Opinion
Civil Action No. 04-876.
June 28, 2004
MEMORANDUM
Presently before this Court is Plaintiff's Motion for Summary Judgment, Defendants The Heil Company, Reber Corporation, and Amber Connell's Responses to Plaintiff's Motion for Summary Judgment, and Plaintiff's Reply. For the reasons set forth below, Plaintiff's Motion for Summary Judgment is granted.
I. Background
On March 22, 2001, Kevin Mackle ("Mackle") was employed as a truck driver, transporting goods for the Reber Corporation, d/b/a Reber Transportation ("Reber"). While unloading a truck, Mackle was hit in the face and chest by a metal manhole cover, ejecting Mackle from the truck. The impact threw Mackle approximately fifty feet causing severe injuries and Mackle died shortly thereafter, leaving a wife, Linda Connell, and two children. Shortly thereafter, Linda Connell contacted Reber to claim the worker's compensation benefits due as a result of her husband's death. It was at that time Ms. Connell learned Reber, the company supposedly employing her husband, was not in fact his current employer. According to Reber, in 1995 Reber transferred all of their employees to TTC Illinois, Inc. ("TTC") and subsequently leased the workers back from TTC, including Mackle. In this way, TTC became liable for all Reber's former employee's worker's compensation coverage, and Reber stopped paying on its own worker's compensation policy. However, Mackle's estate subsequently learned that TTC's worker's compensation coverage only covered Illinois employees and not national employees leaving Mackle without worker's compensation coverage. Because TTC lacked worker's compensation for its national employees, the State of Florida ordered TTC to stop work on June 27, 2001. TTC filed for bankruptcy shortly thereafter.
Mackle's representative filed suit against Reber, Butler Manufacturing, Inc., Heil Trailer International, Polar Corporation, and Polar Tank Trailer, Inc. in state court to recover worker's compensation benefits. As a result, Mackle's status as being either an "employee" or a "leased worker" of Reber is in dispute in that separate state suit. As of this date, Mackle's wife and children have neither received nor been offered worker's compensation benefits, and Mackle's funeral expenses remain uncompensated.
At the time of Mackle's death on March 22, 2001, Mackle worked on behalf of Reber. Reber is partially insured under an automobile liability policy No. BA667103 (the "Policy") issued by Occidental Fire Casualty Company of North Carolina ("Plaintiff"), which provides coverage for Reber's fleet of trucks. However, the Policy contains an exclusion clause, excluding from the insurance all claims made by any Reber employee for bodily injury, including death. The Policy states specifically:
This insurance does not apply to any of the following:
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4. Employee Indemnification And Employer's Liability "Bodily Injury" to:
a. An "employee" of the "insured" arising out of and in the course of:
1. Employment by the "insured"; or
2. Performing the duties related to the conduct of the "insured's" business. . . .
(Pl's Compl. Ex. B, Occidental Policy, II.B.4.a.)
The Policy defines an employee to include any of Reber's leased workers. Plaintiff seeks a declaratory judgment against Reber pursuant to the Policy excluding Reber from Plaintiff's insurance coverage. Plaintiff also seeks a declaration relieving Plaintiff of any obligation to defend or indemnify Reber on the claims made by Amber Conell, Mackle's estate's representative in state court.
II. Standard of Review
A motion for summary judgment will be granted where all of the evidence demonstrates "that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). A dispute about a material fact is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party."Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Since a grant of summary judgment will deny a party its chance in court, all inferences must be drawn in the light most favorable to the party opposing the motion. U.S. v. Diebold, Inc., 369 U.S. 654, 655 (1962).
The ultimate question in determining whether a motion for summary judgment should be granted is "whether reasonable minds may differ as to the verdict." Schoonejongen v. Curtiss-Wright Corp., 143 F.3d 120, 129 (3d Cir. 1998). "Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson, 477 U.S. at 248.
III. Discussion
A declaratory judgment action may be brought in federal court pursuant to 28 U.S.C. § 2201, which allows a party at legal risk to obtain a judicial declaration without waiting for litigation to commence. Alcoa v. Beazer E., 124 F.3d 551 (3d Cir. 1997). Furthermore, the interpretation of language in an insurance policy is a question of law capable of resolution in a Motion for Summary Judgment. First State Underwriters Agency of New England Reinsurance Corp. v. Travelers Ins. Co., 803 F.2d 1308 (3d Cir. 1986). The issues involved in Mackle's state court case do not affect this Court's decision and therefore do not preclude a declaratory judgment. The Policy's exclusion clause is independent of Reber's responsibility under the Pennsylvania Worker's Compensation Act to obtain worker's compensation. As a result, Plaintiff's request for summary judgment is granted and this Court finds the exclusion clause in Reber's policy bars any recovery under the policy in this case.
A. THE UNRESOLVED LEGAL DISPUTES DO NOT PRECLUDE THE COURT FROM ISSUING A DECLARATORY JUDGMENT.
The unresolved issues in Mackle's state court case include disagreements regarding the job status of Mackle as either an "employee" or a "leased worker" of Reber and the availability of worker's compensation to compensate Mackle's injuries. (Def. Amber Connell's Opp. to Summ. J. at 2.) However, even if the state court determines Reber failed to provide worker's compensation when required and considers Mackle to be a "leased worker" of Reber, Plaintiff is not liable to either Reber or Mackle under the Policy, because of the exclusion clause. (Pl's Compl. Ex. B, Occidental Policy, IV.E.) The Policy's exclusion clause explicitly excludes employees and leased workers of Reber from Plaintiff's insurance coverage. (Pl's Compl. Ex. B, Occidental Policy, II.B.4.a.) The Policy defines an employee to include a "leased worker." (Id.) Specifically, the Policy states in part:
SECTION VI — Definitions
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E. "Employee" includes a "leased worker".
H. "Leased worker" means a person leased to you [Reber] by a labor leasing firm under an agreement between you and the labor leasing firm, to perform duties related to the conduct of your business.
(Id.)
Therefore the unresolved issue of Mackle being either an "employee" or a "leased worker" of Reber is immaterial as to determining Plaintiff's liability under the Policy, because both classifications are excluded from recovery under the terms of the exclusion clause. Further determination of Mackle's employment status is irrelevant to Plaintiff's potential liability. As a result, Mackle's status as an "employee" or a "leased worker" does not present a genuine issue of material fact, necessary to avoid summary judgment. Fed.R.Civ.P. 56(c).
B. PLAINTIFF'S EXCLUSION CLAUSE DOES NOT REQUIRE REBER TO HAVE WORKER'S COMPENSATION COVERAGE.
1. Plain language of the Policy.
Defendants first argue that the Policy contains an implicit requirement that Reber provide worker's compensation for its employees in order for the exclusion clause to apply. There is no provision within the Policy's exclusion clause that conditions the exclusion of "employees" and "leased workers" upon Reber obtaining worker's compensation. (Pl's Compl. Ex. B, Occidental Policy, II.B.4.a.) The Policy's exclusion clause is not explicitly or implicitly dependant upon Reber obtaining any alternate insurance coverage for employees and/or leased workers. (Pl's Compl. Ex. B, Occidental Policy, II.B.4.a.) The parties contracted for specific coverage with explicit limitations. The contract clearly anticipates Reber will be responsible for any worker's compensation coverage, but there is no language predicating the effect of the exclusion clause upon Reber ensuring its employees and leased workers were covered.
2. Public Policy Considerations.
Defendants next argue that public policy requires the Court to enforce an exclusion clause unless an employer has worker's compensation. The courts, however, disagree. In Guardian Life Ins. Co. v. Zerance, the Pennsylvania Supreme Court held that public policy considerations could not overcome the clear meaning of contractual language. Guardian Life Ins. Co. v. Zerance, 479 A.2d 949, 953 (Pa. 1984) ("We may not rewrite the insurance contract, under the guise of judicial interpretation, to expand the coverage beyond that as provided in the policy."). Public policy does not require the Policy's exclusion clause to be ruled ineffective as a result of Reber's lack of worker's compensation.
Defendants also argue that to give full effect to the Pennsylvania Worker's Compensation Act, 77 Pa. Cons. Stat. § 1 (2004), provisions of liability in insurance contracts, which seek to avoid protecting employees where no other coverage exists, must be nullified. The Pennsylvania Worker's Compensation Act does not invalidate an insurance policy with an exclusion clause excluding employees' work related injuries as a remedy to a violation of the Worker's Compensation Act. Inman v. Nationwide Mutual Insurance Co., 641 A.2d 329, 331 (Pa.Super. 1994) ("Contract of insurance to cover general liability of the insured cannot be construed, because of a clause which excludes employees' work related injuries, to violate the Pennsylvania Workers' Compensation Act.").
3. Effect of Motor Carrier Act of 1980.
Defendant Reber asserts the Policy's exclusion clause should not be enforced as a remedy to the violation of the Pennsylvania Worker's Compensation Act because Sections 29 and 30 of the Motor Carrier Act of 1980, 49 U.S.C. § 10927 (2004), require minimum levels of coverage for federally regulated motor carriers. However, the purpose of Sections 29 and 30 of the Motor Carrier Act of 1980 is not to remedy violations of the Pennsylvania Worker's Compensation Act, but rather "assure that motor carriers maintain an appropriate level of financial responsibility for motor vehicles operated on public highways." 49 C.F.R. 387.1 (2004). The Act's purpose is to assure financial responsibility for Reber's trucks, which is satisfied, but it does not negate the Policy's exclusion clause.
4. Effect of § 204 of Pennsylvania's No-Fault Motor Vehicle Insurance Act.
Defendant Reber also asserts § 204 of Pennsylvania's No-Fault Motor Vehicle Ins. Act, 40 Pa. Cons. Stat. § 1009 (1984), allows an injured employee to submit a claim to his employer's non-fault insurer if an employer does not supply worker's compensation coverage. However, Reber's reliance upon § 204 of the Pennsylvania No-Fault Motor Vehicle Insurance Act is misplaced, as that section was repealed in 1984. 40 Pa. Cons. Stat. § 1009 (1984); Inman, 641 A.2d at 335.
IV. CONCLUSION
Reber, if found to be Mackle's employer, is liable for Mackle's worker's compensation claim, as the Worker's Compensation Act prohibits Reber, not Reber's insurance carrier, from entering into an agreement with Mackle to hold Reber harmless for any future injury Mackle may suffer. Inman, 641 A.2d at 331 ("Section 71 of the Pennsylvania Worker's Compensation Act prohibits as against public policy an employer from agreeing with his employee to hold employer harmless for any future injury the employee may suffer."). A decision by this Court making Plaintiff liable for Mackle's injuries, despite a clear and unambiguous exclusion clause, would be contrary to public policy. Such a decision would allow Reber to profit from both not having paid for worker's compensation coverage and receiving additional coverage under its automobile policy that was not bargained for or anticipated by the carrier in calculating its premiums. The premiums paid by Reber to Plaintiff under Plaintiff's insurance policy were dependent upon the exclusion clause. Ignoring the Policy's exclusion clause would encourage employers, such as Reber, to ignore their obligation to obtain worker's compensation. As a result, the Policy's exclusion clause is upheld. For all the forgoing reasons, this Court grants Plaintiff's Motion for Summary Judgment. An appropriate order follows.
ORDER
AND NOW, this 7th day of July, 2004, upon consideration of Plaintiff's Motion for Summary Judgment (Docket No. 11), Defendant The Heil Company's Response to Plaintiff's Motion for Summary Judgment (Docket No. 13), Defendant Reber Corporation's Response to Plaintiff's Motion for Summary Judgment (Docket No. 14), Defendant Amber Connell's Response to Plaintiff's Motion for Summary Judgment (Dockets No. 15 and 16), and Plaintiff's Reply (Docket No. 17), it is hereby ORDERED that Plaintiff's motion is GRANTED.It is further ORDERED that the claims of Amber Connell, Administratrix of the Estate of Kevin Mackle, as made in the Court of Common Pleas in Philadelphia County at No. 3443, March Term, 2003, against Reber Corporation, d/b/a Reber Transportation are excluded from the coverage afforded by Plaintiff to Reber Corporation, d/b/a Reber Transportation pursuant to Plaintiff's Policy No. BA 667103. In addition, Plaintiff has no obligation, pursuant to its Policy No. BA 667103, to defend or indemnify Reber Corporation, d/b/a Reber Transportation on the claims made by Amber Connell, Administratrix of the Estate of Kevin Mackle, in the action filed in the Court of Common Pleas in Philadelphia County at No. 3443, March Term, 2003.