By Kevin L. Connors, Esquire

Recently, the Pennsylvania Superior Court, in an Opinion authored by Justice Shogan on April 17, 2015, upheld a “named driver only” provision in an automobile insurance policy, under which the insurance carrier, was only required to provide coverage for the named insured driver, and not for the operator of the vehicle that was insured under the automobile insurance policy.

The case is Byoung Suk An v. Victoria Fire & Casualty Co., d/b/a Titan Auto Insurance.

The Plaintiff, Byoung Suk An, was injured in a motor vehicle accident that had occurred on March 20, 2011.

The Plaintiff filed a Declaratory Judgment Action against two Defendants, Matthew Gilmore and Zainab Walker, identifying Gilmore as the negligent operator of the vehicle owned by Walker, with Walker having been insured under a personal automobile insurance policy that had been issued by Titan, doing business as Victoria.

The Titan/Victoria insurance policy specifically indicated that it did not provide liability coverage for any person that was not listed as a “named driver” on its policy.

Only Walker was named on the policy as a driver.

Of course, the Plaintiff filed a Declaratory Judgment Action, seeking a declaration by the Court that the insurance carrier had a duty to defend and provide insurance coverage to both the driver of the car, as well as the owner of the car that was involved in the motor vehicle accident.

Titan/Victoria then filed a Motion for Summary Judgment, claiming no duty to defend or indemnify either the driver or the owner, as the insurance policy indicated: “we will not provide coverage when the driver of your auto is not listed on the policy.”

In response, the Plaintiff filed a Cross-Motion for Summary Judgment, arguing that the “named driver only” provision violated Section 1718(c) of the Pennsylvania Motor Vehicle Financial Responsibility Law, and was, otherwise, against public policy.

The Trial Court then entered an Order denying the Plaintiff’s Motion for Summary Judgment, and a separate Order granting the Motion for Summary Judgment of Titan/Victoria, thereby dismissing the Plaintiff’s Action for Declaratory Judgment.

The Plaintiff then appealed the Trial Court’s determination to the Superior Court, with the Superior Court upholding both Trial Court Orders, denying the Plaintiff’s Motion for Summary Judgment, and affirming the Summary Judgment entered in favor of Titan/Victoria.

Before the Superior Court, the Plaintiff argued that the Trial Court’s rulings on the Motions for Summary Judgment constituted errors of law, and that the rulings on the Motions for Summary Judgment abused the Trial Court’s discretion, in terms of interpreting Section 1718(c) of the Pennsylvania Motor Vehicle Financial Responsibility Law.

The Trial Court had concluded that Section 1718(c) referred to a “named driver exclusion”, allowing insurers to exclude a particular driver, as opposed to the situation presented in this case, where only the named driver was being provided coverage under the policy.

Claiming that the coverage exclusion was repugnant to the MVFRL, the Plaintiff sought to invalidate the provision by appealing the Trial Court’s rulings on Summary Judgment to the Superior Court.

Considering the insured’s Application for Coverage within the context of the insurance policy issued by Titan/Victoria, the Superior Court referenced the insured’s declaration, in his Application, that the insured had listed all persons who would be permitted to operate the vehicle, that the insured had agreed that any person not listed on the Insurance Application would not be permitted to operate the vehicle, and that the insured would notify the Insurance Agent, if someone not listed on the insurance policy was permitted to operate the vehicle, as that person would then need to be added to the policy, as a “named driver”.

Moreover, the Titan/Victoria insured had indicated that he:

“I understand that the policy being applied for WILL NOT provide coverage when a vehicle listed in the Vehicle Information section of the Application is being operated by any driver that is NOT LISTED in the Driver Information section of the Application.”

In addition, the Titan/Victoria policy also included a Coverage Exclusion, stating:

“This coverage does not apply to:

1. Bodily injury or property damage arising out of the ownership, maintenance or use of your auto by any person not listed as an insured on your policy.”

Reviewing Walker’s insurance policy from Titan/Victoria, the Superior Court determined that the policy did not provide a “named driver exclusion”, as it provided coverage “only for the driver named in the policy.”

For that reason, the Superior Court ruled that the policy was not in conflict with, nor contrary to, either Section 1718(c) of the PMVFRL, nor did the policy provision violate public policy principals.

In short, the Superior Court held in Byoung Suk An, that the “provision of low-cost, affordable policies and return for motor vehicle liability coverage of only the named driver, and the concomitant risk reduction, does not violate public policy.”

For that same reason, the Court concluded that this type of provision in an automobile insurance policy did not violate public policy, and was unambiguous, resulting in the Plaintiff’s Appeal to the Trial Court rulings on the Cross-Motions for Summary Judgment being affirmed, with the Plaintiff’s Appeal being dismissed.

It is not anticipated that the Supreme Court will grant allocator for this Decision, such that it is presumed that this Decision will be final in terms of an automobile insurance carrier offering “named driver only” coverage to its insureds.

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