United States District Court, D. Maine
DECISION AND ORDER ON STIPULATED RECORD
Brock Hornby United States District Judge
issue in this case is the interpretation of a “regular
use” exclusion clause in an automobile insurance
policy. The parties have presented their dispute as a
“case stated, ” i.e., with stipulated
facts and documents.
Lee, driving a 2003 Chevrolet Suburban, struck and killed a
pedestrian, Emily Zarnoch. Statement of the Case ¶¶
1-2 (ECF No. 20) (SOC). Lee Tree Company owned the vehicle.
SOC ¶ 2. Carolyn Lee's father, Michael Lee, an
officer of Lee Tree Company, gave Carolyn Lee permission to
drive the vehicle on this occasion because the car she
usually drove was having mechanical difficulties. Michael Lee
Dep. Tr. 31:12-25, SOC, Ex. 12 (ECF No. 20-12) (Lee Dep.
Tr.). Hartford Insurance Company (Hartford) provided coverage
on the 2003 Chevrolet Suburban under a commercial insurance
policy that Hartford issued to Lee Tree Company. SOC
¶¶ 3-5. A different car, the car that Carolyn Lee
primarily used, was listed and covered on a personal
automobile policy that Progressive Northwestern Insurance
Company (Progressive) issued to her father Michael Lee. SOC
retained an attorney to represent the interests of Carolyn
Lee and her family. SOC ¶ 13. The Estate of Ms. Zarnoch
eventually settled its claim against Carolyn Lee and others,
but Progressive refused to participate. SOC ¶ 15. A
stipulated judgment was filed in Maine Superior Court. SOC
¶ 16. There is an outstanding unpaid balance of $2, 311,
053.75 on the consent judgment, and the Estate obtained
rights to pursue claims under the $250, 000 Progressive
policy. Defs.' Mot. Summ. J. 2-3 (ECF No. 24) (Defs.'
Mem.); see also SOC ¶ 15.
has brought this lawsuit against Carolyn Lee and the Estate
of Emily Zarnoch seeking judgment that it has no duty to
defend or indemnify under the policy it issued to Michael
Lee. Am. Compl. ¶¶ 15, 17 (ECF No. 3). The
defendants have counterclaimed, asserting counts of unfair
claims practices and negligence, and seeking a declaration
that Progressive breached its duties to defend and indemnify.
Defs.' Countercl. ¶¶ 11-20 (ECF No. 5).
Progressive insurance policy excludes from its coverage:
11. bodily injury or property damage arising out of the
ownership, maintenance, or use of any vehicle owned by you or
furnished or available for your regular use, other than a
covered auto for which this coverage has been purchased.
Maine Auto Policy, SOC, Ex. 7, at 4 (ECF No. 20-7). The
policy defines “you” and “your” to
mean “a person shown as a named insured on the
declarations page.” Id. at 2. Carolyn
Lee's father, Michael Lee, is the named insured on the
declarations page. Progressive Declarations Page, SOC, Ex. 3
(ECF No. 20-3). The Estate of Emily Zarnoch's claims
arose out of the “use” of the Chevrolet Suburban
because it is the vehicle that struck and killed Emily
Zarnoch. SOC ¶¶ 1-2. But, as previously stated,
Michael Lee did not own the vehicle (it was owned by Lee Tree
Company), and he did not list it on his personal Progressive
policy (it was listed on Lee Tree Company's commercial
Hartford Policy). SOC ¶¶ 2-4. The question about
which the parties disagree under Exclusion 11 is whether the
Chevrolet Suburban was “furnished or available for
[Michael Lee's] regular use.”
policy “regular use” exclusions have appeared in
Maine Law Court decisions as early as 1970, Allstate Ins.
Co. v. Government Employees Ins. Co., 263 A.2d 78 (Me.
1970), and as recently as this year, Estate of Mason v.
Amica Mut. Ins. Co., 2017 ME 58, ¶ 11, 158 A.3d
495. See also Acadia Ins. Co. v. Mascis, 2001 ME
101, ¶ 4, 776 A.2d 617. The Maine Law Court is clear
that “whether the underlying facts bring the claim
within the [‘regular use'] policy exclusion is . .
. a matter of law.” Estate of Mason, 2017 ME
58, ¶ 9, 158 A.3d 495 (quoting Allstate, 263
A.2d at 81). According to the Law Court's most recent
We interpret “regular use” exclusions consistent
with their “obvious contractual purpose, ” which
“is to cover occasional or incidental use of
other cars without the payment of an additional premium, but
to exclude the habitual use of other cars, which
would increase the risk on the insurance company without a
corresponding increase in the premium.” Acadia Ins.
Co. v. Mascis, 2001 ME 101, ¶ 4, 776 A.2d 617.
Stated another way, “The general purpose and effect of
[a ‘regular use' exclusion] is to give coverage to
the insured while engaged in the only infrequent or
merely casual use of an automobile other than the one
described in the policy, but not to cover him against
personal liability with respect to his use of another
automobile which he frequently uses or has the
opportunity to do so.”
Estate of Mason, 2017 ME 58, ¶ 11, 158 A.3d 495
(quoting Allstate, 263 A.2d at 82).
defendants argue that Michael Lee did not regularly use Lee
Tree Company's 2003 Chevrolet Suburban (he used a
separate company vehicle). Instead, they argue, he (as
distinguished from Lee Tree Company) seldom if ever used it
for himself or his family. Defs.' Mem. 2. Therefore, they say,
Exclusion 11 does not apply. Id. at 3-6. Progressive
argues that Exclusion 11 does apply because the Chevrolet
Suburban was “furnished or available for [Michael
Lee's] regular use” and it was not listed as a
covered auto under the Progressive policy. Pl.'s Mot.
Summ. J. 6-10 (ECF No. 23) (Pl.'s Mem.). Progressive
points to Michael Lee's deposition testimony where he
testified forcefully about his complete control of the
vehicle's use. Id. at 9-10. For example:
Q. You did not regularly use the vehicle for your own
personal business, did you?
A. I used it for whatever I needed the vehicle for.
Q. But it was always for company business, ...