Cont'l Cas. Co. v. Pa. Nat'l Mut. Cas. Ins. Co.
| Decision Date | 12 March 2021 |
| Docket Number | CIVIL ACTION No. 17-4183 |
| Citation | 525 F.Supp.3d 562 |
| Parties | CONTINENTAL CASUALTY COMPANY, Plaintiff, v. PENNSYLVANIA NATIONAL MUTUAL CASUALTY INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
Karen Hahn Ventrell, Cna Coverage Litigation Group, Washington, DC, Melissa a. Cornibe, Cna Coverage Litigation Group, Radnor, PA, for Plaintiff.
Peter J. Speaker, Thomas Thomas and Hafer LLP, Harrisburg, PA, for Defendant.
This Declaratory Judgment action involves a coverage dispute between two insurers stemming from a car accident and a significant personal injury settlement. Plaintiff Continental Casualty Company ("Continental") has sued Defendant Pennsylvania National Mutual Casualty Insurance Company ("Penn National") seeking reimbursement from Penn National, under an equitable contribution theory, for settlement sums paid by Continental. On May 22, 2019, I denied the parties’ cross-motions for summary judgment, finding that genuine issues of material fact remained.
On September 24, 2020, I presided over a bench trial on the limited, but potentially dispositive issue of whether Penn National's insured "borrowed" the vehicle involved in the accident, which would trigger Penn National's liability under the Penn National insurance policies. Having considered the trial record, I find that Penn National's insured did not "borrow" the vehicle and will grant judgment in favor of Defendant Penn National and against Plaintiff Continental.
On September 15, 2015, Jeremy Esakoff was operating a motorcycle in Reading Township, New Jersey, that was struck by a GMC Yukon (the "Yukon") operated by Kathryn Marquet-Sandt. .) At the time of the accident, Marquet-Sandt was employed by Shady Maple Smorgasboard, Inc. ("Shady Maple") and was driving the Yukon to attend a work-related marketing event. The Yukon was owned by Sight & Sound Ministries, Inc. ("Sight & Sound"). As a result of the accident, Mr. Esakoff sustained significant injuries. (Id. ¶ 4.)
Marquet-Sandt had been an employee of Shady Maple for about seven years, and held the title of "Group and Event Sales." (Trial Tr. 16:3–7.) In the scope of that position, and in order to promote business for Shady Maple, Marquet-Sandt travelled on day trips three to four times a week, and on overnight trips every two to three months. (Id. 19:3–11, 20:4–7.) She recalled travelling approximately 120 miles per week. (Id. at 19:22–24.) In September of 2015, the month of the accident, Shady Maple did not have a policy in place regarding what car Marquet-Sandt was supposed to use for company travel. (Id. at 24:21–23.) Shady Maple would reimburse Marquet-Sandt for her travel, including her mileage and other expenses. (Id. at 23:21–24:3.) The Chief Human Resources Officer for Shady Maple, Diane Adamczyk, testified that it would not have been appropriate to reimburse an employee for gas or mileage incurred while travelling in another company's car. (Id. at 68:11–25.)
Prior to September 15, 2015, Marquet-Sandt had, on approximately six occasions, traveled to marketing events in the same car as an employee from Sight & Sound, which often partnered in Shady Maple's marketing efforts. (Id. at 25:11–21, 26:5–14.) On one occasion, Marquet-Sandt took her own car on one of these joint trips, but most of the time she rode in a Sight & Sound vehicle. (Id. at 26:15–23.) Marquet-Sandt could recall actually driving a Sight & Sound vehicle on only one other occasion prior to the accident in question. (Id. at 27:4–22.)
On the day of the accident, a Sight & Sound employee, William Luckenbaugh, planned to use the Sight & Sound Yukon to travel to a trade show in Saratoga Springs, New York for purposes of marketing Sight & Sound's business. (8/10 Stip. ¶ 39.) Marquet-Sandt was travelling to the same show in order to promote Shady Maple business. (Id. ¶ 12.) Luckenbaugh called Marquet-Sandt and suggested they ride together. (Trial Tr. 29:16–21.) Marquet-Sandt then reached out to her supervisor, John Gehr, who approved the trip. (Id. at 29:20–22.) Luckenbaugh packed the Yukon—which displayed a Sight & Sound decal—with Sight & Sound brochures and a fifty-five inch television he planned to use at the trade show. (Dep. of William Luckenbaugh ("Luckenbaugh Dep.") 8:6–9, 15:23–16:7.)3
That morning, Marquet-Sandt drove her 2011 Honda Accord to a parking lot to meet Luckenbaugh. (Trial Tr. 42:11–19.) She brought with her some Shady Maple promotional materials, including some rolled up banners and a small box of "stuff" for the trade show, which she put in the Yukon. (Id. at 42:20–43:11; Luckenbaugh Dep. 16:8–14.) In a "spur-of-the-moment" decision made that morning, Marquet-Sandt offered to drive the Yukon because Luckenbaugh was older and she wanted to help him. (Trial Tr. 43:21–44:3.) Luckenbaugh agreed and got into the passenger seat, while Marquet-Sandt took the driver's seat. (Id. at 30:23–31:12.) Marquet-Sandt then put her Garmin GPS onto the windshield of the car in order to get directions, even though she knew where she was going for a substantial portion of the trip. (Id. at 32:18–23.)
Marquet-Sandt had been driving for about an hour and a half prior to the accident. (Id. at 36:3–5.) Luckenbaugh needed to use the bathroom and asked Marquet-Sandt to stop at a nearby McDonald's. (Id. at 47:10–48:6.) After that break, Luckenbaugh had intended to "switch spots" with Marquet-Sandt and take over driving. (Luckenbaugh Dep. 16:22–24.) Marquet-Sandt, however, missed the exit for the McDonald's and, while attempting to turn around, she hit a motorcycle ridden by Jeremy Esakoff, the plaintiff in the underlying personal injury suit. (Trial Tr. 36:13–21.)
Shortly after the accident, Marquet-Sandt spoke with her supervisor John Gehr, who did not question or reprimand her for driving the Yukon. (Id. at 36:22–37:17.) Indeed, at no time prior to the accident did Shady Maple ever tell Marquet-Sandt that she was not allowed to drive a Sight & Sound vehicle.4 (8/10 Stip. ¶ 20.)
Esakoff filed suit in the Philadelphia County Court of Common Pleas (the "Esakoff Action"), naming nineteen defendants, including Marquet-Sandt, Sight & Sound, and other entities affiliated with both Sight & Sound and Shady Maple. (Id. ¶ 23) The Esakoff Action amended complaint alleged that the accident was caused by Marquet-Sandt's negligence, and that the remaining defendants were vicariously liable. (Id. ¶ 24.)
Sight & Sound's Yukon was scheduled on and subject to the terms of a policy issued by Great American Insurance Company ("GAIC").5 (Id. ¶ 37.) Plaintiff Continental issued a commercial umbrella policy to Sight & Sound that provided coverage above the designated coverage amounts in the GAIC policy. (Id. ¶ 30.)
Defendant Penn National had issued a business automobile policy to Shady Maple ("Penn National Primary Policy"). In connection with the Primary Policy, Penn National provided a defense to Shady Maple in the Esakoff Action. That Primary Policy provided, in pertinent part, as follows:
(Pl.’s Ex. 5.) A "covered ‘auto’ " as defined in the Penn National Primary Policy, as "Any ‘Auto.’ "
The Penn National Primary Policy then set forth "Who Is An Insured":
(Id. )
Penn National also issued a Commercial Umbrella Policy to Shady Maple with limits of $10 million excess of the Penn National Primary Policy (the "Penn National Excess Policy"). (Pl.’s Ex. 6.) As with the Penn National Primary Policy, the Excess Policy provided:
(Pl.’s Ex. 6.)
On November 1, 2017, the Esakoff Action was settled at a private mediation for $10 million (the "Esakoff settlement"). Continental participated in the mediation and contributed $8.7 million to the settlement, while GAIC contributed $1 million and Erie Insurance Exchange contributed $300,000.
On September 19, 2017, Continental brought this lawsuit against Penn National seeking a declaratory judgment that the Penn National Primary and Excess Policies should have responded to any indemnity obligation (by way of settlement or judgment) in the Esakoff Action before the Continental Excess Policy was called upon to respond. Alternatively, Continental seeks a declaration that said policies should have responded on an equal basis.
The parties proceeded to a bench trial on the sole issue of whether the Penn National Primary and Excess Policies were triggered by Marquet-Sandt's operation of the vehicle. The main issue at trial was whether Shady Maple, through the actions of Marquet-Sandt within the course and scope of her employment, "borrowed" the Sight and Sound vehicle.
As noted above, this case involves a claim for...
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