Hiscox Ins. Co. v. MRB Lawn Servs.

• Docket Number: Civil Action 22-2827
• Decision Date: 14 September 2023
• Parties: HISCOX INSURANCE COMPANY, INC., Plaintiff, v. MRB LAWN SERVICES, also known as “MRB LAWN SERVICE,” and SUNBELT RENTALS, INC., Defendants.
• Court: U.S. District Court — Eastern District of Pennsylvania

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HISCOX INSURANCE COMPANY, INC., Plaintiff,
v.
MRB LAWN SERVICES, also known as “MRB LAWN SERVICE,” and SUNBELT RENTALS, INC., Defendants.

Civil Action No. 22-2827

United States District Court, E.D. Pennsylvania

September 14, 2023

MEMORANDUM

HODGE, KELLEY B., J.

This is an insurance coverage dispute brought by insurer, Hiscox Insurance Company, Inc. (“Hiscox”), seeking a declaratory judgment that it owes no duty to defend Sunbelt Rentals, Inc. (“Sunbelt”) and MRB Lawn Services, LLC (“MRB”) in a pending tort action or to indemnify Sunbelt and MRB, if they are found liable in that lawsuit. The underlying case, Madonna et al. v. Sunbelt Rentals, Inc. et al., No. 211200511, in the Court of Common Pleas in Philadelphia County, Pennsylvania, involves claims brought by a father, Brian James Madonna, on behalf of his son, Austin Madonna, who died in a motorcycle collision with a boom lift, owned by Sunbelt, and operated by MRB. (ECF No. 24-1.) Presently before the Court is MRB's and Sunbelt's Motion to Dismiss the First Amended Complaint (ECF No. 25 & 26).^[1] In this action, the parties dispute whether the accident “arises out of [MRB's]. . .ongoing operation of tree removal services,” because if it did, according to Hiscox, insurance coverage is excluded.

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(ECF No. 24-4 at 37, 50; ECF No. 28 at 4.) Hiscox's position is that “factual statements made by its insured, MRB, clearly confine the underlying claims to a recovery to which the policy does not cover because the underlying plaintiff's injury was arising out of MRB's ongoing operation of tree removal.” (ECF No. 28 at 4.) The policy excludes coverage for several enumerated services listed in an endorsement, one of which is for “tree removal.” (ECF No. 24-4 at 50.) Since the collision happened while MRB's owner was driving the boom lift between jobsites where tree removal services were being performed, Hiscox believes coverage is excluded utilizing a broad interpretation of the policy's “tree removal” exclusion, as discussed more fully herein. (Id.) MRB and Sunbelt, in contrast, contend that the “tree removal” exclusion does not apply because: (1) the accident occurred on the roadway while traveling to different jobsites where tree removal services had been completed; (2) the death of the motorcycle driver was not caused by and had no connection to the removal of any tree; and (3) the complaint in the underlying lawsuit makes no mention of “tree removal” services.

The Court finds that the “tree removal” exclusion does not apply to Hiscox's duty to defend MRB and Sunbelt in the underlying litigation. In particular, the “tree removal” exclusion does not encompass bodily injury sustained in a collision occurring on a roadway between jobsites where trees were not being removed, even if tree removal services occurred at nearby properties earlier in the day of the accident. The Court, therefore, grants Defendants' Motion to Dismiss as to Hiscox's claim seeking a declaration that it owes no duty to defend MRB and Sunbelt. Hiscox's claim that it has no duty to indemnify, however, is not ripe for disposition since there has been no finding of liability in the underlying litigation at this time. Thus, dismissal of the duty to indemnify claim is also appropriate but without prejudice.

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I. BACKGROUND

On December 12, 2021, Brian James Madonna - individually and as Administrator of the Estate of his son Austin Madonna - brought negligence, wrongful death, and survival action claims against Sunbelt and MRB in the Philadelphia Court of Common Pleas, Madonna et al. v. Sunbelt et al., Case No. 211200511. As alleged in this complaint, on September 28, 2020, Austin Madonna collided, while riding a motorcycle, with a boom lift owned by Sunbelt and rented to MRB. (ECF No. 24 at 2-3; ECF No. 24-1 at 3.) The accident occurred at approximately 7:47 p.m. that day while Austin Madonna was “traveling north on Old Wilmington Road” and the boom lift was “located in the roadway in the northbound lane at or near 814 Old Wilmington Road, Sadsburyville, PA.” (ECF No. 24-1 at 5.) The boom lift was “in the roadway” after MRB had “completed its work” and was “obstructing the Old Wilmington Road northbound lane” without “proper warning signs and/or barricades in the area around the subject lift.” (Id.) Austin Madonna, who “was too late. . .to stop his motorcycle safely” attempted to avoid the crash by moving the motorcycle to “its side” but instead “skidded towards” and slammed his head into the boom lift. (Id.at 6.) After spending six days in the hospital, Austin Madonna died on October 4, 2020 from the injuries he sustained in this accident. (ECF No. 24-1 at 6.) On July 20, 2020, Hiscox filed a Complaint in this Court, which it amended on March 16, 2023. (ECF 1 & 24.) Hiscox seeks declaratory judgment that an insurance policy it issued to MRB, for policy period May 3, 2020 to May 3, 2021, excluded coverage for the accident, and thus, it has no duty to defend and indemnify Sunbelt and MRB for the underlying action. (Id.) In the First Amended Complaint, Hiscox also brings a claim to rescind this policy because, according to it, “at no time prior to the accident on September 28, 2020, was Hiscox informed that MRB conducted tree removal as part of its business.” (ECF No. 24 at 6.)

While “‘bodily injury'. . .in the performance of. . .ongoing operations” is covered by the insurance policy at issue, there is an exclusion for “[t]ree removal” services. (ECF No. 1-4 at 37, 50.)

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In particular, under a page titled “COMMERCIAL GENERAL LIABILITY COVERAGE FORM” the policy provides:

“We will pay those sums that the insured be-comes legally obligated to pay as damages because of ‘bodily injury' or ‘property damage' to which this insurance applies. We will have the right and duty to defend the insured against any ‘suit' seeking those damages. However, we will have no duty to defend the insured against any ‘suit' seeking damages for ‘bodily injury' or ‘property damage' to which this insurance does not apply.” [sic]

(ECF No. 24-4 at 14.) An endorsement page which “modifies insurance provided under” the “COMMERCIAL GENERAL LIABILITY COVERAGE PART” provides that:

“[t]his insurance does not apply to ‘bodily injury' or ‘property damage' arising out of the ongoing opera-tions described in the Schedule of this endorsement, regardless of whether such operations are conduct-ed by you or on your behalf or whether the opera-tions are conducted for yourself or for others. Unless a ‘location' is specified in the Schedule, this exclusion applies regardless of where such operations are conducted by you or on your behalf. If a specific ‘location' is designated in the Schedule of this en-dorsement, this exclusion applies only to the de-scribed ongoing operations conducted at that ‘loca-tion' For the purpose of this endorsement, ‘location' means premises involving the same or connecting lots, or premises whose connection is interrupted only by a street, roadway, waterway or right-of-way of a railroad.” [sic]

(Id. at 50.) The “Schedule,” under the heading “Description of Designated Ongoing Operation(s)” lists “[s]ervices or work on any projects involving the following materials or infrastructure” with the below graph appearing thereunder:

Airports	Foundation, sheeting or retaining walls
Amusement rides, pools or playgrounds	Hazardous material or waste removal
Asbestos, lead, or mold evaluation or abatement	Hydraulic fracturing, hydrofracturing, or fracking
Automotive glass installation and repair	Landfills
Blasting or demolition	Liquefied petroleum gas (LPG) heating and air conditioning installation and repair
Bridges, dams, harbors, mines, piers or tunnels	Oil, gas or wells
Crane operation	Process piping
Emergency systems	Roofing
Exterior carpentry work	Scaffolding operation
Exterior electrical work	Tree removal
Exterior painting	Underground storage tanks or utilities
Exterior tile, stone, marble, mosaic, or terrazzo work	Window cleaning above 15 feet
Fire suppression	Any other similarly hazardous projects or materials

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(Id.) According to the operative First Amended Complaint, “Hiscox is affording MRB and Sunbelt a defense in the Underlying Lawsuit under a full reservation of rights” meaning that it has filed this action so that it can terminate its defense of MRB and Sunbelt in the underlying case. (ECF No. 24 at 3.) The reason Hiscox states in its First Amended Complaint that it has no duty to defend or indemnify MRB and Sunbelt is because of statements allegedly made by Matthew Burkett, the owner of MRB and operator of the boom lift in question, on at least two occasions indicating that on the day of the accident, he had gone to two different properties located along the road where the collision occurred to remove trees. (ECF No. 24-3 at 3.) The evidence it cites and attaches to its First Amended Complaint includes Mr. Burkett's deposition testimony on April 26, 2021, and a handwritten statement purporting to be signed by him on October 12, 2020.^[2] (ECF No. 242 & 24-3.) In this deposition testimony, Mr. Burkett states he “was contacted by a homeowner. . . to take down a large pin [sic] tree” which he was doing “there for a couple days” when another “homeowner approached. . .[him] down the street.” (ECF No. 24-3 at 3.) One of the houses was at 827 Old Wilmington Road, and the other was at 814 Old Wilmington Road. (Id.) When Mr. Burkett “finished up. . . until noon” at the first house at 814 Old Wilmington Road, he drove the

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boom lift to the neighbor's house at 827 Old Wilmington Road, which was down the road. (Id. at 6.) He then...