On September 18, 2017, the Superior Court of Pennsylvania affirmed summary judgement in favor of Safe Auto Insurance Company (“Safe Auto”) in Safe Auto v Oriental Guillermo.  The case stems from a two-car motor vehicle accident in Allentown, Pennsylvania on April 29, 2013.  Rachel Dixon  was driving a car that her boyfriend, Rene Oriental-Guillermo (“Oriental-Guillermo”) owned, and Priscila Jimenez was a passenger in the other vehicle.  Guillermo insured his car through Safe Auto, which had an Unlisted Resident Driver Exclusion, which excluded from coverage those individuals who lived with Oriental-Guillermo, but were not related to him and whom he did not specifically list on the policy.  Here, Dixon lived with Oriental-Guillermo, but was not related to him and was not listed as a driver on his policy.

On May 13, 2015, Safe Auto filed a declaratory judgment action to enforce the Exclusion, and Safe Auto’s a motion for summary judgement was granted by the trial court.  The trial court enforced the Exclusion and held that Safe Auto had no duty to defend or indemnify Dixon.  Priscila Jimenez and Luis Jimenez timely appealed arguing that: (1) the Exclusion does not apply to the facts of the case; and (2) the Exclusion is unenforceable because it violates the Motor Vehicle Financial Responsibility Law, 75 Pa.C.S. 7501 et seq. (“MVFRL”) and public policy of the Commonwealth of Pennsylvania.

The court held that the policy language was unambiguous, and further stated that there is no dispute that Dixon lived with Oriental-Guillermo, is unrelated to him, and he did not list her as an additional driver on the policy.  Thus, the trial court properly found that the exclusion applied and Safe Auto was not obligated to defend Dixon.

Next, the court considered whether the Exclusion violated the public policy expressed in the MVFRL.  Appellants specifically argued that the Exclusion contravenes the MVFRL’s requirement that an owner of a motor vehicle ensure that all drivers of his vehicle are covered by insurance.  The court held that this argument supports the trial courts interpretation of the exception because it places the onus on the owner of the vehicle to ensure that everyone who drives his car have insurance.  There is no provision in the MVFRL that suggests the legislature intended to shift the risk to insurance companies to insure unidentified individuals who live with the insured, but are not related to the insured.

Finally, the court held that the Exclusion does not violate public policy.  Appellants argued that the Exclusion is contrary to the MVFRL by analogizing it to a Named Driver Only Exclusion.  This type of policy allows a policyholder to exclude certain individuals from his or her policy.  But the court ruled that the legislature placed the burden on the insured to make sure that individuals who drive the insured’s vehicle have insurance — the insurance company does not bear that burden.  Thus, the court affirmed the trial court ruling and concluded that Safe Auto was entitled to Summary Judgment. Thanks to Garrett Gittler for his contribution to this post.  Please email Brian Gibbons with any questions.