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RECENT CASE SUMMARIES

We have prepared the following compilation of insurance coverage decisions by the Pennsylvania courts during the several months, which may be of interest to you. Please contact us if you have any questions or would like a copy of any of these decisions.

[ CASE SUMMARIES Q3/Q4 2014 ]

ADDITIONAL INSURED/EMPLOYER’S LIABILITY

In Ramara, Inc. v. Westfield Ins. Co., United States District Court for the Eastern District of Pennsylvania, 2014 U.S. Dist. LEXIS 164920 (E.D. Pa. November 24, 2014), the court held that, where an additional insured endorsement of policy issued to plaintiff’s employer provided coverage for additional insured only with respect to injury “caused, in whole or in part, by” the Named Insured’s acts or omissions, the insurer was obligated to defend the additional insured even though the complaint in the underlying action did not allege that Named Insured employer was responsible for the injury.

 

ADDITIONAL INSURED/MANAGERS, LANDLORDS, OR LESSORS OF PREMISES

In Fairfield Henry, LLC v. Phila. Indem. Ins. Co., United States District Court for the Eastern District of Pennsylvania, 2014 U.S. Dist. LEXIS 32534 (March 13, 2014), the court held that the owner of a multi-building apartment complex was entitled to coverage as an additional insured under a policy issued to an organization that leased several apartments for use of its mentally ill clients where multiple claims against the owner by other tenants arose out of the actions of organization’s clients.

 

ARBITRATION

In State Farm Mut. Auto. Ins. Co. v. Dill, Superior Court of Pennsylvania, 2015 Pa. Super. LEXIS 11 (Pa. Super. January 13, 2015), the Court held that the claimant waived her objection that an arbitrator’s impartiality had been compromised because she never objected to his participation as an arbitrator at any point during the arbitration proceeding.

 

ASSAULT AND BATTERY

In Navigators Ins. Co. v. Oasis on Essington, United States District Court for the Eastern District of Pennsylvania, 2014 U.S. Dist. LEXIS 104461 (E.D. Pa. July 31, 2014), the court held that insurer was obligated to defend the owners of the insured club under supplemental Assault and Battery coverage, but not the employees who were involved in an altercation with a patron.

 

ASSIGNMENT

In Charbonneau v. Chartis Prop. Cas. Co., United States District Court for the Eastern District of Pennsylvania, 2014 U.S. Dist. LEXIS 40763 (E.D. Pa. March 26, 2014), the court held that a party who was not an insured could assert a claim under a first party property policy because the assignment clause in lease-purchase agreement did not take effect unless there was a loss to the insured property.

 

AUTO/UM/UIM/AMBIGUITY

In Clarke v. MMG Ins. Co., 100 A.3d 271 (Pa. Super. 2014), the Pennsylvania Superior Court held that policy covering the insured’s two automobiles provided underinsured motorist coverage for injuries insured sustained while operating his motorcycle that was covered under another policy where the provision that purported to exclude UIM coverage for such vehicle was ambiguous when compared to a similar exclusion in the UM portion of policy.

 

AUTO/UM/UIM/CHOICE OF LAW

In Peters v. Nat’l Interstate Ins. Co., Superior Court of Pennsylvania, 2014 PA Super 276 (Pa. Super. December 16, 2014), the Court held that the Pennsylvania Motor Vehicle Financial Responsibility Law did not require that a policy provide underinsured motorist benefits for injured driver and passenger under a policy issued to a Pennsylvania corporation where the vehicle was registered in Ohio and principally garaged outside of Pennsylvania.

 

AUTO/UM/UIM/FLEET POLICIES

In Egan v. USI Mid-Atlantic, Inc., 92 A.3d 1 (Pa. Super. 2014), the Pennsylvania Superior Court held that the Motor Vehicle Financial Responsibility Law requires that uninsured and underinsured motorist coverage be offered in a commercial fleet policy and that rejection of such coverage must comply with Section 1731(b).

 

AUTO/UM/UIM/REGULAR USE

In Erie Ins. Group v. Catania, 95 A.3d 320 (Pa. Super. 2014), the court held that “regularly used non-owned vehicle” exclusion barred coverage for uninsured motorist benefits where the insured was injured while driving a delivery truck which he did not own and regularly used in the course of his employment.

 

AUTO/UM/UIM/STACKING

In Bumbarger v. Peerless Indem. Ins. Co., 93 A.3d 872 (Pa. Super. 2014), the court held that the policy provided stacked UM/UIM coverage where a vehicle was added to policy by way of an endorsement and the insurer had not offered or obtained a stacking waiver from the insureds prior to the accident.

In Grudkowski v. Foremost Ins. Co., 556 Fed. Appx. 165, 2014 U.S. App. LEXIS 3738 (3d Cir. Pa. 2014), the court held that an insurance policy that insured “classic cars” did not violate the Motor Vehicle Financial Responsibility Law, even though it limited UM and UIM coverage to only those accidents that actually involved the covered vehicles.

 

AUTO/UM/UIM/REJECTION/THIRD PARTY BENEFICIARIES

In Peters v. Nat’l Interstate Ins. Co., Superior Court of Pennsylvania, 2014 PA Super 276 (Pa. Super. December 16, 2014), the court held that the driver and passenger of the insured vehicle could not challenge named insured’s rejection of underinsured motorist coverage because they were merely third party beneficiaries of the policy.

 

BAD FAITH-ASSIGNMENT OF CLAIM

In Allstate Prop. & Cas. Ins. Co. v. Wolfe, Supreme Court of Pennsylvania, 2014 Pa. LEXIS 3309 (Pa. December 15, 2014), the Supreme Court held that an insured may assign a bad faith claim under 42 Pa.C.S. §8371 to an injured plaintiff and judgment creditor.

 

BODILY INJURY

In Allstate Prop. & Cas. Ins. Co. v. Winslow, United States District Court for the Western District of Pennsylvania, 2014 U.S. Dist. LEXIS 172952 (W.D. Pa. December 15, 2014), the court held that the insurer was obligated to defend an action that sought damages for emotional distress where plaintiff’s complaint also alleged that the insureds’ conduct caused him to suffer physical ailments, such as migraine headaches and abdominal pains.

 

CLAIMS MADE

In AmerisourceBergen Corp. v. Ace Am. Ins. Co., 100 A.3d 283 (Pa. Super 2014), the court held that, where an action had been filed against the insured prior to the current claims made policy, the insurer had no obligation to defend the insured even though the complaint was first served on the insured while a previous policy from the same insurer was in effect.

In Kashkashian v. Liberty Ins. Underwriters, Inc., United States District Court for the Eastern District of Pennsylvania, 2014 U.S. Dist. LEXIS 94267 (E.D. Pa. July 11, 2014), the court held that malpractice insurer was not required to defend or indemnify an insured attorney under claims-made policy for a claim arising out of an investment dispute with a former client where the former client filed a claim with the Pennsylvania Lawyers Fund for Client Security prior to the effective date of the policy.

In Ettinger & Assocs., LLC v. Hartford/Twin City Fire, United States District Court for the Eastern District of Pennsylvania, 2014 U.S. Dist. LEXIS 70265 (E.D. Pa. May 22, 2014), the court held that Prior Knowledge Exclusion in a malpractice policy barred coverage for an insured attorney for a claim by former clients who were co-defendants with him in a Dragonetti Action prior to the inception of the policy.

 

DECLARATORY JUDGMENT-CONFIDENTIAL DOCUMENTS

In Mine Safety Appliances Co. v. North River Ins. Co., United States District Court for the Western District of Pennsylvania, 2014 U.S. Dist. LEXIS 42771 (W.D. Pa. Mar. 31, 2014), the court addressed the parties’ request to file documents under seal in a declaratory judgment action.

 

DECLARATORY JUDGMENT-FEDERAL COURT JURISDICTION

In Reifer v. Westport Ins. Corp., 751 F.3d 129 (3rd Cir. 2014), the United States Court of Appeals for the Third Circuit set forth the standard to be followed by a District Court in determining whether it may exercise its discretion to decline jurisdiction over a declaratory judgment action.

 

DECLARATORY JUDGMENT-FINAL APPEALABLE ORDER

In Modern Equip. Sales & Rental Co. v. Main St. Am. Assur. Co., Superior Court of Pennsylvania, 2014 PA Super 275 (Pa. Super. December 15, 2014), the court held that the trial court’s order holding that the insurer had no duty to defend the additional insured was not a final appealable order where the lower court had not decided the additional insured’s claim for contractual indemnification against the named insured.

 

DECLARATORY JUDGMENT-JOINDER OF PARTIES

In State Farm Fire & Cas. Co. v. Scalia, United States District Court for the Middle District of Pennsylvania, 2014 U.S. Dist. LEXIS 170015 (M. D. Pa. December 9, 2014), the court held that the insurer was not required to join the plaintiff in the underlying action as a defendant in the declaratory judgment action because she did not have a legally protected interest in the insurance policy, but only a contingent financial interest.

In Scottsdale Ins. Co. v. Rse Inc., United States District Court for the Eastern District of Pennsylvania, 2014 U.S. Dist. LEXIS 146632 (October 14, 2014), the court held that the insurer was not required to join the plaintiff and co-defendant in the underlying action as defendants in the declaratory judgment action.

 

DEFECTIVE WORKMANSHIP

In Allegheny Design Mgmt. v. Travelers Indem. Co. of Am., United States Court of Appeals for the Third Circuit, 2014 U.S. App. LEXIS 13190 (3d Cir. Pa. July 11, 2014), the court held that a general contractors’ general liability policy did not cover claim for damage to glass that was installed by a subcontractor because the claim fell within the scope of an exclusion for “[t]hat particular part of any property that must be restored, repaired or replaced because ‘your work’ was incorrectly performed on it”.

 

DUTY TO DEFEND

In Titeflex Corp. v. Nat’l Union Fire Ins. Co., 88 A.3d 970 (Pa. Super. 2014), the Superior Court of Pennsylvania held that an excess insurer was obligated to provide a defense to its insured once the limit of one underlying policy had been exhausted, even though some of the claimants’ bodily injuries did not manifest themselves until subsequent policy periods.

 

EMPLOYEE INJURED DURING COMMUTE

In National Cas. Co. v. Kinney, 90 A.3d 747 (Pa. Super. 2014), the Pennsylvania Superior Court held that, for the purpose of liability and insurance coverage, employees who were injured in an automobile accident while traveling to work were not injured in the course of employment.

 

ERRORS AND OMISSIONS

In Peerless Ins. Co. v. Pa. Cyber Charter Sch., 19 F. Supp. 3d 635 (W.D. Pa. 2014), the court held that the insurer was required to defend the insured charter school for a lawsuit filed by several school districts to recover payments made to the school for ineligible students because expenses incurred by the school to educate those students potentially qualified as a “loss” because of a “wrongful act” within the meaning of a School Leaders Errors and Omissions Liability Insurance Policy.

 

EXPECTED OR INTENDED HARM/OCCURRENCE

In Am. Nat’l Prop. & Cas. Cos. v. Hearn, Superior Court of Pennsylvania, 2014 Pa. Super. LEXIS 1178 (Pa. Super. June 9, 2014), the Superior Court of Pennsylvania held that, where the claimant was injured when the insured punched him while playing a game, the insurer had no obligation to provide coverage because the insured’s conduct was not an “occurrence” and fell within the scope of exclusion for expected or intended harm.

 

GIST OF THE ACTION DOCTRINE

In Bruno v. Erie Ins. Co., Supreme Court of Pennsylvania, 2014 Pa. LEXIS 3319 (Pa. December 15, 2014), the Supreme Court held that the “gist of the action” doctrine did not bar the insureds’ negligence claim against their insurer where allegations that the insurer’s agents acted in a negligent manner regarding the safety of mold removal in their home concerned the insurer’s alleged breach of a general social duty, not a breach of any duty created by the insurance policy itself.

 

MCARE ACT

In Aria Health v. Med. Care Availability & Reduction of…, 2014 Pa. Commw. LEXIS 193 (Pa. Commw. March 31, 2014), the Commonwealth Court of Pennsylvania held that the Medical Care Availability and Reduction of Error Fund was obligated to defend a hospital against a patient’s claim for negligent failure to provide chaperoning in its pediatric care, but not against claims that a physician employed by the hospital sexually assaulted a pediatric patient.

 

PERSONAL INJURY/ADVERTISING INJURY

In Onebeacon Am. Ins. Co. v. Urban Outfitters, United States District Court for the Eastern District of Pennsylvania, 2014 U.S. Dist. LEXIS 67719 (E.D. Pa. May 15, 2014), the court held that Personal Injury/Advertising Injury coverage did not apply to claims against retailers for invasion of privacy arising out of collection of customers’ personal information.

 

TRIGGER OF COVERAGE

In Pa. Nat’l Mut. Cas. Ins. Co. v. St. John & Kathy M. St. John, Supreme Court of Pennsylvania, 2014 Pa. LEXIS 3313 (Pa. December 15, 2014), the Pennsylvania Supreme Court held that coverage was triggered under the policy in effect when injuries to the claimants’ dairy herd became reasonably apparent, even though the claimants did not discover the cause of the injury until two years later and initially dismissed the maladies as incidental to normal dairy farm operation.

In Titeflex Corp. v. Nat’l Union Fire Ins. Co., 2014 PA Super LEXIS 112 (Pa. Super. March 5, 2014), the Superior Court of Pennsylvania held that the “multiple trigger of coverage” does not apply to leak of gasoline that occurred over several years where the injuries were alleged to have occurred as a result of one specific event, a gasoline leak.

 

If you have questions about any of the above decisions or would like a copy of any opinion, please contact us.

Thank you.

YOST & TRETTA, LLP