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A Pittsburgh federal judge has ruled that a Pennsylvania Supreme Court opinion that restricted insurance companies from using the household exclusion to decline stacking of coverage should not be extended to also bar use of the "regular use" exclusion in the same way.

The decision, which may be the first word from the federal courts on the hotly debated issue, appears to contradict a growing trend in Pennsylvania law.

U.S. District Judge Marilyn Horan of the Western District of Pennsylvania declined to extend the impact of the "seismic" decision in Gallagher v. Geico.

Horan on Monday granted a motion by Travelers Insurance to dismiss the case, captioned Barnhart v. Travelers Home and Marine Insurance, in which an injured woman had sought recovery of underinsured motorist (UIM) benefits. Horan's decision hinged on a determination that Gallagher, which dealt with the stacking provision of the Motor Vehicle Financial Responsibility Law, did not expressly overrule a 2011 Pennsylvania Supreme Court decision that deals with the portion of the law regarding UIM coverage.

The case involved Mary Barnhart, who was injured as a passenger on her husband's motorcycle. After the motorcycle's policy was tendered, she sought and was denied UIM coverage from a Traveler's policy she purchased insuring two automobiles.

Horan initially differentiated the underlying case from Gallagher, because the carrier had not known that Barnhart would be riding a motorcycle, but she also ruled more broadly that, because Gallagher and the 2011 case, Williams v. Geico, dealt with separate parts of the MVFRL, Gallagher did not control the issue.

"While Gallagher explicitly overturned a line of decisions concerning the validity of the household exclusion, as applied to Section 1738, stacking of benefits in automobile policies, the Pennsylvania Supreme Court did not overturn Williams or any other line of regular use exclusion cases, as applied to Section 1731 UM/UIM coverage and claims," Horan said. "Therefore, Gallagher's holding does not extend to invalidate the 'regular use exclusion' or to overturn Williams as the controlling precedent for this case."

William Martin of Radcliffe Law in Uniontown, who represented Barnhart, said he was disappointed with the ruling, but plans to appeal the decision to the U.S. Court of Appeals to the Third Circuit, which could end up referring the decisive question in the case to the Pennsylvania Supreme Court.

"Even though they are dealing with different exclusions, I think, essentially, both exclusions operate in the same manner," Martin said.

Both Martin and Schmidt Kramer attorney Scott Cooper, who was not involved in Barnhart but was co-counsel in Gallagher and has since filed several class actions stemming from the ruling, said Monday's ruling appears to conflict with a Northampton County Court of Common Pleas judge, who, in Rush v. Erie Insurance Exchange, opened the door to extending Gallagher to the regular-use exclusion.

In Rush, Northampton County Judge Stephen Baratta denied a motion for summary judgment by defendant Erie Insurance Exchange, which had sought to rely on its policy's regular use exclusion to bar the plaintiffs from recovering stacked UIM benefits.

Baratta agreed with the plaintiffs that, in light of the Supreme Court's recent rulings in Gallagher and Safe Auto Insurance v. Oriental-Guillermo, there is a substantial question of law as to whether regular-use exceptions are against public policy and the MVFRL.

Martin also pointed to another ruling recently out of Fayette County regarding Gallagher and the regular use exception, which he said also allowed the plaintiffs to proceed.

"It seems like the state courts are letting these go forward on the legal issues," he said.

Cooper said he thought, since the motorcycle at issue in Barnhart was owned by her husband, it could further be argued that the regular use exclusion was "really the household exclusion by another situation."

"I would think that if it was in our Superior and Supreme Court, they'd reverse it," Cooper said.

Along with drawing a distinction between the sections of the MVFRL at issue in Gallagher and Barnhart, Horan said that, under the household exclusion, the plaintiff in Gallagher would never have been able to recover the stacked benefits, but in Barnhart the UIM coverage would have been available had it not been waived.

"Therefore, according to the Williams holding, such exclusion was valid and enforceable," Horan said.

Brooks R. Foland of Marshall Dennehey Warner Coleman & Goggin, who represented Travelers, did not return a call seeking comment.