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Pennsylvania Appellate Court Holds the Cause of Personal Injury, Not the Conduct of the Insured, Triggers an Insurer’s Motor Vehicle Exclusion

Insurance policies provide coverage for certain, spelled-out risks. But coverage is not exhaustive, and it is important to read insurance policy exclusions carefully. A recent Pennsylvania appellate decision held that the motor vehicle exclusion in a homeowner insurance policy excluded coverage for fatalities suffered in accidents involving a motor vehicle owned by the insured. In Theresa Wolfe v. Robert Ross, the Pennsylvania Superior Court reviewed a lower court’s verdict in favor of the insured, limiting coverage for a fatality as provided by the exclusion in the homeowner policy.

This case involved a fatality suffered by a 19-year-old who drank alcohol at a graduation party and then left the party on a dirt bike owned by the homeowner’s son. He lost control of the bike and was fatally injured in a collision with a fixed object. As the administratrix of his estate, his mother commenced a civil action for wrongful death and survival against the homeowner, the man who hosted the party at his residence. Her allegations were based on his negligence, as the homeowner, in providing alcohol to her underage son.

The insurance company refused to defend the claim, based on the motor vehicle exclusion in the homeowner policy that precluded coverage for “bodily injury arising out of..use…of a motor vehicle owned by the insured.” Prior to trial, the parties agreed to a consent judgment against the homeowner for the sum of $200,000. In addition, the homeowner assigned the rights under his homeowner policy to the administratrix. She then proceeded to try and collect the judgment by garnishing the proceeds of the homeowner’s policy. The insurance company and administratrix stipulated to certain facts, eventually agreeing that the case was ripe for decision regarding coverage for claims.

Both parties filed motions for summary judgment, and the trial court entered summary judgment in favor of the insurance company. The administratrix appealed. On appeal, the court framed the issues: was the motor vehicle exclusion ambiguous because it did not make clear if the injury must be proximately caused by the vehicle or causally connected with its use, and did the trial court err in failing to find the exclusion inapplicable when the victim operated the vehicle and the insured may have negligently provided alcohol to the underage operator of the vehicle?

The appellate court stated that interpreting insurance contracts is to figure out the intent of the parties, as shown by the terms in the written policy. And ambiguous terms are construed in favor of the insured. Here, the court held the language in the exclusion made clear that it is the cause of the injury, not the conduct of the insured, that triggers the exclusion.  In other words, the homeowner served alcohol to a minor, subjecting him to liability. This conduct is separate from the policy language excluding coverage for injuries arising out of the use of a motor vehicle.   And in this case, the use of the motor vehicle was the proximate cause and the cause in fact of his injury. The exclusionary language, the court held, was not ambiguous based on the facts of this case.

The administratrix made two more attempts to “escape the exclusion,” according to the court. First, she argued that the motor vehicle exclusion only applied when the insured used a motor vehicle and injured another person. The court dismissed this, based on the express language of the policy.

Second, she claimed that providing alcohol was the proximate cause of the accident. The liability provision, she argued, was only concerned with the conduct of the insured, not the decedent. But the court rejected the contention that the nature of the claim pled, in this case, negligence, determines whether the exclusion applies or not. In other words, it does not matter that the homeowner was thought to have negligently provided alcohol to the decedent before his accident.

On a related note, the administratrix argued for concurrent causation, but the court rejected this because the motor vehicle played an active role in and was instrumental to the decedent’s fatal injuries. The court held that an independent concurrent causation approach would still bar coverage based on the facts. The motor vehicle caused the decedent’s death.

Finally, the court turned to public policy and looked at the rationale for excluding certain injuries. Insurers can limit their liability and impose conditions on obligations as long as they do not oppose law or public policy.   Here, the insurance company was seeking to avoid higher risks associated with motor vehicles, traditionally covered by an auto insurance policy. The exclusion is in place, the court held, excluding homeowner’s coverage for the death of the administratrix’s decedent and affirming the order of summary judgment.

This case demonstrates the importance of securing competent legal representation in all phases of litigation, and particularly an attorney familiar with insurance policies.  The personal injury attorneys at the Needle Law Firm are experienced at maximizing recovery on insurance claims.  For a free, confidential consultation, contact our office at 570-344-1266 or through our online form.

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