Pennsylvania National Security Insurance Company v. Bradford Building Company et al
MEMORANDUM OPINION Signed by Judge William M Acker, Jr on 7/17/14. (SAC )
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
SECURITY INSURANCE COMPANY,
Counterclaim Defendant, }
BRADFORD BUILDING CO.,
RFM DEVELOPMENT CO, INC., RFM }
BREMEN, LLC, and WESTFIELD }
RONALD SEIMER, as next friend }
of STEVE PICKELSIMER.
CIVIL ACTION NO.
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
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
injured in a fall through a roof while working at a construction
site where Bradford was the prime contractor, and RFM was its
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
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
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
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
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
DONE this 17th day of July, 2014.
WILLIAM M. ACKER, JR.
UNITED STATES DISTRICT JUDGE
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