Empire Fire and Marine Ins. Co. v. Jones

• Decision Date: 13 September 2010
• Docket Number: No. 4:09-cv-422,4:09-cv-422
• Citation: 739 F.Supp.2d 746
• Court: U.S. District Court — Middle District of Pennsylvania
• Parties: EMPIRE FIRE AND MARINE INSURANCE COMPANY, Plaintiff, v. Robert A. JONES d/b/a R.A. Jones & Sons and James Drumheiser, Defendants. and James H. Drumheiser, Plaintiff on the Counterclaim and Cross Claim, v. Empire Fire and Marines Insurance Company, Defendant on the Counterclaim, and Robert A. Jones d/b/a R.A. Jones & Sons, Defendants on the Cross Claim.

739 F.Supp.2d 746

EMPIRE FIRE AND MARINE INSURANCE COMPANY, Plaintiff,
v.
Robert A. JONES d/b/a R.A. Jones & Sons and James Drumheiser, Defendants.
and
James H. Drumheiser, Plaintiff on the Counterclaim and Cross Claim,
v.
Empire Fire and Marines Insurance Company, Defendant on the Counterclaim,
and
Robert A. Jones d/b/a R.A. Jones & Sons, Defendants on the Cross Claim.

No. 4:09-cv-422.

United States District Court,
M.D. Pennsylvania.

Sept. 13, 2010.

739 F.Supp.2d 747

Eric N. Anderson, Jason A. Rosenberger, Meyer, Darragh, Buckler, Bebenek & Eck, P.L.L.C., Pittsburgh, PA, for Plaintiff.

Brigid Q. Alford, Marshall Dennehey Warner Coleman & Goggin, Harrisburg, PA, Frank E. Garrigan, Garrigan & Targonski, Shamokin, PA, Edward E. Kopko, Edward E. Kopko, Lawyer, P.C., Ithaca, NY, for Defendants.

MEMORANDUM

JOHN E. JONES III, District Judge.

THE BACKGROUND OF THIS MEMORANDUM IS AS FOLLOWS:

This matter is before the Court on the Report and Recommendation ("R & R") of

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Magistrate Judge Thomas M. Blewitt (Doc. 54), filed on August 19, 2010, which recommends that we grant the Plaintiff's Motion for Summary Judgment (Doc. 28) and deny Defendant James Drumheiser's ("Drumheiser") cross-Motion for Summary Judgment. (Doc. 39). Drumheiser filed objections to the R & R on September 2, 2010. (Doc. 55). No other parties have filed objections to the R & R and the time for doing so has lapsed. Accordingly, this matter is ripe for disposition. For the reasons set forth below, the Court will adopt the Magistrate Judge's R & R, grant the Plaintiff's Motion for Summary Judgment, deny Drumheiser's cross Motion for Summary Judgment and close this case.

I. PROCEDURAL BACKGROUND

Plaintiff Empire Fire and Marine Insurance Company ("Empire"), filed a Complaint for Declaratory Judgment on March 9, 2009 against Defendants Robert A. Jones, d/b/a R.A. Jones & Sons ("Jones") and Drumheiser seeking this Court's determination of Empire's obligation to provide liability coverage to Jones. ¹ (Doc. 1). This action arose when Drumheiser was injured by a garbage truck owned and operated by Jones. Jones filed an Answer to Empire's Complaint on April 23, 2009. The following day, Drumheiser filed an Answer to Empire's Complaint, a cross claim against Jones,² and counterclaims against Empire.³

Following the close of discovery, Empire filed a Motion for Summary Judgment against Drumheiser and Jones. (Doc. 28). Drumheiser filed a cross-Motion for Summary Judgment against Empire. (Doc. 38). We referred both of the Motions to Magistrate Judge Blewitt for an R & R. As noted above, on August 19, 2010, Magistrate Judge Blewitt issued the instant R & R, recommending that Empire's Motion be granted in its entirety and that Drumheiser's Motion be denied in its entirety.

II. FACTUAL BACKGROUND

On August 19, 2008, Drumheiser was working for Jones' trash collection business. After tossing a bag of trash into the back of Jones' garbage truck, Drumheiser attempted to jump aboard the outside of the truck. As Drumheiser attempted to board the truck, he slipped and fell from the truck onto the road. The garbage truck, driven by Jones, proceeded to run over Drumheiser's lower leg causing severe injuries.

Empire was Jones' insurance provider at the time of the above incident. The policy provides "Truckers Coverage" to Jones doing business by and through R.A. Jones & Sons for accidents involving Jones' garbage truck. At issue in this case is whether Empire's insurance policy issued to Jones provides liability coverage Jones for the Drumheiser accident. The relevant portions of Empire's policy provide:

SECTION II—LIABILITY COVERAGE

A. Coverage

We will pay all sums an "Insured" ⁴ legally must pay as damages because

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of "bodily injury" or property damage to which this insurance applies, caused by an "accident" and resulting from the ownership, maintenance or use of a covered "auto."

(Doc. 28, Ex. A, p. 38).

The provisions below list "Exclusions" to the Empire policy's liability coverage. Relevant to this case is the "Employee" Exclusion to the policy's liability coverage. Specifically, the relevant Exclusions are as follows:

B. Exclusions

This insurance does not apply to any of the following:

4. Employee Indemnification and Employer's Liability

"Bodily injury" to:

a. An "employee" of the "insured" arising out of and in the course of:

(1) Employment by the "insured"; or

(2) Performing the duties related to the conduct of the "insured's" business;

or

b. The spouse, child, parent, brother or sister of that "employee" as a consequence of Paragraph a. above.

This exclusion applies:

(1) Whether the "insured" may be liable as an employer or in any other capacity; and

(2) To any obligation to share damages with or repay someone else who must pay damages because of injury.

But this exclusion does not apply to "bodily injury" to domestic "employees" not entitled to workers' compensation benefits or to liability assumed by the "insured" under an "insured contract." For the purposes of the Coverage Form, a domestic "employee" is a person engaged in household or domestic work performed principally in connection with a residence premises.

5. Fellow Employee

"Bodily injury" to any fellow "employee" of the "insured" arising out of and in the course of the fellow "employee's" employment or while performing duties related to the conduct of your business.

(Doc. 28, Ex. A, p. 39).

There are several definitions in the policy that are relevant to this case. Specifically, they are as follows:

SECTION V—DEFINITIONS

F. "Employee" includes a "leased worker." "Employee" does not include a "temporary worker."

I. "Leased worker" means a person leased to you by a labor leasing firm under an agreement between you and the labor leasing firm to perform duties related to the conduct of your business. "Leased worker" does not include "temporary worker."

O. "Temporary worker" means a person who is furnished to you to substitute for a permanent "employee" on leave or to meet seasonal or short-term workload conditions.

(Doc. 28, Ex. A, pp. 46-47).

Although the definition of "Employee" merely explains what the word includes and not what it means, as Magistrate Judge Blewitt aptly noted, the parties seem to agree that if Drumheiser does not fit the definition of "Temporary worker," he falls under the "Employee" exclusion to the policy's liability coverage. Thus, the critical issue in this case is whether Drumheiser was a "Temporary worker" vel non under the policy at the time of the accident.

At the relevant time, Jones had a business which provided coal and trash hauling services. About one year prior to the

739 F.Supp.2d 750

incident on August 19, 2008, Jones ran into Michael and Gloria Kalman ("the Kalmans") at a local restaurant. During this encounter, Jones expressed that he was looking for someone to help him with his hauling services. It was at this time that the Kalmans recommended Drumheiser to Jones, with the understanding that Drumheiser would continue to work for the Kalmans as well.⁵ A week or two following this encounter, Jones called Drumheiser to solicit his labor. Drumheiser agreed to work for Jones in addition to working for the Kalmans.

Drumheiser did not have a written employment contract with Jones or the Kalmans. Instead, a loosely understood arrangement evolved among the parties. Drumheiser testified that he would work one or two days a week for Jones and it would only be a couple of hours in the morning and never in the afternoon. The Kalmans mostly used Drumheiser's services in the late mornings and afternoons. Occasionally, on days Drumheiser would work for Jones, Drumheiser would call Mr. Kalman and inform him of his plans to work for Jones. Sometimes, Drumheiser would ask Mr. Kalman if it was "ok" for him to work for Jones. Mr. Kalman testified that there was never a time when his need for Drumheiser's help conflicted with Jones' need for Drumheiser's help. Further, it is admitted that Jones never paid the Kalmans for Drumheiser's work.

On the day of the accident, Drumheiser called Mr. Kalman and told him that he made arrangements to work for Jones in the morning and that he would work for Kalman in the afternoon. On that day, Jones picked Drumheiser up around 6:15 a.m. and they started hauling trash around 7:00 a.m. The accident occurred around 11 a.m.

The parties dispute whether the Kalmans "loaned" Drumheiser to Jones for the purpose of assisting Jones with his trash hauling service. Mr. Kalman testified:

"Well Jonesy said to me, look, I'm strapped for a helper because I know that's the way Jonesy was sort of doing it, it just seemed like he couldn't hold a helper. And then he said to me, he was really disgusted, I said listen, I'll loan you Buttons (Drumheiser) but I want him back. I mean it was just a figure of speech. I mean I had no control over Buttons but I just said I'll loan you Buttons but I want him back but like in a kidding way and Buttons came every day."

(Doc. 32, Kalman Dep., p. 37) (emphasis added). While Kalman admitted that he was Drumheiser's primary employer, he also admitted that he had "no right or authority to prevent him (Drumheiser) from working with anyone." (Doc. 32, Kalman Dep., p. 13).

III. STANDARDS OF REVIEW

A. Review of Magistrate Judge's R & R

When objections are filed to the report of a magistrate judge, the district court makes a de novo determination of those portions of the report or specified proposed findings or recommendations to which objections are made. 28 U.S.C. § 636(b)(1); United States v. Raddatz, 447 U.S. 667, 674-75, 100 S.Ct. 2406, 65 L.Ed.2d 424 (1980). The court may accept, reject, or modify, in whole or in part, the magistrate judge's findings or recommendations. Id. Although the standard of review is de novo, 28 U.S.C. § 636(b)(1) permits whatever reliance the district

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court, in the exercise of sound discretion, chooses to place on a magistrate judge's proposed findings and recommendations. Raddatz, 447 U.S. at 674-75...