Federal Insurance Company v. Jenny M. Neice, Administratrix of the Estate of Jeremy R. Neice and Dana Mining Company of Pennsylvania, LLC

IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA
January 2023 Term FILED
__________________ March 3, 2023
released at 3:00 p.m.
No. 21-0735 EDYTHE NASH GAISER, CLERK
SUPREME COURT OF APPEALS
__________________ OF WEST VIRGINIA
FEDERAL INSURANCE COMPANY,
Third-Party Defendant Below, Petitioner,
v.
JENNY M. NEICE, Administratrix of the Estate of Jeremy R. Neice
and DANA MINING COMPANY OF PENNSYLVANIA, LLC,
Plaintiff/Third-Party Plaintiff Below, Respondents.
____________________________________________________________
Appeal from the Circuit Court of Monongalia County
The Honorable Phillip D. Gaujot, Judge
Civil Action No. 17-C-483
REVERSED AND REMANDED
____________________________________________________________
Submitted: January 10, 2023
Filed: March 3, 2023
Ronald P. Schiller, Esq. Scott S. Segal, Esq.
Bonnie M. Hoffman, Esq. Jason P. Foster, Esq.
HANGLEY ARONCHICK SEGAL THE SEGAL LAW FIRM
PUDLIN & SCHILLER Charleston, West Virginia
Philadelphia, Pennsylvania Counsel for Respondent Jenny M.
and Neice, Administratrix of the Estate
Charles R. Bailey, Esq. of Jeremy R. Neice
BAILEY & WYANT, PLLC
Charleston, West Virginia
Counsel for Petitioner
Tiffany R. Durst, Esq.
Nathaniel D. Griffith, Esq.
PULLIN, FOWLER, FLANAGAN,
BROWN & POE PLLC
Charleston, West Virginia
Counsel for Dana Mining Company
of Pennsylvania, LLC
JUSTICE WOOTON delivered the Opinion of the Court.
SYLLABUS BY THE COURT
1. “A circuit court’s entry of summary judgment is reviewed de novo.”
Syl. Pt. 1, Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994).
i
WOOTON, Justice:
Petitioner Federal Insurance Company (hereinafter “Federal”) appeals the
Circuit Court of Monongalia County’s March 4, 2020 and April 8, 2021, orders granting
summary judgment in favor of respondents Jenny M. Neice, Administratrix of the Estate
of Jeremy R. Neice (hereinafter “Neice”) and Dana Mining Company of Pennsylvania,
LLC (“hereinafter “Dana Mining”) (collectively “respondents”), finding that Federal owed
Dana Mining defense and indemnity pursuant to a liability insurance policy under which
Dana Mining was a named insured. Specifically, the circuit court found that, under
applicable Pennsylvania law, the policy’s “Employer’s Liability” exclusion (“ELE”)—
excluding coverage for claims or damages sustained by “any employee” arising out of his
or her employment with “any insured”—was inapplicable to Neice’s wrongful death action
against Dana Mining because Neice’s decedent was not an employee of Dana Mining.
After careful review of the briefs of the parties, their oral arguments, the
appendix record, and the applicable law, we find that the circuit court erred in concluding
that the ELE was inapplicable to Neice’s wrongful death claim against Dana Mining. We
conclude that Pennsylvania courts would adhere to the majority rule in their interpretation
and application of the subject policy’s ELE, finding that it bars coverage for Dana Mining
as to Neice’s claims. We therefore reverse the circuit court and remand for further
proceedings consistent with this opinion.
1
I. FACTS AND PROCEDURAL HISTORY
On January 16, 2016, Neice’s decedent, Jeremy Neice, was killed while
working in an underground coal mine in Pennsylvania that was owned by Dana Mining, a
wholly owned subsidiary of Mepco Holdings, LLC. Mr. Neice was an employee of Mepco,
LLC, a sister company of Mepco Holdings, LLC. For the time period covering Mr. Neice’s
accident, Mepco Holdings, LLC was insured under a “Mining Industries” insurance policy
issued by Federal. Dana Mining and Mepco, LLC were each designated as named insureds
by endorsement to the subject policy.
Neice filed a wrongful death action in Monongalia County against Dana
Mining as the owner/operator of the mine. Dana Mining tendered the complaint to Federal,
seeking defense and indemnity. Federal denied coverage based, in part, 1 on the ELE
endorsement, which provides, in pertinent part:
A. With respect to all coverages under this contract, this
insurance does not apply to any damages, loss, cost or expense
arising out of any injury or damage sustained at any time by
any:
1. employee . . . of any insured arising out of and in the
course of:
a. employment by any insured . . . .
1
Federal also asserted that Neice’s claim did not constitute an “occurrence” under
the policy and that the “Expected or Intended Injury” exclusion applied. The circuit court
rejected those coverage defenses in the orders on appeal; however, Federal assigns no error
to those rulings.
2
B. This exclusion applies:
1. regardless of the capacity in which any insured may be
liable;
2. to any insured against whom a claim or suit is brought,
regardless of whether such claim or suit is brought by an
employee . . . of:
a. such insured; or
b. any other insured . . . .
(Some emphasis added; language bolded in policy). Federal contended that since Mr.
Neice’s accident arose out of his employment with Mepco, LLC, a named insured, there
was no coverage for Neice’s claim against named insured Dana Mining.
Dana Mining filed a third-party complaint against Federal in the wrongful
death action, seeking a declaratory judgment requiring Federal to defend and indemnify
under the policy; Neice subsequently joined in the request for declaratory judgment. 2 All
2
Federal filed a motion to dismiss asserting the policy’s so-called “No Action”
clause which provides, in part: “No person or organization has a right under this insurance
to[] join [Federal] as a party or otherwise bring [Federal] into a suit seeking damages from
an insured[.]” In the order on appeal, the circuit court refused relief to Federal under this
provision, concluding that West Virginia procedural law expressly permits an action
against an insurer to determine coverage to be brought in the underlying personal injury
action. See Christian v. Sizemore, 181 W. Va. 628, 383 S.E.2d 810 (1989). Alternatively,
the circuit court found that Federal waived this provision by failing to seek a hearing or
ruling on its motion to dismiss.
Because we find Federal’s first assignment of error regarding the ELE dispositive,
it is unnecessary to address Federal’s additional assignments of error regarding the
applicability and operation of the “No Action” clause.
3
parties agreed that Pennsylvania law controlled the determination of coverage for purposes
of the declaratory judgment aspect of the proceedings.
Dana Mining then sought and obtained summary judgment as to Federal’s
duty to defend it in the underlying litigation. In its March 4, 2020, order, 3 the circuit court
concluded that Federal was obligated to defend Dana Mining under the subject policy,
finding that the ELE did not operate to preclude coverage when read in conjunction with
the “Separation of Insureds” provision, which states: “[T]his insurance applies[] as if each
named insured were the only named insured; and separately to each insured against
whom claim is made or suit is brought.”
The circuit court reasoned that, under applicable Pennsylvania law, the
language of this provision required it to treat other insureds under the policy as though they
“d[id] not exist.” Therefore, it found that the ELE’s exclusion of coverage for claims by
“any . . . employee” arising out of his or her employment with “any insured” must be read
as excluding only claims by employees of “the lone insured as to whom coverage is to be
tested,” i.e. Dana Mining. Simply put, the circuit court found that the ELE was applicable
to only those claims where an employee asserts a claim against his or her own insured
employer. In support of this construction, the circuit court relied almost exclusively on
language and reasoning from a case from Pennsylvania’s intermediate appellate court—
3
Federal filed an immediate appeal of this order, which we dismissed as
interlocutory.
4
Mutual Benefit Insurance Company v. Politopoulos, 75 A.3d 528, 537 (Pa. Super. Ct. 2013)
(“Politsopoulos I”), aff’d on other grounds sub nom. Mut. Benefit Ins. Co. v. Politsopoulos,
115 A.3d 844 (Pa. 2015) (“Politsopoulos II”). 4 See discussion, infra.
Neice then sought summary judgment on Federal’s duty to indemnify Dana
Mining for any damages arising from her wrongful death claim; Dana Mining joined in the
motion and Federal filed a cross-motion for summary judgment on the issue. The circuit
court adopted the interpretation of the ELE from the March 4 order, 5 finding that the
exclusion was equally inapplicable to indemnification and therefore the subject policy
provided indemnity to Dana Mining for Neice’s claim. This appeal followed.
II. STANDARD OF REVIEW
As is well-established, “[a] circuit court’s entry of summary judgment is
reviewed de novo.” Syl. Pt. 1, Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994).
And while this Court’s standard of review is governed by the law of West Virginia, the
underlying issue requires the Court to ascertain how a Pennsylvania court would resolve
the case at bar, similar to a federal court sitting in diversity:
4
Because the Pennsylvania Supreme Court corrected the misspelling of the
appellee’s surname by the Superior Court, we utilize the proper spelling throughout this
opinion.
5
This order was entered when the case was pending before Judge Susan B. Tucker;
the case was apparently thereafter transferred to Judge Gaujot who entered the second order
on appeal.
5
[W]e analogize the role of a state court ascertaining and
applying the common law of another state to that of a federal
court obliged to ascertain and apply state common law. When
an issue of state law arises in federal court and there is no
controlling decision by the state’s highest court, the federal
court is obliged to predict what the state’s highest court would
decide if confronted with the issue.
Lucero v. Valdez, 884 P.2d 199, 204 (Ariz. Ct. App. 1994). Although the “ultimate issue”
as presented by the parties has not been expressly decided in Pennsylvania, we are likewise
mindful that “[t]he absence of precedent is not the absence of law; there is law to be
discovered and applied, by any court having jurisdiction.” Arthur L. Corbin, The Laws of
the Several States, 50 Yale L.J. 762, 772 (1941).
III. DISCUSSION
As a preliminary matter, we note that Pennsylvania approaches the
interpretation and construction of insurance policies much as West Virginia does. Under
Pennsylvania law, “it is well established that, in construing a policy of insurance, a court
is required to give plain meaning to a clear and unambiguous contract provision unless
such provision violates the law or a clearly expressed public policy.” Safe Auto Ins. Co. v.
Oriental-Guillermo, 214 A.3d 1257, 1261 (Pa. 2019). Further, “[w]ords of an insurance
policy which are unambiguously written should be construed according to their plain and
ordinary meaning, and we should give effect to that language.” Techalloy Co., Inc. v.
Reliance Ins. Co., 487 A.2d 820, 823 (Pa. Super. Ct. 1984) (citations omitted). That said,
however, Pennsylvania courts have further observed that “exclusionary clauses should be
strictly construed as a general matter.” First Pa. Bank, N.A. v. Nat’l Union Fire Ins. Co.
6
of Pittsburgh, Pa., 580 A.2d 799, 802 (Pa. Super. Ct. 1990) (footnote omitted). With these
principles in mind, we proceed to the parties’ arguments.
A. THE LANGUAGE OF THE ELE
The circuit court found that, by application of the “Separation of Insureds”
provision, the subject ELE is inapplicable where the employee asserting the claim is not an
employee of the insured seeking coverage. Federal asserts this was erroneous because the
unambiguous language of the ELE plainly evidences an intent to exclude coverage for
claims or suits brought by “any employee” against “any” of the insureds, regardless of
whether he or she was an employee of the specific insured seeking coverage. Neice appears
not to dispute this reading of the ELE itself, relying primarily on the “Separation of
Insureds” provision to overcome the exclusion’s purported scope. Dana Mining augments
that position by arguing that ELEs are intended solely to avoid duplication of coverage
with workers’ compensation coverage and therefore any reading which applies the ELE
outside of an employee-employer relationship is contrary to its intended purpose, creating
a gap in expected coverage.
To Federal’s point, we observe that the Pennsylvania Supreme Court
mandates that the “terms used in the written insurance policy” are the primary source from
which to discern the intended operation of an exclusion. Donegal Mut. Ins. Co. v.
Baumhammers, 938 A.2d 286, 290 (Pa. 2007). Therefore, we begin our analysis with the
language of the ELE which provides that “this insurance does not apply to any damages . .
7
. arising out of any injury or damage sustained . . . by any[] . . . employee . . . of any insured
arising out of and in the course of[] . . . employment by any insured[.]” (Emphasis added).
We agree with Federal that a literal reading of this exclusion denies coverage for any
insured for claims by an employee of any of the universe of insureds under the policy—
regardless of whether the insured seeking coverage is the employee’s actual employer or
not. Although Mr. Neice was not Dana Mining’s employee, Neice’s claim arose out of his
employment with “any insured” under the policy, i.e., Mepco, LLC.
Critically, however, the ELE does not leave the matter at that. In a passage
given little to no analysis in the circuit court’s order or respondents’ briefs, the ELE
provides further clarification of its intended reach, stating that it “applies[] . . . regardless
of the capacity in which any insured may be liable[.]” (Some emphasis added). This
“capacity” language apparently purports to clarify the scope of the exclusion to ensure that
it is read as encompassing claims which may fall outside of the capacity one would expect
under the exclusion—that is, employment-based claims. 6 A plain reading of this provision
would suggest that it is designed to disabuse precisely the construction afforded to the ELE
6
See J&J Holdings, Inc. v. Great Am. E&S Ins. Co., 420 F. Supp. 3d 998, 1013
(C.D. Cal. 2019), aff’d sub nom. J & J Realty Holdings v. Great Am. E & S Ins. Co., 839
F. App’x 62 (9th Cir. 2020) (“If the Exclusion applied only to the employer of employees
that sustain injuries during the course of employment, the employer’s liability would, of
course, be in its capacity as an employer and not in “any other capacity.”).
8
by the circuit court—that it applies only in scenarios involving an employee’s claim against
his or her own employer.
Even more germane to the issue presented, however, is the second
“regardless of” clarification contained in the ELE. This provision further states that the
ELE applies “to any insured against whom a claim or suit is brought, regardless of whether
such claim or suit is brought by an employee . . . of[] . . . such insured[] or . . . any other
insured[.]” (Emphasis added). As applied to the case at bar, this language would appear
to reiterate that it indeed excludes coverage for Dana Mining regardless of whether Neice
is “an employee . . . of . . . such insured,” i.e. Dana Mining, or “any other insured,” i.e.
Mepco LLC. (Emphasis added).
Federal courts applying Pennsylvania law have interpreted such policy
language in precisely this fashion, finding that the ELE eliminates coverage for non-
employer insureds against claims arising from employment with a coinsured. See
Westminster Am. Ins. Co. v. Sec. Nat’l Ins. Co., 555 F. Supp. 3d 75, 85 (E.D. Pa. 2021),
appeal docketed, No. 21-2730 (3d Cir. Sept. 16, 2021) (finding that similar language
specifically “accounts for” suit by employee of another insured by “explicitly stating that
the exclusion apples ‘[w]hether an insured may be liable as an employer or in any other
capacity.’”); Great Lakes Ins. SE v. Wagner Dev. Co., Inc., No. CV 20-553-KSM, 2021
WL 4399677, at *3 (E.D. Pa. Sept. 24, 2021) (“Other judges applying Pennsylvania law
have interpreted policy provisions barring coverage when an individual has a relationship
9
with ‘any insured’ to mean what they say, regardless of the precise relationship between
the injured individual and the insured he or she sues.” (emphasis added)); Markel Ins. Co.
v. Young, No. CIV.A. 11-1472, 2012 WL 2135564, at *6 (E.D. Pa. June 12, 2012)
(rejecting argument that ELE applies only to employee-employer claims and noting that
“[t]he Markel insurance policy provides that the exclusion clause applies ‘[w]hether the
insured may be liable as an employer or in any other capacity.’”).
It would be difficult to find language which more clearly purports to exclude
claims by an employee of “any insured”—regardless of whether the insured seeking
coverage is the employer or not. In fact, this Court has previously found the term “any
insured” unambiguous in the context of an exclusionary clause and respondents direct us
to no Pennsylvania case to the contrary. See Am. Nat’l Prop. & Cas. Co. v. Clendenen,
238 W. Va. 249, 258, 793 S.E.2d 899, 908 (2016) (“We do not believe that [this] phrase[]
[is] ambiguous.”). It is presumably because of this relatively indisputable reading of the
policy language that respondents resort to the “Separation of Insureds” provision to attempt
to alter the applicability of the ELE, as discussed more fully infra.
B. “ANY” INSURED AND “THE” INSURED
Before turning to respondents’ argument that the “Separation of Insureds”
provision alters this plain reading of the ELE, it is necessary to first address the significance
of the ELE’s use of the term “any insured,” rather than “the insured” in its exclusion of
coverage for claims by employees of “any insured” which arise from their employment.
10
Respondents contend this distinction is a mere “red herring” that does not affect the impact
of the “Separation of Insureds” provision on the ELE. To the contrary, the difference
between these two terms as utilized in exclusionary provisions generally informs the issue
presented and provides the proper backdrop for consideration of the “Separation of
Insureds” issue. Further, this threshold analysis is particularly necessary because 1) the
endorsement in the instant case modified the policy’s original ELE language from “the
insured” to “any insured” in the applicable ELE endorsement; 2) the circuit court failed to
address the significance of the two terms to any degree; and 3) the circuit court relied
entirely on a case—Politsopoulos I— in which the policy utilized “the insured”—rather
than “any insured,” as contained in the instant policy.
As previously indicated, the ELE applicable in this case was issued by
endorsement, replacing the ELE contained in the policy itself. However, the language of
the policy ELE is still edifying for purposes of contrast with the ELE endorsement. The
policy ELE provided that the insurance did not apply to claims by an employee of “the
insured arising out of and in the course of[] . . . employment by the insured[.]” (Emphasis
added). The policy ELE contained a similar caveat that it applied “whether the insured
may be liable as an employer or in any other capacity[.]” However, the applicable ELE
endorsement amplifies this clarification by adding the language discussed above which
reiterates that the ELE applies “regardless of” whether the claimant is the employee of the
insured seeking coverage or the employee of “any other insured.”
11
By this comparison, we conclude that the ELE endorsement reflects a
significant modification of the operable language of the exclusion. This modification
appears to have sought to emphasize—and perhaps reshape—the breadth of the policy
exclusion. See, e.g., J&J Holdings, 420 F. Supp. 3d at 1011 (“[I]if the parties had intended
to limit the Exclusion such that it eliminated coverage only for the employer of the injured
employee, it could have stated that the insurance does not apply to injuries suffered by ‘an
employee of the insured arising out of and in the course of employment by the insured.’
Indeed, the original text of the Exclusion, which the operative endorsement replaced and
superseded, included that exact language.” (emphasis added)); Nautilus Ins. Co. v. K.
Smith Builders, Ltd., 725 F. Supp. 2d 1219, 1230 (D. Haw. 2010) (“[T]he Endorsement
Exclusion expressly modified the terms of the Policy by changing the bodily injury
exclusion to cover ‘bodily injury to an employee of any insured,’ . . . and not ‘bodily injury
to an employee of the insured[.]’ . . . . The court gives effect to this modification and finds
that the Endorsement Exclusion precludes coverage[.]”).
In fact, the substantive difference in these phrases has been the subject of
considerable analysis nationwide, including both Pennsylvania and West Virginia courts.
It is the “strongly established” majority view that the term “any insured” is meaningfully
different from “the insured”—the former referring not only to the insured seeking
coverage, but indeed “any” insured under the policy. Id.; see Spezialetti v. Pac. Emps. Ins.
Co., 759 F.2d 1139, 1141 (3d Cir. 1985) (finding that phrase “the insured” creates “some
uncertainty” among coinsureds but “[t]hat deficiency does not exist here where the policy
12
refers to ‘any insured,’ not ‘the insured.’”); Clendenen, 238 W. Va. at 258, 793 S.E.2d at
908 (“The majority of courts have held that unlike the phrase, ‘the insured,’ the phrase ‘any
insured’ unambiguously expresses a contractual intent to create joint obligations and to
prohibit recovery by an innocent co-insured.”). As one court has explained, “[t]o hold that
the term ‘any insured’ in an exclusion clause means ‘the insured making the claim’ would
collapse the distinction between the terms ‘the insured’ and ‘any insured’ in an insurance
policy exclusion clause, making the distinction meaningless.” Bituminous Cas. Corp. v.
Maxey, 110 S.W.3d 203, 214 (Tex. App. 2003); see also Nautilus Ins., 725 F. Supp. 2d at
1229 (“To give full effect to the terms of the Policy, the court must interpret an exclusion
barring coverage to ‘any insured’ differently from an exclusion barring coverage to ‘the
insured.’”). 7
This distinction has most often been addressed in the context of intentional
act exclusions which purport to eliminate coverage for one insured due to acts by another
7
See 3 Allan D. Windt, Insurance Claims and Disputes: Representation of
Insurance Companies & Insureds § 11:8 (6th ed. 2023) (“Many exclusions eliminate
coverage for certain actions taken by ‘any’ insured. Such an exclusion should be read to
eliminate coverage for all insureds[.]”); Archer Daniels Midland Co. v. Burlington Ins. Co.
Grp., Inc., 785 F. Supp. 2d 722, 734 (N.D. Ill. 2011) (“[T]he distinction between the terms
‘the insured’ and ‘any insured’ is . . . significant. . . . According to fundamental principles
of contract construction, the difference cannot be meaningless.”); BP Am., Inc. v. State
Auto Prop. & Cas. Ins. Co., 148 P.3d 832, 836 (Okla. 2005), as corrected, (Oct. 30, 2006)
(“[T]he term ‘any insured’ in an exclusionary clause is unambiguous and expresses a
definite and certain intent to deny coverage to all insureds”); USA Gymnastics v. Liberty
Ins. Underwriters, Inc., 27 F.4th 499, 520 (7th Cir. 2022) (“‘Any,’ to a reasonable person,
does not mean ‘the’ and is not limited to a particular insured’s conduct. . . . ‘Any Insured’
is broad, yet clear in its meaning, so it does not admit of ambiguity. It would muddy the
language to read ‘any’ to mean something other than ‘without restriction.’”).
13
coinsured. In that vein, policy language which excludes coverage due to the act of “any
insured” has been described as creating joint obligations among coinsureds and therefore
successfully operates to eliminate coverage when any insured breaches that obligation.
Pennsylvania courts and courts applying Pennsylvania law have adhered to this view of
such exclusions. See McAllister v. Millville Mut. Ins. Co., 640 A.2d 1283, 1289 (Pa. Super.
Ct. 1994) (“The 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.”); Travelers Home & Marine Ins. Co. v. Stahley, 239 F. Supp. 3d 866, 872-73
(E.D. Pa. 2017) (“Whether the intentional act of one co-insured will also preclude coverage
of innocent co-insureds hinges upon the exclusionary language used in the policy. . . . This
determination often turns on whether the exclusionary provision applies to ‘the insured,’
‘an insured,’ or ‘any insured.’”) (footnotes omitted)); see also Kundahl v. Erie Ins. Grp.,
703 A.2d 542, 544-45 (Pa. Super. Ct. 1997), superseded by statute on other grounds as
stated in Lynn v. Nationwide Ins. Co., 70 A.3d 814 (Pa. Super. Ct. 2013) (“A loss caused
by ‘anyone we protect’ unequivocally evinces joint responsibility, since the term ‘anyone’
is naturally inclusive as opposed to exclusive. Thus, if any one [insured] violates the
policy, coverage must be denied to all insureds.” (citations omitted)).
In McAllister, the Superior Court of Pennsylvania traced Pennsylvania’s
handling of this issue back to 1926 when the Court found that an insurance policy did not
purport to insure the “interests of the assured in severalty but jointly” and therefore the act
of an insured barred coverage for the innocent coinsured. Id. at 1286 (citing Bowers Co.
14
v. London Assurance Corp., 90 Pa. Super. 121, 125 (1926)). The McAllister court noted
that Pennsylvania Superior Courts had continued to follow the “joint obligation” approach,
finding that whether a coinsured would be denied coverage “depends on whether the
interests of the co-insureds are joint or severable . . . . as expressed in the insurance
policy[.]” Id. at 1287 (citing Maravich v. Aetna Life & Cas. Co., 504 A.2d 896, 902-03
(Pa. Super. Ct. 1985)). Critically, the court drew a distinction between precedent that dealt
with policies barring coverage due to the act of “the insured” from the policy before it
which utilized the term “any insured.” Id. It observed that the Third Circuit had concluded
that, under Pennsylvania law, a policy which purported to exclude coverage for the
dishonest act of “any insured” was unambiguous and “could not have been any clearer,”
but that the “outcome may have been different had the exclusion used the term ‘the insured’
instead of ‘any insured.’” Id. (citing Spezialetti, 759 F.2d at 1141-42).
Guided by this precedent, the McAllister court found 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” and that the intentional
act of one insured bars coverage to an innocent coinsured under such an exclusion. Id. at
1289. Relying on this decision, Pennsylvania federal courts sitting in diversity have
construed similar exclusions accordingly, adhering to the majority view. See Westport
Ins. Corp. v. Hanft & Knight, P.C., 523 F. Supp. 2d 444, 461 (M.D. Pa. 2007)
(“Pennsylvania law is clear that the use of the term ‘any insured’ in these exclusions, rather
than ‘the insured,’ bars coverage for innocent co-insureds.”); Stahley, 239 F. Supp. 3d at
15
874 (“[T]he Court concludes that the Pennsylvania Supreme Court would interpret a
provision applying to ‘an insured’ as having the same exclusionary effect as a provision
referring to ‘any insured.’ Accordingly, the intentional act exclusion in the Policy bars
coverage of [the insured due to acts by coinsured].”); Strouss v. Fireman’s Fund Ins. Co.,
No. CIV.A. 03-5718, 2005 WL 418036, at *4 (E.D. Pa. Feb. 22, 2005) (stating that under
Pennsylvania law “[i]t is equally well-settled that where an intentional injury exclusion
applies by its terms to ‘any insured’ . . . an innocent insured is precluded from recovering
losses related to contractually proscribed conduct by a co-insured.”); Ferrino v. Pac.
Indem. Co., No. CIV. A. 95-102, 1996 WL 32146, at *3 (E.D. Pa. Jan. 24, 1996)
(“McAllister; Spezialetti v. Pacific Indemnity Ins. Co., []; and Atlantic Mut. Ins. Co. v.
Central Capital Leasing Corp., [] all hold that policy language referring to ‘any insured’
or similar language is unambiguous and indicates that the insureds’ obligations and
interests are joint.”) (footnote omitted)); Atl. Mut. Ins. Co. v. Ctr. Cap. Corp., No. CIV. A.
91-4636, 1992 WL 97823, at *4 (E.D. Pa. May 5, 1992), aff’d, 983 F.2d 1049 (3d Cir.
1992) (“[T]his court concludes that the language of the provision clearly evidences the
intent to deny coverage in the event of the fraud of any insured.”).
Respondents insist that the analysis of the language of intentional act
exclusions is not germane to ELEs but fail to articulate why Pennsylvania courts’ analysis
of precisely the same operative phrases and language is not instructive in ascertaining how
a Pennsylvania court would rule on the issue at hand. In fact, federal courts obliged to
16
apply Pennsylvania law have expressly relied upon this precedent and utilized the same
analysis when confronted with ELEs.
Most recently, in Westminster American the United States District Court for
the Eastern District of Pennsylvania found that an ELE precluded coverage for an
employee’s claim against a non-employer property owner and contractor that were
additional insureds under a commercial general liability policy. 555 F. Supp. 3d at 75.
Like the policy in this case, the Westminster policy excluded coverage for claims by an
employee of “‘any insured arising out of and in the course of[] . . . [e]mployment by any
insured’” and noted that the ELE applied “‘[w]hether an insured may be liable as an
employer or in any other capacity.’” Id. at 84. The District Court found that “‘[u]nder
Pennsylvania law, “[an] employee injury exclusion provision applie[s] to additional
insureds seeking coverage under the policy, and not just to the primary purchaser of the
policy.”’” Id. (quoting Brown & Root Braun, Inc. v. Bogan Inc., 54 F. App’x 542, 546 (3d
Cir. 2002)); accord Szeles Real Est. Dev. Co., L. P. v. Hartford Cas. Ins. Co., No. CIV. A.
12-7145, 2013 WL 3865104, at *3 (E.D. Pa. July 25, 2013) (“The Policy’s employee injury
exclusion provision thus bars coverage for claims brought by Berkshire employees against
Berkshire, as the named insured, and also applies with equal force to claims brought by
Berkshire employees against [non-employer] Szeles, as an additional insured.”);
Arcelormittal Plate, LLC v. Joule Tech. Servs., Inc., 558 F. App’x 205, 211 (3d Cir. 2014)
(“The long-standing rule under Pennsylvania law, by contrast, is that an employee
exclusion in a CGL policy generally does bar coverage for claims against one insured by a
17
different insured’s employee.”); Markel Ins., 2012 WL 2135564, at *5 (citing Pa. Mfrs.
Ass’n Ins. Co. v. Aetna Cas. and Sur. Ins. Co., 233 A.2d 548, 550-51 (Pa. 1967) (“An
employer liability exclusion clause precludes coverage for an injury suffered by an
employee of any named insured, regardless of whether the employee works for the named
insured seeking coverage.”); Brown & Root Braun, 54 F. App’x at 546 (“The Pennsylvania
Supreme Court squarely rejected Aetna’s position that the employee injury exclusion
provision in the policy . . . operated to exclude coverage for employees only when those
employees are employed by the insured seeking coverage[.]”).
Therefore, we readily conclude that courts obliged to apply Pennsylvania law
have consistently aligned Pennsylvania with the majority viewpoint that where an
exclusion references “any insured,” the language is read more broadly than “the insured”
and is to be applied according its plain and ordinary meaning.
C. THE “SEPARATION OF INSUREDS” PROVISION
As previously indicated, both the circuit court and respondents focus less on
the wording of the exclusion itself than the effect of the “Separation of Insureds” provision
on that wording. They contend that the “Separation of Insureds” provision renders any
other insureds under the policy conceptually non-existent and requires the ELE to be
viewed solely through the lens of the insured seeking coverage. Following this argument,
to the extent the insured seeking coverage is not the employer and all other potential
18
employer-insureds “do not exist,” the ELE retains no applicability. 8 Respondents are
dismissive of the foregoing caselaw, arguing that either the policies did not contain, or the
decisions failed to discuss the impact of, a “Separation of Insureds” provision, among other
contextual distinctions. While Neice argues that the “Separation of Insureds” provision
clearly modifies the scope of the ELE, Dana Mining argues that “[a]t the very least” it
renders the ELE ambiguous. 9 We find that a Pennsylvania court would disagree on both
counts.
8
We note that the bulk of Neice’s brief is fundamentally dependent upon the Court’s
indulgence of a paradigm of sorts that places the various insureds under the subject policy
into categories which she contends clarifies the application of the ELE, i.e. first named
insureds, named insureds, “relational” insureds, and “non-insureds.” This scheme
ostensibly suggests an operable distinction between types of “insureds” that is not entirely
based in the policy language. Moreover, we find no indication in the subject policy or
pertinent authority that permits us to engage in the fiction that various types of “insureds”
under the policy “move” from one category to another or otherwise “cease to exist” for
purposes of the issue at hand—another fundamental precept of Neice’s argument.
More importantly, the underlying principle of this paradigm appears to be that the
existence of a “Separation of Insureds” provision predominates the application of the ELE
irrespective of the language of the ELE itself. For the reasons discussed herein, we
disagree.
9
Dana Mining further argues that the circuit court’s construction of the ELE is both
consistent with the “purpose” of the ELE and the “parties’ expectations.” However, the
parties offer no record evidence regarding how any of the parties “intended” the various
coverages to operate and, more importantly, in Pennsylvania, “reasonable expectations”
arguments typically extend only to consumers, not commercial entities. See Madison
Const. Co. v. Harleysville Mut. Ins. Co., 735 A.2d 100, 109 n.8 (Pa. 1999) (noting that
extending reasonable expectations argument to commercial entities would “entail a
substantial expansion” of the doctrine). Further, “an insured may not complain that his or
her reasonable expectations were frustrated by policy limitations which are clear and
unambiguous.” McAllister, 640 A.2d at 1288.
19
As indicated, the “Separation of Insureds” provision in this case provides that
the insurance applies “as if each named insured were the only named insured[.]”
Mimicking language from Politsopoulos I, the circuit court explained that this provision
creates a fictitious scenario where other named insureds cease to exist and therefore
“cannot employ anyone.”
There is a small minority of courts that have adopted a similar view of ELEs.
The argument is typically presented in one of two ways:
[T]hese courts find either that a severability clause
unambiguously modifies the entirety of a policy, including its
coverage and exclusion provisions, as if the insured claiming
coverage was the only insured; or, then again, that the existence
of the severability clause renders an exclusion applicable to
“any insured” ambiguous, which requires a construction in
favor of coverage
Strouss, 2005 WL 418036, at *5; see also Nautilus Ins., 725 F. Supp. 2d at 1229 (“Under
the minority [view], the two phrases are treated indistinguishably—that is, like ‘the
insured,’ ‘any insured’ is interpreted as if it encompasses only the particular insured
seeking coverage.”).
However, this reasoning has been soundly rejected by a majority of courts
and dismissed by one commentator as “not justifiable.” 10 At best, the “Separation of
10
As the commentator explained:
(continued . . .)
20
Insureds” provision has largely been found to alter or create ambiguities in exclusionary
language only when it refers to “the insured.” See Maxey, 110 S.W.3d at 214 (“If the
exclusion clause uses the term ‘the insured,’ application of the separation of insureds clause
requires that the term be interpreted as referring only to the insured against whom a claim
is being made under the policy. If, however, the exclusion clause uses the term ‘any
insured,’ then application of the separation of insureds clause has no effect on the exclusion
clause; a claim made against any insured is excluded.” (citations omitted)); Politsopoulos
II, 115 A.3d at 854 (finding ELE’s reference to “the insured” ambiguous when viewed in
light of “Separation of Insureds” provision). The reason for this application of the
“Separation of Insureds” provision traces back to the genesis of the provision itself.
As discussed by several courts, the “Separation of Insureds” provision was
designed specifically to clarify the meaning and application of policies which utilized “the
insured” and ensure that “the insured” was read as meaning “the insured seeking coverage.”
As explained by the United States District Court of Hawaii:
[I]t has been held that an “any insured” exclusion will be
treated like a “the insured” exclusion if the policy contains a
severability clause; that is, a provision stating that the
“insurance applies separately to each insured.” Such a holding
is not justifiable. A severability clause provides that each
insured will be treated independently under the policy. The fact
remains, however, that as applied even independently to each
insured, an “any insured” exclusion unambiguously eliminates
coverage for each and every insured.
Windt, supra note 7, § 11.8 (footnotes omitted).
21
Prior to 1955, courts interpreted exclusions concerning “the
insured” to preclude coverage for any insured—a result
contrary to the intentions of the insurance companies. In 1955,
to resolve the confusion and clarify that ‘the insured’ is to be
applied separately to each individual insured, the National
Bureau of Casualty Underwriters and the Mutual Insurance
Rating Bureau adopted the separation of insureds clause, then
titled the severability of interests clause. The history of the
separation of insureds clause shows that “the term ‘the insured’
means, and means only, the person claiming coverage, or (to
put it another way) only the person coverage for whom is at
issue.”
Nautilus Ins., 725 F. Supp. 2d at 1229-30 (citations omitted). As a result, “[t]he history of
the separation of insureds clause . . . ‘makes clear that the “separation of insureds” clause
only affects exclusionary clauses referring to “the insured,” and not “any insured.”’” Id.;
see Ohio Cas. Ins. Co. v. Holcim (US), Inc., 744 F. Supp. 2d 1251, 1271 (S.D. Ala. 2010)
(“When such clauses (which are also known as severability clauses) became standard in
liability insurance policies more than a half century ago, the insurance industry’s purpose
and intent was to clarify ‘that the term “the insured” in an exclusion refers merely to the
insured claiming coverage.’”); see also Universal Ins. Co. v. Burton Farm Dev. Co., LLC,
718 S.E.2d 665, 670 (N. C. Ct. App. 2011) (“Since the exclusion refers to the insured rather
than any insured, the separation of insureds clause requires that the exclusion be applied
separately with respect to each insured.”). Therefore, in light of the creation of the
“Separation of Insureds” provision, the term “any insured” took on a comparatively broader
import: “After companies began including the separation of insureds clause, the ‘majority
of reported decisions’ interpreted exclusions applicable to ‘any insured’ to permit insurers
22
to deny coverage to an insured when another employer’s employee sued for injuries.” J&J
Holdings, 420 F. Supp. at 1012.
Although not binding on our decision, this Court has made the same
observation. See Clendenen, 238 W. Va. at 263, 793 S.E.2d at 913 (agreeing that “[t]he
majority of courts across the country addressing the impact of severability clauses on
exclusionary language utilizing ‘an insured’ or ‘any insured’ have concluded that the
severability clause has no bearing on the application of the exclusionary language.”); see
also J & J Holdings, 420 F. Supp. 3d at 1011-12 (“[M]any other states follow the rule that
‘the use of “any” clearly conveys that the excluded activity of one insured will bar coverage
for all others, regardless of a severability clause.’ Indeed, this approach represents the
majority view.” (citations omitted)); Am. Fam. Mut. Ins. Co. v. White, 65 P.3d 449, 456
(Ariz. Ct. App. 2003) (“Most courts that have construed the phrase ‘any insured’ in an
exclusion have found that it bars coverage for any claim attributable to the excludable acts
of any insured, even if the policy contains a severability clause.” (footnote omitted)).
Most importantly, we find that Pennsylvania courts—and courts bound to
apply Pennsylvania law—have aligned themselves with this majority position. See
McAllister, 640 A.2d at 1289 (“Notwithstanding the provision which defines each named
insured as a ‘separate insured’ under the policy, the policy specifically provides that
Millville will not pay for loss resulting from neglect by ‘any insured’ or from the intentional
acts of ‘an insured.’”) (emphasis added)); Stahley, 239 F. Supp. 3d at 875 (“A severability
23
clause . . . does not modify a policy’s exclusion when the exclusion provision applies to
‘any insured[]’ . . . . [and] does not override the clear and unambiguous language of the
intentional act exclusion[.]”); Markel Ins., 2012 WL 2135564, at *6 (“A severability clause
in an insurance contract does not change the meaning of the word ‘insured’ in the employer
liability exclusion clause to ‘insured being sued.’”); Neff ex rel. Landauer v. Alterra
Healthcare Corp., 271 F. App’x 224, 226 (3d Cir. 2008) (rejecting invocation of
“Separation of Insureds” provision to create ambiguity and stating “[t]he abuse or
molestation does not have to have been committed by ‘the insured’ or even ‘an insured,’
but by ‘anyone.’ Invoking the separation of insureds provision does not narrow the broad
reach of the exclusion.”); Brown & Root Braun, 54 F. App’x at 548 (“We conclude that
the severability clause does not exclude [the non-employer insured seeking coverage] from
the employee injury exclusion provision.”). Cf. Strouss, 2005 WL 418036, at *6 (“[T]his
Court is not convinced that the Pennsylvania Supreme Court would overrule McAllister
and find that the severability clause renders the ‘one or more insured’ language in the
instant policy ‘ambiguous’ as a matter of law.”) (footnote omitted)).
While Neice and Dana Mining insist that failure to apply the “Separation of
Insureds” provision in this manner renders it meaningless, many courts have found just the
opposite—that using the “Separation of Insureds” provision to make “any insured” read as
“the insured seeking coverage” would “render the ‘any’ or ‘anyone’ language in the
applicable provisions superfluous[.]” Clendenen, 238 W. Va. at 267, 793 S.E.2d at 917;
see also Pa. Mfrs’ Ass’n Ins. Co. v. Aetna Cas. & Sur. Ins. Co., 233 A.2d 548, 551 (Pa.
24
1967) (“Neither the court below nor this court is reading the Severability of Interests clause
out of the policy. What we are doing is interpreting the unambiguous language of the
contract.”). 11 As Federal correctly notes, the subject policy utilizes the term “the insured”
in two of its other exclusionary provisions—the “Expected or Intended Injury” exclusion
and “Crime or Fraud Exclusion.”—which the “Separation of Insureds” provision could
potentially impact pursuant to Politsopoulos II. See, e.g., Am. Fam. Mut. Ins. Co. v.
Wheeler, 842 N.W.2d 100, 107 (Neb. 2014) (“[W]e do not agree with the . . . argument
that the majority position renders the severability clause meaningless. First, the
severability clause affects the interpretation of exclusions referencing ‘the insured.’ There
are such exclusions in these policies, such as the ‘Illegal Consumption of Alcohol’
exclusion.”).
The foregoing notwithstanding, the circuit court—and respondents—insist
that the Pennsylvania Superior Court case of Politsopoulos I is “almost completely
analogous” and mandates a contrary interpretation of the ELE in the instant case. However,
11
See Vivify Constr., LLC v. Nautilus Ins. Co., 94 N.E.3d 281, 288 (Ill. App. Ct.
2017) (“Furthermore, our interpretation does not render the separation of insureds
provision meaningless, as that provision must still be applied to the policy’s other
exclusions.”); Chacon v. Am. Fam. Mut. Ins. Co., 788 P.2d 748, 752 (Colo. 1990) (“We
find the reasoning of the majority of courts more persuasive . . . because it considers and
gives effect to all the policy provisions and recognizes that an insurance policy is a contract
between the parties which should be enforced in a manner consistent with the intentions
expressed therein.” (footnote omitted)). Cf. Maxey, 110 S.W.3d at 214 (“[C]onstruing the
term ‘any’ the same as the word ‘the’ in an exclusion clause when an insurance policy
contains a separation of insureds or severability of interests clause would require a tortured
reading of the terms of the policy.”).
25
we find that reliance on Politsopoulos I to render the ELE at bar inapplicable reflects a
gross misunderstanding of the significance of both the policy language and the issue
presented as a whole—as demonstrated by the Pennsylvania Supreme Court’s analysis in
Politsopoulos II.
In Politsopoulos I, the plaintiff/employee of a property lessee filed a
negligence action against the lessor/owner under a premises liability theory. The insurer
denied coverage on the basis of an ELE that excluded coverage for claims by “[a]n
‘employee’ of the insured arising out of and in the course of[] . . . [e]mployment by the
insured[.]” 75 A.3d at 530 n.2 (emphasis added). The trial court found that because the
coinsured lessor/owner was an insured under the policy, it qualified as “the insured” for
purposes of triggering the ELE even though it was not the plaintiff’s actual employer. Id.
at 532-33.
On appeal, the Superior Court reversed, finding that the “Separation of
Insureds” provision required it to read the ELE as though the insured seeking coverage was
the only insured under the policy. Id. at 537. The Politsopoulos I court reasoned:
There is no dispute that [the employer/lessors] are insureds
under the Umbrella Policy. However, the Umbrella Policy
directs us to treat each insured as though no other insured
exists. An insured who does not exist cannot employ anyone.
Thus, if the person injured is not employed by the lone insured
as to whom coverage is to be tested, the Employers’ Exclusion
simply does not come into play.
26
Id. As previously indicated, the circuit court below borrowed this analysis and language
nearly verbatim to find the ELE at issue inapplicable.
However, the circuit court failed to recognize that, on appeal of this ruling,
the Pennsylvania Supreme Court thoroughly explained why the policy language at issue in
that case yielded such a result and expressly contrasted it with the type of exclusionary
language used in the case at bar. In Politsopoulos II, the Court found that because the ELE
used the phrase “the insured,” it was ambiguous, particularly when construed with the
“Separation of Insureds” provision. 115 A.3d at 854 (emphasis added). By way of
footnote, however, it expressly distinguished the policy language at issue with exclusions
which used the term “any insured”: “[I]n terms of ‘any insured’ exclusions, the main
controversy appears to center, not on whether the term unambiguously implicates any or
all insureds, but upon whether such meaning should be narrowed to the insured against
whom a claim is asserted in light of a separation-of-insureds clause.” Id. at 851 n.5. The
Court then acknowledged that, as pertains to “any insured,” “[t]he great majority of courts
. . . merely apply the rule that a separation-of-insureds clause does not negate the effect of
a plainly worded exclusion.” Id.
This explicit carve out of “any insured” exclusionary provisions from its
analysis notwithstanding, the Politsopoulos II discussion is instructive on Pennsylvania’s
likely treatment of the term “any insured” in an ELE. First, the Politsopoulos II court
emphasized that, as to an ELE, “the appropriate focus here is less upon the specific wording
27
of the separation-of-insureds clause than on the terms of the employer’s liability
exclusion.” Id. at 851. Consistent with its characterization of “any insured” exclusions,
the Court then expressly rejected the notion that the “Separation of Insureds” provision
alone can undermine unambiguous exclusions: “[N]either a separation-of-insureds clause
nor its analogue, a severability-of-interests provision, is to be interpreted in a manner which
would subvert otherwise clear and unambiguous policy exclusions.” Id. at 850. 12
Secondly—and contrary to respondents’ contention that the distinction
between “the insured” and “any insured” is immaterial—the Politsopoulos II court found
the ELE in that case ambiguous specifically because it utilized the phrase “the insured”
rather than “any insured”:
[W]e are persuaded that, at least where a commercial general
liability policy makes varied use of the definite and indefinite
articles, this, as a general rule, creates an ambiguity relative to
the former, such that “the insured” may be reasonably taken as
signifying the particular insured against whom a claim is
asserted.
Id. at 853 (emphasis added). Finding that the “Separation of Insureds” provision merely
“reinforce[d]” this ambiguity, the Court cited authority which differentiated policies that
use the term “any insured”: “‘If the exclusion is written to apply to an employee of the
insured, as opposed to any insured, . . . the exclusion should not apply to a claim against
12
With this statement, the Pennsylvania Supreme Court implicitly rejected
respondents’ contention in the instant case that the “Separation of Insureds” provision in
the ELE at issue is “more robust” than other such provisions and therefore yields a different
result. See infra n.14.
28
an insured entity that is not the employer.’” Id. (quoting Windt, supra note 7, § 11.14)
(emphasis added) (footnote omitted). 13 Further, the Court acknowledged “‘the distinction
that surfaces time and again in the case law’” between “the insured” and “any insured” and
cited approvingly the conclusion that “‘separation of insureds clauses affect interpretation
of policy exclusions using the term “the insured” (essentially modifying that term to mean
“the insured claiming coverage”), but have no effect on the interpretation of exclusions
using the term “an insured” or “any insured.”’” Id. (quoting Holcim, 744 F. Supp. 2d at
1271 (emphasis added)).
Therefore, not only does the Politsopoulos case involve meaningfully
different policy language, but the Pennsylvania Supreme Court examined and cited
numerous authorities which embody Federal’s position in this matter: that “any insured”
is to be literally construed and that the “Separation of Insureds” provision does not alter
the scope of an exclusion using that term. 14 Consistent with that approach, and although
13
In fact, even the Politsopoulos I court noted that “[t]he parties certainly could
have fashioned the Umbrella Policy to effectuate the result for which Insurer argues[]”—
presumably through the use of the phrase “any insured.” 75 A.3d at 537; accord Travelers
Indem. Co. v. Bloomington Steel & Supply Co., 718 N.W.2d 888, 895 (Minn. 2006) (“The
language of the Travelers’ policies excludes coverage for bodily injury expected or
intended from the standpoint of ‘the insured.’ Travelers could have made clear that it was
not insuring Bloomington Steel for the risk of an intentional act [by] . . . exclud[ing]
coverage for bodily injury expected or intended from the standpoint of ‘an’ or ‘any’
insured.” (footnote omitted)).
14
Respondents attempt to capitalize on the fact that the insured in Politsopoulos was
merely an insured by definition and not a named insured to argue that because Dana Mining
is a named insured, we are “able to do what the [] Court in Politsopoulos could not[.]”
(continued . . .)
29
bound by Pennsylvania law, we are mindful that this Court has likewise observed that
“[t]he purpose of severability clauses is to spread protection, to the limits of coverage,
among all of the insureds. The purpose is not to negate unambiguous exclusions.”
Clendenen, 238 W. Va. at 268, 793 S.E.2d at 918 (emphasis added); see also Holcim, 744
F. Supp. 2d at 1272 (recognizing that “courts from many jurisdictions have emphasized
that a separation of insureds provision is not designed to, and does not have the effect of,
negating plainly-worded exclusions.”).
Nor do we find that the “Separation of Insureds” provision creates an
ambiguity with respect to the ELE. “[C]ourts must not ‘distort the meaning of the language
Respondents appear to be arguing that because the “Separation of Insureds” provision
requires the policy to be read “as if each named insured were the only named insured,” it
has a greater applicability to the ELE as to Dana Mining, a named insured. Again, however,
respondents’ focus is misplaced. As cited above, Politsopoulos II explains that as to the
impact of a “Separation of Insureds” provision, the “appropriate focus” is not on the
wording of the provision, but rather the wording of the exclusion to which it is applied,
expressly counseling against preoccupation with “modest variations” in such provisions.
115 A.3d at 851.
Similarly, respondents insist that cases dealing with “severability” clauses are
distinguishable from cases addressing “Separation of Insureds” provisions. Dana Mining
even goes so far as to contend that the Pennsylvania Supreme Court observes such a
distinction, claiming that Politsopoulos II stands for the proposition that the latter is
“‘clearer and stronger’” than the former. However, the Pennsylvania Supreme Court was
merely quoting the Superior Court’s finding to that effect and promptly disabused it,
referring to them collectively in its analysis: “As a general rule, neither a separation-of-
insureds clause nor its analogue, a severability-of-interests provision, is to be interpreted
in a manner which would subvert otherwise clear and unambiguous policy exclusions.”
Politsopoulos II, 115 A.3d at 850 (emphasis added). Therefore, for purposes of evaluating
these provisions’ impact on exclusionary language, we note that most courts address them
jointly and/or interchangeably, including the Pennsylvania Supreme Court.
30
or resort to a strained contrivance in order to find an ambiguity,’ and must give effect to a
contract’s clear and unambiguous terms.” Great Lakes Ins., 2021 WL 4399677, at *3
(citing Madison Constr. Co., 735 A.2d at 106). In fact, in the absence of Pennsylvania
authority finding ambiguity as to these specific provisions, we would be hard-pressed to
suddenly find them unclear where we have previously declined to do so in nearly identical
circumstances: “[W]e conclude that with respect to the two insurance policies at issue in
this case, the severability clause’s command to apply the insurance separately to each
insured does not alter the intentional/criminal act exclusions’ plain meaning or create
ambiguity in its application.” Clendenen, 238 W. Va. at 267-68, 793 S.E.2d at 917-18; see
also Sayre ex rel. Est. of Culp v. State Farm Fire & Cas. Co., No. 11-0962, 2012 WL
3079148, at *2 (W. Va. May 25, 2012) (memorandum decision) (rejecting argument that
“the severability clause[] creates an ambiguity which defeats the family exclusion[]”).
In sum, respondents would have this Court disregard the litany of decisions
from Pennsylvania courts and courts bound to apply Pennsylvania law on this issue and
align it with the minority view—all on the basis of a single Superior Court case that
construed meaningfully different policy language, which was distinguished on that basis
by the state’s highest court on appeal. And while we are cognizant of the general
proposition that ELEs are theoretically intended to avoid duplication of workers’
compensation coverage, we cannot disregard the broad reach of the language of this
particular ELE or the ample body of Pennsylvania caselaw construing similar language and
exclusions as written. Respondents offer this Court essentially no authority upon which
31
we could conclude a Pennsylvania court would find the ELE as crafted in this case
inapplicable, even if we were to agree with their policy-based arguments or the minority
viewpoint. We therefore conclude that the circuit court erred in finding the ELE
inapplicable to Neice’s action against Dana Mining. Under the language of the applicable
ELE endorsement, we find that Neice’s claim arises out of Mr. Neice’s employment with
“any insured,” i.e., Mepco LLC, and the policy therefore excludes coverage for Neice’s
action against Dana Mining.
IV. CONCLUSION
For the foregoing reasons, we reverse the March 4, 2020, and April 8, 2021,
orders of the Circuit Court of Monongalia County and remand for further proceedings
consistent with this opinion.
Reversed and remanded.
32