of the appellate decisions on this issue.” Id.

at 35; see also id. at 8 ( arguing Rush I “is ‘on an island’ as the sole decision finding that the ‘regular use exclusion,’ ... violate[d] 75 Pa.[]C.S. § 1731.”).J

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Based on the foregoing

, and consistent with Rush II

, n one of

Appellants’ issues entitle them to relief. Accordingly , we affirm the judgment

entered in favor of Erie.

Judgment affirmed.

Judge McLaughlin joins the opinion.

Judge Stabile concurs in the result.

DATE: 7/3/2024