Pennsylvania National Security Insurance Company v. Bradford Building Company et al

Filing 57

MEMORANDUM OPINION Signed by Judge William M Acker, Jr on 7/17/14. (SAC )

FILED
2014 Jul-17 PM 04:22
U.S. DISTRICT COURT
N.D. OF ALABAMA

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
PENNSYLVANIA NATIONAL
SECURITY INSURANCE COMPANY,

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Plaintiff and
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Counterclaim Defendant, }
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v.
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BRADFORD BUILDING CO.,
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Defendant and
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Counterclaimant,
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RFM DEVELOPMENT CO, INC., RFM }
BREMEN, LLC, and WESTFIELD }
INSURANCE CO.
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Defendants.
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RONALD SEIMER, as next friend }
of STEVE PICKELSIMER.
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Intervenor.
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CIVIL ACTION NO.
2:12-cv-4030-WMA

MEMORANDUM OPINION
The above-entitled litigation will hereinafter be disposed of
in an abbreviated fashion for reasons that will become apparent.
The case began as an action for declaratory judgment brought in
this court by plaintiff, Pennsylvania National Security Insurance
Company (“Penn Nat’l”), seeking a declaration that it owed no duty
and had

no

obligation

to

defend

or

to

indemnify

defendants,

Bradford Building Co. (“Bradford”), RFM Development Co., Inc., and
RFM Bremen, LLC (together “RFM”), which were defendants in a
personal injury action (“the underlying lawsuit”) brought in a
Georgia state court by intervenor, Ronald Seimer, as next friend of

Steve

Pickelsimer

(“Pickelsimer”).

Pickelsimer

was

severely

injured in a fall through a roof while working at a construction
site where Bradford was the prime contractor, and RFM was its
subcontractor.
negligence.

Pickelsimer sued Bradford and RFM for alleged
While defending Penn Nat’l’s declaratory action,

Bradford filed a counterclaim charging Penn Nat’l with bad faith
and fraud, as to which Penn Nat’l filed a motion to dismiss.
The coverage question presented by Penn Nat’l involved the
interpretation of the commercial insurance policy it issued to
Bradford, including a determination of the meaning of the words
“insured contract”, words which Bradford and RFM contend is a wellunderstood term of art in construction insurance agreements like
this one and that provided coverage to RFM which was not a named
insured.
Instead of standing flat-footedly on its denial of coverage,
Penn Nat’l provided a defense to Bradford and RFM in the underlying
lawsuit under a reservation of rights.

This court concludes that,

under the circumstances Penn Nat’l was premature in seeking a
declaration that it would not be required to defend or to indemnify
Bradford and/or RFM.

From the start, it was apparent to all

parties that in the event Pickelsimer lost his tort claim against
Bradford and RFM, there would be nothing to expose Bradford, RFM or
Penn Nat’l to liability.

The court does not understand why Penn

Nat’l filed its declaratory action unless it was to get free legal

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advice and/or to head off a bad faith or misrepresentation claim.
Without objection, the court stayed the case pending the
outcome of the underlying lawsuit in Georgia.

The trial court in

Georgia granted summary judgment in favor of Bradford upon finding
that the law of Geogia treated Pickelsimer as Bradford’s employee,
making Pickelsimer’s injury compensable only under Georgia’ workers
compensation statute. Pickelsimer did not appeal from that ruling.
The underlying suit proceeded against RFM.

After discovery and

further briefing, a motion for summary judgment by RFM was granted
by the Georgia trial court, whereupon Pickelsimer appealed to the
Georgia Court of Appeals, which affirmed the adjudication in favor
of RFM.

Pickelsimer then petitioned for certiorari to the Supreme

Court of Georgia, which on June 30, 2014, denied Pickelsimer’s
petition, ending any and all claims Pickelsimer had against Penn
Nat’l’s would-be insureds.
Under these procedural facts, this court is not called upon to
write an opinion that would justify rulings that do not have to be
made, and that will not be made.

In other words, all pending

motions in the above-entitled case have been rendered moot, that
is, except perhaps for the viability of the counterclaims brought
by Bradford for bad faith and fraud.

Neither of these claims is

meritorious, not only because Alabama and Georgia frown upon such
claims when the coverage question is fairly debatable, as it
certainly was here, but also because the insurer being charged with

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bad faith refusal to defend and/or pay, actually tendered and
provided a defense, and by doing so, successfully protected its
insureds from liability.
A separate final judgment in accordance with this opinion will
be entered.
DONE this 17th day of July, 2014.

_____________________________
WILLIAM M. ACKER, JR.
UNITED STATES DISTRICT JUDGE

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