A.H. v. Roosevelt Inn, LLC. ( 2021 )

J-A15036-21
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
A.H. V. ROOSEVELT INN, LLC D/B/A : IN THE SUPERIOR COURT OF
ROOSEVELT INN; ROOSEVELT : PENNSYLVANIA
MOTOR INN, INC.; UVFS :
MANAGEMENT COMPANY, LLC YAGNA :
PATEL; ALPHA-CENTURION :
SECURITY, INC. D/B/A ALPHA :
CENTURY SECURITY, INC; ALPHA :
CENTURY SECURITY, INC; :
WYNDHAM HOTEL COMPANY D/B/A : No. 1797 EDA 2020
RAMADA INN; WYNDHAM HOTEL :
MANAGEMENT, INC. D/B/A RAMADA :
IN; 4200 ROOSEVELT LLC, AND :
4200 ROOSEVELT LLC D/B/A DAYS :
INN, 4200 ROSE HOSPITALITY LLC :
AND 4200 ROSE HOSPITALITY LLC :
D/B/A DAYS INN; WYNDHAM HOTEL :
COMPANY D/B/A DAYS INN, :
WYNDHAM HOTEL MANAGEMENT, :
INC., D/B/A DAYS INN, WYNDHAM :
HOTELS AND RESORTS, LLC, D/B/A :
DAYS INN, DAYS INN, SURATI :
MANAGEMENT GROUP, DAYS INN BY :
WYNDHAM D/B/A DAYS INN, :
WYNDHAM WORLDWIDE :
CORPORATION, WYNDHAM HOTEL :
GROUP, LLC, WYNDHAM HOTELS :
AND RESORTS, LLC, WYNDHAM :
HOTELS AND RESORTS, INC., AND :
WYNDHAM HOTEL MANAGEMENT, :
INC. :
:
:
APPEAL OF: NATIONWIDE PROPERTY :
AND CASUALTY COMPANY :
Appeal from the Order Entered August 21, 2020
In the Court of Common Pleas of Philadelphia County Civil Division at
No(s): No. 200102954
BEFORE: BOWES, J., STABILE, J., and MUSMANNO, J.
MEMORANDUM BY MUSMANNO, J.: Filed: October 7, 2021
J-A15036-21
Nationwide Property and Casualty Company (“Nationwide”) and
Depositor’s Insurance Company (“Depositor’s”) (collectively, “Appellants”)
appeal from the Order denying Appellants’ Petition to Intervene in this civil
action arising out of a sex trafficking operation.1 We reverse and remand for
further proceedings.
A.H. initiated the instant action on January 24, 2020, by filing a
Complaint against various hotels and related defendants, including, inter alia,
4200 Roosevelt, LLC, and 4200 Roosevelt, LLC d/b/a/ Days Inn; and 4200
Rose Hospitality, LLC, and 4200 Rose Hospitality, LLC d/b/a Days Inn
(collectively, “the 4200 Roosevelt Defendants”). The Complaint alleged that
“[f]rom the age of 17 to 18, A.H. was the victim of human trafficking. She
was exploited by traffickers of commercial sex acts and those who financially
benefitted from her exploitation[.]” Complaint, 1/24/20, ¶ 2. The Complaint
generally alleged that the various defendants were aware of the sex trafficking
occurring within their premises, failed to prevent it or report the conduct to
proper authorities, and financially profited from the sex trafficking. See id.,
¶¶ 21-24, 42-45, 74-77. The Complaint includes several counts of negligence
(relating to violation of Pennsylvania’s Human Trafficking Law, 18 Pa.C.S.A.
§§ 3001-3072); negligent infliction of emotional distress; intentional infliction
of emotional distress; and negligent hiring, training, and/or supervision
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1 We will address the propriety of this appeal with Appellants’ first claim, infra.
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against various groups of defendants. Additionally, A.H. sought punitive
damages as to all defendants.
Following additional procedural matters not relevant to the instant
appeal, Appellants filed a Petition to Intervene on August 14, 2020. The
Petition to Intervene explained Appellants’ relationship to the action as
follows:
3. Nationwide is defending [the 4200 Roosevelt Defendants] in
this lawsuit under a reservation of rights.
4. Nationwide issued a Premier Businessowners Policy No. ACP
BPMD 5431888755 [] for the period of April 23, 2008[,] to April
23, 2009. 4200 Roosevelt[,] LLC[,] is an insured under said
policy. …
5. The Nationwide Premier Policy was cancelled and rewritten
effective August 20, 2008[,] under a Premier Businessowners
Policy issued by Depositor’s … Policy ACP BPMD 5431888755[,]
which was in effect for the policy term August 20, 2008[,] through
August 20, 2009. … [The 4200 Roosevelt Defendants] are
insureds under said policy.
Petition to Intervene, 8/14/20, ¶¶ 3-5. The relevant portion of the Liability
Coverage Form provides as follows:
I. COVERAGES
A. COVERAGE A – BODILY INJURY AND PROPERTY DAMAGE
LIABILITY
1. INSURING AGREEMENT
a. We will pay those sums up to the applicable Limit of
Insurance that the insured becomes legally obligated to pay
as damages because of “bodily injury” or “property damage”
to which this insurance applies. We will have the right and
duty to defend the insured against any “suit” seeking those
damages for which there is coverage under this policy.
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HOWEVER, we will have no duty to defend the insured
against any “suit” seeking damages for “bodily injury” or
“property damage” to which this insurance does not apply.
Id., Exhibit A (Premier Businessowners Policy), Liability Coverage Form, at 2;
3 (detailing exclusions); 21 (defining “bodily injury” as “bodily injury, sickness
or disease sustained by a person, including death resulting from any of these
at any time.”).
Appellants sought to intervene “solely with respect to the submission of
special jury interrogatories and the jury verdict slip to assure that the basis of
the jury verdict is clear to assist with respect to subsequent insurance
coverage determinations as to potential indemnification of the 4200 Roosevelt
Defendants.” Petition to Intervene, 8/14/20, at 1. Specifically, Appellants
wish to “determine whether an award of punitive damages is based on direct
or vicarious liability,” and “whether the jury found that the [4200 Roosevelt
Defendants had] violated the Pennsylvania Human Trafficking Law.” Id., ¶¶
7-8; see also Memorandum in Support of Petition for Intervention, 8/14/20,
at 5-6 (explaining that a general verdict would not permit Appellants, as the
insurers, to determine whether the verdict was based on negligence or
intentional tort). The trial court denied Appellants’ Petition to Intervene on
August 21, 2020.2
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2From the record, it does not appear that any parties opposed Appellants’
Petition to Intervene.
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On September 18, 2020, Appellants filed a Notice of Appeal. The trial
court subsequently ordered Appellants to file a Pa.R.A.P. 1925(b) concise
statement of errors complained of on appeal, and Appellants timely complied.3
On appeal, Appellants present the following issues for our review:
1. Whether the Superior Court has jurisdiction under Pa.R.A.P.
313 to hear this interlocutory appeal?
2. Whether the trial court abused its discretion when it misapplied
the law pursuant to Butterfield v. Giuntoli, 670 A.2d 646, 658
(Pa. Super. 1995)[,4] which recognizes Appellants’ right to
interven[e] for the purpose of securing a record that will identify
whether the jury’s verdict is based on a claim for which
indemnification may be barred by Pennsylvania public policy?
3. Whether the trial court abused its discretion when it disallowed
a [P]etition to [I]ntervene on the grounds that Appellants’
interests are already adequately represented by counsel pursuant
to Pa.R.C.P. 2329(2)[,] where the appointed defense counsel
represents the interests of the insured, not [] Appellants, where
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3 On October 26, 2020, this Court entered a Rule to Show Cause directing
Appellants to explain whether this Court has jurisdiction to consider their
appeal. On November 3, 2020, Appellants filed a Response, asserting that
the Order denying their Petition to Intervene is immediately appealable as a
collateral order. This Court subsequently discharged the Rule to Show Cause
and referred the issue to the merits panel.
4 In Butterfield, this Court addressed the trial court’s grant of summary
judgment in favor of the insurer, in a garnishment action to collect punitive
damages awarded in an underlying medical malpractice action, where the
insurer had refused to indemnify its insured. See Butterfield, 670 A.2d at
647-48. Based on the jury’s verdict, it was impossible to identify whether the
jury had assessed liability based on direct liability, vicarious liability, or both.
Id. at 648, 650. This Court reversed the grant of summary judgment, holding
that the insurer had the burden to establish the basis of the jury’s verdict; the
insurer had the option to file a petition to intervene, or to request specific jury
interrogatories or instructions to clarify the issue; and the insurer nevertheless
failed to establish the record to determine its duty of indemnification. See id.
at 655-58.
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Appellants are defending their insureds under a reservation of
rights to deny indemnity?
4. Whether the trial court abused its discretion when it disallowed
a [P]etition to [I]ntervene on the grounds that Appellants’
interests are already represented pursuant to Pa.R.C.P. 2329(2),
without first holding a hearing where such factual matters may be
addressed and objections raised?
Brief for Appellant at 2.
As an initial matter, we consider this Court’s jurisdiction to entertain the
instant appeal, which Appellants addressed in their first issue. Appellants
argue that the Order denying their Petition to Intervene is an appealable
collateral order. Id. at 11. In support, Appellants argue that the Order
denying their Petition to Intervene is separable from the main cause of action,
and it would be impossible to seek clarification regarding the jury’s verdict
after trial. Id. at 11-12.
“Whether an order is appealable under the collateral order doctrine
under Pa.R.A.P. 313 is a question of law, subject to a de novo standard of
review, and the scope of review is plenary.” Shearer v. Hafer, 177 A.3d 850,
854 (Pa. 2018).
“An appeal may be taken as of right from a collateral order of a trial
court or other government unit.” Pa.R.A.P. 313(a).
A collateral order is an order separable from and collateral to the
main cause of action where the right involved is too important to
be denied review and the question presented is such that if review
is postponed until final judgment in the case, the claim will be
irreparably lost.
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Pa.R.A.P. 313(b). All three prongs of the test must be satisfied before an
appellate court can exercise jurisdiction. See Rae v. Pa. Funeral Dirs.
Ass’n, 977 A.2d 1121, 1125 (Pa. 2009); see also id. at 1123, 1129
(explaining that the collateral order doctrine is narrowly construed, and
adopting an issue-by-issue approach to its application); Commonwealth v.
Williams, 86 A.3d 771, 780 (Pa. 2014) (stating that “the collateral order
doctrine is to be narrowly construed in order to buttress the final order
doctrine”).
Instantly, Appellants’ Petition to Intervene satisfies the separability
prong of Rule 313(b) because Appellants’ right to intervene can be resolved
without addressing the merits of the underlying causes of action (i.e.,
negligence, negligent infliction of emotional distress, intentional infliction of
emotional distress, and negligent hiring). See Williams, 86 A.3d at 781
(stating that “[a]n order is separable from the main cause of action if it can
be resolved without an analysis of the underlying dispute.”). Further,
resolution of the underlying action will not otherwise resolve the issue of
indemnification. Finally, regarding the third prong, Appellants’ ability to
submit jury interrogatories or a special verdict form would be lost following
the close of trial. See Bogdan v. Am. Legion Post 153 Home Ass’n, 2021
PA Super 127 (Pa. Super. filed June 23, 2021) (evaluating insurer’s petition
to intervene, and explaining that “[t]he petition to intervene in the underlying
action … is the only way for [the insurers] to secure the reasons for the verdict
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in order to sustain its burden of establishing whether any exclusions apply in
the declaratory judgment action.”). Thus, we conclude that the collateral
order doctrine’s requirements have been satisfied, and we will proceed to
address the merits of the Appellants’ claims.
We will address Appellants’ remaining claims together.5 Appellants
assert that, as the 4200 Roosevelt Defendants’ insurers, they have the right
to intervene for the purpose of securing specific jury interrogatories or a
special verdict to determine their duty of indemnification. Id. at 14-15; see
also id. at 14 (stating that “[a]n insurer has a right to intervene in litigation
against its insured where entry of a judgment may impose an obligation of
indemnity on the insurer.”). According to Appellants, clarification regarding
the basis of the jury’s verdict are “probative and necessary to the duty of
indemnification[,]” and indemnification may be contrary to public policy. Id.
at 15. Appellants claim that the trial court improperly concluded that defense
counsel could adequately represent Appellants’ interests. Id. at 16-18.
Additionally, Appellants claim that the trial court erred by failing to hold the
requisite hearing. Id. at 19.
As this Court has explained,
[i]t is well established that a question of intervention is a matter
within the sound discretion of the court below and unless there is
a manifest abuse of such discretion, its exercise will not be
interfered with on review. In ruling on a petition to intervene, the
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5 Appellants combined the discussion of their second and third claims in the
Argument section of their brief.
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trial court is required to determine whether the allegations of the
petition have been established and, assuming that they have,
whether they demonstrate an interest sufficient to justify
intervention.
Bogdan, 2021 PA Super 127, at *4 (quotation marks, citations and paragraph
breaks omitted).
Pennsylvania Rules of Civil Procedure 2327 and 2329 govern who may
intervene, and a trial court’s actions on a petition to intervene. Rule 2327
provides, in relevant part, as follows:
Rule 2327. Who May Intervene
At any time during the pendency of an action, a person not a party
thereto shall be permitted to intervene therein, subject to these
rules if
(1) the entry of a judgment in such action or the satisfaction of
such judgment will impose any liability upon such person to
indemnify in whole or in part the party against whom judgment
may be entered[.]
Pa.R.C.P. 2327(1).
Rule 2329. Action of Court on Petition
Upon the filing of the petition and after a hearing, of which due
notice shall be given to all parties, the court, if the allegations
of the petition have been established and are found to be
sufficient, shall enter an order allowing intervention; but an
application for intervention may be refused, if
(1) the claim or defense of the petitioner is not in subordination
to and in recognition of the propriety of the action; or
(2) the interest of the petitioner is already adequately
represented; or
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(3) the petitioner has unduly delayed in making application for
intervention or the intervention will unduly delay, embarrass or
prejudice the trial or the adjudication of the rights of the parties.
Pa.R.C.P. 2329 (emphasis added).
Here, the trial court, without first holding the requisite hearing, denied
Appellants’ Petition to Intervene, based upon Rule 2329(2), i.e., because
Appellants’ claims are adequately represented. According to the trial court,
“a review of the Petition demonstrates, on its face, that [Appellants’] rights
are adequately represented by retained defense counsel. Accordingly, any
hearing would be a waste of judicial resources….” Trial Court Opinion,
1/11/21, at 6. The trial court stated that Appellants are defending the 4200
Roosevelt Defendants, and reasoned as follows:
Although doing so under a reservation of rights, [Appellants] are
fulfilling their duty to defend the [4200 Roosevelt Defendants].
Since [Appellants] have control over the attorneys defending the
[4200 Roosevelt Defendants], [Appellants] have the ability to
protect their interest by instructing retained defense counsel to
include the requested interrogatories on the jury verdict slip.
Accordingly, the interests of [Appellants] are already adequately
represented, and this [c]ourt had the discretion to deny the
Petition to Intervene.
Id. at 5.
Upon review, we conclude that the trial court manifestly abused its
discretion in denying Appellants’ Petition to Intervene. This Court has
recognized that an insurer may be permitted to intervene in order to propose
a special verdict form and jury interrogatories to assist in coverage
determinations regarding indemnification. See Bogdan, 2021 PA Super, at
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*5 (concluding that, where a liquor liability insurer filed a petition to intervene
for purposes of requesting special interrogatories related to the jury’s verdict,
which would assist the insurer in subsequent coverage determinations, the
trial court abused its discretion in denying such petition based on the insurer’s
delay in filing such petition); see also Butterfield, 670 A.2d at 658 & n.15
(reversing the grant of summary judgment in favor of insurer, and indicating
that the insurer had the option to intervene, citing Rule 2327(1)). Appellants
argued in their Petition to Intervene, and we agree, that defense counsel “is
not expected to address any insurance coverage issues[.]” Petition to
Intervene, 8/14/20, ¶ 13. Indeed, there is a clear potential for conflict
between defense counsel, hired to represent the interests of the 4200
Roosevelt Defendants, and Appellants, who may have a duty to indemnify the
4200 Roosevelt Defendants. See generally Pa.R.C.P. 2327(1) (permitting
intervention by a non-party if “the entry of a judgment … or the satisfaction
of such judgment will impose any liability upon such person to indemnify in
whole or in part the party against whom judgment may be entered[.]”).
Accordingly, we reverse the Order denying Appellants’ Petition to Intervene,
and remand the matter to the trial court for further proceedings.
Order reversed. Case remanded for further proceedings consistent with
this Memorandum. Jurisdiction relinquished.
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Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 10/7/21
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