Lebanon Coach Co. v. Carolina Cas. Ins. Co.

• Decision Date: 10 April 1996
• Citation: 450 Pa.Super. 1,675 A.2d 279
• Parties: , 109 Ed. Law Rep. 282 LEBANON COACH COMPANY, Appellee v. CAROLINA CASUALTY INSURANCE COMPANY; County of Lebanon Transportation Authority (Colt); City of Lebanon; Lebanon School District; Commonwealth of Pennsylvania, Department of Transportation; Beth McKinney; Paula Jo Lehman, a Minor, by Her Parents and Natural Guardians, Patricia M. Lehman and Willard Lehman; Patricia M. Lehman and Willard Lehman, Individually; and Fireman's Fund Insurance Company, Appellees. Appeal of Paula Jo LEHMAN, a Minor, by Her Parents and Natural Guardians, Patricia M. LEHMAN and Willard Lehman; Patricia M. Lehman and Willard Lehman, Individually, Appellants.
• Court: Pennsylvania Superior Court

Page 279

675 A.2d 279

450 Pa.Super. 1, 109 Ed. Law Rep. 282

LEBANON COACH COMPANY, Appellee v. CAROLINA CASUALTY INSURANCE COMPANY; County of Lebanon Transportation Authority (Colt); City of Lebanon; Lebanon School District; Commonwealth of Pennsylvania, Department of Transportation; Beth McKinney; Paula Jo Lehman, a Minor, by Her Parents and Natural Guardians, Patricia M Lehman and Willard Lehman; Patricia M. Lehman and Willard Lehman, Individually; and Fireman's Fund Insurance Company Appellees Appeal of Paula Jo LEHMAN, a Minor, by Her Parents and Natural Guardians, Patricia M. LEHMAN and Willard Lehman; Patricia M. Lehman and Willard Lehman, Individually, Appellants.

Superior Court of Pennsylvania.

Argued Oct. 25, 1995.

Filed April 10, 1996.

Leslie M. Cyr, Philadelphia, for Fireman's Fund Insurance, appellee.

Kenneth C. Sandoe, and William H. Sturm, Jr., Myerstown, for appellants.

Robert B. Keys, Jr., Lebanon, for Lebanon Coach Co., appellee.

James T. Reilly, Lebanon, for Carolina Casualty, appellee.

Marc A. Hess, Lebanon, for McKinney, appellee.

Before CAVANAUGH, KELLY and HESTER, JJ.

KELLY, Judge:

In this appeal we must again consider the automobile insurance policy provision that provides coverage for only those accident claims resulting from the ownership, maintenance or use of a motor vehicle. Specifically, we must determine whether the injuries sustained by a minor after alighting from a bus transporting her to school resulted from the use of the bus and, therefore, whether the bus owner's insurer has a duty to defend and indemnify the operator of the bus covered under the owner's bus policy in an underlying tort action. In addition, we must decide whether a state or federal endorsement amends the bus operator's basic form automobile policy to afford coverage to a bus not specifically identified in the policy's declarations. Based on the reasoning set forth below, we hold that the bus owner's insurer has a duty to defend and indemnify the bus operator under the circumstances of this case. Furthermore, we hold that neither endorsement expands the bus operator's basic policy to provide coverage for the bus. Accordingly, we reverse in part, affirm in part, and remand this matter for proceedings consistent with this opinion.

The relevant facts and procedural history of this appeal are as follows. On January 11, 1988, a bus owned by the County of Lebanon Transit Authority ("COLT") and operated under contract by Lebanon Coach Company ("Lebanon Coach") was transporting children to school. ¹ The bus stopped on Cornwall Road at the intersection of Cornwall Road and Hauck Street in the City of Lebanon to discharge its high school passengers. Paula Jo Lehman, then a minor, stepped off of the bus onto the sidewalk, walked the length of the bus to the corner crosswalk, and, walking behind the bus, began crossing the street to the high school. While the bus remained stationary, a car driven by Beth McKinney turned onto Cornwall Road from Hauck Street and struck Paula Jo, pushing her and then pinning her to the bus. Paula Jo sustained traumatic injuries as a result of the accident, culminating in the amputation of her right leg.

Paula Jo Lehman, by her parents, Patricia and Willard Lehman; and Patricia Lehman and Willard Lehman, individually ("the Lehmans"), filed a complaint on February 28, 1990, bringing an action in tort against Lebanon Coach, COLT, Commonwealth of Pennsylvania Department of Transportation, City of Lebanon, Lebanon School District, and Beth McKinney. ² Lebanon Coach asked COLT's insurer, Carolina Casualty, to defend Lebanon Coach in the underlying tort action; however, Carolina Casualty refused. Lebanon Coach then filed the instant declaratory judgment action on September 20, 1990, against Carolina Casualty and COLT, asking the court to determine whether Carolina Casualty had a duty to defend Lebanon Coach in the underlying tort action. Carolina Casualty and COLT filed preliminary objections on October 24, 1990, which were overruled by an opinion and order filed on March 5, 1991. Lebanon Coach amended its complaint on January 28, 1991, to add defendants City of Lebanon, Lebanon School District, Commonwealth of Pennsylvania Department of Transportation, Beth McKinney and the Lehmans. Lebanon Coach's automobile insurer, Fireman's Fund, filed a petition to intervene, which the trial court granted in an order filed on November 13, 1991.

The Lehmans filed a motion for summary judgment against Carolina Casualty and Fireman's Fund; Fireman's Fund filed a cross-motion for summary judgment against all parties; and Carolina Casualty and COLT filed cross-motions for summary judgment against all parties. In its opinion filed December 23, 1994, the trial court held that neither Carolina Casualty nor Fireman's Fund had a duty to defend or indemnify Lebanon Coach in the underlying tort action, and, thus, granted summary judgment for the two insurers as well as COLT. This timely appeal by the Lehmans followed.

The Lehmans raise the following issues for our review:

I. WHETHER THE COURT BELOW ERRED WHEN IT CONCLUDED THAT CAROLINA CASUALTY INSURANCE COMPANY IS NOT REQUIRED TO DEFEND AND INDEMNIFY LEBANON COACH COMPANY AGAINST A CLAIM ARISING FROM A MOTOR VEHICLE ACCIDENT BECAUSE IT APPLIED AN INCORRECT STANDARD TO INTERPRET THE PHRASE "RESULTING FROM THE OWNERSHIP, MAINTENANCE OR USE OF A COVERED BUS" CONTAINED IN THE INSURANCE CONTRACT.

II. WHETHER THE COURT BELOW ERRED WHEN IT CONCLUDED THAT FIREMAN'S FUND INSURANCE CO. IS NOT REQUIRED TO DEFEND AND INDEMNIFY LEBANON COACH COMPANY AGAINST A CLAIM ARISING FROM A MOTOR VEHICLE ACCIDENT BECAUSE THE 'STATE' AND/OR 'FEDERAL' ENDORSEMENTS AMENDED THE BASIC FORM POLICY TO AFFORD COVERAGE TO BUSES NOT SPECIFICALLY IDENTIFIED IN THE DECLARATIONS.

(The Lehmans' Brief at 3).

At the outset, we note that our scope of review from a grant of summary judgment is plenary. Phico Insurance Company v. Presbyterian Medical Services Corporation, 444 Pa.Super. 221, 224, 663 A.2d 753, 755 (1995) (citations omitted); Harrity v. Medical College of Pennsylvania Hospital, 439 Pa.Super. 10, 19, 653 A.2d 5, 10 (1994), allocatur denied, --- Pa. ----, --- A.2d ---- (1995) (citations omitted). The standard of appellate review states as follows:

[S]ummary judgment is properly entered where the pleadings, depositions, answers to interrogatories, and admissions, together with affidavits demonstrate that no genuine, triable issue of fact exists and that the moving party is entitled to judgment as a matter of law. The court must examine the record in the light most favorable to the non-moving party and resolve all doubts against the moving party. Moreover, the burden is on the moving party to prove that no genuine issue of material fact exists. Whether a claim is within a policy's coverage or barred by an exclusion is a question of law that may be decided by a motion for summary judgment. We are not bound by the trial court's conclusions of law, but may draw our own inferences and reach our own conclusions. We will reverse a grant of summary judgment only when the trial court has committed an error of law or abused its discretion.

Butterfield v. Giuntoli, 448 Pa.Super. 1, 10, 670 A.2d 646, 650 (1995) (citations omitted). See also Phico Insurance Company v. Presbyterian Medical Services Corporation, supra (citations omitted); Aetna Casualty and Surety Company v. Roe, 437 Pa.Super. 414, 419-20, 650 A.2d 94, 97 (1994) (citations omitted).

Whether a particular loss is within the coverage of an insurance policy is a question of law which may be decided on a motion for summary judgment in a declaratory judgment action. Equibank v. State Farm Mutual Automobile Insurance Company, 426 Pa.Super. 354, 359, 626 A.2d 1243, 1245 (1993), allocatur denied, 536 Pa. 642, 639 A.2d 28 (1994) (quotation omitted). See also Alexander v. CNA Insurance Company, 441 Pa.Super. 507, 510, 657 A.2d 1282, 1284 (1995), allocatur denied, 543 Pa. 689, 670 A.2d 139 (1995) (citing Aetna Casualty and Surety Company v. Roe, supra at 420, 650 A.2d at 98). Thus, it is subject to full review by this Court. Gilderman v. State Farm Insurance Company, 437 Pa.Super. 217, 224, 649 A.2d 941, 944 (1994), allocatur denied, 541 Pa. 626, 661 A.2d 874 (1995). In Butterfield v. Giuntoli, supra, we explained the principles governing the interpretation of insurance contracts as follows:

When interpreting an insurance contract, words that are clear and unambiguous must be given their plain and ordinary meaning. Where ambiguities are found, they must be construed in the light most favorable to the insured. However, 'a contract is not rendered ambiguous by the mere fact that the parties do not agree upon the proper construction.' An ambiguity exists only when a policy provision is reasonably susceptible of more than one meaning. [ ] ... Whether a policy provision is ambiguous is a question of law to be decided by the courts.

In order to decide whether a claim comes within the insurance policy's coverage, we must first ascertain the policy's scope. Moreover, the proper focus of this scrutiny is the reasonable expectations of the insured at the time of purchase. In determining the insured's reasonable expectations, we must examine the totality of the insurance transaction involved.

Id. at 14-15, 670 A.2d at 652-53 (citations and footnote omitted). See also Gilderman v. State Farm Insurance Company, supra; Koenig v. Progressive Insurance Company, 410 Pa.Super. 232, 236-37, 599 A.2d 690, 691-92 (1992), allocatur denied, 531 Pa. 640, 611 A.2d 712 (1992) (citations omitted); State Automobile Insurance Association v. Kuhfahl, 364 Pa.Super. 230, 237-38, 527 A.2d 1039, 1042-43 (1987), allocatur denied, 517 Pa. 618, 538 A.2d 500 (1988) (citations omitted).

The Lehmans first contend that the trial court erred in granting summary judgment in favor of Carolina Casualty because the court erroneously concluded that the insurance...