J-A24040-14
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
CONSTRUCTURAL DYNAMICS, INC., IN THE SUPERIOR COURT OF
PENNSYLVANIA
v.
LIBERTY MUTUAL INSURANCE COMPANY
AND ISRAEL SANTIAGO
APPEAL OF: LIBERTY MUTUAL
INSURANCE COMPANY
No. 423 EDA 2014
Appeal from the Order December 10, 2013
in the Court of Common Pleas of Philadelphia County
Civil Division at No.: November Term, 2012, No. 01715
BEFORE: GANTMAN, P.J., BENDER, P.J.E., and PLATT, J.*
MEMORANDUM BY PLATT, J.: FILED DECEMBER 19, 2014
Appellant, Liberty Mutual Insurance Company, appeals from the trial
court’s order granting the summary judgment motion of Appellee,
Constructural Dynamics, Inc. (CDI) and denying Appellant’s cross-motion in
this action for declaratory judgment. CDI has filed a motion to quash the
appeal. After careful review, we affirm the trial court’s order and deny CDI’s
motion to quash.
The trial court summarized the factual and procedural history as
follows:
____________________________________________
*
Retired Senior Judge assigned to the Superior Court.
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[CDI] commenced the current declaratory judgment action
seeking [a] declaration that [Appellant] is required to defend and
indemnify CDI in an underlying litigation . . . [arising] out of an
accident involving . . . Israel Santiago (hereinafter
“Santiago”).[1]
CDI leased a space to Clarence J. Venne, LLC (hereinafter
“Venne”) in the Riverside Industrial Complex. The lease required
Venne to obtain commercial general liability insurance, “with a
[t]wo [m]illion ($2,000,000) [d]ollar combined single limit” and
required Venne to name CDI as an additional named insured.
Moreover, “[a]ll insurance carried by [t]enant pursuant to [the]
[l]ease shall be primary, not contributory with, and not in excess
of, any coverage which [l]andlord may carry in [l]andlord’s sole
discretion.”
The lease further provides:
17. INDEMNITY BY TENANT; EXONERATION
(a) Tenant hereby agrees to indemnify, defend and
hold [l]andlord harmless from and against any and
all claims, actions, damages, losses, liability,
penalties, fines, costs and expenses, including
reasonable attorneys’ fees and other professional
fees and court costs, to the extent arising directly or
indirectly from (i) any loss of life, personal injury or
property damage occurring (a) in the [b]uilding or at
the [c]omplex other than in, on, or upon the
[p]remises, to the extent caused, directly or
indirectly, by any act or omission of [t]enant, its
officers, employees, agents, invitees, licensees or
contractors; or (b) in, on, or [upon] the [p]remises
[to the] extent caused, directly or indirectly, by any
act or omission of [t]enant, its officers, employees,
agents, invitees, licensees or contractors . . .
Moreover, [p]aragraph 17(d) of the lease provides:
(d) It is the intention of the parties that the provision
of this [s]ection 17 shall require [t]enant to
____________________________________________
1
Santiago was a defendant in this action, but is not a party in this appeal.
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indemnify and hold [l]andlord harmless with regard
to acts, including negligence of [t]enant (and
negligence of [l]andlord, solely in connection with
any work-related injury or illness suffered by an
employee of [t]enant due to [l]andlord’s negligence
where such injury or illness is typically treated as a
workman’s compensation claim), which result in
harm to any employee of [t]enant. This [p]rovision
shall be deemed to fulfill the requirements requiring
or permitting contribution or indemnity as set forth
in, and constitutes an express waiver of defenses
and/or immunity afforded [t]enant by, the
Pennsylvania Workers’ Compensation Act, 77 P.S.
Section 481(b), or any similar provision of any
similar act.
Subsequently, Venne obtained commercial general liability
insurance policy no. YY7-Z31-509641-029 (hereinafter “the
policy”)[,] which provides that, “SECTION II – WHO IS AN
INSURED is amended to include as an insured any manager or
lessor of premises leased by you in which the written lease
agreement obligates you to procure additional insured
coverage.” Although Venne did not name CDI as an additional
named insured, as required by the lease, the policy named CDI
as an additional insured. The policy had a coverage period from
April 1, 2009 through April 1, 2010. The policy further provides
that, “[i]f the written agreement to indemnify an additional
insured requires that you indemnify the additional insured for its
sole negligence, then coverage for the additional insured shall
conform to that agreement.” Moreover, the policy provided that
the policy will not be excess and will be primary if a “written
agreement . . . requires that the insurance provided for the
additional insured be primary concurrent or primary non
contributory.”
In the underlying complaint, Santiago alleges that on
August 31, 2009, during the course of his employment with
Venne, he was injured while moving “skids loaded with heavy
boxes from the first floor to the second floor using freight
elevators at the [s]ubject [p]remises.” Santiago brought suit
against defendants, Elevator Construction and Repair Company,
Riverside Industrial Complex Inc., PKB Contractors Inc. and CDI,
for various counts of negligence. Venne was not a party to the
underlying litigation. Moreover, the underlying litigation settled
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and thus[,] determinations of the duty to indemnify and the duty
[to] defend are both ripe.
(Trial Court Opinion, 12/10/13, at 1-3) (record citations omitted).
On January 8, 2014, Appellant timely appealed.2
Appellant raises the following question for our review:
Is additional insured coverage triggered where there is no
allegation that the named insured caused or contributed to the
liability of the purported additional insured, and the applicable
policy includes additional insured coverage only for situations
where the named insured caused or contributed to the liability of
the purported additional insured?
(Appellant’s Brief, at 4).
Preliminarily we note that in its motion to quash the appeal, CDI
asserts that the trial court’s December 10, 2013 order is not a final order
because a hearing on damages and the amount recoverable by CDI has not
been held. (See CDI’s Motion to Quash, 3/10/14, at 1-2). We disagree.
The Declaratory Judgments Act provides:
§ 7532. General scope of declaratory remedy
Courts of record, within their respective jurisdictions, shall
have the power to declare rights, status, and other legal
relations whether or not further relief is or could be claimed. No
action or proceeding shall be open to objection on the ground
that a declaratory judgment or decree is prayed for. The
declaration may be either affirmative or negative in form
and effect, and such declarations shall have the force and
effect of a final judgment or decree.
____________________________________________
2
The trial court did not order Appellant to file a Rule 1925(b) statement of
errors, but it filed a Rule 1925(a) opinion in which it relied on its opinion
dated December 6, 2013 and filed on December 10, 2013. See Pa.R.A.P.
1925.
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42 Pa.C.S.A. § 7532 (emphasis added).
. . . Consequently, a trial court order is final and immediately
appealable pursuant to Pa.R.A.P. 341(b)(2), when the court
enters a declaratory judgment order either affirmatively or
negatively declaring the rights and duties of the parties,
effectively disposing of the claims presented, even if the order
does not expressly dispose of all claims or specify that the claims
were declaratory in nature.
Nat’l Casualty Co. v. Kinney, 90 A.3d 747, 754 (Pa. Super. 2014) (case
citations omitted).
Here, the trial court, by granting CDI’s motion and denying Appellant’s
cross-motion for summary judgment, in effect ruled Appellant has a legal
obligation to defend and indemnify CDI in the underlying Santiago matter.
Thus, the decision concerning CDI’s legal obligation constituted a final order
under the Declaratory Judgments Act. See 42 Pa.C.S.A. § 7532; Nat’l
Casualty Co., supra at 754. Therefore, the court’s order was immediately
appealable and we deny CDI’s motion to quash.
Accordingly, we will review Appellant’s issue regarding the denial of
additional insured’s coverage where there is no allegation of the named
insured causing or contributing to the additional insured’s liability.
In reviewing the merits of the appeal, we note that our standard of
review for an order granting or denying summary judgment of an additional
insured’s coverage is well-settled:
We view 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. Only where there is no
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genuine issue as to any material fact and it is clear
that the moving party is entitled to a judgment as a
matter of law will summary judgment be entered.
Our scope of review of a trial court’s order granting
or denying summary judgment is plenary, and our
standard of review is clear: the trial court’s order will
be reversed only where it is established that the
court committed an error of law or abused its
discretion.
When interpreting an insurance policy, we first look to the
terms of the policy. When the language of the policy is clear and
unambiguous, we must give effect to that language. However,
when a provision in the policy is ambiguous, the policy is to be
construed in favor of the insured. Also, we do not treat the
words in the policy as mere surplusage and, if at all possible, we
construe the policy in a manner that gives effect to all of the
policy’s language.
We then compare the terms of the policy to the allegations
in the underlying complaint. It is well established that an
insurer’s duties under an insurance policy are triggered by the
language of the complaint against the insured. In determining
whether an insurer’s duties are triggered, the factual allegations
in the underlying complaint are taken as true and liberally
construed in favor of the insured. It does not matter if in reality
the facts are completely groundless, false or fraudulent. It is the
face of the complaint and not the truth of the facts alleged
therein.
Indalex Inc. v. Nat’l Union Fire Ins. Co. of Pittsburgh, PA, 83 A.3d
418, 420-21 (Pa. Super. 2013), appeal denied, 99 A.3d 926 (Pa. 2014)
(citations and quotation marks omitted).
Here, Appellant argues that the trial court committed an error of law in
misapplying Pennsylvania law and misreading the policy language. (See
Appellant’s Brief, at 11-26). Specifically, it contends that the policy
language only extends coverage to an additional insured when either (1)
Venne negligently caused CDI’s liability, or (2) Venne agreed in writing to
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indemnify CDI for the additional insured’s own negligence and the
agreement comports with applicable state law. (See id. at 11-12). This
issue does not merit relief.
We first address Appellant’s argument that the underlying complaint
filed by Santiago is devoid of any allegation of Venne’s negligence. (See id.
at 12-13). In support of this assertion, Appellant cites to Santiago’s
amended complaint. (See id. at 13-14). Our independent review of the
“factual allegations in the underlying complaint” uncovered no allegation of
Venne’s negligence. Indalex Inc., supra at 421; (see also Appellant’s
Motion for Summary Judgment, 10/21/13, at Exhibit A). Therefore, the
record does support Appellant’s claim that it is not required to indemnify CDI
under paragraph 17(a) of the lease. (See Lease Agreement, 2/11/09, at
16-17 ¶ 17(a)); see also Indalex Inc., supra at 420-21. Hence,
Appellant’s first argument is legally persuasive. However, that does not end
our inquiry.
With respect to Appellant’s second argument, that the lease does not
provide indemnification to CDI for its negligence absent Venne’s negligence,
a review of the lease reflects that the language is clear and unambiguous.
(See Lease Agreement, 2/11/09, at 16-17 ¶ 17). Therefore, “we must give
effect to that language.” Indalex Inc., supra at 420. Specifically,
paragraph 17(d) states that Venne will indemnify CDI for CDI’s negligence
“solely in connection with any work-related injury or illness suffered by an
employee of [Venne] . . . where such injury . . . is typically treated as a
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workman’s compensation claim[.]” (Lease Agreement, 2/11/09, at 17 ¶
17(d)). Here, Santiago’s claim would typically be treated as a workman’s
compensation claim. (See Appellant’s Motion for Summary Judgment,
10/21/13, at Exhibit A). Therefore, the plain terms of this provision create
Appellant’s obligation to indemnify CDI even in the absence of Venne’s
negligence.
Based on the foregoing, we conclude that the trial court properly
determined that Appellant is obligated to indemnify CDI pursuant to
paragraph 17(d) of the lease. (See Trial Ct. Op., at 5); see also Indalex
Inc., supra at 420-21. Accordingly, we discern no error of law or abuse of
discretion in the trial court’s decision granting CDI’s summary judgment
motion and denying Appellant’s cross-motion in this declaratory judgment
action. See Indalex Inc., supra at 420-21. Therefore, we affirm the order
of the trial court.
Order affirmed. Motion to quash appeal denied.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 12/19/2014
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Construtural Dynamics v. Liberty Mutual Insurance
Combined Opinion