Carrasquillo, A. v. Kelly, N.

J-A19028-19
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
ANNA M. CARRASQUILLO, : IN THE SUPERIOR COURT OF
INDIVIDUALLY AND AS : PENNSYLVANIA
ADMINISTRATRIX OF THE ESTATE OF :
RAFAEL SANTIAGO, DECEASED :
:
:
v. :
:
: No. 2720 EDA 2018
NANCY KELLY AND NATIONWIDE :
MUTUAL FIRE INSURANCE COMPANY :
:
:
APPEAL OF: NATIONWIDE MUTUAL :
FIRE INSURANCE COMPANY :
Appeal from the Order Entered, August 8, 2018,
in the Court of Common Pleas of Philadelphia County,
Civil Division at No(s): October Term, 2017, No. 563.
BEFORE: PANELLA, P.J., KUNSELMAN, J., and STEVENS*, P.J.E.
MEMORANDUM BY KUNSELMAN, J.: FILED NOVEMBER 12, 2019
In this declaratory judgment action, Anna Carrasquillo asked the trial
court to declare that Nationwide Mutual Fire Insurance Company had a duty
to defend and indemnify its insured, Nancy Kelly, in a separate lawsuit
involving the death of Carrasquillo’s son. The trial court denied Nationwide’s
motion for summary judgment in the declaratory judgment action.
Nationwide appealed from that order. Upon careful review, based upon the
language of the policy at issue, we reverse.
On October 5, 2014, Rafael Santiago was staying at the home of Nancy
Kelly, located in Philadelphia, Pennsylvania. James Kelly, who resided with
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* Former Justice specially assigned to the Superior Court.
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Nancy Kelly, was also present.1 That night, James Kelly fatally shot Santiago
inside the Philadelphia home. When the shooting occurred, James and Nancy
Kelly were insured under a homeowners’ insurance policy with Nationwide.2
On May 23, 2016, James Kelly pleaded guilty to the charge of murder in
the third degree and was sentenced to 20 to 40 years in prison.
On September 29, 2016, Appellee, Anna Carrasquillo, Santiago’s
mother, initiated a wrongful death and survival action, individually and as
executrix of the Estate of Santiago, against Nancy Kelly and James Kelly in
the Philadelphia Court of Common Pleas.3
Of particular relevance, Paragraph 8 of the Carrasquillo’s wrongful death
complaint alleged the following:
8. On or about October 5, 2014, plaintiff’s decedent, Rafael
Santiago, was attacked by defendant, James Kelly, and fatally
shot resulting in plaintiff’s decedent’s death.
Carrasquillo's Complaint at ¶ 8 (emphasis added).
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1The Complaint does not indicate the relationship between Nancy and James
Kelly.
2We note that Nationwide does not dispute James or Nancy Kelly’s status as
an insured under the policy.
3 According to this Complaint, Nancy Kelly currently resides in North Fort
Myers, Florida, and James Kelly resides at SCI Camp Hill, Camp Hill,
Pennsylvania. It does not appear that Nancy Kelly participated in the
declaratory judgment action below; counsel for Nancy Kelly did not enter his
appearance with the trial court until after the court entered its order denying
Nationwide’s motion for summary judgment. A brief was filed on Nancy Kelly’s
behalf in this appeal.
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Paragraph 10 of Carrasquillo's wrongful death complaint alleged the
following:
10. The accident was caused exclusively and solely by the
defendant's negligence, in that:
(a) Defendants caused or permitted dangerous conditions to
exist;
(b) Defendants failed to have the lethal weapons stored
safely and securely so that other individuals could not
access them;
(c) Defendants failed to give warning that the lethal
weapons were not stored safely and securely such that
defendant, James Kelly, could access them and cause
harm to others;
(d) Defendants failed to remove the dangerous condition;
(e) Defendants failed to exercise reasonable prudence and
due care to keep the household safe for others;
(f) Defendants failed to prevent a person with known
dangerous propensities to have access to lethal
weapons;
(g) Defendants were negligent in causing injury and death
to plaintiff’s decedent, Rafael Santiago; and
(h) Defendants was [sic] otherwise negligent under the
circumstances.
Id. at ¶ 10 (a)-(h)(emphasis added).
After filing this complaint, Carrasquillo requested Nationwide to defend
its insured, Nancy Kelly, and indemnify her for the claims in the wrongful death
action. Nationwide refused to provide a defense for Nancy Kelly or indemnify
her based upon exclusions in her homeowners' insurance policy.
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The Nationwide Homeowners' Policy insuring the Kellys provided liability
coverage as follows:
SECTION II -LIABILITY COVERAGES
Page GI
Coverage agreements
Coverage E -Personal Liability
We will pay damages an insured is legally obligated to pay due to
an occurrence resulting from negligent personal acts or negligence
arising out of the ownership, maintenance or use of real or
personal property. We will provide a defense at our expense by
counsel of our choice. We may investigate and settle any claim or
suit. Our duty to defend a claim or suit ends when the amount we
pay for damages equals our limit of liability.
This coverage is excessive over other valid and collectible
insurance. It does not apply to insurance written as excess over
the applicable limits of liability.
SETION II -LIABILITY COVERAGES
Page G2
Additional liability coverages
We will pay the following in addition to the limits of liability.
These additional coverages are not subject to the Section II
Liability Exclusions.
1. Claims Expense. We will pay:
a) Expenses we incur and costs levied against an insured in
a legal action we defend, including prejudgment interest on
that portion of the award which does not exceed the limit of
this coverage....
Nationwide Policy at G1-G2.
The liability coverages provided by this policy were subject to the
following exclusions:
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SECTION II -LIABILITY EXCLUSIONS
1. Coverage E - Personal Liability and Coverage F - Medical
Payments to Others do not apply to bodily injury or property damage:
a) by an act intending to cause harm done by or at the
direction of any insured.
This exclusion does not apply to corporeal punishment of
pupils.
b) caused by or resulting from an act or omission which is
criminal in nature and committed by an insured.
This exclusion 1.b) applies regardless of whether the insured
is actually charged with, or convicted of a crime.
Nationwide Policy at H1 (emphasis added).
On October 5, 2017, Carrasquillo filed a separate action, which is the
subject of this appeal, seeking a declaratory judgment. Specifically,
Carrasquillo requested an order from trial court declaring that the allegations
set forth in the wrongful death complaint were covered by the Kelly policy (i.e.
not excluded) from coverage, and therefore Nationwide had a duty to defend
and indemnify its insured, Nancy Kelly. Declaratory Judgment Complaint, at
¶ 11.
On October 31, 2017, Nationwide attempted to remove the declaratory
judgment action to the United States District Court for the Eastern District of
Pennsylvania pursuant to 28 U.S.C. §§ 1331, 1332, and 2201-2202. However,
on April 17, 2018, the Eastern District Court issued a Memorandum Opinion,
concluding that Carrasquillo had no standing to file a declaratory judgment
action asking the court to declare the rights between an insurance company
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(Nationwide) and its insured (Nancy Kelly).4 On that basis, the District Court
determined there was no actual and justiciable controversy sufficient to
provide it with subject matter jurisdiction. Carrasquillo v. Kelly, et al., 17-
4887 at 7-8 (E.D. Pa. April 17, 2018). On May 15, 2018, the District Court
remanded the declaratory judgment action to the Court of Common Pleas of
Philadelphia, pursuant to 28 U.S.C. § 1447(c).
On July 3, 2018, Nationwide filed a motion for summary judgment in
the state declaratory judgment action. Essentially, Nationwide argued that
the intentional and criminal acts of insured James Kelly triggered the
intentional and criminal act exclusions under the policy and precluded
coverage to Nancy Kelly. In support of its position, Nationwide attached a
copy of the criminal docket, reflecting James Kelly’s guilty plea and term of
imprisonment. Nationwide requested that the trial court enter an order
granting its motion for summary judgment and a decree declaring that
Nationwide had no duty to defend Nancy Kelly in the underlying wrongful
death action.
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4 The District Court observed that this was not a typical declaratory judgment
action filed by the insurance company, but rather an action filed by an injured
party seeking to declare the rights of third parties. Under these
circumstances, the court found “[c]learly, Carrasquillo is asserting the legal
interests of a third party (Nancy Kelly) rather than her own and, thus, has no
standing to pursue such a claim. Further, Carrasquillo has not alleged that
she has been assigned any rights of Nancy Kelly under the Nationwide
insurance policy at issue.” Carrasquillo v. Kelly, et al., 17-4887 at 8 (E.D.
Pa. April 17, 2018).
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On July 26, 2018, Carrasquillo filed an answer in opposition to
Nationwide’s motion for summary judgment. Carrasquillo argued that the
allegations in the wrongful death complaint triggered coverage because
Nancy Kelly's actions sounded in negligence, and were not intentional or
criminal acts, which would support a preclusion of coverage. Carrasquillo
maintained that Nancy Kelly's actions were independent and separate from
those of James Kelly and, therefore, Nationwide was obligated to provide a
defense for those claims.
On August 8, 2018, the trial court denied Nationwide’s motion for
summary judgment. Nationwide filed a timely notice of appeal. Both
Nationwide and the trial court complied with Pennsylvania Appellate Rule of
Procedure 1925.
Nationwide raises three questions for our review on appeal:
1. Did the [trial court] err[] by denying [Nationwide’s] Motion for
Summary Judgment when the criminal act exclusion contained
within Nationwide homeowners policy number 58 37 HO 483403
at SECTION II - LIABILITY EXCLUSIONS 1.(b) applied, based upon
the clear and undisputed allegations of the Complaint in the
underlying bodily injury action docketed at Philadelphia CCP No.
160903564, and the undisputed facts in support of the Motion for
Summary Judgment including the fact that Mr. Santiago was
intentionally killed by a resident relative “insured” of the named
insured Nancy Kelly's household?
2. Did the [trial court] err by [] denying [Nationwide’s] Motion for
Summary Judgment when the intentional act exclusion contained
within Nationwide homeowners policy number 58 37 HO 483403
at SECTION II - LIABILITY EXCLUSIONS 1.(b) applied, based upon
the clear and undisputed allegations of the Complaint in the
underlying bodily injury action docketed at No. 160903564, and
the undisputed facts in support of the Motion for Summary
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Judgment including the fact that Mr. Santiago was attacked, shot
and killed by a resident relative “insured” of the named insured
Nancy Kelly's household?
3. Did The [trial court] err by misapplying the well-established law
in the Commonwealth of Pennsylvania that where an applicable
exclusion such as the present criminal act exclusion precludes
coverage due to the conduct of "an insured" creating joint
obligations of the insureds, that there is no coverage for any
insured [] under the terms of the current Nationwide policy[?]
Nationwide’s Brief at 6-8 (citations omitted).
Initially, we note that, generally, an appeal from an order denying
summary judgment is not appealable as of right. Good v. Frankie & Eddies
Hanover Inn, LLP, 171 A.3d 792, 794 (Pa. Super. 2017). As we have
explained, this Court is obligated to “first ascertain whether the [order
appealed from] is properly appealable, because the question of appealability
implicates the jurisdiction of this [C]ourt.” Commonwealth v. Borrero, 692
A.2d 158, 159 (Pa. Super. 1997). Thus, preliminarily, we must address
whether this appeal is appropriately before this Court. Based upon our review,
we conclude that the trial court’s order constituted a final order under
Pa.R.A.P. 341(b)(2) because it is expressly defined as a final order under
Section 7532 of the Declaratory Judgment Act, 42 Pa.C.S.A. § 7532. That
section provides:
Courts of record, within their respective jurisdictions, shall have
the power to declare rights, status, and other legal relations
whether or not further relief is or could be claimed. No action or
proceeding shall be open to objection on the ground that a
declaratory judgment or decree is prayed for. The declaration
may be either affirmative or negative in form and effect, and such
declarations shall have the force and effect of a final judgment or
decree.
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42 Pa.C.S.A. § 7532.
Pursuant to Pa.R.A.P. 341(b)(2), an order is final if it is expressly so
defined by a statute. The Supreme Court has held that Section 7532 defines
any order in a declaratory judgment action that either affirmatively or
negatively declares "rights, status, and other legal relations" as a final order.
See 42 Pa.C.S.A. § 7532; see also Pa.R.A.P. 341(b)(1) (providing that “[a]
final order is ‘any order that disposes of all claims and of all parties[.]’”);
Good, 171 A.3d at 794; National Cas. Co. v. Kinney, 90 A.3d 747, 754
(Pa. Super. 2014).
Here, by concluding that the exclusions in the policy did not apply and
denying Nationwide’s motion for summary judgment, the trial court's order
effectively declared that Nationwide had a duty to defend, and thus,
potentially indemnify, Nancy Kelly in the underlying action.5 Thus, all of the
claims raised in the declaratory judgment action have been resolved. As such,
this Court has jurisdiction over this appeal pursuant to 42 Pa.C.S.A. § 742.6
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5We note that the duty to defend is broader than the duty to indemnify.
Kvaerner Metals Div. of Kvaerner U.S., Inc. v. Commercial Union Ins.
Co., 908 A.2d 888, 896 n.7 (Pa. 2006).
6 This section provides:
The Superior Court shall have exclusive appellate jurisdiction of
all appeals from final orders of the courts of common pleas,
regardless of the nature of the controversy or the amount
involved, except such classes of appeals as are by any provision
of this chapter within the exclusive jurisdiction of the Supreme
Court or the Commonwealth Court.
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See Kinney, 90 A.3d at 755 (concluding that trial court, by denying motion
for summary judgment in declaratory judgment action, effectively resolved all
issues, and therefore, the order was immediately appealable).
Nancy Kelly argues, however, that when the trial court merely denied
the motion, as opposed to making a declaration, the order was not a final
appealable order. Kelly’s Brief at 5. We disagree.
Contrary to Kelly’s argument, in Nationwide Mut. Ins. Co. v. Wickett,
763 A.2d 813, 818 (Pa. 2000), our Supreme Court specifically addressed this
issue and concluded that a court was not required to specifically make a
declaration of rights. Id. “Rather, [Section 7532] affords the courts broad
discretion in crafting declaratory judgment orders by permitting such orders
to be either affirmative or negative in form and effect.” Id. For finality, the
critical question is whether the order fully resolved the claims raised in the
declaratory judgment action, or simply narrowed the scope of the action’s
claims. Modern Equip. Sales & Rental Co. v. Main St. Am. Assurance
Co., 106 A.3d 784 (Pa. Super. 2014 (en banc). If the order resolved the
claims, it is a final order. As stated above, the trial court’s order fully resolved
the dispute Carrasquillo raised in her declaratory judgment action.
Additionally, before addressing the merits of Nationwide’s appeal, we
must consider whether this matter is properly before us. Nancy Kelly contends
that this Court lacks subject matter jurisdiction. Specifically, she claims that
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42 Pa.C.S.A. § 742.
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Carrasquillo lacks standing to bring this action. Nancy Kelly’s Brief at 9. She
argues that the U.S. District Court would not decide the case for this very
reason. Id. at 16. Thus, this Court should dismiss Carrasquillo’s appeal. Id.
We disagree.
Generally, a plaintiff must have standing to bring a declaratory
judgment action. Additionally, a court must have subject matter jurisdiction
to proceed with a case. However, unlike the federal law, under Pennsylvania
law, standing and subject matter jurisdiction are distinct concepts and are not
interdependent. We note that in the federal courts, the standing doctrine
emanates from the Constitution. ASARCO Inc. v. Kadish, 490 U.S. 605
(1989) (the federal courts' standing doctrine springs from the “case or
controversy” requirement contained in Article III of the United States
Constitution). State courts, however, are not governed by Article III and are,
thus, not bound to adhere to the federal definition of standing. Id. at 2045.
Furthermore, the Pennsylvania Constitution has no counterpart to Article III's
“case or controversy” requirement. See, e.g., Appeal of Lansdowne
Borough Board of Adjustment, 170 A. 867 (Pa. 1934).
Under Pennsylvania jurisprudence, standing relates to a party’s right to
make a legal claim or seek judicial enforcement. Subject matter jurisdiction,
on the other hand, concerns the court’s authority to consider cases of a given
nature and grant the type of relief requested. As such, “[i]t is well-settled
that the question of subject matter jurisdiction may be raised at any time, by
any party, or by the court sua sponte.” B.J.D. v. D.L.C., 19 A.3d 1081, 1082
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(Pa. Super. 2011) (quoting Grom v. Burgoon, 672 A.2d 823, 824–25 (Pa.
Super. 1996)).
However, standing is not jurisdictional. Consequently, this Court has
explained that “[i]n Pennsylvania, whether a party has standing to maintain
an action is not a jurisdictional question. Thus, an issue relating to standing
is waivable.” Grimm v. Grimm, 149 A.3d 77, 83 (Pa. Super. 2016) (internal
quotation marks, brackets, footnote, and citations omitted); see also
Adoption of Z.S.H.G., 34 A.3d at 1289 (clarifying that “standing is not
intertwined with subject matter jurisdiction [even] when a statute designates
who may sue” and is therefore subject to waiver) (emphasis in original).
Based on our review of the record, no one challenged Carrasquillo’s
standing to bring this declaratory judgment action in the state court below.
Instead, Nancy Kelly only raised it for the first time on appeal. Her standing
challenge is therefore waived. See Pa.R.A.P. 302(a) (“Issues not raised in the
lower court are waived and cannot be raised for the first time on appeal.”);
In re Paulmier, 937 A.2d 364, 368 n. 1 (Pa. 2007) (unlike subject matter
jurisdiction, an issue concerning standing is subject to waiver); In re
Adoption of Z.S.H.G., 34 A.3d 1283, 1289–90 (Pa. Super. 2011). We now
turn to the merits of Nationwide’s issues presented on appeal.
Nationwide raises three separate issues relating to the trial court’s
denial of its motion for summary judgment. We note that all of these issues
involve the interpretation of an insurance contract, namely whether the policy
covers the claims Carrasquillo alleged in the underlying complaint or whether
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an exclusion applies. Specifically, at issue are two separate exclusions, the
intentional act exclusion and the criminal act exclusion. We, therefore,
address Nationwide’s issues together.
We begin our analysis by noting the applicable scope and standard of
review for appellate review of a motion for summary judgment:
We 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. Only
where there is no genuine issue as to any material fact and it is
clear that the moving party is entitled to a judgment as a matter
of law will summary judgment be entered. Our scope of review of
a trial court's order granting or denying summary judgment is
plenary, and our standard of review is clear: the trial court's order
will be reversed only where it is established that the court
committed an error of law or abused its discretion.
QBE Ins. Corp. v. M & S Landis Corp., 915 A.2d 1222, 1225 (Pa. Super.
2007), appeal denied, 956 A.2d 436 (2008) (quoting Pappas v. Asbel, 768
A.2d 1089, 1095 (Pa. 2001)).
Furthermore, here, the trial court entered summary judgment on the
basis of its interpretation of an insurance policy as to the existence or non-
existence of coverage. This Court has summarized the law regarding an
insurer's duty to defend and indemnify as follows:
The interpretation of an insurance contract regarding the
existence or non-existence of coverage is generally performed by
the court. Insurance policies are contracts, and the rules of
contract interpretation provide that the mutual intention of the
parties at the time they formed the contract governs its
interpretation. Such intent is to be inferred from the written
provisions of the contract. If doubt or ambiguity exists it should
be resolved in [the] insured's favor.
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An insurer's duty to defend and indemnify the insured may be
resolved via declaratory judgment actions. In such actions, the
allegations raised in the underlying complaint alone fix the
insurer's duty to defend. As this Court has summarized: The duty
to defend is a distinct obligation, separate and apart from the
insurer's duty to provide coverage.
Moreover, the insurer agrees to defend the insured against any
suit arising under the policy even if such suit is groundless, false,
or fraudulent. . . .
Pennsylvania recognizes that a duty to defend is broader than the
duty to indemnify. Accordingly, even if there are multiple causes
of action and one would potentially constitute a claim within the
scope of the policy's coverage, the insurer would have a duty to
defend until it could confine the claim to a recovery excluded from
the policy. The question of whether a claim against an insured is
potentially covered is answered by comparing the four corners of
the insurance contract to the four corners of the complaint. . . .
Significantly, [i]t is not the actual details of the injury, but the
nature of the claim which determines whether the insurer is
required to defend. In making this determination, the factual
allegations of the underlying complaint against the insured are to
be taken as true and liberally construed in favor of the insured.
Penn–America Ins. Co. v. Peccadillos, Inc., 27 A.3d 259, 264–65 (Pa.
Super. 2011) (citations and quotation marks omitted). The interpretation of
an insurance policy is a question of law. Kvaerner, 908 A.2d at 893. Our
standard of review is de novo, and thus, we need not defer to the findings of
the trial court. Id. Our scope of review, to the extent necessary to resolve
the legal question before us, is plenary. Id.
On appeal, Nationwide contends that the trial court erred when it
concluded that neither the intentional act exclusion nor the criminal act
exclusion applied and denied its motion for summary judgment. No one
challenged whether these exclusions applied to James Kelly. The issue is
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whether the intentional act and/or criminal act exclusion contained in the
homeowners’ policy applies to deny coverage to Nancy Kelly, an innocent co-
insured, since she did not shoot Santiago. Nationwide’s Brief at 31.
Carrasquillo and Nancy Kelly argue that neither exclusion applies. First,
they claim that the intentional act exclusion does not apply in this case
because the allegations in Carrasquillo’s complaint do not clearly demonstrate
that the shooting was intentional. Since the circumstances surrounding the
shooting are unknown at this time, it is unclear whether James Kelly intended
to harm Santiago. Carrasquillo’s Brief at 16-18.
Furthermore, the complaint clearly states that the incident resulting in
Santiago’s injuries was caused exclusively and solely by the defendants’
negligence. Thus, considering only the allegations of the complaint, which the
Court is required to do, Carrasquillo’s claims potentially fall within the scope
of the policy and trigger coverage. Carrasquillo’s Brief at 12-14, 18; Kelly’s
Brief at 18-19.
Similarly, Carrasquillo argues that the criminal act exclusion also does
not apply because the complaint characterizes the shooting as an accident.
Carrasquillo claims Nancy Kelly’s actions were negligent, not criminal.
Carrasquillo’s Brief at 19. Thus, according to Carrasquillo and Kelly, the trial
court correctly denied summary judgment. Carrasquillo’s Brief at 18; Kelly’s
Brief at 19.
The trial court found that a genuine issue of fact existed regarding the
actions of Nancy Kelly, namely, whether she acted negligently in storing the
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gun, in allowing James Kelly access to the gun, and/or in failing to inform
Santiago that the gun was accessible. Trial Court Opinion, 3/25/19, at 10.
Thus, the trial court determined that the intentional act and criminal act
exclusions did not apply. Comparing the four corners of the insurance contract
to the four corners of the complaint, there are no allegations that Nancy Kelly
acted criminal or intentionally. Trial Court Opinion, 3/25/19, at 10. The trial
court, therefore, concluded that Nationwide was required to defend, and
potentially indemnify, Nancy Kelly in the underlying action and denied
Nationwide’s request for summary judgment. Id. at 11. Based upon our
review of the record and applicable law, we disagree.
First, we consider whether the trial court erred in determining that the
criminal act exclusion did not apply. That exclusion provides that Nationwide
does not cover payments for bodily injury or property damage “caused by or
resulting from an act or omission which is criminal in nature and committed
by an insured” regardless of whether the insured is actually charged with, or
convicted of a crime.
Here, it is undisputed that James Kelly pled guilty to third degree murder
for shooting Santiago, which formed the basis of the underlying wrongful
death complaint. Nationwide raised James Kelly’s criminal conviction as an
affirmative defense to the declaratory judgment action. To support its motion
for summary judgment, Nationwide attached a copy of the criminal docket
reflecting James Kelly’s guilty plea and sentence. Carasquillo presented no
evidence to dispute his conviction.
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Typically, we are required to consider only the allegations contained in
the underlying complaint to determine whether an insurer has a duty to
defend. In her wrongful death complaint, Carrasquillo alleged the criminal
nature of this incident by alleging that James Kelly, who had “dangerous
propensities”, “attacked” and “fatally shot” Santiago. Carrasquillo's Complaint
¶ 8.
This Court has stated that coverage determinations should not depend
upon the “use of artful pleadings designed to avoid exclusions in liability
insurance policies.” Steyers v. Bedford Grange Mut. Ins. Co., 900 A.2d
895 (Pa. Super. 2006). It is evident that Carrasquillo artfully crafted her
complaint, and omitted any reference to James Kelly’s conviction. We are
compelled to consider the conviction in determining whether the criminal act
exclusion applies in this case. There is no question that James Kelly’s
conviction for third degree murder triggers the criminal act exclusion and
clearly precludes any coverage for him. However, whether the criminal
conduct of one insured (here, James Kelly) vitiates coverage for claims of
negligence asserted against another insured (here, Nancy Kelly) depends on
the language in the policy.
Generally, courts have held that where exclusionary policy language
refers to the conduct of “any insured” and “anyone we protect”, the policy
precludes an innocent insured from coverage. Use of “an insured”, likewise,
equates to “any insured”. General Acc. Ins. Co. of Am. v. Allen, 708 A.2d
828, 832 (Pa. Super. 1998), appeal denied 764 A.2d 1070 (2000). Courts
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have found this terminology to be unambiguous. Under these policies, courts
apply the exclusion to all persons covered by the policy, including an innocent
co-insured.
For example, in McAllister v. Millville Mut. Ins. Co., 640 A.2d 1283,
1288 (Pa. Super. 1994), this Court held that “if the language of the policy,
particularly the exclusionary clause, clearly indicates that the insureds'
obligations are joint, then the prohibited acts of one insured bar all others
from recovering.” McAllister involved three insured brothers. One
committed arson by burning down the subject property; the other two sought
coverage for the loss. There, we held that, “[t]he use of the terms ‘any’ and
‘an’ in the exclusions clearly indicate that the insureds' obligations under the
policy's neglect and intentional provisions are joint, not several ... [such that]
the intentional actions of [the arsonist brother] bar any recovery by [other
brothers].” Id. at 1289 (emphasis added).
We reached the same conclusion in Donegal Mut. Ins. v.
Baumhammers, 893 A.2d 797, 818 (Pa. Super. 2006), affirmed in part,
reversed in part, 938 A.2d 286 (2007). In that case, the plaintiffs filed claims
against the parents of a mass shooter, Jeffrey Baumhammers, alleging that
Baumhammers’ parents were negligent by failing to take away his guns or
report his dangerous propensities to authorities. The excess policy at issue
contained a criminal act exclusion, which excluded coverage for bodily injury
or damage arising out of a criminal act of “any insured” whether or not such
insured is convicted of a crime. The parents claimed that the criminal act
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exclusion barred coverage for their son only, since he committed the
underlying criminal acts. Nonetheless, because the language of the exclusion
was clear and applied to criminal behavior of “any insured,” we concluded
that the criminal act exclusion applied to the parents.7 Id.
On the other hand, courts have held that where exclusionary language
refers to conduct of “the insured,” coverage is excluded only for the insured
in question, but other insureds are still covered under the policy. See Allen,
708 A.2d at 832; Maravich v. Aetna Life and Casualty Co., 504 A.2d 896
(Pa. Super. 1985) (where coverage was found for an innocent co-insured
under policy language excluding coverage for loss resulting from the neglect
of the insured where her husband had intentionally set their house on fire
and she had not.)
Here, the exclusionary language in the policy excludes coverage for the
criminal act of “an insured.” Indisputably, James Kelly is “an insured” under
the policy. Additionally, James Kelly committed a criminal act, third degree
murder, which is the harm in Carrasquillo’s underlying wrongful death action.
Based upon the foregoing discussion, we are constrained to conclude that the
policy excludes coverage for Nancy Kelly based on the criminal act of James
Kelly. As a matter of law, Nationwide is not obligated to defend or indemnify
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7We note that although this case was appealed to our Supreme Court, the
applicability of the criminal act exclusion was not addressed.
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Nancy Kelly in the underlying action. We, therefore, conclude that the trial
court erred in denying Nationwide’s motion for summary judgment.8
Judgment vacated. Order denying Nationwide’s motion for summary
judgment reversed. Jurisdiction relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 11/12/19
____________________________________________
8 Because the applicability of the criminal act exclusion is dispositive of this
matter, it is not necessary for us to address the applicability of the intentional
act exclusion.
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