ALLSTATE INSURANCE COMPANY et al v. WELLS et al

Filing 48

MEMORANDUM THAT ALLSTATE FILED THIS THREE-COUNT COMPLAINT PURSUANT TO 28 U.S.C. 2201, SEEKING A DECLARATORY JUDGMENT OF THE RIGHTS AND LIABILITIES OF THE PARTIES UNDER A HOMEOWNER'S INSURANCE POLICY AND A PERSONAL UMBRELLA INSURANCE POLICY ISSUE D TO DEFENDANT GAIL L. WELLS. THE PARTIES FILED CROSS-MOTIONS FOR JUDGMENT ON THE PLEADINGS PURSUANT TO RULE 12(c) OF THE FEDERAL RULES OF CIVIL PROCEDURE, ETC. SIGNED BY HONORABLE LAWRENCE F. STENGEL ON 7/15/09. 7/17/09 ENTERED AND COPIES E-MAILED.(ti, )

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IN THE UNITED STATES DISTRICT COURT F O R THE EASTERN DISTRICT OF PENNSYLVANIA A L L S T A T E INSURANCE C O M P A N Y , et al., P l a i n t i f fs v. G A I L L. WELLS, et al., D efe n d a n ts : : : : : : : : C IV IL ACTION NO. 08-05294 MEMORANDUM STENGEL, J. July 15, 2009 A lls ta te 1 filed this three-count complaint pursuant to 28 U.S.C. 2201, seeking a d ec laratory judgment of the rights and liabilities of the parties under a homeowner's in s u ra n c e policy (# 028357530) and a personal umbrella insurance policy (# 908660308) is s u e d to Defendant Gail L. Wells. The parties filed cross-motions for judgment on the p le a d in g s pursuant to Rule 12(c) of the Federal Rules of Civil Procedure. For the f o llo w in g reasons, I will grant Allstate's motion, deny the motion of the defendants, and e n te r judgment in favor of Allstate. Plaintiffs Allstate Insurance Company and Allstate Indemnity Company are insurance companies incorporated in the State of Illinois, with principal places of business at 2775 Sanders Road, Northbrook, Illinois, and duly licensed to conduct business in the Commonwealth of Pennsylvania. Because no defendant is a resident of Illinois and the amount in controversy exceeds $75,000, jurisdiction is derived from the diverse citizenship of the parties pursuant to 28 U.S.C. 1332. 1 I . BACKGROUND A lls ta te seeks an Order declaring that it does not have a duty to defend or in d e m n if y Defendant Mark Wells, a family member2 of Mrs. Wells, for the claims set f o rth by Defendant Kathleen Schickling in a companion case filed in the Philadelphia C o u rt of Common Pleas. (June Term 2008, No. 0073). Mrs. Schickling filed that case as th e executrix of the estate of her husband James Schickling, who died a couple of days a f te r being violently struck in the head by Mr. Wells. That case alleges causes of action b a se d on negligence, negligent infliction of emotional distress, wrongful death, survival a c tio n , and the loss of consortium. Allstate's complaint includes the following three p a ra g ra p h s contained in Mrs. Schickling's state court matter which outlined the factual b a sis of her complaint: 42. On or about the late evening of June 3, 2006 or early morning h o u rs of June 4, 2006, Defendant Mark Wells struck the d e c ed e n t, James Schickling, in the head causing injuries to the d e c e d e n t that caused the decedent's death. At all times material hereto, on the late evening of June 3, 2 0 0 6 or the early morning hours of June 4, 2006, Defendant M a rk Wells, having been negligently, carelessly and re c k le ss ly sold and served alcoholic beverages by the D e f e n d a n ts through their duly authorized agents, servants, re p re se n ta tiv e s, and/or employees at the Defendant Holiday In n Conference Center and the Budweiser Tap Room while he 43. The complaint identifies Mr. Wells as the policy-holder's husband, but the motion for judgment on the pleadings identifies him as her son. The exact relationship is not dispositive because the policies define an "insured person" as "you and, if a resident of your household: (a) any relative; and (b) any dependent person in your care." See Compl. Exh.'s A and B. Allstate concedes that Mr. Wells is an insured person under both policies. 2 2 w a s obviously in a visibly intoxicated condition in violation o f applicable Pennsylvania law, did strike the decedent, James S c h ick lin g , with great force causing the decedent's death th e re a f te r on June 6, 2006, as described hereinafter at length. 44. On April 9, 2007, Defendant Mark Wells plead guilty to the c h a rg e of involuntary manslaughter3 arising from the death of th e decedent, James Schickling. See Compl. 25 (footnote added); see also Compl. Exh. C 42-44. O n July 21, 2008, Allstate sent a reservation of rights letter to Defendant Mark W e lls informing him of its intent to investigate whether it had a responsibility in this m a tter to provide coverage: We are sending you this Reservation of Rights letter regarding th e Civil Action filed by Kathleen Schickling, Executrix of th e Estate of James Schickling, in the Court of Common Pleas o f Philadelphia County as a result of an incident that occurred o n or about June 3-4, 2006. This letter serves to reserve our rig h ts to timely investigate this matter without an admission o f coverage. T h e re is an indication of a reason or reasons why Allstate In s u ra n c e Company does not have an obligation to you under s a id policy with respect to the Civil Action filed by Kathleen S c h ick lin g . The intent of Allstate Insurance Company is to p ro v id e , without prejudice to the rights of Allstate Insurance C o m p a n y, a defense to you until a determination is made w h e th e r or not Allstate Insurance Company has responsibility in this matter or Allstate Insurance Company has satisfied its e lf with respect to such matter. Our conduct, in providing a defense to you and in conducting A person is guilty of involuntary manslaughter when as a direct result of the doing of an unlawful act in a reckless or grossly negligent manner, or the doing of a lawful act in a reckless or grossly negligent manner, he causes the death of another person. 18 Pa.C.S. 2504. 3 3 a n investigation related to the facts of this matter are not in te n d e d to be, and shall not operate in any way as, a waiver o r invalidation of any of the conditions of Policy Numbers 0 2 8 3 5 7 5 3 0 and 908660308 or any rights that Allstate In su ra n c e Company has under policies to assert non-liability b e c a u s e of applicable policy provisions. S e e Compl. Exh. D. II. STANDARD FOR MOTIONS FOR JUDGMENT ON THE PLEADINGS In deciding a Rule 12(c) motion, the court must view the facts and inferences to be d ra w n from the pleadings in a light most favorable to the non-moving party. Janney M o n tg o m e ry Scott, Inc. v. Shepard Niles, Inc., 11 F.3d 399, 406 (3d Cir. 1993). Judgment will only be granted if it is clearly established that no material issue of fact re m a in s to be resolved and that the movant is entitled to judgment as a matter of law. Jablonski v. Pan American World Airways, Inc., 863 F.2d 289, 290-291 (3d Cir. 1988). III. DISCUSSION A lls ta te argues that the incident between Mr. Wells and the decedent cannot be c o n sid e re d an "occurrence" under the policies. I agree. Both the homeowners and the p e rs o n a l umbrella insurance policies provide that "Allstate would pay damages which an in su re d person becomes legally obligated to pay because of bodily injury or property d a m a g e arising from an occurrence to which this policy applies, and is covered by this p a rt of the policy." See Compl. Exh.'s A and B. An "occurrence" is defined in the p o lic ie s as "an accident, including continuous or repeated exposure to substantially the s a m e general, harmful conditions during the policy period, resulting in bodily injury or 4 p ro p e rty damage." Id. "Bodily injury" is defined as "physical harm to the body, in c lu d in g sickness or disease, and resulting death." Id. An insurer's duty to defend and indemnify an insured in a suit brought by a third p arty depends upon a determination of whether the third party's complaint triggers c o v e ra g e . Mutual Benefit Ins. Co. v. Haver, 725 A.2d 743, 745 (Pa. 1999). The p a rtic u la r cause of action that a complaint pleads is not determinative of whether c o v e ra g e has been triggered. Rather, it is necessary to look at the factual allegations c o n ta in e d in the complaint. Id.; see also Agora Syndicate, Inc. v. Levin, 977 F.Supp. 713, 7 1 5 (E.D. Pa. 1997) (a plaintiff may not dress up a complaint so as to avoid the insurance e x c lu s io n ). If there is no possibility that any of the underlying claims could be covered by th e policy, judgment in the insurer's favor with regard to the duty to defend and ind em n ify is appropriate. Germantown Ins. Co. v. Martin, 595 A.3d 1172 (Pa.Super. 1 9 9 1 ). Accordingly, to determine Allstate's obligation, the language of the policies and the allegations of the related state court complaint should be construed together. The s ta te court complaint alleges that Mr. Wells "did strike the decedent, James Schickling, w ith great force causing the decedent's death thereafter on June 6, 2006." See Compl. 2 5 ; see also Compl. Exh. C 43. Several paragraphs of the complaint characterize this in c id e n t as a criminal attack or an assault. See Compl. Exh. C 56, 58, 59, 63, 65, 67. It also alleges that the other defendants "failed to warn the decedent, James Schickling, 5 of the dangerous condition developing in the area of the Budweiser Tap Room in the Holiday Inn Conference Center, and further failed to protect the decedent, James Schickling, from foreseeable harm." Id. 68. In determining whether these facts constitute an "occurrence" under the policies, I look to the Pennsylvania Supreme Court which, in a case with an identical definition of "occurrence," held: Under this definition, an "occurrence" is an accident. The willful and malicious assault alleged in the complaint is not an accident but rather is an intentional tort. As such, it is not covered by the policy and, therefore, the insurer owed no duty to defend. Gene's Restaurant, Inc. v. Nationwide Insurance Co., 548 A.2d 246, 247 (Pa. 1988). Likewise, I find that Mr. Wells' violently striking Mr. Schickling's head which ultimately c a u se d his death was not an accident and thus does not constitute a covered "occurrence" u n d e r the policies. There is neither ambiguity in the language of the policies nor any potential that the claims asserted are within the policies' coverage. See Stidham v. M illv a le Sportsmen's Club, 618 A.2d 945, 953 (Pa.Super. 1992). Allstate is not obligated to defend or indemnify Defendant Mark Wells for the claims asserted by Defendant Linda Schickling in her state court action. I also note that, even if the incident could be considered an occurrence, the criminal act exclusion in both policies would preclude coverage here. The policies p ro v id e : "We do not cover any bodily injury or property damage intended by, or which m a y reasonably be expected to result from the intentional or criminal acts or omissions of 6 a n y insured person." See Compl. Exh.'s A and B. The policies further provide that this e x c lu sio n applies even if the insured lacks the mental capacity to govern his conduct, or if th e bodily injury is of a different kind or degree than that intended or reasonably e x p e c te d . Id. That it was not Mr. Wells' intention to kill Mr. Schickling that night is of no import here. The Pennsylvania Superior Court has held that a "a policy provision that e x c lu d e s coverage for bodily injury `expected or intended' by the insured excludes only in ju ry and damage of the same general type which the insured intended to cause." Erie In s . Exchange v. Fidler, 808 A.2d 587 (Pa.Super. 2002). The court continued, "an in s u re d intends an injury if he desired to cause the consequences of his act or if he acted k n o w in g that such consequences were substantially certain to result." Id. Here, the e x c lu s io n applies even if the bodily injury is of a different kind or degree than that inten d ed or reasonably expected. While Mr. Wells may not have intended to kill Mr. S c h ic k lin g , he certainly could have expected to cause very serious injuries by striking a m an 's head with great force. Those injuries which eventually caused Mr. Schickling's d e a th are of the same general type which Mr. Wells intended to cause. Furthermore, striking the head of a man with great force is a criminal act to which M r. Wells pled guilty and for which he received a sentence of incarceration. That c r im in a l act is just what the policy excludes. As a result, Allstate is not obligated to defend or indemnify Mr. Wells for the claims asserted by Defendant Linda Schickling in 7 her cause of action in state court. It is also of no importance that Mr. Wells was intoxicated when he struck Mr. S c h ic k lin g . The policies provide that this exclusion applies even if the insured lacks the m e n ta l capacity to govern his conduct. The Superior Court of Pennsylvania rejected the d e f en s e of intoxication in a similar case: A p p e lle e s argue that the insured's conduct was unintentional (a n d , therefore, accidental) because he was under the in f lu e n c e of alcohol. It is correct that Martin's speech was s lu rre d , he smelled of alcohol, and a blood test disclosed an a lco h o lic blood content of .26 percent. However, while v o lu n tar y intoxication may so cloud the mind as to deprive it o f the power of pre-meditation and deliberation, it will not p re v e n t the formation of the general intent necessary for the c o m m is sio n of an assault and battery. S ta te Farm Mut. Automobile Ins. Co. v. Martin, 660 A.2d 66, 68 (Pa.Super. 1995). Thus, M r. Wells' intoxication is irrelevant, and has no effect on the criminal act exclusion. In conclusion, because there is no possibility that any of the underlying claims in the related state court action could be covered by these policies, judgment in Allstate's f a v o r with regard to the duty to defend and indemnify is warranted. An appropriate Order follows. 8

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