Stowe v. Reliance Ins. Co.
| Decision Date | 01 November 1979 |
| Docket Number | 38 |
| Citation | 3 Phila. 196 |
| Parties | Putnam T. Stowe v. Reliance Insurance Co |
| Court | Pennsylvania Commonwealth Court |
(1) The duty of a liability insurance carrier to defend a claim instituted by a third party against one of its insured exists whenever that claim potentially may become one which is within the scope of coverage of the insurance policy
(2) An insurance carrier has no duty to defend an action against its insured instituted by a third party when it is apparent from the face of the third party Complaint that none of the alleged injuries fall within the coverage of the policy
(3) The defendant insurance carrier had no duty to defend its insured under a Homeowners Policy against a third party assumpsit action (a) where the claims and losses lodged in the third party Complaint relate to a business venture that had no nexus whatsoever to the premises listed in the Declarations of said Homeowners Policy; (b) where the wrongful conduct alleged in the third party Complaint did not constitute an " occurrence" or " accident" that resulted in " property damage" within the meaning of the Homeowners Policy and the law; and (c) where the Homeowners Policy specifically excluded coverage for business pursuits and damages resulting from events which are either " expected" or " intended" from the standpoint of the Insured.
Gordon W. Gerber, Esquire, for Plaintiff
Bernard F. Pettit, Esquire, for Defendant
The instant case had its origin in a Complaint in Assumpsit filed by Putnam T. Stowe (Stowe) against Reliance Insurance Company (Reliance) to recover the sum of $7,725.52 representing counsel fees and other costs allegedly incurred by Stowe in his defense of a certain Montgomery County civil action instituted by one Sidney M. DeAngelis (DeAngelis), Stowe claiming that Reliance was obligated to assume such defense in his behalf under the terms of a Homeowners Insurance Policy issued by Reliance to Stowe and that Reliance's refusal to provide Stowe a defense in the DeAngelis lawsuit was wrongful, unwarranted, unjustified and contrary to the prevailing law of this Commonwealth. Following the filing of all pleadings and the pursuance of discovery thereafter, the Motion of Reliance for Summary Judgment and Judgment on the Pleadings and the Cross Motion of Stowe for Summary Judgment came before this Court for disposition.
On February 9, 1979, upon consideration of the briefs and oral arguments presented by Stowe and Reliance, we entered an order in which we denied and dismissed Stowe's Motion for Summary Judgment, granted the Motion of Reliance for Summary Judgment, and entered judgment in favor of Reliance and against Stowe. Thereafter, on February 16, 1979, Stowe lodged an appeal in the Superior Court from the aforementioned Order and this Opinion is issued in accordance with Pa. R.A.P. 1925.
Stowe and Reliance both concede that there is no genuine issue or dispute of any material fact and consequently neither party has challenged the propriety or authority of this Court's rendering of a summary judgment in the instant action. The narrow question that now confronts us here is purely a matter of law -- whether or not the Homeowners Insurance Policy issued to Stowe by Reliance encompasses coverage for the claims and losses alleged in the DeAngelis Complaint so as to impose an obligation upon Reliance to assume the defense of Stowe in the Montgomery County lawsuit.
The relevant facts as disclosed from the record may be summarized as follows:
Stowe was issued a Homeowners Insurance Policy (Policy) by Reliance covering the period June 5, 1972 to June 5, 1975 and thereafter renewed from June 5, 1975 to June 5, 1978 providing coverage and protection with respect to Stowe's personal residence at 815 Waverly Road, Bryn Mawr, Pa. [1] The only premises listed in the Declarations of the Policy is this Bryn Mawr residence and these Declarations specifically state that " The described residence premises covered hereunder is located at the above address (815 Waverly Road, Bryn Mawr, Pa.) unless otherwise stated herein" and, as previously indicated, no other residence or premises is set forth in the Declarations as being covered under the Policy. [2] In addition, Section I, Coverage A (Dwelling) of the Policy further declares that " This policy covers the described dwelling building (815 Waverly Road, Bryn Mawr, Pa.), including additions in contact therewith, occupied principally as a private residence." (Emphasis supplied.)
Since the duty of an insurance carrier to defend an action brought by a third party against one of its insured is to be determined solely by the nature of the claims made and the allegations contained in the Complaint of said third party against the insured. Eastcoast Equipment Co. v. Maryland Casualty Co., 38 D. & C.2d 499 (1965); Wilson v. Maryland Casualty Company, 377 Pa. 588, 105 A.2d 304 (1954); Keller v. Gold, 28 D. & C.2d 275 (1962), it is necessary at this juncture to fully examine the essential allegations in the DeAngelis Complaint to determine whether or not Reliance was obliged under the Policy to defend Stowe in the Montgomery County action.
On December 6, 1974, DeAngelis filed his Complaint against Stowe and sixteen other individuals (referred to as the Baker-Wister Group) and approximately six months thereafter (June 12, 1975) an Amended Complaint [*] in which the thrust of his charges was directed to and centered upon a 250 acre tract of ground in Gladwyne, Lower Merion Township, Pennsylvania, known as the " Foerderer Tract" [3] and did not relate to or in any way involve Stowe's residence in Bryn Mawr.
Furthermore, in the Amended Complaint, DeAngelis alleges, inter alia, that in 1972 while negotiations were pending between Villanova University and Fidelity Mutual Life Insurance Company involving the sale of the Foerderer Tract and the anticipated construction of a multitude of townhomes and other housing units thereon, the Baker-Wister Group, whose members resided in the general vicinity of the Foerderer Tract, entered into a joint venture to purchase said Tract and to develop it pursuant to their own socio-economic interests prior to the consummation of the sale to Fidelity Mutual upon their (Baker-Wister Group) belief that the erection and development of said housing units by Fidelity Mutual would markedly diminish the value of their homes; would increase real estate taxes due to the need of constructing new schools or enlarge existing schools; would lead to the influx of individuals and families into the neighborhood who could not match their own wealth, position, and influence in the community; and would probably create various other problems.
In the Amended Complaint, DeAngelis further alleges that the Baker-Wister Group, following their acquiring title to the Foerderer Tract on March 22, 1972, formed a non-profit corporation entitled " Foerderer Tract Committee, Inc." [4] to conduct their land development operations thereon, and further alleges that said corporation was created not only as a device by which the Baker-Wister Group could conceal their true identities, but also as a vehicle by which they could elicit private contributions to said project and secure for themselves substantial tax savings under the guise of " charitable contributions" to a non-profit organization.[5]
Additionally, DeAngelis, in alleging in his Amended Complaint that the Foerderer Tract Committee, Inc. did not validly conduct itself as a non-profit corporation or with the true objectives thereof, but was rather merely a joint venture undertaken for the personal gain and profit of the Baker-Wister Group, cited the following:
(a) No federal tax returns were filed by the Baker-Wister Group with respect to said non-profit corporation;
(b) Adequate records applicable to the formulation of said non-profit corporation, as required by law, were not maintained by the Baker-Wister Group;
(c) The Baker-Wister Group, as heretofore indicated, sought to solicit so-called charitable contributions from Lower Merion Township residents which action was violative of the Solicitation of Charitable Funds Act of August 9, 1963 (P.L. 628) in that
(1) A Register Statement was not filed with the Pennsylvania State Department prior to the solicitation of funds;
(2) Funds were solicited from the public for non-charitable purposes;
(3) True and adequate financial records as to the activities undertaken in Pennsylvania were not maintained; and
(4) The public was misled and misrepresented as to the actual purpose behind the solicitation of said funds which were never intended to be used for " charitable" purposes.
Moreover, the DeAngelis Amended Complaint avers: that various members of the Baker-Wister Group were guilty of misfeasance and non-feasance by permitting the use of their names as members of the Board of Directors of the Foerderer Tract Committee, Inc. in order to attract purchasers of ground and " charitable" contributors, but not actually overseeing or supervising the operations of said nonprofit corporation; that Stowe and other members of the Baker-Wister Group sought to purchase part of the Foerderer Tract for purposes of resale to further their own personal gain and benefit; and that the Baker-Wister Group had either " actual, imputed, or constructive knowledge" that one of its members had appropriated large sums of money for his personal use from funds which came into the possession of the entire Baker-Wister Group.
In furtherance of his charges, DeAngelis asserts that the Baker-Wister Group by devious means convinced the Commissioners of Montgomery County to condemn 140 acres of the Foerderer Tract for " recreational land" or a " County Park"...
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