KRAEMER BROTHERS, LLC v. SOVEREIGN ENVIRONMENTAL GROUP
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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