OLIVER, District Judge.
In this insurance dispute, Defendant-Appellant James Sweeney ("Mr. Sweeney") appeals from the Order of the District Court granting summary judgment in favor of Plaintiff-Appellee/Cross-Appellant Liberty Mutual Insurance Company ("Liberty Mutual"). Liberty Mutual cross-appeals from the portion of the District Court's Order rejecting two alternative and independent bases for denying Mr. Sweeney coverage under his insurance policy. For the following reasons, we will reverse the judgment of the District Court, and remand with instructions for the District Court to enter judgment in favor of Mr. Sweeney. Liberty Mutual's cross-appeal is dismissed.
At all relevant times, Mr. Sweeney owned and operated a transmission repair shop in Chalfont, Pennsylvania. During the course of managing his repair shop, Mr. Sweeney developed an informal business relationship with George Tradewell ("Mr. Tradewell"), who owned a car rental business in nearby Montgomeryville, Pennsylvania. As part of this business relationship, Mr. Sweeney would refer his customers to Mr. Tradewell if they needed to rent a vehicle while their own vehicles were in Mr. Sweeney's shop for repair. In his deposition, Mr. Tradewell estimated that he would rent vehicles to one or two of Mr. Sweeney's customers per month.
The manner in which the rental cars would be delivered to Mr. Sweeney's customers varied. On some occasions, Mr. Sweeney would simply refer his customers to Mr. Tradewell's shop or drive them to Mr. Tradewell's business. If any of Mr. Tradewell's employees were available, Mr. Tradewell would have them drop off a rental car at Mr. Sweeney's shop. As
On February 4, 2004, at 8:17 p.m., Mr. Sweeney was injured in a car accident while driving a 2000 Ford Taurus owned by Mr. Tradewell's business. Mr. Tradewell had no firsthand knowledge of how and when Mr. Sweeney came into possession of the car, and was out of the state on the day of the accident. At his deposition, Mr. Sweeney also could not recall when he came into possession of the vehicle, but testified that he intended to deliver it to a customer the following morning. That evening, Mr. Sweeney's wife asked him to go to a local grocery store to pick up taco shells for their dinner. Mr. Sweeney opted to use Mr. Tradewell's 2000 Ford Taurus to run this errand because it was the outermost car in his driveway. He was involved in the accident on his way back from the grocery store. Following the accident, Mr. Sweeney filed an application for underinsured motorist ("UIM") benefits
On May 25, 2006, Liberty Mutual filed an action for declaratory relief in the United States District Court for the Eastern District of Pennsylvania. Liberty Mutual sought a declaration providing that Mr. Sweeney was not entitled to coverage on the basis of the three provisions cited above. The District Court granted summary judgment in favor of Mr. Sweeney on the basis that the second exclusion did not bar coverage, and denied Liberty Mutual's cross-motion for summary judgment. Liberty Mutual appealed, and on March 23, 2009, this Court summarily remanded the case to the District Court as a result of the District Court's failure to address all three policy exclusions relied upon by Liberty Mutual. Liberty Mut. Ins. Co. v. Sweeney, 317 Fed.Appx. 185 (3d Cir.2009). This Court explained that the District Court's ruling was improper because "Liberty Mutual need only prove that one of its asserted policy exclusions applies." Id.
We have jurisdiction pursuant to 28 U.S.C. § 1291. We review the District Court's grant of summary judgment de novo and apply the same standard the District Court applied. Viera v. Life Ins. Co. of N. Am., 642 F.3d 407, 413 (3d Cir.2011). We review the facts in the light most favorable to the nonmoving party and draw all inferences in the nonmoving party's favor. See Gray v. York Newspapers, Inc., 957 F.2d 1070, 1078 (3d Cir.1992). We will affirm if our review shows "that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R.Civ.P. 56(a).
On appeal, Mr. Sweeney argues that the District Court erred in holding that Liberty Mutual could deny coverage on the basis of the policy's "auto business" exception. Mr. Sweeney argues that this provision does not bar coverage because, at the time of the accident, he was running a personal errand and was not engaged in any type of "auto business" as defined by the policy. As an initial matter, Mr. Sweeney notes that the District Court considered the wrong policy language in interpreting the "auto business" exception. The language considered by the District Court provided, in pertinent part, that Liberty Mutual "will not pay for bodily injury caused by anyone using a non-owned motor vehicle in any kind of auto business." (App.54a.) However, prior to Mr. Sweeney's 2004 accident, certain provisions in his insurance policy had been amended, including the "auto business" provision. The amended provision provided that Liberty Mutual "will not pay for bodily injury sustained while using a non-owned motor vehicle in any kind of auto business. Examples of auto business are: selling, repairing, servicing, storing or parking motor vehicles." (App. 64a (emphasis added).)
Interpreting the original policy language, the District Court held that "the relevant issue is not one of timing as Defendant contends, but whether the language `in any kind of auto business' pertains to Defendant's use of the `non-owned' vehicle." (App. 11a.) The District Court further emphasized that "but for Defendant's desire to provide his customers with an alternative means of transportation while he serviced the customers' transmissions, Defendant would never have come into possession of the `non owned' vehicle. The specific reason for Defendant's use at the time of the accident is not enough to change the general purpose for which he possessed the vehicle." (App.12a.) Liberty Mutual concedes that the District Court did not consider the correct language, but argues that the result would nevertheless be the same under the amended policy language.
Under Pennsylvania law, the interpretation of a contract of insurance is a matter of law for determination by the court. Standard Venetian Blind Co. v. Am. Empire Ins. Co., 503 Pa. 300, 469 A.2d 563, 566 (1983). The court's "primary goal in interpreting a policy ... is to ascertain the parties' intentions as manifested by the policy's terms." Kvaerner Metals Div. of Kvaerner U.S., Inc. v. Commercial Union Ins. Co., 589 Pa. 317, 908 A.2d 888, 897 (2006). The court construes "[w]ords of common usage ... according to their natural, plain, and ordinary sense." Id. To this end, the court "may consult the dictionary definition of a word to determine its ordinary usage." Id. Contractual terms are ambiguous "if they are subject to more than one reasonable interpretation when applied to a particular set of facts." Madison Const. Co. v. Harleysville Mut. Ins. Co., 557 Pa. 595, 735 A.2d 100, 106 (1999). If the court finds that a particular term is ambiguous, "the policy provision is to be construed in favor of the insured and against the insurer, the drafter of the agreement." Standard Venetian Blind Co., 469 A.2d at 566 (citation omitted). If "however, the language of the contract is clear and unambiguous, a court is required to give effect to that language." Id. We find that the "auto business" exclusion at issue in this case is unambiguous, and does not operate to bar coverage in this case.
While the District Court held that "the relevant issue is not one of timing," (App.16a), this is incorrect when one considers the actual policy language. The relevant "auto business" exception bars coverage for injuries "sustained while using a non-owned motor vehicle in any kind of auto business." The operative clause is "sustained while using," which unambiguously imposes a temporal restriction. The word "while" is defined as "the time during which an action takes place or a condition exists." Webster's Third New International Dictionary, Unabridged (Merriam-Webster 2002), http://unabridged.merriam-webster.com (last accessed May 30, 2012). The exclusion is triggered in "the time during which" the insured is "using a non-owned motor vehicle in any kind of auto business." At the time of the accident, Mr. Sweeney was using Mr. Tradewell's car for the purpose of running a personal errand, and not using it "in any kind of auto business." The fact that the car was a rental vehicle which was to be eventually delivered to a customer is not dispositive; pursuant to the plain language of the policy, we look to the conduct Mr. Sweeney was engaged in at the time of the accident.
This line of cases teaches us that "we are to examine the conduct at issue to see if it is contemplated by the exclusion." McKuhn, 664 A.2d at 177. That is because such "automobile business" exclusions are typically intended to "encompass a specific risk," Pecorara, 596 A.2d at 239, namely the risks associated with the operation of the automobile businesses. See also McKuhn, 664 A.2d at 177 ("We must ask whether the exclusion was meant to protect against the risk occasioned by the conduct."). At argument, counsel for Liberty Mutual questioned whether a focus on the timing and circumstances of the accident provides an appropriate limiting principle. However, we need not define the outer limits of the auto business exception at issue here because the facts of this case are not at the margins. Mr. Sweeney's accident did not take place as he was making a brief rest stop on his way to deliver the car to a customer; Mr. Sweeney was returning from a trip to the grocery store in a car that he intended to deliver to a customer the next day. Because Mr. Sweeney's injuries were sustained while he was using the non-owned vehicle to run a personal errand after work hours, and not while he was engaged "in any kind of auto business," we reverse the decision of the District Court finding that coverage was precluded by the "auto business" exception.
On cross-appeal, Liberty Mutual challenges the District Court's determination regarding the "intended use" provision of the insurance policy.
(App.252a.) On the basis of Mr. Tradewell's conclusory statement that such use "was not intended," Liberty Mutual argues that "Mr. Tradewell's permission to use the vehicle on a personal errand ... is not enough to escape this policy exclusion when Mr. Tradewell's own testimony is that Mr. Sweeney's personal errand `was not intended.'" (Appellee/Cross-Appellant's br. at 24.)
Liberty Mutual, however, selectively quotes Mr. Tradewell's deposition testimony, omitting testimony which unequivocally shows that the vehicle was being used in a manner contemplated by the owner:
(App.253a-256a.)
The operative term in this provision is unambiguous. The word "intended" is defined as "to have in mind." Webster's Third New International Dictionary, Unabridged (Merriam-Webster 2002), http://unabridged.merriam-webster.com (accessed May 30, 2012). The deposition testimony in this case reflects that Mr. Tradewell clearly had in mind that Mr. Sweeney might be using his vehicles to run personal errands on those occasions where he came into possession of them. In fact, he encouraged Mr. Sweeney to do so as a means of getting Mr. Sweeney's opinion regarding the condition of his cars. Liberty Mutual has put forth no evidence showing that Mr. Tradewell did not have in mind that Mr. Sweeney would be using his vehicles to run personal errands, and thus
Finally, we address Liberty Mutual's argument concerning the policy's "regular use" exclusion, which provides that "[Liberty Mutual] will not pay for bodily injury sustained while using or occupying a motor vehicle or trailer not insured under this Part, that is furnished or made available for regular use by you or a household resident." After noting that "[g]enerally, courts have found the term `regular use' unambiguous in exclusion of automobile liability coverage," (App.13a), the District Court held that "it is obvious that [Mr. Sweeney's] use of the `non-owned' vehicle was not habitual but merely incidental to a service offered as a convenience to his customers." (App.14a.) On cross-appeal, Liberty Mutual argues that "the test for `regular [use]' does not consider how often the fleet of vehicles is actually used, but rather whether the group of vehicles was regularly available for use." (Appellee/Cross-Appellant's br. at 30.) Liberty Mutual further argues that "[g]iven the nature of the relationship between their two businesses, [Mr. Tradewell] made vehicles available for Mr. Sweeney's regular use in connection with his transmission repair business." (Id. at 31.) We disagree, and hold that the "regular use" exclusion does not operate to bar coverage for Mr. Sweeney's injuries.
As both Mr. Sweeney and Liberty Mutual note, courts have routinely found "regular use" exclusions to be unambiguous. See, e.g., Brink v. Erie Ins. Grp., 940 A.2d 528, 533 (Pa.Super.Ct.2008) (holding exclusion is not ambiguous). Viewed in isolation, "`[r]egular use' means `habitual use' as opposed to occasional or incidental use." Crum & Forster Pers. Ins. Co. v. Travelers Corp., 428 Pa.Super. 557, 631 A.2d 671, 673 (1993) (citation omitted). However, the "vehicle must be `furnished or available' for regular use[;] ... [t]his implies an understanding with the owner of the vehicle that the family member of the named insured could use the automobile of the other person at such times as he or she desired, if available." Id. (citations omitted). Significantly, the Pennsylvania Superior Court has described the purpose of such provisions as preventing "the situation in which [the insured] may have two vehicles which they can use interchangeably while insuring only one of them." Id.; see also Johnson v. Braunsberg, 51 Pa. D. & C. 2d 659, 661 (Pa.Com.Pl.1970) ("Regular use" exclusion "represents an attempt on the part of the insurance company to strike a balance between the desire of the insured to be covered, even though not always using his own car, and its own right to receive payment of premiums based upon the risk presented by the number of automobiles operated."). While the question whether a vehicle is excluded from coverage under a "regular use" provision is usually a question for the jury, the court can decide the issue of coverage as a matter of law where the relevant facts are not in dispute. Crum & Forster Pers. Ins. Co., 631 A.2d at 673.
In this case, the record does not reveal any indicia of habitual use or any understanding between Mr. Sweeney and Mr. Tradewell that Mr. Sweeney had general access to Mr. Tradewell's fleet of vehicles. As the District Court noted, Mr. Tradewell's vehicles were available to Mr. Sweeney in limited circumstances only, i.e., when one of Mr. Sweeney's customers needed a replacement vehicle while his or her vehicle was being repaired in Mr. Sweeney's shop. And even when one of Mr. Sweeney's customers needed a rental vehicle, Mr. Sweeney did not as a matter
For the foregoing reasons, we will REVERSE the judgment of the District Court, dismiss Liberty Mutual's cross-appeal, and remand this case to the District Court with instructions to enter judgment in favor of Mr. Sweeney.