Harleysville Mutual Ins. v. Established Traffic (memorandum)

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J-A04016-13 NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37 HARLEYSVILLE MUTUAL INSURANCE CO. IN THE SUPERIOR COURT OF PENNSYLVANIA Appellant v. ESTABLISHED TRAFFIC CONTROL INC., ET AL. Appellees No. 1286 EDA 2012 Appeal from the Order Entered March 26, 2012 In the Court of Common Pleas of Bucks County Civil Division at No(s): 2010-10282 THE TRAVELERS INDEMNITY COMPANY OF AMERICA, I/I/A TRAVELERS PROPERTY AND CASUALTY INSURANCE CO. IN THE SUPERIOR COURT OF PENNSYLVANIA Appellant v. ESTABLISHED TRAFFIC CONTROL INC., ET AL. Appellees No. 1295 EDA 2012 Appeal from the Order Entered March 26, 2012 In the Court of Common Pleas of Bucks County Civil Division at No(s): 2010-10282 BEFORE: FORD ELLIOTT, P.J.E., MUNDY, J., AND FITZGERALD, J.* MEMORANDUM BY MUNDY, J.: FILED MAY 30, 2013 *Former Justice specially assigned to the Superior Court J-A04016-13 In this joint appeal, Appellants, Harleysville Mutual Insurance Company (Harleysville), and Travelers Indemnity Company of America (Travelers), appeal from the March 26, 2012 orders denying their respective motions for summary judgment and declaring that Appellants had a duty to defend Appellee, Established Traffic Control, Inc. (ETC), in this declaratory judgment action.1 After careful review, we affirm said orders on the basis of the thorough and well-reasoned trial court opinion. This case arose from a consolidated declaratory judgment action brought by Harleysville and Travelers to determine their respective duties to ____________________________________________ 1 Contrary to the contentions of ETC, we conclude that Pennsylvania Bankers Association v. Pennsylvania Department of Banking, 948 A.2d 790 (Pa. 2008) is factually distinguishable from the instant matter, and that the March 26, 2012 declaratory judgment orders at issue constitute final orders for appeal purposes, based upon our Supreme Court s holding in Nationwide Mut. Ins. Co. v. Wickett, 763 A.2d 813 (Pa. 2000). See ETC s Brief at 5-7. Unlike the case sub judice, Pennsylvania Bankers involved preliminary objections in the nature of demurrers filed by credit unions with respect to some, but not all, of the Bank s alternative declaratory judgment claims, which challenged the constitutionality of exemption from taxation provided to credit unions under the Credit Union Code. Pennsylvania Bankers, supra at 793-794. However, these did not represent an affirmative or negative declaration of the parties rights within the meaning of Section 7532 of Declaratory Judgment Act, providing that such declarations have the force and effect of a final judgment or decree. In Nationwide, our Supreme Court held that, under its plain meaning, Section 7532 ¦ does not impose any specific requirements on courts seeking to enter declaratory judgment orders. Rather, it affords the courts broad discretion in crafting declaratory judgment orders by permitting such orders to be either affirmative or negative in form and effect. Nationwide, supra at 818. Thus, an order in a declaratory judgment action that either affirmatively or negatively declares the rights and duties of the parties[,] as we deem is the case here, constitutes a final order. Id. -2- J-A04016-13 defend ETC in their underlying personal injury action.2 The relevant facts and procedural history of this case, as summarized by the trial court, are as follows. On November 13, 2007, [John] Chatley was removing a construction arrow board sign from a trailer on the shoulder of Interstate 80 to set up a traffic lane closure for the installation of security cameras. James Schneider (hereinafter Schneider ), an employee of [ETC], was traveling approximately one hundred (100) feet behind Chatley s truck, to establish a one hundred (100) foot safety buffer from the flow of traffic while Chat[le]y removed the arrow board signs from the truck and placed them on the roadway. At some point during the work, Schneider positioned his vehicle too close to Chatley s truck, preventing the proper placement of the arrow board signs. As a result, Chatley motioned for Schneider to pull his vehicle in front of Chatley s own truck to enable the proper placement of the arrow board signs. As Chatley stood on the shoulder of the roadway, placing the arrow board signs, a 2000 Jeep Cherokee driven by Gregory J. Gutierrez careened out of control and struck the trailer and arrow board sign, knocking loose the arrow board and striking Chatley in the head. Chatley suffered severe and catastrophic injuries as a result of the accident. On October 31, 2008, Chatley and his wife sued the Delaware River Joint Toll Bridge Commission (hereinafter Delaware River Commission ), Mass Electric Construction Company (hereinafter Mass Electric ), Siemens Corporation and Siemens Building Technologies, Inc. (hereinafter ____________________________________________ 2 We note that Appellees, ETC, Technology Insurance Company, Inc., and Siemens Building Technologies, Inc., n/k/a Siemens Industry, Inc. (collectively, Appellees), have all filed separate appellate briefs in this matter. -3- J-A04016-13 collectively Siemens ), Jacobs Edwards & Kelcey, and [Gutierrez] in a negligence action for the injuries he sustained as a result of the accident. On April 8, 2010, Siemens joined [ETC] as an additional defendant, claiming that ETC s negligence was the sole cause of Chatley s injuries or, in the alternative, that ETC is joint and severally liable and/or liable over to Siemens for Chatley s injuries. On April 9, 2010, Mass Electric and Delaware River Commission also joined ETC as an additional defendant, claiming that ETC s negligence was the sole cause of Chatley s injuries or, in the alternative, that ETC is joint and severally liable and/or liable over to Mass Electric and Delaware River Commission for Chatley s injuries. At the time of the underlying accident, ETC was the policyholder on a number of separate insurance policies. [Harleysville] issued a Commercial General Liability Policy to ETC, which provided coverage for damages resulting from bodily injury or property damage. Harleysville s policy included an Auto Liability Exclusion, which removed coverage for: Bodily injury ¦ arising out of the ownership, maintenance, use or entrustment to others of any aircraft, auto or watercraft owned or operated or rented or loaned to any insured. Use includes operation and loading or unloading. Further, the Harleysville policy included an Other Insurance clause that provided: This insurance is excess over: (1) Any of the other insurance, whether primary, excess, contingent or on any other basis: *** -4- J-A04016-13 (d) If the loss arises out of the maintenance or use of aircraft, autos or watercraft to the extent not subject to Exclusion g. of Section I Coverage A Bodily Injury And Property Damage Liability. At the time of the accident, ETC also held a Business Automobile Policy issued by [Travelers], which provided coverage as follows: Section II LIABILITY COVERAGE A. Coverage We will pay all sums an insured legally must pay as damages because of bodily injury or property damage to which this insurance applies, caused by an accident and resulting from the ownership, maintenance or use of a covered auto . The Travelers policy included an Employee Indemnification And Employer s Liability exclusion, which removed coverage for: Bodily injury to: a. An employee of the insured arising out of and in the course of: (1) Employment by the insured ; or (2) Performing the duties related to the conduct of the insured s business . . . Further, the Traveler[s ] policy included a duplicate recover clause, which states, in pertinent part: C. Limit of Insurance Regardless of the number of covered autos , insureds , premiums paid, claims made or vehicles involved in the accident , the most we will pay for the total of all damages ¦ -5- J-A04016-13 resulting from any one accident is the Limit of Insurance for Liability Coverage shown in the Declarations. *** No one will be entitled to receive duplicative payments for the same elements of loss under this Coverage Form and any Medical Payments Coverage Endorsement, Uninsured Motorists Coverage Endorsement or Underinsured Motorists Coverage Endorsement attached to this Coverage Part. On October 5, 2010, Harleysville, the commercial general liability insurer of ETC, commenced the instant declaratory judgment action to determine whether it had a duty to defend and/or indemnify its insured, ETC, in the underlying personal injury action. Harleysville filed a Motion for Summary Judgment on June 17, 2011. In its Motion, Harleysville argued that it has no duty to defend and/or indemnify its insured, ETC, for the claims against ETC in the underlying personal injury action. On August 31, 2011, Travelers filed a Response and Cross-Motion for Summary Judgment. In its Motion, Travelers argued that it had no duty to defend and/or indemnify its insured, ETC, for the claims against ETC in the underlying personal injury action. After all responses in opposition to the Motions were filed, argument on the Motions was held on March 21, 2012. Trial Court Opinion, 7/10/12, at 2-6 (footnotes and headings omitted; emphasis in original). Thereafter, on March 26, 2012, the trial court denied both Harleysville s motion for summary judgment, and Travelers cross-motion for summary judgment. In so ruling, the trial court concluded that both Harleysville and Travelers had a duty to defend ETC in an underlying -6- J-A04016-13 personal injury action. See Trial Court Orders, 3/26/12. Travelers and Harleysville filed timely notices of appeal on April 25 and 26, 2012, respectively.3 On appeal, Harleysville raises the following issues for our review. 1. Whether the [trial] court incorrectly applied the but-for test to determine whether the auto exclusion in the Harleysville insurance policy applies? 2. Whether the [trial] court erred in holding that the auto exclusion in the Harleysville Commercial General Liability insurance policy does not apply? 3. Whether the [trial] court erred in holding that the excess provision of the Other Insurance claims of the Harleysville policy does not apply? 4. Whether the [trial] court erred in ruling that Harleysville has a duty to defend ETC in the Underlying Action? Harleysville s Brief at 2. Travelers, in turn, raises the following issues for our review. 1. Whether the [trial] court erroneously declined to find that the limit of insurance of the Travelers policy was exhausted by payment of the full amount of its limit to the plaintiffs in the underlying action to satisfy the underinsured motorist claim, pursuant to the clear and unambiguous non-duplication of limits provisions in the Travelers policy? ____________________________________________ 3 We note that Harleysville, Travelers, and the trial court have complied with Pa.R.A.P. 1925. -7- J-A04016-13 2. Whether the [trial] court erred in concluding that the underlying lawsuit, which asserts claims against the insured for contribution and common law indemnification for general liability claims asserted against them, triggers potential coverage under an automobile liability policy? 3. Whether the [trial] court erred in concluding that the employee exclusions contained in the Travelers policy do not apply to bar coverage for the underlying lawsuit, in which the plaintiff in the underlying action alleged he was injured in the course and scope of his employment with ETC? Travelers Brief at 3. We begin by noting that [o]rdinary summary judgment procedures are applicable to declaratory judgment actions. Keystone Aerial Surveys, Inc. v. Pennsylvania Property & Cas. Ins. Guar. Ass'n, 777 A.2d 84, 88 (Pa. Super. 2001) (citation omitted), affirmed, 829 A.2d 297 (Pa. 2003). The proper construction of a policy of insurance is resolved as a matter of law in a declaratory judgment action. The Declaratory Judgments Act may be invoked to interpret the obligations of the parties under an insurance contract ¦. Genaeya Corp. v. Harco Nat. Ins. Co., 991 A.2d 342, 346 (Pa. Super. 2010) (internal quotation marks and citations omitted). As the interpretation of an insurance contract is a question of law, our standard of review is de novo; thus, we need not defer to the findings of the lower tribunals. Our scope of review, to the extent necessary to resolve the legal question before us, is plenary. -8- J-A04016-13 ¦ The task of interpreting [an insurance] contract is generally performed by a court rather than by a jury. The purpose of that task is to ascertain the intent of the parties as manifested by the terms used in the written insurance policy. When the language of the policy is clear and unambiguous, a court is required to give effect to that language. When a provision in a policy is ambiguous, however, the policy is to be construed in favor of the insured to further the contract s prime purpose of indemnification and against the insurer, as the insurer drafts the policy, and controls coverage. Contractual language is ambiguous if it is reasonably susceptible of different constructions and capable of being understood in more than one sense. Finally, [i]n determining what the parties intended by their contract, the law must look to what they clearly expressed. Courts in interpreting a contract, do not assume that its language was chosen carelessly. Thus, we will not consider merely individual terms utilized in the insurance contract, but the entire insurance provision to ascertain the intent of the parties. Erie Ins. Exchange v. E.L. ex rel. Lowry, 941 A.2d 1270, 1273 (Pa. Super. 2008) (citations and internal quotation marks omitted), appeal denied, 956 A.2d 435 (Pa. 2008). Herein, the trial court authored an extensive, 19-page opinion that comprehensively discusses and disposes of the claims raised by Harleysville and Travelers on appeal. In sum, the trial court concluded that the entry of summary judgment in favor of Harleysville and Travelers was not appropriate in this instance, and that each insurer has a duty to defend ETC -9- J-A04016-13 in the underlying personal injury action. See Trial Court Opinion, 7/10/12, at 2, 9, 19. We agree with the trial court s determination that both Harleysville and Travelers have a duty to defend ETC in the underlying personal injury action. Specifically, we agree with the trial court s analysis that the claims against ETC fall within Harleysville s Commercial General Liability Policy and are not excluded by any policy provisions. Trial Court Opinion, 7/10/12, at 9. As the trial court explained in its opinion, the majority of the allegations raised against ETC do not relate to the use of a motor vehicle and do not fall within the Auto Liability Exclusion [provision] in Harleysville s policy. Id. at 9-10. Likewise, we agree with the trial court s reasoning that the Other Insurance provision of Harleysville s policy is inapplicable. [T]he allegations against ETC in the Joinder Complaints, which trigger Harleysville s duty to defend ETC, are not all related to the use of an automobile. The allegations raised against ETC claim that ETC was negligent in its failure to properly secure the construction site to ensure its safety to the public and adequately controlling traffic at the site. Because the Other Insurance provision only applies where the loss arises out of the maintenance or use of ¦ autos, this exclusion does not apply to alleviate Harleysville s duty to defend ETC in the underlying action. Id. at 12 (footnote omitted). Additionally, we agree with the trial court s determination that ETC s alleged negligent acts fall within the Commercial Automobile Policy issued by Travelers. Id. at 13. Specifically, we discern no merit to Travelers - 10 - J-A04016-13 contention that it does not have a duty to defend ETC in the underlying action because it already paid underinsured motorist (UIM) benefits under the Business Auto Policy to Chatley. See Travelers Brief at 17-24. As the trial court explained in its opinion, the Limit of Insurance provision in Travelers Business Auto Policy is not applicable in this instance. Trial Court Opinion, 7/10/12, at 14. There are multiple insurance policies in play and multiple tortfeasors who potentially could be responsible for Chatley s injuries. First, Gutierrez, the driver in this accident, had his own insurance policy with a policy limit of $100,000, an amount which was insufficient to cover John Chatley s injuries. As such, the Travelers UIM policy was triggered to help compensate John Chatley for his injuries. Second, ETC held liability coverage under the Travelers Business Auto Policy. The Joinder Complaints in the underlying action raised allegations regarding ETC s use of a covered automobile, allegations which could trigger the liability coverage under Travelers policy. As such, there are two separate insurance policies implicated in this action and two separate tortfeasors who are potentially at fault for Chatley s injuries. Therefore, the Limit of Insurance provision of Traveler s Business Auto Policy does not bar Travelers from having a duty to defend its insured, ETC. Id. at 14-15. Lastly, we agree with the trial court s analysis that there are a number of allegations [raised against ETC] that could be construed to arise out of ETC s use of a covered automobile[,] and that said allegations do not fall within the Employer Liability Exclusion provision in Travelers Business Auto Policy. Id. at 16-18. - 11 - J-A04016-13 We agree with the thorough analysis of the law and facts as developed by the trial court in its July 10, 2012 opinion. Therefore, we conclude the trial court did not err in determining that Harleysville and Travelers had a duty to defend ETC in the underlying personal injury action. Accordingly, for all the foregoing reasons, we adopt the July 10, 2012 opinion of the Honorable Robert J. Mellon as our own for purposes of this appellate review. Orders affirmed. Judgment Entered. Prothonotary Date: 5/30/2013 - 12 -

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