State Farm Fire & Cas. Co. v. Jackson

• Decision Date: 21 August 2018
• Docket Number: CIVIL ACTION NO. 18-102
• Court: U.S. District Court — Eastern District of Pennsylvania
• Parties: STATE FARM FIRE & CASUALTY COMPANY, Plaintiff, v. GARY JACKSON and KATHLEEN JACKSON, Defendants.

STATE FARM FIRE & CASUALTY COMPANY, Plaintiff, v. GARY JACKSON and KATHLEEN JACKSON, Defendants.

CIVIL ACTION NO. 18-102

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA

August 21, 2018

MEMORANDUM OPINION

Mitchell S. Goldberg, J.

Plaintiff, State Farm Fire and Casualty Company ("State Farm"), brings this action against its insureds, Defendants Gary Jackson and Kathleen Jackson, seeking a declaratory judgment that it has no duty under Defendants' homeowners insurance policy to defend claims brought against Mr. Jackson in the Pennsylvania state court. State Farm moves for summary judgment on Count I of the Complaint, which seeks a declaration that there was no "occurrence" under the Policy. For the following reasons, I will grant the Motion and enter summary judgment in favor of State Farm and against Defendants.

I. STATEMENT OF UNDISPUTED FACTS

Defendant, Gary Jackson, was named as a defendant in an action captioned Jonathan Cox v. Amdel, LTD d/b/a Fountain Street Pub, Fountain Street Pub, William Flynn, and Gary Jackson, Docket No. 170300420, filed on July 13, 2017 in the Pennsylvania Court of Common Pleas for Philadelphia County (the "Underlying Action"). (Pl.'s Mot. Summ. J., Ex. A.) The complaint in the Underlying Action (the "Underlying Complaint") alleges that, on March 8, 2015, the plaintiff, Jonathan Cox, was a business guest at Fountain Street Pub. (Id. ¶ 7.) According to the Underlying Complaint, on that date, Mr. Jackson assaulted and battered Cox, causing him to suffer bodily injury. (Id. ¶¶ 14, 28-29.)

State Farm had issued a Homeowner's Policy to Defendants Gary Jackson and Kathleen Jackson, husband and wife, for the policy period of April 29, 2014 to April 29, 2015 (the "Policy"). (Pl.'s Mot. Summ. J., Ex. C.) The Policy provides, in pertinent part, as follows:

COVERAGE L - PERSONAL LIABILITY

If a claim is made or a suit is brought against an insured for damages because of bodily injury or property damage to which this coverage applies, caused by an occurrence, we will:

1. pay up to our limit of liability for the damages for which the insured is legally liable; and

2. provide a defense at our expense by counsel of our choice. We may make any investigation and settle any claim or suit that we decide is appropriate. Our obligation to defend any claim or suit ends when the amount we pay for damages, to effect settlement or satisfy a judgment resulting from the occurrence, equals our limit of liability.

(Id.) The Policy goes on to define "occurrence" as follows:

"occurrence," when used in Section II of this policy, means an accident, including exposure to conditions, which first results in:

a. bodily injury; or

b. property damage;

during the policy period. All bodily injury and property damage resulting from one accident, series of related accidents or from continuous and repeated exposure to the same general conditions is considered to be one occurrence.

(Id.)

On January 8, 2018, State Farm filed a Complaint for Declaratory Judgment in federal court ("Federal Complaint"), seeking a declaration that it does not have a duty to defend or indemnify Mr. Jackson in connection with the Underlying Action. Count I of the FederalComplaint alleges that there was no "occurrence" that would trigger its duty under the Policy. Count II asserts that coverage is barred by the intentional acts exclusion of the Policy. Count III seeks a declaration that, under Pennsylvania law, State Farm is not obligated to make any payment for the amounts of restitution ordered to be paid by Mr. Jackson as part of his criminal conviction for simple assault. Count IV seeks a declaration that the Policy does not include any coverage for punitive damages.

On April 13, 2018, State Farm moved for summary judgment as to Count I. Defendants responded on May 2, 2018, and State Farm filed a reply on May 7, 2018.

II. SUMMARY JUDGMENT STANDARD OF REVIEW

Federal Rule of Civil Procedure 56 states, in pertinent part:

A party may move for summary judgment, identifying each claim or defense—or the part of each claim or defense—on which summary judgment is sought. The court shall 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. The court should state on the record the reasons for granting or denying the motion.

Fed. R. Civ. P. 56(a). "Through summary adjudication, the court may dispose of those claims that do not present a 'genuine dispute as to any material fact' and for which a jury trial would be an empty and unnecessary formality." Capitol Presort Servs., LLC v. XL Health Corp., 175 F. Supp. 3d 430, 433 (M.D. Pa. 2016).

A factual dispute is "material" if it might affect the outcome of the suit under the applicable law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). An issue is "genuine" only if there is a sufficient evidentiary basis that would allow a reasonable fact-finder to return a verdict for the non-moving party. Id. at 248. The court must resolve all doubts as to the existence of a genuine issue of material fact in favor of the non-moving party. Saldana v. KmartCorp, 260 F.3d 228, 232 (3d Cir. 2001). Unsubstantiated arguments made in briefs are not considered evidence of asserted facts. Versarge v. Township of Clinton, 984 F.2d 1359, 1370 (3d Cir. 1993).

III. DISCUSSION

The sole issue in dispute here is whether State Farm has a duty to defend and/or indemnify Defendants in connection with the allegations against him in the Underlying Action.

"Pennsylvania's courts have taken a relatively broad view in discerning whether a complaint triggers the insurer's duty to defend." Berg Chilling Sys. v. Hull Corp., 70 F. App'x 620, 624 (3d Cir. 2003). "An insurance company's duty to defend a suit against an insured is determined solely on the basis of the allegations of the complaint in the underlying action." Nat'l Fire Ins. Co. of Hartford v. Robinson Fans Holdings, Inc., No. 10-1054, 2011 WL 1327435, at *1 (W.D. Pa. Apr. 7, 2011); see also Kvaerner Metals Div. of Kvaerner U.S., Inc. v. Commercial Union Ins. Co., 908 A.2d 888, 896 (Pa. 2006). In other words, "[a] carrier's duty to defend and indemnify an insured in a suit brought by a third party depends upon a determination of whether the third party's complaint triggers coverage." Kvaerner, 908 A.2d at 896 (quoting Mut. Benefit Ins. Co. v. Haver, 725 A.2d 743, 745 (Pa. 1999)). That duty "is broader than the duty to indemnify, in that the former duty arises whenever an underlying complaint may 'potentially' come within the insurance coverage." The Frog, Switch & Mfg. Co., Inc. v. Travelers Ins. Co., 193 F.3d 742, 746 (3d Cir. 1999). An insurer is not required to defend a claim when it is apparent on the face of the complaint that none of the injuries fall within the purview of the insurance policy. Peerless Ins. Co. v. Brooks Sys. Corp., 617 F. Supp. 2d 348, 356 (E.D. Pa. 2008).

Here, as set forth above, the duty to defend in the Policy is triggered by an "occurrence." The Policy defines "occurrence" as an "accident, including exposure to conditions, which first results in . . . bodily injury." (Pl.'s Mot. Summ. J., Ex. C.) State Farm claims that the eventsdescribed in the Underlying Complaint do not constitute an "occurrence" within the meaning of the Policy.

Pennsylvania law dictates that the interpretation of an insurance contract is a question of law. 401 Fourth St., Inc. v. Investors Ins. Grp., 879 A.2d 166, 170 (Pa. 2005). The task of interpreting an insurance contract is generally performed by the court rather than a jury, and "[t]he purpose of that task is to ascertain the intent of the parties as manifested by the terms used in the written insurance policy." Id. at 171. "[A]ll provisions of an insurance contract [must] be read together and construed according to the plain meaning of the words involved, so as to avoid ambiguity while at the same time giving effect to all of its provisions." Masters v. Celina Mut. Ins. Co., 224 A.2d 774, 776 (Pa. Super. Ct. 1966). "Ambiguous terms must be strictly construed against the insurer, but the policy language must not be tortured to create ambiguities where none exist." Sikrica v. Nationwide Ins. Co., 416 F.3d 214, 220 (3d Cir. 2005). Terms of common usage in an insurance policy must be construed according to their plain meaning and a dictionary may inform an understanding of the terms. Ramara, Inc. v. Westfield Ins. Co., 814 F.3d 660, 676-77 (3d Cir. 2016) (quoting Am. Auto. Ins. Co., 658 F.3d at 320); Wall Rose Mut. Ins. Co. v. Manross, 939 A.2d 958, 962 (Pa. Super. Ct. 2007) (quoting Am. Auto. Ins. Co. v. Murray, 658 F.3d 311, 320 (3d Cir. 2011)).

The dictionary definition of an "accident" is "an unexpected happening causing loss or injury which is not due to any fault or misconduct on the part of the person injured but for which legal relief may be sought." Unitrin Direct Ins. Co. v. Esposito, 276 F. Supp. 3d 316 (E.D. Pa. 2017) (quoting Webster's Third New International Dictionary, Unabridged (2017)). The Pennsylvania Supreme Court has emphasized that the fortuity of the events in question is the key factor to consider in determining whether an event is an "accident":

An accident, simply stated, is merely an unanticipated event; it is something which occurs not as the result of natural routine but as the culmination of forces working without design, coordination or plan. And the more disorganized the forces, the more confusedly they operate, the more indiscriminately haphazard the clash and intermingling, the more perfect is the resulting accident.

Brenneman v. St. Paul Fire & Marine Ins. Co., 192 A.2d 745, 747 (Pa. 1963).

Generally, an intentional act does not qualify as accidental in determining whether it is within the scope of an insurance policy. Donegal Mut. Ins. Co. v. Baumhammers, 938 A.2d 286, 291 (Pa. 2007). "Where a willful and malicious assault is alleged in the complaint, it is not an accident but...