Opinion
J.A19042/13 No. 3494 EDA 2012
03-03-2014
MODERN EQUIPMENT SALES & RENTAL CO., Appellant v. MAIN STREET AMERICA ASSURANCE COMPANY, UNITED CONSTRUCTION SERVICES, INC. AND RUICK AND HOLLY ROLLAND, H/W Appellee
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
Appeal from the Order Dated November 29, 2012
In the Court of Common Pleas of Chester County
Civil Division No(s).: 11-11713-CT
BEFORE: BENDER, PANELLA, and FITZGERALD, JJ. MEMORANDUM BY FITZGERALD, J.:
Former Justice specially assigned to the Superior Court.
Appellant, Modern Equipment Sales & Rental Co., appeals from the order of the Chester County Court of Common Pleas denying its motion for partial summary judgment and granting Appellee, Main Street America Assurance Company, cross-motion for summary judgment. Appellant contends that Appellee owes a duty to defend and indemnify it with regard to the claims raised in the Rolland v. Seen complaint. Appellant argues that it qualifies as an additional insured under Appellee's insurance policy. Appellant avers the court erred in granting summary judgment in favor of Appellee on Appellant's claim for bad faith. We affirm.
Ruick L. Rolland and Holly Rolland v. Stephen Senn, December Term, 2009 No. 3110 (CCP Chester 2009).
The trial court summarized the facts of this case as follows:
Defendants Ruick L. Rolland (Mr. Rolland) and Holly Rolland filed the Philadelphia Action against inter alia [Appellant] and Defendant United Construction Services, Inc. ["USC"] for injuries sustained by Mr. Rolland. The Second Amended Complaint filed in the Philadelphia Action alleges the following. Mr. Rolland was performing restoration work at a private residence when a track loader leased by [Appellant] to [USC] ran over and severely crushed Mr. Rolland's left leg. This ultimately resulted in the amputation of that leg. [USC] allowed the track loader to be used by a landscaping company; who, in turn, allowed the track loader to be driven by a ten year old at the time of the accident. The Second Amended Complaint alleges the following counts against [Appellant]: VI—Negligence/Negligent Entrustment/Recklessness; VII—Strict Liability; and XI—Loss of Consortium.Trial Ct. Op., 2/14/13, at 2-3.
[Appellee] issued a policy of primary commercial general liability insurance to [USC] that was in effect during the time frame relevant herein. This policy included a Contractors Extension Endorsement (Endorsement) which included provisions relating to additional insured and states as part of the definition of Additional Insured; "Any person(s) or organization(s) who is the lessor of leased equipment leased to you, and required by the lease to be included as an additional insured but only with respect to liability for 'bodily injury', 'property damage' or personal and advertising injury' caused in whole or part, by your maintenance, operation or use by you of equipment leased to you by such person(s) or organization(s)." (emphasis added). The terms "you" and "your" are defined to refer to Spackle Drywall, LLC (not a party to this action) and [USC]. It is the interpretation of this Endorsement that is the crux of the instant appeal.
Appellant filed a complaint for declaratory judgment seeking a judicial determination that Appellee had a duty to defend and indemnify it in the underlying personal injury action pursuant to the additional insured endorsement. Appellant also asserted a bad faith claim. Appellant filed a motion for summary judgment against Appellee in its claim for declaratory relief. Appellee filed a cross-motion for summary judgment seeking dismissal of Appellant's claims for declaratory judgment. On November 29, 2012, the trial court granted Appellee's motion and denied Appellant's motion for summary judgment. This timely appeal followed. Appellant filed a court-ordered Pa.R.A.P. 1925(b) statement of errors complained of on appeal and the trial court filed a responsive opinion.
Appellant raises the following issues for our review:
A: Whether the trial court committed error in granting [Appellee's] Motion for Summary Judgment, holding that [Appellee] does not owe a duty to defend and indemnify [Appellant] with regard to the claims raised in the Rolland Complaint, including but not limited to the following manner:Appellant's Brief at 3-4.
1. By concluding the claims asserted in the Rolland Complaint relate only to USC's 'entrustment' and thereby failing to consider other aspects of conduct alleged in the Rolland Complaint that trigger [Appellee's] obligation to defend and indemnify its putative additional insured, [Appellant], under the policy of commercial general liability insurance issued by [Appellee] to [USC] . . . .
2. By failing to recognize, under Pennsylvania law, the concept of 'use' of mobile equipment includes 'entrustment,' and thereby failing to conclude the Rolland Complaint asserts claims which trigger
[Appellee's] duty to defend and indemnify [Appellant] under [Appellee's] Policy against claims alleging injuries to third parties alleged to have arisen out of or that were connected with the use, misuse or negligent work-related decisions of USC in making available a track loader;B. Whether the trial court further committed error in granting [Appellee's] Motion for Summary Judgment on [Appellant's] bad faith claim?
3. By failing to recognize the genesis of the contractual obligation between USC and [Appellant] foresaw the particular risk that was alleged to have resulted in the Rolland Complaint, and it was clearly part of [Appellant's] reasonable expectations that [Appellee's] Policy would provide coverage to [Appellant] for this particular risk.
Appellant argues that it qualifies as an additional insured pursuant to the terms of Appellee's insurance policy which provided primary commercial general liability insurance to UCS. Appellant contends that the allegations in the underlying Rolland second amended complaint trigger Appellee's duty to defend and indemnify. Appellant avers that the complaint alleges Rolland's injuries were connected with the use and operation of the track loader. Id. at 14.
Appellant contends that even assuming arguendo that the claims in the Rolland complaint only relate to UCS's entrustment of the track loader, use of mobile equipment includes entrustment. Because the policy provided that Appellee must defend its additional insured, "against claims of 'personal and advertising injury' caused in whole or in part, by your maintenance, operation or use by you of equipment leased to you by such person(s) or organization(s)," Appellee had a duty to defend and indemnify. Id. at 18. Appellant argues that the trial court erred in granting summary judgment as to the bad faith claim because it is a question of fact to be determined at the time of trial. Id. at 21.
On appellate review
an appellate court may reverse a grant of summary judgment if there has been an error of law or an abuse of discretion. But the issue as to whether there are no genuine issues as to any material fact presents a question of law, and therefore, on that question our standard of review is de novo. This means we need not defer to the determinations made by the lower tribunals.Summers v. Certainteed Corp., 997 A.2d 1152, 1159 (Pa. 2010) (citation omitted).
'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.' 'Where, however, the language of the contract is clear and unambiguous, a court is required to give effect to that language.'Prudential Prop. & Cas. Ins. Co. v. Sartno., 903 A.2d 1170, 1174 (Pa. 2006) (citations omitted).
Describing the hallmarks of ambiguity in an earlier case, we said that:
Contractual language is ambiguous "if it is reasonably susceptible of different constructions and capable of being understood in more than one sense." This is not a question to be resolved in a vacuum. Rather, contractual terms are ambiguous if they are subject to more than one reasonable interpretation when applied to a particular set of facts.
Words of 'common usage' in an insurance policy are to be construed in their natural, plain, and ordinary sense, and a court may inform its understanding of these terms by considering their dictionary definitions. Moreover, courts must construe the terms of an insurance policy as written and may not modify the plain meaning of the words under the guise of 'interpreting' the policy. If the terms of a policy are clear, this Court cannot re-write it or give it a construction in conflict with the accepted and plain meaning of the language used.Genaeya Corp. v. Harco Nat. Ins. Co., 991 A.2d 342, 347 (Pa. Super. 2010) (citation omitted). Furthermore, "Where the policy contains definitions for the words contained therein, the court will apply those definitions in interpreting the policy." Monti v. Rockwood Ins. Co., 450 A.2d 24, 25 (Pa. Super. 1982).
'The insurer's obligation to defend is fixed solely by the allegations in the underlying complaint. It is not the actual details of the injury, but the nature of the claim which determines whether the insurer is required to defend. The duty to defend is limited to only those claims covered by the policy. The insurer is obligated to defend if the factual allegations of the complaint on its face comprehend an injury which is actually or potentially within the scope of the policy.Old Guard Ins. Co. v. Sherman, 866 A.2d 412, 416-17 (Pa. Super. 2004) (citations omitted and emphasis supplied).
Thus, the insurer owes a duty to defend if the complaint against the insured alleges facts which would bring the claim within the policy's coverage if they were true. It does not matter if in reality the facts are completely groundless, false, or fraudulent. It is the face of the complaint and not the truth of the facts alleged therein which determines whether there is a duty to defend.'
Instantly, the trial court stated:
The Contractors Extension endorsement at issue states as part of the definition of Additional Insured; "Any person(s) or organization(s) who is the lessor of leased equipment leased to you, and required by the lease to be included as an additional insured but only with respect to liability for 'bodily injury,' property damage' or 'personal and advertising injury' caused in whole, or in part, by your maintenance, operation or use by you of equipment leased to you by such person(s) or organization(s)." (emphasis added). The terms "you" and "your" are defined to refer to Spackle Drywall, LLC (not a party to this action) and co-Defendant United Construction Services, Inc. (USC). A review of the Second Amended Complaint in the Rolland action reveals that no claims were made relating to USC's operation or use of the track loader. Instead the Complaint refers to USC's "entrustment" of the track loader and failure to insure that the equipment was operated by qualified personnel.Trial Ct. Order, 11/29/12, at 2 n.1. The trial court concluded "based on the Endorsement, [Appellee] has no duty to defend or indemnify [Appellant]." Trial Ct. Op. at 4. We agree no relief is due.
In the Exclusions section of the Businessowners Coverage Form, under Aircraft, Auto or Watercraft, the policy provides, inter alia:
g. Aircraft, Auto or WatercraftId. at 5.
"Bodily injury" or "property damage" arising out of the ownership, maintenance, use or entrustment to others of any aircraft, "auto" or watercraft owned or
operated by or rented or loaned to any insured. Use includes operation and "loading or unloading."
This exclusion applies even if the claims allege negligence or other wrongdoing in the supervision, hiring, employment, training or monitoring of others by an insured, if the "occurrence" which caused the "bodily injury" or property damage" involved the ownership, maintenance, use or entrustment to others of any aircraft, "auto" or watercraft that is owned or operated by or rented or loaned to any insured.
The named insured is Spackle Drywall, LLC, who is not a party in the underlying suit. Schedule of Named Insured(s) at 1.
Instantly, the complaint in the underlying action did not state a claim relating to Appellee's operation or use of the track loader. It did not assert a claim within the scope of coverage. Therefore, Appellee has no duty to defend or indemnify Appellant, and accordingly we affirm. See Old Guard Ins. Co., supra.
Given our resolution we need not reach the claim that the trial court erred in granting summary judgment on the bad faith claim.
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Order affirmed.
Bender, P.J.E. files a Dissenting Memorandum. Judgment Entered. ___________________
Joseph D. Seletyn, Esq.
Prothonotary