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GRADLER v. PRUDENTIAL PROP. & CAS. INS. CO.

January 4, 1979

Thomas G. GRADLER
v.
PRUDENTIAL PROPERTY AND CASUALTY INSURANCE COMPANY v. TRAVELERS INSURANCE COMPANY



The opinion of the court was delivered by: KNOX

Plaintiff, Thomas G. Gradler, brought an action against defendant, Prudential Property and Casualty Insurance Company (Prudential) claiming entitlement to insurance benefits under a policy issued to plaintiff's mother and covered for liability purposes under the Pennsylvania No-Fault Insurance Act (Act), 40 P.S. § 1009.101 et seq. Defendant answered by generally denying liability and filed a third party complaint against Travelers Insurance Company (Travelers) alleging that Travelers was the proper carrier on the loss under a policy covering the vehicle in which the plaintiff was injured. Travelers answered by denying that its policy provided the applicable security. Plaintiff subsequently amended his complaint by alleging that Prudential or, in the alternative, Travelers was liable for plaintiff's injuries under the priority system set forth in § 204(a) of the Act.

 The parties have agreed to all the evidentiary material relevant and have submitted the issue for trial by the court. Drake v. Donegal Mutual Insurance Co., 422 F. Supp. 272 (W.D.Pa.1976). The question of law to be decided is whether plaintiff was injured "while occupying a vehicle furnished by his employer" under the Travelers policy and § 204(a)(1) of the Act.

 The record in this case contains the following facts. Gerald J. Lutz, the President of Lutz Builders, Inc., provided plaintiff with the use of a 1962 Chevrolet truck for transportation to and from the Professional Building in Erie, Pennsylvania, the principal place of business of Lutz Builders, Inc. (Lutz Depo. at 25, 27, 28; Gradler Depo. at 5). Plaintiff was a passenger and Robert Vantrone was the operator of the truck at the time of the accident. Lutz did not know Vantrone and had not authorized any other person to drive the truck. (Lutz Depo. at 28, 30; Gradler Depo. at 22). The accident occurred on Route 8, south of Union City, on Sunday, June 12, 1977, at approximately 2:00 a.m. when plaintiff and Vantrone were returning from a party in the vicinity of Canadohta Lake. Plaintiff had the use of the vehicle for one year and a half prior to date of the accident. (Gradler Depo. at 6).

 Lutz and his wife were the named insureds of the truck under a policy issued by Travelers, policy number 009906406 101 1. (Lutz Depo. at 27). Lutz testified that he owned the truck and that the corporation did not own any vehicles at the time of the accident. (Lutz Depo. at 38). Lutz stated that he bought the truck for the primary purpose of hauling cement and other materials to his cottage in North East, Pennsylvania, where he was digging a basement. (Lutz Depo. at 35). After he had completed the basement project and prior to the time of the accident Lutz advertised the truck for sale. (Lutz Depo. at 36).

 The truck was used occasionally to pick up materials and supplies for Lutz Builders, Inc., including drywall, lumber, and steel studs. (Lutz Depo. at 33, 39; Gradler Depo. at 18, 19, 20, 21, 41-42). Some of these materials could not be transported by automobile. (Gradler Depo. at 41-42). Most of the supplies were delivered directly to the Professional Building. (Lutz Depo. at 39). The truck was parked in the parking lot of the Professional Building when it was not being used. (Lutz Depo. at 35; Gradler Depo. at 19, 20). Tool boxes were mounted on the sides of the truck by some of the employees of Lutz Builders, Inc. (Gradler Depo. at 42-43). Most of the tools in the tool boxes were owned by the plaintiff. (Gradler Depo. at 42). A sander belonging to the company was taken from the vehicle shortly after the accident. (Lutz Depo. at 39).

 Plaintiff's paychecks were issued by Lutz Builders, Inc. (Gradler Depo. at 12, 13, 19). Lutz, the president of the corporation, is also a fifty per cent shareholder. (Lutz Depo. at 27, 35). At the time of the accident the corporation did not have its own phone number or listing and calls were placed and received under the phone number of Gerald J. Lutz. (Lutz Depo. at 27-28). Lutz physically directed the work of the employees of the corporation. (Lutz Depo. at 27; Gradler Depo. at 20). Lutz paid for the maintenance and state inspection of the truck. (Gradler at 15).

 At the time of the accident plaintiff lived at home with his parents (Gradler Depo. at 3) and was an "insured" under a policy issued by Prudential to plaintiff's mother, Eileen R. Gradler, policy number 28-2 A 194914, under § 204(a)(2) of the Act, as explained below.

 § 204(a) of the Act establishes categories and priorities as between insurers responsible for the payment of insurance benefits. § 204(a) provides, in part:

 
(a) Applicable security. The security for the payment of basic loss benefits applicable to an injury to:
 
(2) an insured is the security under which the victim or deceased victim is insured;

 40 P.S. § 1009.204. Subparagraph (1) puts such responsibility on the insurer of a motor vehicle of an employee when the victim is an employee or a member of his family who is using the car at the time of the accident. If a claimant carries insurance, subparagraph (2) directs that the claim must be presented to that insurer. Schimmelbusch v. Royal Globe Insurance Co., 247 Pa.Super. 28, 371 A.2d 1021 (1977). Under the priority system, if plaintiff is not covered by the ...


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