Penn–am. Ins. Co. v. Peccadillos Inc.

• Decision Date: 19 August 2011
• Citation: 2011 PA Super 176,27 A.3d 259
• Parties: PENN–AMERICA INSURANCE COMPANY, Appellantv.PECCADILLOS, INC., David M. Freeman, Loretta J. Swartwood, Administratrix of the Estate of Heidi Marie Britton Spicer, Michael J. Wright, Parent and Natural Guardian of Haley Morgan Wright, a Minor, Terry I. Soliwoda, Grandparent and Natural Guardian of Madison Paige Wander, a Minor, James R. Watson, Administrator of the Estate of Megan Ann Watson, Phillip L. Clark, Jr., Administrator of the Estate of Jacob Charles Latta, Appellees.
• Court: Pennsylvania Superior Court

27 A.3d 259

2011 PA Super 176

PENN–AMERICA INSURANCE COMPANY, Appellant

v.PECCADILLOS, INC., David M. Freeman, Loretta J. Swartwood, Administratrix of the Estate of Heidi Marie Britton Spicer, Michael J. Wright, Parent and Natural Guardian of Haley Morgan Wright, a Minor, Terry I. Soliwoda, Grandparent and Natural Guardian of Madison Paige Wander, a Minor, James R. Watson, Administrator of the Estate of Megan Ann Watson, Phillip L. Clark, Jr., Administrator of the Estate of Jacob Charles Latta, Appellees.

Superior Court of Pennsylvania.

Argued June 7, 2011.Filed Aug. 19, 2011.

Gale White, Philadelphia, for appellant.Mark J. Homyak, Pittsburgh, for Soliwoda and Wright, appellees.BEFORE: STEVENS, P.J., FORD ELLIOTT, P.J.E., MUSMANNO, BENDER, GANTMAN, DONOHUE, ALLEN, LAZARUS, and OLSON, JJ.OPINION BY BENDER, J.:

In this declaratory judgment action, Penn–America Insurance Company (Penn–America) appeals from the order granting summary judgment in favor of Peccadillos, Inc., and its proprietor, David M. Freeman (collectively “Peccadillos”), and denying Penn–America's cross motion for summary judgment. Penn–America contends that the trial court erred in finding that provisions of the company's general commercial liability policy of insurance compel its defense of claims against Peccadillos arising from a fatal car crash caused by two patrons that Peccadillos had ejected from its premises in a dangerously inebriated condition. Penn–America argues that the claims are not subject to coverage due to the liquor liability exclusion of the policy and that, consequently, it has no duty to tender Peccadillos' defense. We conclude that at least one averment of the complaint invokes the policy's duty to defend and, therefore, is not excluded from coverage. Accordingly, we affirm the trial court's order granting summary judgment in favor of Peccadillos and Freeman and against Penn–America.

In September 2007, the plaintiffs in the underlying tort action filed a complaint naming as defendants Peccadillos, Inc. and Phillip L. Clark, Jr., Administrator of the Estate of Jacob Charles Latta, deceased (“Latta Estate”). ¹ The complaint averred, in pertinent part, as follows:

7. On March 17, 2006, [Jacob] Latta [ (“Latta”) ], then aged twenty-two, accompanied by his friend, Matthew James Maisner (“Maisner”), then aged twenty-two, were in the City of Erie on St. Patrick's Day.

8. Latta and Maisner determined to “celebrate” St. Patrick's Day by visiting a series of bars where both of them drank excessive amounts of alcohol, causing them to be significantly and visibly intoxicated.

9. In the late afternoon and/or early evening of that day, Latta and Maisner were patrons of Peccadillos, where they continued to purchase and consume additional alcohol, although both were visibly intoxicated, and Peccadillos' agents served the alcohol to Latta and Maisner in that condition.

10. Latta and Maisner continued to become even more intoxicated and rowdy, including a physical altercation with another Peccadillos patron.

11. Latta and Maisner were then required to leave Peccadillos' premises by Peccadillos' agents, when it was apparent that neither of them was in a safe condition to operate a motor vehicle.

12. Upon leaving Peccadillos, at approximately 9:00 p.m., Latta drove his 2004 Dodge Stratus, with Maisner as his passenger, on State Route 97 ( [“]Perry Highway[”] ) southbound in Summit Township, Erie County, Pennsylvania, while extremely intoxicated.

13. At that location, Perry Highway is a two lane black asphalt highway with asphalt berms, with one lane of travel in each direction.

14. At that time, the weather was clear and cold and the pavement was dry.

15. At that same time, date and place, ... Heidi Marie Britton Spicer[ ] was operating her 1990 Buick Skylark in a safe and normal fashion northbound on Perry Highway.

16. [ ] Heidi Marie Britton Spicer was accompanied by ... Megan Ann Watson, in the right front passenger seat, and Heidi's two minor daughters, [ ] Hayley Morgan Wright and [ ] Madison Paige Wander, with [ ] Hayley being seated in the left rear passenger seat, and [ ] Madison seated in the right rear passenger seat.

17. At that same time, date and place, [ ] Latta, traveling at an extraordinarily high rate of speed greatly in excess of the speed limit, attempted to pass another southbound vehicle that had stopped to make a signaled left hand turn, by making an illegal pass off of the traveled surface of the roadway on the right, lost control of his vehicle, and crossed over the southbound lane and into the northbound lane, causing his vehicle to violently collide with the Spicer vehicle.

18. As a result of the collision, Latta, Maisner, Heidi Spicer and Megan Ann Watson, all suffered fatal injuries, resulting in their deaths on said date.

19. Both minor[s] ... witnessed the collision and fatal injuries of their Mother and the injuries of each other.

Action for Complaint in Declaratory Judgment, 05/28/08, Exhibit 1, at ¶¶ 7–19. The complaint also contained the following allegation, on the basis of which Peccadillos asserts it right to defense under the policy:

47. The above described collisions and Plaintiff's resultant injuries and damages as aforesaid, were caused by the reckless and/or negligent, grossly negligent, willful and/or wanton actions and/or inactions of Defendant Peccadillos of continuing to serve alcoholic beverages to the intoxicated Defendant Latta in violation of 47 P.S. § 4–493(1), thereby rendering him incapable of safely operating his vehicle, and by ejecting Latta from the premises after the physical altercation rather than by taking him in charge or summoning the police when Defendant Peccadillos knew or should have known that Defendant Latta would attempt to operate a motor vehicle in his unsafe, extremely intoxicated condition.

Id. at ¶ 47 (emphasis added).

Responding to Peccadillos' demand for defense under Penn–America's general commercial liability policy, Penn–America filed a complaint in declaratory judgment. The complaint named the following parties as defendants: Peccadillos, Plaintiffs, the Latta Estate, and David Freeman (collectively referred to as “Defendants”). Penn–America's complaint paraphrased elements of Plaintiffs' complaint in the underlying action and further stated that Plaintiffs filed a writ of summons against Freeman. Penn–America also averred that Peccadillos had tendered Plaintiffs' suit to Penn–America for defense and indemnity, and acknowledged that it had denied liability coverage based upon its policy's liquor liability exclusion. Further, Penn–America sought a declaration from the trial court that it is not required to defend the underlying action.

Following multiple depositions, Penn–America filed a motion for summary judgment repeating its assertion that the language of its liquor liability exclusion precluded coverage under the policy and negated its duty to defend. Peccadillos and Freeman responded by filing what they styled as a motion for partial summary judgment seeking a contrary determination. Following oral argument, on May 8, 2009, the trial court entered an order denying Penn–America's motion for summary judgment and granting Peccadillos' and Freeman's motion for summary judgment. Penn–America filed its notice of appeal ^2,3 following which the matter proceeded to a three-judge panel of this Court. In an Opinion issued July 22, 2010, two members of the panel joined in affirming the trial court's order, while a third judge dissented. Largely adopting the rationale of the Dissent, Penn–America sought reconsideration before this Court, en banc, and raised the following questions in its substituted brief on appeal:

1. Whether the court below erred in denying summary judgment to Penn–America finding that it had no duty to defend the claims in the underlying lawsuit[?]

2. Whether the court below erred in granting summary judgment to Peccadillos finding that Penn–America had a duty to defend the suit [captioned] Swartwood, et al. v. Clark, et al., Docket No. 14036–2007 (C.P.Erie) against Peccadillos where the claims in that suit are excluded from coverage by the Liquor Liability exclusion in the policy[?]

3. Whether the court below erred in finding a duty to defend based solely on extraneous allegations of negligence that could not form the basis of a claim against Peccadillos[?]

4. Whether, under Pennsylvania law, a claim even exists under Restatement (Second) of Torts Section 319 outside of liquor liability to impose liability on a bar owner for failing to control the conduct of a patron after the patron has left the bar and injured non-patrons offsite[?]

Brief for Appellant at 3.

In support of its first two questions, Penn–America contends that the trial court erred by denying its motion for summary judgment and granting summary judgment in favor of Peccadillos and Freeman.

The standards which govern summary judgment are well settled. When a party seeks summary judgment, a court shall enter judgment whenever there is no genuine issue of any material fact as to a necessary element of the cause of action or defense that could be established by additional discovery. A motion for summary judgment is based on an evidentiary record that entitles the moving party to a judgment as a matter of law. In considering the merits of a motion for summary judgment, a court views the record in the light most favorable to the nonmoving party, and all doubts as to the existence of a genuine issue of material fact must be resolved against the moving party. Finally, the court may grant summary judgment only when the right to such a judgment is clear and free from doubt. An appellate court may reverse the granting of a motion for summary judgment if there has been an error of law or an abuse of discretion....

Swords v. Harleysville Insurance Companies, 584 Pa. 382, 883 A.2d 562, 566–67 (2005) (citations omitted).

In this instance, the court entered summary judgment...