Ladies and Gentlemen:
Continental Casualty issued a commercial insurance policy which the Declarations identified under the heading “Insured Name and Address” the following: “Pro Machine, Randy Egbert and Paul Massey, T/A.” Further down the page, the “named insured” was identified as “a partnership.” The underinsured motorist coverage of the policy applied to “only those ‘autos’ you own . . .” “You” was defined as the “Named Insured shown in the Declarations.”
Massey sustained personal injuries in a motor vehicle accident while operating a motorcycle he personally owned. After recovering the liability limits of the tortfeasor’s policy, he recovered the $15,000 limit of coverage available under the policy insuring his motorcycle. Massey then asserted a claim for underinsured motorist benefits against Continental Casualty. Continental Casualty denied the underinsured motorist claim on the basis that Massey did not qualify as a “named insured” and because coverage was excluded under the household exclusion which provided that the underinsured motorist coverage did not apply to bodily injury sustained by “you while occupying or when struck by any vehicle owned by you that is not a covered auto for Underinsured Motorist Coverage under this Coverage form.”
The lower court granted summary judgment to Continental Casualty. On appeal, the Superior Court found that case law, treatises and previous observations on its part supported the conclusion that an insurance policy which lists a partnership name as the “insured” extends coverage to the individuals comprising that partnership as well as to the partnership itself. Applying that conclusion to the policy issued by Continental Casualty, the Superior Court panel concluded that the term Named Insured “necessarily includes Massey and Egbert in their capacity as partners trading as Pro Machine.”
The Superior Court concluded that Massey would be entitled to recover underinsured motorist coverage only if he was operating the motorcycle on partnership business at the time of the accident. Because the record did not establish whether Massey was acting on behalf of the partnership at the time of the accident, the case was remanded to the lower court for further proceedings.
If you would like to read the full opinion of the Superior Court, click on this link,
http://www.superior.court.state.pa.us/opinions/A31032_06.PDF. If you have any questions about the case or any other automobile insurance law issues,please feel free to call me at 215-665-3340.
Very truly yours,
Michael Saltzburg
MS/dma
