First Liberty Ins. Corp. v. Coll, M.

J-A17015-15
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
THE FIRST LIBERTY INSURANCE IN THE SUPERIOR COURT OF
CORPORATION PENNSYLVANIA
v.
MICHAEL COLL AND COLLEEN COLL
v.
JAYDEN ALKER, A MINOR BY HIS
PARENTS AND NATURAL GUARDIANS,
KEVIN ALKER AND TARA ALKER IN
THEIR OWN RIGHT
Appellants No. 1622 EDA 2014
Appeal from the Order Dated April 14, 2014
In the Court of Common Pleas of Philadelphia County
Civil Division at No(s): September Term, 2012 No. 003400
BEFORE: GANTMAN, P.J., BENDER, P.J.E., and OTT, J.
MEMORANDUM BY OTT, J.: FILED AUGUST 07, 2015
Jayden Alker, a minor by his parents and natural guardians, Kevin
Alker and Tara Alker, in their own right (Alkers) appeal the order dated April
14, 2014, in the Court of Common Pleas of Philadelphia County, granting
declaratory judgment in favor of the First Liberty Insurance Corporation
(First Liberty).1 Specifically, the trial court determined the homeowner’s
insurance policy in question contained a valid and enforceable exclusion
regarding Jayden Alker’s injuries suffered through the Colls’ operation of a
____________________________________________
1
Michael Coll and Colleen Coll are not part of this appeal.
J-A17015-15
home day care business. The Alkers claim the trial court erred because (1)
there was no proof the day care service operated on a profit motive, and (2)
the term “Home Daycare Business” was inherently ambiguous. After a
thorough review of the submission by the parties, relevant law, and the
certified record, we affirm based upon the sound reasoning of the Honorable
Alice Beck Dubow in her Pa.R.A.P. 1925(a) opinion, dated January 6, 2015.2
Briefly, we note that the Alkers had left their child, Jayden, in the care
of Colleen Coll at the Colls’ home. The Alkers paid Coll $25.00 per day for
this care and on the date of the injury, the arrangement had been in place
____________________________________________
2
Our standard of review for declaratory judgment is well-established:
Our standard of review in a declaratory judgment action is
limited to determining whether the trial court clearly
abused its discretion or committed an error of law. We
may not substitute our judgment for that of the trial court
if the court's determination is supported by the evidence.
Pocono Summit Realty, LLC v. Ahmad Amer, LLC, 52 A.3d
261, 265 (Pa. Super. 2012)(citations and quotation marks
omitted).
Additionally,
[w]e will review the decision of the lower court as we
would a decree in equity and set aside the factual
conclusions of that court only where they are not
supported by adequate evidence. The application of the
law, however, is always subject to our review.
Id. (citations and quotation marks omitted).
Erie Insurance Group v. Catania, 95 A.3d 320, 322 (Pa. Super. 2014).
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for approximately two years. On October 11, 2010, while under the Colls’
care, in the Colls’ home, the Colls’ dog bit the child on the face, causing
physical and emotional injury. The Alkers filed suit against the Colls who
sought defense and indemnification through their homeowner’s insurance,
issued by First Liberty.
First Liberty filed this declaratory judgment action seeking a
declaration of rights and duties pursuant to the exclusion noted above.
Specifically, the relevant language of the policy is:
NO SECTION II – LIABILITY COVERAGES FOR HOME DAY CARE
BUSINESS.
LIMITED SECTION I – PROPERTY COVERAGES FOR HOME DAY
CARE BUSINESS
If an “insured” regularly provides home day care services to a
person or persons other than “insureds” and receives monetary
or other compensation for such services, that enterprise is a
“business.” Mutual exchange of home day care services,
however, is not considered compensation. The rendering of
home day care services by an “insured” to a relative of an
“insured” is not considered a “business.”
Therefore, with respect to a home day care enterprise which is
considered to be a “business,” this policy:
1. Does not provide Section II – Liability Coverages
because a “business” of an “insured” is excluded under
exclusion 1.b. of Section II – Exclusions[.]
See First Liberty Policy, Endorsement HO 04 96 04 91.
The relevant language of exclusion 1.b. is as follows:
1. Coverage E – Personal Liability and Coverage F – Medical
Payments to Others do not apply to “bodily injury” or “property
damage”:
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....
b. Arising out of or in connection with a “business”
engaged in by an “insured.” This exclusion applies but is
not limited to an act or omission, regardless of its nature
or circumstance, involving a service or duty rendered,
promised, owed, or implied to be provided because of the
nature of the “business[.]”
Id., Endorsement HO 00 03 04 91, Section II, 1.b., at 12 of 18.
The trial court has provided a proper analysis regarding the Alkers’
first contention regarding the application of the “profit motive” as a defining
factor for the application of a business exclusion. See Trial Court Opinion,
1/6/2015, at 3-5, 6-8.
Regarding the Alkers’ second issue; although the trial court opinion
does not specifically address the nature of a home day care business, it is
nonetheless clear reading the entire decision that the trial court determined
the child care services Coll provided fit the description. Our review of the
certified record finds no error therein.
Throughout the 1925(a) opinion, the trial court refers to the regularly
provided, paid, services supplied by Coll as babysitting the child. We believe
that this alone fairly encompasses home day care services. However, the
certified record provides a more complete description of those services. The
record demonstrates that Coll cared for the child on a regular basis in her
home. She was paid for the service. See Answers to Interrogatories,
5/28/2013, at 4-7. She admitted she provided paid babysitting services to
both the Alkers and the child of another couple. Id. at 9. She had no
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restrictions on how she cared for the children, including the ability to take
them on daytrips, such as to the park. Id. at 8; N.T., Deposition of Colleen
Coll, 6/21/2013, at 16. She provided food, shelter and attention to the
children. Answers to Interrogatories, 5/28/2013, at 8; N.T. Deposition Coll,
6/21/2013, at 26. She provided medicine, as needed, to the Alkers’ child.
N.T. Deposition Coll, 6/21/2013, at 25. All of these facts support the
determination that Coll provided home day care services to the Alkers.3
Order affirmed. Parties are directed to attach a copy of the trial court
opinion in the event of further proceedings.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 8/7/2015
____________________________________________
3
Alkers opine, in part, that because the Coll situation does not meet the
statutory definition of “Family child day care home,” see 55 Pa.C.S. §
3209.4, Coll did not provide home day care services. This fact only
demonstrates Coll did not provide licensed day care services.
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J-A17015-15
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IN THE COURT OF COMMON PLEAS OF PHILADELPHIA COUNTY
FIRST JUDICIAL DISTRICT OF PENNSYLVANIA
TRIAL DIVISION - CIVJL
THE FIRST LIBERTY JNSURANCE SUPERIOR COURT
CORPORATION 1622 EDA 2014
Plaintiff
v. SEPTEMBER TERM, 2012
No. 3400
MICHAEL COLL, COLLEEN COLL
t
and
-
r
-
J.A., a minor by his parents :
and natural guardians, KEVIN ALKER and ., ··-' I
·_,
-:~
TARA ALKER in their own right
;, ;
Defendants. r·· :
c.
OPINION
III IllIll1209(:>:~40000071
Ill l II lllllllII I II Ill
I. PROCEDURAL HISTORY AND FACTS
This appeal arises from a Declaratory Judgment Action that The First Liberty Insurance
Corporation, a homeowner insurance carrier, filed in order to determine whether the insurance
carrier must provide coverage for an incident that occurred in the insured's home while the
insured was providing home daycare services. Since the insurance policy unambiguously
excludes coverage for incidents occurring while the insured is providing home daycare services,
the trial court ordered that the insurance company was not required to provide coverage and
indemnify the insured.
COPIES SENT PURSUANT TO Pa.R.C.P. 236(b) D. SPARACINO' 01/08/2015
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In particular, on October I I. 20 I 0. Colleen. Coll was providing daycare services for J.A.
in her home and Ms. Cotl's dog bit J.A. on the cheek . .I.A. sustained physical and emotional
injuries as a result of the dog bite. At the Lime. Ms. Coll had a homeowners insurance policy
with The First Liberty Insurance Company.
On September 28. 20 I::?. The First Liberty Insurance Company filed a Declaratory
Judgment Action against Michael and Colleen Coll as well as .J.A. and his parents lo determine
whether The First Liberty Insurance Company had to provide insurance coverage for the claim
arising out of the dog bite.
"\
The parties stipulated to the above-referenced facts of the case at the bench trial on
March 15, 2014 and the parties agreed to introduce into evidence Plainti rr s Exhibits t through
10. (N.T. 3/14/14 p. 5-6).
On March 31. 2014, the trial court ordered that The First Liberty Insurance Company was
not obligated to defend further and indemnify its insureds'. Michael Coll and Colleen Coll, in the
action that J .A. 's parents tiled against the Col ls. (Order. J/3 I/ 14 ).
On April 9.2014. J.A. a minor by his parents and natural guardians. Kevin Alker and
Tara A Iker r·A/ker Appellants") filed a Motion for Post-Trial Relief requesting that the trial
court reconsider its March 31, 2014 Order. (See Alker Defendants' Motion for Post Trial Relief.
4/9/ l 4). On April I 4. 2014. the trial court denied the A Iker Appel I ants' Motion for Post Trial
relief. (Order. 4/14/14.) On May 9. 2014, the A Iker Appellants filed a Notice of Appeal, (See
Docket).
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II. STATEMENT OF FACTS
The undisputed and relevant facts in this case arc as follows.
A. Facts Surrounding the Homeowners' Insurance Policv
The First Liberty Insurance Corporation issued a Liberty Guard Deluxe Homeowners
Insurance Policy ("the policy") to Michael and Colleen Coll with effective dates December 13.
2009 through December 13. 2010. designated as policy number 11]6-288-319145-409 .5.
(Plaintiffs Exhibit I). The policy was valid and in effect at the time of the incident that is the
subject of this Declaratory Judgment Action. Id.
.,
The policy does not provide coverage for incidents arising from any business in which
the insured engages. The specific language oft he policy provides that the policy does not
provide coverage for bodily injury or property damage ''urisin!! Olll of or in conneclron \\.illi u
'business engaged' in by an 'insured:·· Id. at Section II - Exclusions l(b) (emphasis added).
The policy details this exclusion by providing that the policy does not cover "an act or omission
regardless of its nature or circumstance, involving a service or duty rendered. promised. owed. or
implied to he provided because ot"tht! nature o/'1hc ·business .:" Ld_. (emphasis added).
The policy defines "business" as including a "trade. profession, or occupation." Id. at
Definitions.
The policy also contains an endorsement that addresses "home daycare business" and
precludes coverage for home day care activities that the insured regularly provides for
compensation. In particular, the policy does not provide liability coverage for a home daycare
business in a situation in which an "insured reJ,:ul<1rlv provides home day care services ton
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person or persons other than the insureds and receives moneturv or other compensalillll for such
services." Id. at Endorsement. Section II (emphasis added).
B. Facts Surrounding the Home Davcare Set-vices
At the time of the incident Col ken Coll had been babysi Hing for J. I\. for more than two
years in Ms. Col l's home. (Plaintiffs Exhibit 6 al ~5-7: Plaintiff s Exhibit 8 alp. l J-15). The
mother of .I.A. paid Ms. Coll $25/day to babysit IorJ.A. from 8:00 AM. to 5:00 P.!vf. during the
school year. (Plaintiffs Exhibit 6 at ~5-7: Plaintiffs Fxhibit 8 at p. 13-15: 26).
Before babysitting for J.A. in her home. Ms. Coll babysat for another child five days a
week for one and a half to two years. The parents of that chi Id also paid Ms. Coll $:f~/da).
(Plaintiffs Exhibit 6 at ~9: Plaintiffs Exhibit 8 at p. 10).
On the day of the incident. Ms. Coll was also providing home daycare services for her
nephew and a child of a family friend.' (Plaintiffs Exhibit 6 al i]8).
Ms. Colls friend referred the motherolf.A. to Ms. Corl to babysit forJ.A. (Plaintiffs
Exhibit 9 at p. 8). Consequently. Ms. Coif and the mother of .f.A. only knew each other through
the babysitting arrangement and did not socialize "outside of the babysitting." !_cl. at p. 22.
At the time of the incident. Ms. Coif owned a pit bull/lab mix. who was nine months old
and lived in the house with her. (Plaintiff's Exhibit 8 at p.17. 22). The dog bit .I.A. on his cheek
and .I.A. sustained ongoing physical and psychological injuries as a result of the dog bite.
(Plaintiffs Exhibit 9 al p. 34 ).
I
Although Ms. Coll provided home daycare services to her nephew and u lamily friend without churging their
or .I .I\. and another child $25 'day 10 provide
parents. Hint does not override the fact that Ms. Coll charged the parents
home daycare services.
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'
III. STATEMF.NT OF ERRORS COMPLAINF-D OF ON APPEAL
The Appellants raise the following issues on Appeal:
I. .. This Court erred hy denying the Alker Defendants Yzvppellants Motion for
reconsideration:"
2. "This Court erred by rinding as a matter of fact that Ms. Coll provided 'home day care
services· to f J.A. I:"
J. "This Court erred by holding that Ms. Colls activity fell within the business pursuits
exclusion of the appl icablc policy: ..
4. "This Court erred by holding-that the "continuity prong of the business pursuits
exception had been satisfied by Ms. Cell's actions:"
5. "This Court erred by holding that the 'profit motive' prong ofthe business pursuits
exception had been satisfied by Ms. Col l's actions:"
6. "This Cou11 erred by not holding that the business exclusion and home day care exclusion
are against public policy: ..
7. "The Court erred by holding that (.I.A.J's injuries 'arose out of and in connection with
Ms. Cali's daycare business' because {.1.Aj's injuries in fact arose out of and were in
connection to the negligent supervision ofa dog that had nothing to do with the alleged
'home daycare bus i ncss. · ··
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IV. LEGAL DISCUSSION
A. The Trial Court Properly Interpreted the Unambiguous Language of the
Horncowncrts Insurance Policy.
The trial court properly entered dee laratory judgment and ordered that The First l.iberty
Insurance Company was not obligated to defend further or indemnify Michael and Colleen Coll
because Ms. Coll was consistently providing home daycare services in her home for
compensation and thus, the Business Pursuit Exclusion from her policy applied.
The Pennsylvania Supreme Court has held that when the language or an insurance
contract is clear and unambiguous, the trial court must give effect lo the language:
The principles governing our interpretation of a contract o?
insurance are familiar and well settled. The [ask of interpreting a
contract is generally performed by a court rather than by a jury.
The goal of that task is, of course, to ascertain the intent of the
parties as manifested by the language of the written instrument,
Where a provision of a policy is ambiguous, the policy provision is
to be construed in favor of the insured and against the insurer, the
drafter of the agreement. Whc:re. however. the la11guauc of the
contract is clear and unambiguous. a court is required to give effoct
to that language.
Standard Venetian Blind Co. v. Am. Empire Ins. Co., 503 Pa. 300, 304-05, 469
A .2d 563. 566 ( 1983) (internal citations and quotations omitted: emphasis
added).
The courts. in interpreting insurance policies, have examined "business pursuit
exclusions" and considered I\VO factors when determining whether an insureds activities me a
"business." The courts first consider the con ti nuity of services Iha! the insured has provided and
second, whether the insured provided such services with a profit motive. '111e courts have defined
"profit motive" as a means of I ivcl ihood. a means or earning a living. procuring subsistence or
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profit. commercial transactions or engagements. Sun Alliant'.e Ins. Co. v. Soto. 836 F.2d 834,
836 (3d Cir. 1987).
In the context of providing home daycare services. the courts have held that the "profit
motive" prong is met when an insured is motivated to babysit by a desire for compensation rather
than emotional ties. Travelers lndcm. Co. v. Fantozzi By & Through_ F825 F. Supp. 80.
85 (E.D. Pa. 1993).
ln this ease. the literal words of the insurance policy address coverage when an insured
provides home daycare services and precludes coverage for home daycare services when the
insured I) regularly provides home day care services to a person or persons other LIFm the
insured: and 2) receives monetary or other compensation tor such services. (Plain ti !rs Exhibit
I ).
The undisputed facts in this case demonstrate that the exclusion for home daycare
services applies. For over two years. Ms. Coll babysat for .I.A. in her home three to lour days a
week during the school year for the entire duy and received compensation. (Plaintiff's Exhibit 6
at f5- 7: Plaintiffs Exhibit 8 at p.13-15. 26). Ms. Coll. prior to providing home day care services
to J.A., provided similar services to another child five days a week for the entire day for one and
a half to two years and was paid for such services. (Plaintiffs Exhibit 6 nt f9: Plaintiffs fxhibi!
8 at p, 10). Therefore, Ms. Coll consistently and regularly provided home daycare services not
only to .I .A. but also to another chi Id.Additionally. the parents of J.A. and the other child paid Ms, Coll for these home day
care services. specifically at a rate of $25.00 per day. (Plaintiff's l.xhibit 6 at VS- 7. ,;9:
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Plaintiff's Exhibit 8 at p. 10. [J.JS. 26). Thus. Ms.Coll received compensation in exchange for
providing home daycare services.
Additionally. when applying these facts to the courts· interpretation ofvbusi ness pursuit"
exclusions in insurance policies. the result is the same. Ms. Coll provided home daycare services
consistently, was paid for those services. and charged only individuals who were not relatives or
close family friends. (Plaintiffs Exhibit 6 at ~5-9) .. Therefore. Ms. Coll was being
compensated for services and engaged in a "business pursuit."
Therefore. the trial court properly entered declaratory judgment in favor of lhe First
I .ibcrty Insurance Company.
B. The Trial Court Properly Found That .J.A.'s Injuries Arose Out of and in
Connection With the Home Daycare Business.
The Alker Appellants argue that the business exclusion of the horneowner's policy only
applies lo injuries "arising out ofor in connection with a business." (Plaintiffs Exhibit I at
Section I! - Exclusions 1 (b)). The Alker Appellants conclude that since .I.A.'s injuries arose out
of the neg] igent supervision of a dog and not out of the operation of a home daycare center. the
exclusion docs not apply. (Statement of Errors at il7). This is incorrect.
Pennsylvania courts have determined that the term ..arising out of· is unambiguous and
indicates a "but for" or .. cause and result" relationship between the alleged injuries and the
business activities of the insured. Madison Construction Co. v. Harleysville Mutual lnsurance
Co .. 735 A.2d I 00 (Pa. 1999) (citing McC'nbc v. Old Republic Insurance Co .. 425 Pa. 22 I. :?28
A.2d. 90 I. 903 ( Pa. I 96 7)).
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In this case. J.A. 's injuries would not have occurred "bu! for" the fact that Ms. Coll was
providing babysitting services to him. JI\. was in Ms. Coll's home on the day the dog bit him
because Ms. Coll was babysitting for him. Consequently. the dog would not have bitten J.A. "but
for" Ms. Coll's babysitting for .I.A.
lherefore. the trial court properly dcterrni ned that J.A. 's inj uries arose out of and in
connection with Ms. Coll 's daycare business.
C. The Trilli Court's Decision Was Not Against Puhlic Policy
The Pennsylvania Supreme Court is hesitant to permit courts to declare contracts contrary to
public policy:
Public policy is to be ascertained by reference lo the laws and legal
precedents and not from general considerations of supposed pub I ic
interest. As the term "public policy" is vague, there must be found
definite indications in the law or the sovereignty to justify the
invalidation of a contract as contrary to that policy .... Only
dominant public policy would justify such action. In the absence of
a plain indication of that policy through long governmental
practice or statutory enactments. or of violations of obvious ethical
or moral standards. the Court shou lcl not assume to dee I are
contracts ... contrary to public pol icy."
Hall v. Amica Mutual Insurance Co .. 538 Pn. 337, 347-48. 648 A.2d 755, 760
(1994) (quoting Muschanv v. United Slates. 324 U.S. 49. 66-67. 65 S.Ct. 442.
451. 89 I..F.d. 744, 756 ( 1945) (footnotes and citations omitted).
Further. "Ir is only when a given policy is so obviously for or against the public health,
safety, morals or wel fore that there is a virtual unanimity of opinion in regard to it. that a court
may constitute itself the voice of the cornmuni ty in so decluri ng ... Only in the dearest cases,
therefore, may a court make an alleged public policy the basis of'judicial decision." Hall at 347-
348 (quoting Mamlin v. Genoe, 340 Pn. 320, 325. 17 A.2d 407. 409 ( 1941 »
()
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Here. the A Iker Appellants claim that "this Court erred by not holding that the business
exclusion and home day care exclusion arc against public policy .' (Statement or Errors at ~6).
The Alker Appellants, however, fail to articulate which "public: policy" that the trial court is
allegedly violating by enforcing the terms of the horneowncrs policy. Without a clearer
argument. the trial court cannot evaluate whether the provision violates public policy and the
Alker Appellants have waived this argument.
D. The Trial Court Properly Denied the Motion fur Reconsideration
The Superior Court has made it clear that "'the standard of review of a motion for
reconsideration is limited to whether the trial court manifestly abused its discretion or committed
.,
an error oflaw," Dahl v. AmcriOucst Mortgage Co .. 2008 PA Super 142. 954 A.2~1 588. 593 (Pu.
Super. Ct. 2008) citing Koresl826 A.2d 6. 7 (Pa.Super.2003).
Further. an abuse of discretion ··is not merely an error of'judgnient." Drelles v.
Manufacturers Life Ins. Co., 2005 PA Super 249, 881 A.2d 822. 830 ( Pa. Super. Ct. 2005) citing
In re Deed of Trust of Rose I Ii 11 Cemetery Association. 52 7 Pu. 21 I. 116. 590 A.1d I. J ( 1991 ).
Ruther. the standard lor abuse or discretion is. "i l. in reaching a conclusion. the lav .. i~ overridden
or misapplied. or the judgment exercised is manifestly unreasonable or lacking in reason.
discretion must be held to have been abused. Id. at 830-83 I,
For the reasons above. the trial courtdid not abuse its discretion or commit an error or
law. Therefore, the trial court properly denied the Alker Appellants' Motion for
Reconsideration.
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V. CONCLUSION
The trial court properly entered Declaratory Judgment and the Superior Court should
uphold its decision.
BY;zcRTflr--
ALICE BECK DUBOW . .JUDGE
Dated:
11