Erie Insurance Exchange v. Greenwich Ins. Co. ( 2019 )

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
ERIE INSURANCE EXCHANGE : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellant :
:
:
v. :
:
:
GREENWICH INSURANCE COMPANY : No. 373 EDA 2018
Appeal from the Order Entered December 28, 2017
In the Court of Common Pleas of Philadelphia County
Civil Division at No(s): November Term 2015 No. 3959
BEFORE: OTT, J., STABILE, J., and McLAUGHLIN, J.
MEMORANDUM BY OTT, J.: FILED MAY 28, 2019
Erie Insurance Exchange appeals from the order entered December 28,
2017, granting summary judgment in favor of Greenwich Insurance Company
and denying Erie’s motion for summary judgment. This order terminated
Erie’s declaratory judgment action in which it sought co-payment from
Greenwich regarding a motor vehicle accident that killed underlying plaintiff
Jeremy Andre. In this timely appeal, Erie raises three issues, asserting the
trial court erred (1) in determining Stephen Koons was not an insured of
Greenwich for purposes of this accident, (2) in holding the workers’
compensation case of the Greenwich policy precluded coverage, and (3) in
refusing to address Erie’s argument that Greenwich owed Erie 50% of the
defense and indemnity costs. After a thorough review of the submissions by
the parties, relevant law, and the certified record, we affirm.
Our scope and standard of review is as follows:
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This Court’s standard of review of a trial court’s decision in a
declaratory judgment action is narrow. Because declaratory
judgment actions arise in equity, we will set aside the judgment
of the trial court only where it is not supported by adequate
evidence. The test is not whether we would have reached the
same result on the evidence presented, but whether the trial
court’s conclusion reasonably can be drawn from the evidence.
See Nationwide Mut. Ins. Co. v. Cummings, 438 Pa.Super.
586, 652 A.2d 1338, 1340-41 (1994).
Our standard of review of a challenge to an order granting
summary judgment is as follows:
We may reverse if there has been an error of law or an
abuse of discretion. Our standard of review is de novo, and
our scope plenary. We must view the record in the light
most favorable to the nonmoving party and all doubts as
to the existence of a genuine issue of material fact must
be resolved against the moving party. Furthermore, [in]
evaluating the trial court’s decision to enter summary
judgment, we focus on the legal standard articulated in the
summary judgment rule. The rule states that where there
is no genuine issue of material fact and the moving party
is entitled to relief as a matter of law, summary judgment
may be entered. Where the nonmoving party bears the
burden of proof on an issue, he may not merely rely on his
pleadings or answers in order to survive summary
judgment. Failure of a non-moving party to adduce
sufficient evidence on an issue essential to his case and on
which he bears the burden of proof establishes the
entitlement of the moving party to judgment as a matter
of law.
Gubbiotti v. Santay, 52 A.3d 272, 273 (Pa. Super. 2012)
(citations omitted).
Carlino East Brandywine, L.P. v. Brandywine Village Association, 197
A.3d 1189, 1199, 1120 (Pa. Super. 2018).
In the underlying action, Jeremy Andre, deceased, was employed by
Ches-Mont Disposal and was in the course and scope of employment when the
trash truck he was working with unexpectedly began to roll. Andre attempted
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to enter the cab of the vehicle to activate the brake by pushing it with his
hand. As the truck continued to roll, the door of the cab came into contact
with the garage wall, pushing the door closed, and crushing Andre. See
Andre v. Blue Mountain Recycling, LLC; Casella Waste Management;
Casella Waste Systems Inc.; and Stephen P. Koons, d/b/a/ Miller
Concrete, First Amended Complaint, ¶¶ 40-48. In addition to this tort action,
Andre’s estate also sought and received workers’ compensation benefits from
Ches-Mont regarding the accident. See Greenwich Motion for Summary
Judgment, Exhibit F (Workers’ Compensation Decision Cover Letter),
7/26/2017.
Of specific relevance to this appeal, the tort complaint alleged Koons,
d/b/a Miller Concrete, had purchased the truck in which Andre was killed, had
leased the truck to Ches-Mont, which was also partially owned by Koons, and
as the owner/lessor of the truck, had “retained the duty to keep this truck in
proper working order in order to protect third persons, such as the deceased,
from injury” See Andre v. Blue Mountain, First Amended Complaint, Count
II, at ¶ 130. Subsequent paragraphs of Count II detail further allegations of
negligent acts by Koons, all of which flow from the alleged retained duty of his
actions as owner/lessor of the truck. Id. at ¶¶ 131-155. Koons tendered this
claim to two insurance companies that had provided insurance policies that
possibly applied to the accident, Erie Insurance Exchange and Greenwich
Insurance Company. Erie provided a Business Catastrophic Loss (BCL) Policy
to Koons, d/b/a Miller Concrete, as well as a policy insuring vehicles owned by
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Miller Concrete. Greenwich provided, in relevant part, an umbrella policy to
Ches-Mont Disposal, providing coverage against bodily injury claims made
against Ches-Mont, as well as covering officers of Ches-Mont (such as Koons),
as long as the negligent acts alleged were taken in the course and scope of
their duties with Ches-Mont. See Erie v. Greenwich, First Amended
Complaint, at ¶¶ 5-14, 15-22.
Greenwich disclaimed responsibility from providing a defense and/or
indemnification for the tort claim against Koons. Erie provided Koons with
both defense and indemnification, eventually settling the claim against Koons
for $1,125,000. Id. at ¶ 59. After settling the claim with Andre, Erie obtained
an assignment of rights from Koons regarding Greenwich’s failure to provide
a share of the defense and indemnification. Erie then filed a declaratory
judgment action against Greenwich in federal court. The result of that action
narrowed Erie’s claim to Coverage B of Greenwich’s umbrella policy. Although
the district court ultimately found in favor of Greenwich, on appeal, the Third
Circuit believed there was an open question of material fact as to whether the
underlying allegations against Koons were pled against him acting individually
or as part of duties with Ches-Mont. The federal court never resolved this
issue. See Koons v. XL Ins. America, Inc., 516 Fed.Appx. 217 (3rd Cir.
2013).
Thereafter, Erie filed this declaratory judgment action in the Court of
Common Pleas of Philadelphia County. After the close of discovery, both
parties filed motions for summary judgment. Upon consideration of the
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respective motions, Judge Ramy I. Djerassi determined Andre had sued Koons
in his individual capacity, d/b/a Miller Concrete, as owner of the allegedly
defective truck. Further, Judge Djerassi concluded that even if Koons had
been sued for acting as an officer of Ches-Mont, the claims would be barred
by workers’ compensation and the Greenwich policy specifically excludes such
claims from coverage.
We agree with Judge Djerassi’s able analysis. There is no scenario
contemplated in the underlying tort action for which the Greenwich umbrella
policy affords coverage.
As with any matter in which insurance coverage is at issue, we look to
the language of the insurance policy in question and the allegations in the
complaint. We begin by noting the definition of an insured under Coverage B
of the Greenwich umbrella policy:
Insured under Coverage B Means:
1. the Named Insured;
2. if you are an individual, your spouse, but only with respect to
the conduct of business of which you are the sole owner;
3. your partners, joint venture members, executive officers,
employees, directors, stockholders or volunteers while acting
within the scope of their duties as such;
…[1]
Greenwich Policy, p. 17.
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1There is no contention that any of the remaining definitions of an insured
apply. Therefore, we need not list them.
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The first page of the Greenwich policy lists “Chesmont Disposal
Company, LLC” as the named insured. The first page also identifies the named
insured as a corporation. As such, the first two definitions of an insured cannot
apply to Koons. Therefore, Koons, who was undeniably an officer of Ches-
Mont, is an insured under the Greenwich policy “while acting within the scope
of [his] duties as such.” Id. There is no question that this language is clear
and unambiguous in defining Koons as an insured only when he acts within
the scope of his duties as an officer of Ches-Mont.
We must now look to the allegations of the complaint to determine the
scope of the claims against Koons. Initially, the complaint identifies Koons as
an “individual”, who “upon information and belief, and at all relevant times …
did business in Pennsylvania under the fictitious name of Miller Concrete.”
Andre v. Blue Mountain, First Amended Complaint, at ¶¶ 14, 15. There is
no indication here that Koons was associated with, much less was acting within
the scope of his duties for, Ches-Mont. Accordingly, we believe that any
subsequent reference to Defendant Koons refers to the individual Koons d/b/a
Miller Concrete.
Negligence Count II of the First Amended Complaint provides the
specific allegations against Koons. The first substantive paragraph, ¶ 127,
identified “Koons, d/b/a Miller Concrete, was the owner and lessor of the truck
and co-owner of Ches-Mont Disposal.” Id. at ¶ 127. Although ¶ 127 identifies
Koons as also being the co-owner of Ches-Mont, neither ¶ 127 nor any
subsequent paragraph details any act of negligence committed by Koons
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acting in the scope of his duties for Ches-Mont. All subsequent paragraphs
detailing acts of negligence by Koons identify him as “d/b/a Miller Concrete,”
or as “owner of the truck,” or as “lessor of the truck,” or simply as “Defendant
Koons”. Also pursuant to ¶ 127, the owner/lessor of the truck is identified as
Koons/Miller. Another example of identifying Koons is ¶ 130, which states
“Defendant Koons had and retained the duty to keep this truck in working
order…” Id. at ¶ 130 (emphasis added). In the context of the complaint, it
was the owner/lessor – Koons d/b/a Miller - who retained the duty to ensure
the truck was in working condition, not the lessee, Ches-Mont. The relevant
language throughout the complaint indicates Koons was being sued not as a
person acting on behalf of Ches-Mont, but as an individual acting under the
fictitious name of Miller Concrete. Accordingly, the trial court correctly
determined for purposes of the underlying action, the Greenwich policy did
not apply to Koons d/b/a Miller Concrete.
However, Erie currently contends that the foregoing issue was not
properly before the trial court pursuant to collateral estoppel. Erie notes the
Third Circuit vacated the District Court’s determination that Koons had been
sued individually, rather than as acting on behalf of Ches-Mont, thereby
settling the issue. We disagree. First, the Third Circuit never resolved the
issue of Koons’ capacity as a defendant. The Third Circuit merely noted that
there remained an open question as to that issue and remanded the matter
for further action. All federal involvement was terminated prior to the
resolution of that issue. Collateral estoppel requires there be a prior resolution
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of a particular issue. Without this resolution, the issue remained open for the
Court of Common Pleas to decide.
Although the federal appellate decision does not explicitly state the
nature of the material fact to be determined, our review of the certified record
leads to the inevitable conclusion that the workers’ compensation claim had
not resolved by the time of the Third Circuit’s decision. Therefore, there
remained the possibility that Koons could be liable for negligent acts he
committed in the scope of his duties for Ches-Mont.2 Once the workers’
compensation claim against Ches-Mont settled with payment to Andre, it
became obvious that no claim against Koons acting in the scope of duty for
Ches-Mont was tenable. This fact allowed Judge Djerassi to render his
decision, when the federal court could not. Accordingly, Greenwich was not
collaterally estopped from raising this issue before the Court of Common Pleas.
Although the above resolves this matter, we also recognize the trial
court correctly reasoned that even if Koons was acting on behalf of Ches-Mont
and the Greenwich policy did apply, the claims against Koons would be barred
by workers’ compensation.
There can be no dispute that Andre was in the course and scope of his
employment with Ches-Mont when he suffered the fatal injuries. Pursuant to
the workers’ compensation claim, Ches-Mont was determined to be liable to
____________________________________________
2 The Third Circuit decision was issued on March 25, 2013; the workers’
compensation claim against Ches-Mont did not resolve until March 10, 2015.
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Andre’s Estate for approximately $170,000.00. See Greenwich Motion for
Summary Judgment, Exhibit F, p. 5, 7/26/2017.
Long established law dictates workers’ compensation “is the sole and
exclusive means of recovery against employers for all injuries arising out of
accidents occurring within the course of employment.” Pollard v. Lord Corp.,
664 A.2d 1032, 1033 (Pa. Super. 1995), aff’d 695 A.2d 767 (Pa. 1997).
Further, “[a]s part of the quid pro quo of [the Workers’ Compensation Act],
an employee surrenders the right to sue an employer in tort for injuries
received in the course of employment to obtain the benefit of strict liability…
If an injury is compensable under the Act, the compensation provided by th[e]
Act is the employee’s exclusive remedy.” Trial Court Opinion, 12/26/17 at 10,
n. 30, quoting Dennis v. Kravco Co., 761 A.2d 1204, 1205 (Pa. Super.
2000).
The Act itself is equally clear that no tort action could be brought against
Koons acting on behalf of Ches-Mont.
§ 481. Exclusiveness of remedy; actions by and against
third party; contract indemnifying third party
(a) The liability of an employer under this act shall be exclusive
and in place of any and all other liability to such employes, his
legal representative, husband or wife, parents, dependents, next
of kin or anyone otherwise entitled to damages in any action at
law or otherwise on account of any injury or death as defined in
section 301(c)(1) and (2) or occupational disease as defined in
section 108.
(b) In the event injury or death to an employe is caused by a third
party, then such employe, his legal representative, husband or
wife, parents, dependents, next of kin, and anyone otherwise
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entitled to receive damages by reason thereof, may bring their
action at law against such third party, but the employer, his
insurance carrier, their servants and agents, employes,
representatives acting on their behalf or at their request shall not
be liable to a third party for damages, contribution, or indemnity
in any action at law, or otherwise, unless liability for such
damages, contributions or indemnity shall be expressly provided
for in a written contract entered into by the party alleged to be
liable prior to the date of the occurrence which gave rise to the
action.
77 P.S. § 481 (footnotes omitted).
Accordingly, workers’ compensation extinguishes any claim that Koons’
alleged negligent actions were taken in the scope of his duties with Ches-Mont.
Because no such tort claim against Koons can survive, the umbrella policy that
is undeniably applicable to Koons through Ches-Mont, cannot be reached
through a tort claim.
Erie’s claims in this matter are caught between Scylla and Charybdis. If
Koons was sued individually d/b/a Miller Concrete, he is not an insured under
the Greenwich policy which affords coverage to Koons only for actions taken
in the course of his duties with Ches-Mont. In the alternative, if Koons was
sued for alleged negligent actions taken during the scope of his duties with
Ches-Mont, then workers’ compensation was Andre’s exclusive remedy and
the Greenwich umbrella policy is equally inapplicable because no tort claim
against Koons survives. As the Greenwich umbrella policy is not applicable in
either instance, Erie cannot be entitled to contribution from Greenwich to
offset its payments settling the underlying Andre’s tort action.
Order affirmed.
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Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 5/28/19
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