Creed v. Allstate Ins. Co.
| Decision Date | 27 July 1987 |
| Citation | 365 Pa.Super. 136,529 A.2d 10 |
| Parties | Joy CREED, Appellant, v. ALLSTATE INSURANCE COMPANY. 907 Phila. 1986 |
| Court | Pennsylvania Superior Court |
Thomas Bruno, II, Philadelphia, for appellant.
James M. Marsh, Philadelphia, for appellee.
Before CIRILLO, President Judge, and BROSKY, WIEAND, OLSZEWSKI, DEL SOLE, MONTEMURO, TAMILIA, POPOVICH and JOHNSON, JJ.
On June 25, 1979, a dog owned by Joy Creed was allowed to run loose and attacked and bit Justin Coffey, a minor. Suit was commenced on behalf of the minor by his parents and natural guardians against the Appellant. At the time of the incident, Appellant had a homeowner's insurance policy issued by Allstate Insurance Company, the Defendant-Appellee herein. The lawsuit filed on behalf of Justin Coffey sought damages for personal injury to Justin, derivative claims on behalf of his parents and natural guardians and in Count III thereof included a claim for punitive damages. Upon receipt of the Complaint, Ms. Creed forwarded the matter to Allstate Insurance Company and that company caused an appearance to be entered and undertook her defense. However, the company also advised her by letter dated March 13, 1980 that the policy in question, according to Allstate, only provided protection against claims for personal injury and property damage. The carrier further pointed out that there was a claim for punitive damages being made and that this claim was not covered under the terms of her homeowner's liability policy and any portion of a verdict which would be attributable to punitive damages would not be paid by Allstate.
As a result of the receipt of that letter, Ms. Creed secured the services of personal counsel to work with counsel secured by her insurance carrier in representing her interests in the subject lawsuit.
Ultimately, the time came for the settlement of the personal injury claims and the case was settled for the total sum of $102,000.00, $101,000.00 being paid by Allstate Insurance Company on its behalf and on behalf of its insured and $1,000.00 being paid by Joy Creed, the insured, to settle the claims for punitive damages. The General Release executed on behalf of the minor contained the following language:
It is understood and agreed that this [is] a release of all claims, including, but not limited to, claims for person injuries, claims for property damage, claims for negligent infliction of emotional distress, claims for permanent injuries, claims for future damages, claims for compensatory damages, claims for punitive damages, and claims for medical payments under a certain policy insurance issued by Allstate Insurance Company to Joy Creed. (emphasis added).
Following the settlement of the personal injury action, Joy Creed began the instant lawsuit against Allstate Insurance Company claiming that it had breached its contract of insurance with her by failing to pay the claim for punitive damages, thus requiring her to make a $1,000.00 payment and, for breaching its duty to defend in the claim for punitive damages thereby causing her to retain counsel and incur expenses in the amount of $4,500.00. The Defendant filed appropriate responsive pleadings to the Plaintiff's Complaint. The matter was subsequently tried before a Board of Arbitrators resulting in a verdict in favor of the Defendant from which the Plaintiff appealed. A Motion for Summary Judgment was filed by each party along with supporting Affidavits and the trial court, in ruling on the Motions for Summary Judgment, entered judgment in favor of the Defendant-Appellee, Allstate Insurance Company. We affirm.
First, it is axiomatic in Pennsylvania that an insurer under a general liability policy has two duties to its insured. The first duty is to defend its insured against claims where the allegations are sufficient to bring those claims under the terms of the policy and the second duty is to pay that which it has agreed to pay in appropriate cases under the terms of the policy. See D'Auria v. Zurich Ins. Co., 352 Pa.Super 231, 507 A.2d 857 (1986). The duty to defend is however, limited only to those claims covered by the policy, "[t]hus, the insurer owes a duty to defend if the complaint against the insured alleges facts which would bring the claim within the policy's coverage if they were true". Id. at 235, 507 A.2d at 859.
The policy in question provides as follows:
Losses We Cover
We will pay all sums arising from the same loss which an insured person becomes legally obligated to pay as damages because of bodily injury or property damage by this part of the policy.
The policy further defines the terms bodily injury and property damages as follows "Bodily injury"--means bodily injury, sickness or disease, including resulting death, care and loss of services.
"Property damage"--means physical injury to or destruction of tangible property, including loss of its use.
The Appellant herein argues that the carrier was required to pay claims for punitive damages but nowhere...
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