KRAEMER BROTHERS, LLC v. SOVEREIGN ENVIRONMENTAL GROUP

Filing 10

MEMORANDUM AND ORDER THAT THE MOTION OF DEFENDANT SOVEREIGN ENVIRONMENTAL GROUP, TO DISMISS THE COMPLAINT OF PLAINTIFF KRAEMER BROTHERS, LLC IS DENIED; ETC.. SIGNED BY HONORABLE EDMUND V. LUDWIG ON 1/14/10. 1/14/10 ENTERED AND COPIES MAILED, E-MAILED.(jl, )

IN THE UNITED STATES DISTRICT COURT F O R THE EASTERN DISTRICT OF PENNSYLVANIA K R A E M E R BROTHERS, LLC v. : : : : : : C IV IL ACTION

N o . 09-2027

S O V E R E IG N ENVIRONMENTAL GROUP

MEMORANDUM L u d w ig , J. January 14, 2010

T h is is a declaratory judgment and breach of contract action arising from a contractual in d e m n if ic a tio n provision. Jurisdiction is diversity. 28 U.S.C. § 1332. Defendant Sovereign E n v iro n m e n ta l Group moves to dismiss the complaint as premature. Fed. R. Civ. P. 12(b)(1). The m o tio n must be denied. Plaintiff Kraemer Brothers, LLC, was the general contractor for the construction of The G re a t Wolf Lodge in Tannersville, Pennsylvania. Kraemer contracted with defendant Sovereign E n v iro n m e n ta l Group to provide onsite construction safety personnel. The contract included an in d e m n if ic a tio n provision: S o v e re ig n shall indemnify, defend and hold harmless client and its officers, directors and e m p lo ye e s from and against any and all claim, including claims for personal injury or p rop erty damage, and any damages, losses or expense (including attorney's fees and court c o sts ) to the extent caused by or resulting from acts or omissions of Sovereign, its agent, re p re se n tativ e s or employees or Sovereign's failure to comply with this agreement. C o n trac t, Paragraph 9.1 (emphasis added). O n July 24, 2005, John Henning, an employee of a sheet-metal sub-contractor, was injured o n the job site while descending a flight of unlit concrete stairs. On July 10, 2007, Henning

c o m m e n c e d a personal injury action in the Court of Common Pleas of Monroe Count against K ra e m e r and others, for damages in excess of $50,000. Kraemer has been, and continues to be, d e f en d in g that action. Sovereign has not provided a defense, although called upon to do so. A c c o rd in g to the complaint, the contract requires Sovereign to provide indemnification and a defense under the contract. Sovereign moves to dismiss on the ground that no case or

c o n tro v e rs y exists and that claims for indemnity and attorneys' fees based upon unresolved l a w s u its are premature. However, in the cases cited by Sovereign, attorneys' fees constituted d a m a g e s to be collected as part of an indemnification award. In contrast, the contractual provision re lie d upon here by plaintiff specifically includes a duty to defend - alleged to have been triggered b y the underlying state court action. A duty to defend is separate and distinct from a duty to indemnify. Jacobs Constructors, In c . v. MPS Energy Services, Inc., 264 F.3d 365, 376 (3d Cir. 2001) (citations omitted). It is u n d ispu ted that Kraemer has made no payment in the pending state court action - either in the form o f a settlement or judgment - and that therefore an action to declare the parties' rights to in d e m n if ic a tio n would be premature and subject to dismissal. However, Kraemer also is asking f o r a defense, in addition to indemnity. The issue whether the duty to defend was activated by the s ta te court action is ripe. Sovereign's motion must be denied. B Y THE COURT: /s/ Edmund V. Ludwig Edmund V. Ludwig, J.

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