Declaratory Judgment In Garage Policy Case

Pittsburgh Partner Miles A. Kirshner, Esquire represented Penn National Insurance, which issued a garage policy providing liability insurance only when an insured person was operating a vehicle which was listed or specifically described in the policy.  The named insured was involved in an accident while operating a vehicle, on company business, which was not listed on the policy.  Penn National denied coverage and the underlying plaintiff and insured filed an action for declaratory judgment, seeking indemnfication of a $275,000 consent judgment.

Following a non-jury trial, the Court of Common Pleas entered its first Memorandum and Order in November 2006, holding that there was no coverage because the subject vehicle did not fit any of the specified categories of covered vehicles as described in the policy.  Plaintiffs moved for reconsideration on the alternative theory that coverage should be afforded because the insured was acting in a manner which was incidental to his garage operation at the time of the loss.  In a Memorandum and Order dated June 26, 2007, the trial court has now rejected this argument, and entered a final declaration.  The Court agreed with Penn National’s contention that “the significant criterion for coverage under a garage operations policy is whether the vehicle involved is an insured vehicle under the policy.”  Copies of the trial court’s Memoranda of November 9, 2006 and June 26, 2007 may be found by clicking on the attached links.