Ramara, Inc. v. Westfield Ins. Co.

• Decision Date: 17 February 2016
• Docket Number: No. 15–1003.,15–1003.
• Citation: 814 F.3d 660
• Parties: RAMARA, INC. v. WESTFIELD INSURANCE COMPANY; Fortress Steel Service, Inc.; Sentry Builders Corp. ; Anthony Axe Westfield Insurance Company, Appellant.
• Court: U.S. Court of Appeals — Third Circuit

814 F.3d 660

RAMARA, INC.

v.WESTFIELD INSURANCE COMPANY; Fortress Steel Service, Inc.; Sentry Builders Corp. ; Anthony Axe Westfield Insurance Company, Appellant.

No. 15–1003.

United States Court of Appeals, Third Circuit.

LAR 34.1a Dec. 11, 2015.

Filed: Feb. 17, 2016.

Submitted under Third Circuit

Allan C. Molotsky, Esq., Dennis Chow, Esq., Fowler Hirtzel McNulty & Spaulding, Philadelphia, PA, Attorneys for Appellant.

Francis S. Blatcher, Esq., Pamela W. Blatcher, Esq., Media, PA, Attorneys for Appellee.

Before FUENTES, CHAGARES, and GREENBERG, Circuit Judges.

OPINION OF THE COURT

GREENBERG

, Circuit Judge.

I. INTRODUCTION

This matter comes on before this Court on an appeal from a supplementary order entered following the District Court's ruling and entry of an order on cross-motions for summary judgment in a case arising out of a workplace accident at a Philadelphia parking garage. Appellee, Ramara, Inc. ("Ramara"), the garage owner, engaged Sentry Builders Corporation ("Sentry") as a general contractor to perform work at its parking garage, and, in turn, Sentry engaged a subcontractor, Fortress Steel Services, Inc. ("Fortress"), to install concrete and steel components as part of the work. As required by its subcontracting agreement with Sentry, Fortress obtained a general liability insurance policy ("the Policy") from Westfield Insurance Group ("Westfield") naming Ramara as an additional insured under the Policy. While Fortress was working on the project in April 2012, one of its employees on the job, Anthony Axe, was injured in an accident. As a result of his injury, Axe filed a tort action against Ramara and Sentry but he did not include Fortress as a defendant as it was immune from actions at law by its employees for injuries suffered on the job if they were entitled to compensation for their injuries under the Pennsylvania Workers' Compensation Act ("Act").¹ Ramara tendered its defense in Axe's action to Westfield. But Westfield declined to defend Ramara as it claimed that Axe's complaint against Ramara did not include allegations imposing that obligation on it under its Policy with its applicable endorsements. Ramara responded by initiating this action.

Both parties moved for summary judgment, and the District Court on November 24, 2014, granted partial summary judgment to Ramara and denied summary judgment to Westfield. Ramara, Inc. v. Westfield Ins. Co., 69 F.Supp.3d 490 (E.D.Pa.2014)

. The Court on December 19, 2014, entered a supplemental order that included a quantified judgment in favor of Ramara against Westfield for Ramara's counsel fees and costs incurred to date and ordered that Westfield "prospectively ... provide defense to Ramara in the underlying action...." App. 21. Westfield timely appealed from the December 19, 2014 order. We address two issues on this appeal: whether we have jurisdiction and, if so, whether Westfield must defend Ramara in the Axe action.

II. JURISDICTION

The District Court had subject matter jurisdiction pursuant to 28 U.S.C. § 1332

based on diversity of citizenship and, as we will explain, even though Ramara argues that we do not have jurisdiction, we have jurisdiction under 28 U.S.C. § 1292(a)(1).

III. STANDARD OF REVIEW

We exercise plenary review in determining whether we have jurisdiction. See In re Fosamax (Alendronate Sodium) Prods. Liab. Litig. (No. II), 751 F.3d 150, 155–56 (3d Cir.2014)

; Belitskus v. Pizzingrilli, 343 F.3d 632, 639 (3d Cir.2003). If "we determine that we do not have jurisdiction over this appeal, our ‘only function remaining [will be] that of announcing the fact and dismissing the cause.’ " Elliott v. Archdiocese of N.Y., 682 F.3d 213, 219 (3d Cir.2012) (alteration in original) (quoting Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 94, 118 S.Ct. 1003, 1012, 140 L.Ed.2d 210 (1998) ). If, however, we determine that we have jurisdiction, our review of the District Court's interpretation of the Policy applying Pennsylvania law will be plenary. See Elec. Ins. Co. v. Rubin, 32 F.3d 814, 815 (3d Cir.1994). In these circumstances, in determining whether the underlying complaint triggered an obligation under the Policy on Westfield to defend Ramara, we view the factual allegations in the complaint as true and "liberally construe[ ] [them] in favor of [Ramara]." Frog, Switch & Mfg. Co. v. Travelers Ins. Co., 193 F.3d 742, 746 (3d Cir.1999) (citing Biborosch v. Transamerica Ins. Co., 412 Pa.Super. 505, 603 A.2d 1050, 1052 (1992) ).

Moreover, we exercise plenary review over a district court's grant of summary judgment. Blunt v. Lower Merion Sch. Dist., 767 F.3d 247, 265 (3d Cir.2014)

, cert. denied, – –– U.S. ––––, 135 S.Ct. 1738, 191 L.Ed.2d 702 (2015)

; Dee v. Borough of Dunmore, 549 F.3d 225, 229 (3d Cir.2008). Under this standard, a court will "grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). There is a genuine dispute of material fact if the evidence is sufficient for a reasonable factfinder to return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). But a mere "scintilla of evidence" in the nonmovant's favor does not create a genuine issue of fact, id. at 252, 106 S.Ct. at 2512, and the non-movant may not rest on speculation and conjecture in opposing a motion for summary judgment. Acumed LLC v. Advanced Surgical Servs., Inc., 561 F.3d 199, 228 (3d Cir.2009).

IV. BACKGROUND

A. Factual Background

As we have indicated, Ramara engaged Sentry to be its general contractor for work at its parking garage and on or about February 22, 2014, Sentry contracted with a subcontractor, Fortress, to install concrete and steel components at the garage. Sentry and Fortress memorialized their understanding in a letter ("the Agreement") which required Fortress to provide all labor and equipment necessary to "perform the work in a workmanlike manner and in accordance with the acceptable standard of the trade." App. 82. The Agreement further required Fortress to supervise the project until its completion. In addition, the Agreement stipulated that "Sentry Builders Corporation and or Ramara, Inc. will NOT be responsible for the procedures or actions of Fortress Steel in its performance or deliveries to complete the work." App. 82. Finally, the Agreement stated that "Fortress Steel will before commencement of work provide Sentry Builders Corp. insurance for Workmen's Compensation and General Liability with the appropriate limits of coverage, said certificate(s) of insurance shall also include the landlord Ramara, Inc. as additional insured." App. 82.

Westfield issued a Certificate of Liability Insurance showing that Fortress was the named insured under a policy that provided $1 million of primary liability coverage for each occurrence and $9 million of umbrella coverage. App. 173. Ramara and Sentry were listed as additional insureds under a typewritten section of the certificate entitled "Description of Operations/Locations /Vehicles." App. 68, 173. The typewritten section reads: "RE: Project 444 City Avenue—Additional Insureds include Ramara Inc. and Sentry Builders with regard to above referenced project." App. 68, 173. Fortress thereafter began work at the job site.

In April 2012, Axe was injured during the course of his employment by Fortress while working at Ramara's parking garage. Axe filed a lawsuit ("Axe "), the underlying action, seeking damages for his injuries in the Philadelphia County Court of Common Pleas against Ramara, as the property owner, and Sentry, as the general contractor, but he did not include Fortress, his employer, as a defendant, for, as we already have set forth, it would have had immunity in the action by reason of the Pennsylvania Workers' Compensation Act. See 77 Pa.Stat.Ann. § 481

("The liability of an employer under this act shall be exclusive and in place of any and all other liability."). When Ramara sought a defense under the Policy, Westfield refused to provide that defense as it contended that the Policy did not insure Ramara for Axe's claims arising from the accident.

B. Key Provisions of the Policy

Westfield predicated its denial of coverage on its interpretation of several provisions in the Policy now at issue on this appeal. The two provisions that we need consider are the "Additional Insured—Owners, Lessees or Contractors—Automatic Status When Required in Construction Agreement With You" ("the Additional Insured Endorsement") and an "Other Insurance Endorsement." The Additional Insured Endorsement in relevant part reads as follows:

A. Section II—Who Is An Insured

is amended to include as an additional insured any person or organization for whom you are performing operations when you and such person or organization have agreed in writing in a contract or agreement that such person or organization be added as an additional insured on your policy. Such person or organization is an additional insured only with respect to liability for ‘bodily injury,’ ‘property damage,’ or ‘personal and advertising injury’ caused, in whole or in part, by:

1. Your acts or omissions; or

2. The acts or omissions of those acting on your behalf; in the performance of your ongoing operations for the additional insured.

A person's or organization's status as an additional insured under this endorsement ends when your operations for that additional insured are completed.

App. 105 (second emphasis added). Westfield argues that for this paragraph to require it to defend Ramara in the Axe case, the complaint in that case must have alleged explicitly that Fortress's acts or omissions proximately caused Axe's injuries.

Ramara responds to Westfield's interpretation of the Additional Insured Endorsement by arguing that it conflicts with the Policy's Other Insurance Endorsement and therefore Westfield's interpretation of the Additional Insured Endorsement would not be...