Allstate Insurance v. Drumheller

Opinions of the United
2006 Decisions States Court of Appeals
for the Third Circuit

6-27-2006

Allstate Ins Co v. Drumheller
Precedential or Non-Precedential: Non-Precedential

Docket No. 05-2591

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 NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

No: 05-2591

ALLSTATE INSURANCE COMPANY,

Appellant

v.

DONALD DRUMHELLER; GINGER KATZENMOYER

Appeal from the United States District Court
for the Eastern District of Pennsylvania
(Civ. No. 02-cv-07411)
District Judge: Hon. Anita B. Brody

Before: McKEE and GARTH, Circuit Judges,
and LIFLAND, Senior District Judge*

Argued: May 15, 2006

(Opinion filed: June 27, 2006 )

MICHAEL T. McDONNELL, III, ESQ. (Argued)
Ryan, Brown, McDonnell & Berger & Gibbons, P.C.
1600 Market Street, 14th Floor
Philadelphia, PA 19103
Attorneys for Appellant

JOHN C. BUTERA, ESQ. (Argued)
Butera & Jones
130 West Lancaster Avenue
Wayne, PA 19087
Attorneys for Appellee, Katzenmoyer

*
The Hon. John C. Lifland, Senior District Judge of the United States District
Court for the District of New Jersey, sitting by designation.
JAMES E. PRENDERGAST, ESQ.
Davis, Bennett, Spiess & Prendergast
130 West Lancaster Avenue
Wayne, PA 19087
Attorneys for Appellee, Drumheller

OPINION

McKEE, Circuit Judge.

Allstate Insurance Company appeals the District Court’s order in this declaratory

action in which that court ruled that Allstate had a duty to defend and indemnify

Drumheller pursuant to its homeowner’s policy with him. Drumheller had been sued to

recover for injuries sustained by a third party as a result of an accident involving an all-

terrain vehicle or ATV. For the reasons that follow, we will affirm the District Court.

I.

Since we write primarily for the parties who are familiar with this dispute, we

need not set forth the factual or procedural background except insofar as may be helpful

to our brief discussion. Drumheller’s Deluxe Homeowner’s Policy with Allstate

provides limited coverage for bodily injury arising out of the use of an ATV, but contains

the following exclusion:

Losses We Do Not Cover Under Coverage X:

We do not cover bodily injury . . . arising out of the
ownership . . . use of any motor vehicle. . . . However, this
exclusion does not apply to:

b. any motor vehicle designed principally for recreational use
off public roads, unless the vehicle is being used by an

2
 insured person and is being used away from an insured
premises.

The following definitions that are contained in the policy are relevant to our discussion:

7. “Residence Premises” means the dwelling, other structures
and land located at the address stated in the Policy
Declarations

8. “Insured Premises” means:
(a) the residence premises; and
(b) Under Section II only . . . .
(6) any premises used by an insured person in connection
with the residence premises.

In the coverage action underlying the instant dispute, the District Court initially

determined that Allstate did not have a duty to defend or to indemnify Drumheller,

because the injuries that are involved in the personal injury action in which Drumheller is

a defendant occurred when the ATV struck a manhole on a trail which was not on the

“residence premises.” App. at 26. Accordingly, the District Court reasoned that

Drumheller was a trespasser. App. at 27. The District Court framed the coverage issue

under the relevant language of the policy as “whether the trail on which Drumheller was

operating the ATV was used ‘in connection with the residence premises.’” App. 26.

After reviewing the undisputed facts, and relevant case law, the District Court held:

Drumheller possesses no property rights in the trail, and use
of the trail is not necessary to access his residence premises.
Aside from Drumheller’s use of the trail for recreational
purposes, [Drumheller and Katzenmoyer] have failed to
present any evidence that demonstrates a connection between
Drumheller’s premises and the trail.

3
App. 28.

Drumheller and Katzenmoyer appealed, and we remanded in an unpublished

opinion, dated September 30, 2004. There, we noted that the Pennsylvania Superior

Court had decided State Farm Fire and Casualty Co. v. MacDonald, 850 A.2d 707 (Pa.

Super. 2004), after the District Court had entered judgment in favor of Allstate in

Allstate’s declaratory judgment action. In MacDonald, the Superior Court found that a

homeowner’s policy covered liability for the death of a visitor using an ATV even

though the accident occurred on a field that was adjacent to the insured property. Since

MacDonald bore directly on the coverage dispute between Drumheller and Allstate, we

vacated the District Court’s grant of summary judgment and remanded that dispute so the

District Court could determine if MacDonald had any impact on its grant of summary

judgment. App. at 296.

On remand, the District Court found that MacDonald did impact its original

analysis. The court predicted that the Pennsylvania Supreme Court would follow the

MacDonald analysis as to the scope of the coverage of Allstate’s policy with

Drumheller. 1 Accordingly, the District Court held that Allstate had a duty to defend and

1
The District Court, exercising diversity jurisdiction in this declaratory judgment
action, was obliged to apply the substantive law of Pennsylvania. Nationwide Mut. Cas.
Co. v. Buffetta, 230 F.3d 634, 637 (3d Cir. 2000) (citation omitted). Because there was
no reported decision of the Pennsylvania Supreme Court addressing the issue presented
here, it was the duty of the District Court to predict how the Pennsylvania Supreme Court
would address it. Id. (citation omitted).

4
to indemnify Drumheller in Katzenmoyer’s state court personal injury action.2 App. 297-

300.

Allstate then filed this appeal.3

II. DISCUSSION

Under the terms of the policy, Katzenmoyer’s bodily injury is not covered if

2
To determine whether an insurer has a duty to defend an insured, a court must
determine the scope of coverage under the insurance policy itself and then ascertain
whether the complaint against the insured states a claim that is potentially covered under
the policy. Britamco Underwriters Inc. v. Weiner, 636 A.2d 649, 651 (Pa. Super. 1994).
An insurance company must defend an insured whenever the complaint filed by the
injured party may potentially come within the policy’s coverage. Pacific Indemnity Co.
v. Linn, 766 F.2d 754, 760 (3d Cir. 1985) (citing Gedeon v. State Farm Mut. Auto. Ins.
Co., 188 A.2d 320, 321-22 (Pa. 1963)). The duty to defend remains with the insurer
until the insurer can confine the claim to a recovery that is not within the scope of the
policy itself. Id. (citing Cadwallader v. New Amerstdam Cas. Co., 152 A.2d 484 (Pa.
1959)).

An insurer’s duty to defend an action against the insured is not necessarily
coextensive with its obligation to indemnify the insured. West American Ins. Co. v.
Lindepuu, 128 F.Supp.2d 220, 224-25 (E.D. Pa. 2000) (citing C.H. Heist Caribe Corp. v.
American Home Assurance Co., 640 F.2d 479, 481 (3d Cir. 1981)). Whereas the duty to
defend arises whenever the complaint filed by the injured party may fall within the scope
of the policy’s coverage, the duty to indemnify is more limited because it arises only if it
is established that the insured’s damages are actually covered by the terms of the policy.
Id. If there is no possibility that any of the underlying claims could be covered by the
policy, then judgment in the insurer’s favor with regard to the duty to defend and
indemnify is appropriate. Id.
3
Drumheller contends that Allstate’s appeal is untimely because the District
Court’s decision on remand was dated March 16, 2005, but Allstate did not file its Notice
of Appeal until May 9, 2005, or fifty-three days after the decision on remand.
However, Allstate’s appeal is timely. Although the decision on remand was dated
March 16, 2005, it was not entered on the docket until April 14, 2005. Thus, the Notice
of Appeal was timely filed “within 30 days after the judgment or order appealed from is
entered.” F.R.A.P. 4(a)(1)(A).

5
Drumheller was operating the ATV “away from an insured premises.” More

specifically, if Drumheller was not operating the ATV on his “residence premises” or on

“any premises used by [Drumheller] in connection with the residence premises,”

Katzenmoyer’s bodily injury claim is not covered and, therefore, Allstate has no duty to

defend or to indemnify Drumheller in Katzenmoyer’s state court action. Obviously,

when Drumheller struck the sewer manhole on the trail, he was not operating the ATV

on his “residence premises.” Therefore, the dispositive issue is whether the trail was

used “in connection with the residence premises.”

As noted, on remand the District Court applied the analysis in MacDonald and

reasoned that, since the accident on the trail occurred in a location that Drumheller used

in connection with the residence premises, the resulting injuries were covered under

Allstate’s policy. Therefore, after predicting that the state supreme court would follow

MacDonald’s reasoning,4 the District Court held that Allstate had a duty to defend and to

4
In Koppers Co., Inc. v. Aetna Cas. and Surety Co., 98 F.3d 1440 (3d Cir. 1996),
we said that

[w]e review the District Court’s interpretation and prediction of state law
de novo. In adjudicating a case under state law, we are not free to impose
our own view of what state law should be; rather, we are to apply existing
state law as interpreted by the state’s highest court in an effort to predict
how that court would decide the precise legal issues before us. In the
absence of guidance from the state’s highest court, we must look to
decisions of state intermediate appellate courts, of federal courts
interpreting that state’s law, and of other state supreme courts that have
addressed the issue. We must also consider analogous decisions,
(continued...)

6
indemnify Drumheller in Katzenmoyer’s personal injury action. Our analysis of

MacDonald leads us to the same conclusion.

A. State Farm Fire and Casualty Co. v. MacDonald, 850 A.2d 707 (Pa. Super. 2004).

The facts of MacDonald are well-known to the parties and were thoroughly

discussed during oral argument. Accordingly, we need not reiterate them in great detail.

The policy State Farm issued to MacDonald excluded coverage for bodily injury arising

out of the ownership of “a motor vehicle owned . . . by . . . any insured . . . .” 850 A.2d

at 709. The policy defined a motor vehicle to include “a motorized . . . all-terrain vehicle

. . . owned by an insured and designed or used for recreational or utility purposes off

public roads, while off an insured location.” Id. at 709-10. Finally, the policy defined

“insured location” to mean:

a. the residence premises;
b. the part of any premises, other structures and grounds used
by you as a residence. This includes premises, structures and
grounds you acquire while this policy is in effect for your use
as a residence;
c. any premises used by you in connection with the premises
included in [a. or b.]

4
(...continued)
considered dicta, scholarly works, and any other reliable data tending
convincingly to show how the highest court in the state would decide the
issue at hand.

Id. at 1445.

7
Id. at 710 (emphasis in original).

In disposing of State Farm’s appeal, the Superior Court first noted that the policy

did not define “use” or the phrase “in connection with.” The Superior Court held that

“use” and “in connection with” had to be interpreted “according to their plain and

ordinary meanings.” Id. at 711. Thus, it concluded:

In common parlance, “use” means “continued or repeated
exercise or employment,” or “habitual or customary practice.”
WEBSTER’S THIRD NEW INTERNATIONAL
DICTIONARY 2523 (4th ed. 1976). “Connection” means
“the act of connecting: a coming into or being put in contact,
id. at 481, and “with” is defined as “alongside of: near to.”
Id. at 2626.

Id. at 711. Accordingly, the Superior Court held that because MacDonald “repeatedly

rode his ATV from his property onto the adjacent field and back,” he “used the adjacent

field in connection with his residence premises.” Id.

The Superior Court found support for its analysis in Nationwide Mut. Ins. Co. v.

Prevatte, 423 S.E.2d 90 (N.C. App. 1992), which involved an ATV accident on a trail

that began on the insured’s property and ended on a neighbor’s property. Id. at 91. In

her deposition, the insured testified that her children regularly rode ATVs on the property

where the accident occurred; that the family used the trail for walking; that the family

had been walking and riding on the trail for several years; and that each walk or ride

began and ended on the insured’s property. Id. at 92.

The homeowner’s policy there defined insured location as the “residence

8
premises” and “any premises used by you in connection with” the residence premises. Id.

at 91 (emphasis in original). Nationwide argued that the definition of an insured

location, when read in context with the whole policy, applied only to those places in

which the insured had a legal interest. The North Carolina court disagreed and found

that the plain language of the definition of an “insured location” controlled, and held,

based on the insured’s deposition testimony, that the location where the accident

occurred qualified as an insured location “as defined by the policy because it was used in

connection with the [insured’s] residence.” Id. at 92.

That trail was used “in connection with” the insured’s residence, and the court

was unwilling to rewrite the policy “to restrict coverage to locations where the insured

[had] a legal interest.” Id. In rejecting Nationwide’s invitation to restrict the language

of the policy the court noted:

that plaintiff-insurer, who drafted the policy, had the
opportunity to restrict the definition of insured location to
include only those locations in which the insured had a legal
interest, by expressly providing so in the policy. Plaintiff-
insurer failed to include such a provision. Absent such a
clause of restriction, coverage should not be denied under the
facts of this case.

Id.

In deciding MacDonald, the Pennsylvania Superior Court found “such reasoning

persuasive as State Farm [had] also failed to limit its coverage to . . those areas in which

the insured has an underlying legal interest. Under the plain language of the definition of

9
an ‘insured location,’ [thus, it concluded] MacDonald is entitled to coverage.”

MacDonald, 850 A.2d at 712.

Here, Allstate criticizes the District Court both for predicting that the

Pennsylvania Supreme Court would follow MacDonald and for applying the MacDonald

analysis. It makes a number of arguments as to why it has no duty to defend or to

indemnify Drumheller in Katzenmoyer’s state court personal injury action.5 We consider

each of Allstate’s arguments below:

B. MacDonald’s facts are different and, therefore,
MacDonald does not control.

Allstate begins by noting that in MacDonald, the field where the accident

occurred was “adjacent” to MacDonald’s property. Therefore, Allstate claims that

Drumheller must establish that his property is “contiguous or immediately adjacent” to

MacElhenney’s property where the trail is located. However, argues Allstate, there is no

conclusive evidence that Drumheller’s property “is bounded by the MacElhenney land.”

Indeed, Allstate argues that the record demonstrated that to get to the trail, Drumheller

had to leave his own property. According to Allstate:

[T]he record more clearly demonstrates that in order for

5
“The burden is on the insured to establish coverage under an insurance policy.”
Nationwide Mut. Ins. Co. v. Cosenza, 258 F.3d 197, 206 (3d Cir. 2001) (citation
omitted). “It is the insurer, however, that bears the burden of establishing the
applicability of an exclusion in an insurance contract, and exclusions are always strictly
construed against the insurer and in favor of the insured.” Id. at 206-07 (citations
omitted).

10
 Drumheller to access the trail created by the construction of
the sanitary sewer easement he had to cross []over a bridge
leaving his property, proceed briefly on a closed public road
called Mayberry Road, then enter onto his Aunt Diane and
Uncle Ed’s property, travel along easement trail passing
manholes #3-#4-#5 (which appear to be on the [Aunt and
Uncle’s property], and then enter the first MacElhenney
parcel containing manhole #6 and then proceed onto the
second MacElhenney parcel before arriving at manhole #7.

Allstate’s Br. at 15.

We note, though, that Allstate does not say how far Drumheller’s property is from

the beginning of the trail on MacElhenney’s property. Drumheller’s deposition

testimony establishes the two pieces of land are quite close, even if they do not actually

touch:

Q: When you come down and across the bridge from your
house and you turn right onto the trail, you don’t go onto
Mayberry Road, do you?

A: I would be on Mayberry for a blink of an eye.

Q: Just a couple of feet?

A: Yes.

App. at 270.

In any event, although the parties spend a great deal of time arguing about

whether the two properties are adjacent, we do not think that is dispositive. The

foundation of Allstate’s argument is that the Superior Court in MacDonald said that the

field where the accident occurred was “adjacent” to MacDonald’s property. Allstate

11
believes that the court’s analysis was determined by the fact that the property where the

accident occurred was “contiguous” to MacDonald’s property. We disagree. “Adjacent”

does not mean “contiguous,” and we do not interpret MacDonald as requiring property to

touch or share a common border with property in which the insured has a legal interest in

order to be “adjacent” to that property or be used “in connection with” it.

WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY at 26, defines “adjacent” as

follows:

“not distant or far off” or “relatively near and having nothing
of the same kind intervening” or “having a common border”
or “abutting” or “touching” or “living nearby or sitting or
standing relatively near or close together” or “immediately
preceding or following with nothing of the same kind
intervening.”

BLACK’S LAW DICTIONARY at 38, defines “adjacent” as follows:

“Lying near or close to: sometimes, contiguous; neighboring.
Adjacent implies that the two objects are not widely
separated, though they may not actually touch.”

Thus, the fact that the Superior Court referred to the property where the accident

occurred in MacDonald as being “adjacent” to MacDonald’s property does not mean that

the court was requiring the two parcels to actually touch in order for an accident on the

former to be covered under the applicable policy language. The MacDonald court’s

description of where the accident occurred simply does not mean that MacDonald’s

property and the “adjacent” property were contiguous or bounded by each other. Indeed,

BLACK’S LAW DICTIONARY at 26 draws a distinction between “adjacent” and

12
“adjoining.” While “adjacent” is defined as above, “adjoining imports that [the objects]

are so joined or united to each other that no third object intervenes.” Had the Superior

Court described the location of the accident as “adjoining” MacDonald’s property rather

than being “adjacent” to it, Allstate’s argument would have considerably greater force.

However, we do not believe that the precise physical relationship of Drumheller’s

property to the MacElhenney property is the crucial inquiry. The entire focus in

MacDonald was MacDonald’s repeated use of the ATV on his property and on the

adjacent field; not the precise relationship of the two parcels which were merely

described as “adjacent.” We think that the Pennsylvania Supreme Court would follow

MacDonald’s holding that “in connection with” means the repeated use of the ATV

emanating from and returning to the insured’s residence.

Moreover, just as the Superior Court stressed, had Allstate intended to restrict

coverage to property that actually adjoined or touched the insured premises, it could have

easily drafted an appropriate limitation into the exclusions in the policy. It could have

simply defined “insured premises” as “any adjoining or contiguous premises used by an

insured person in connection with the residence premises.” However, it did not define

“insured premises” with any such restrictions.6

6
We are not impressed with Allstate’s argument that it cannot be expected to
anticipate every possible contingency and that the absence of such an explicit limitation
is therefore not relevant. It is neither burdensome nor unreasonable to enforce a policy
extending coverage to property regularly “used in connection with” the insured’s
(continued...)

13
 C. The District Court ignored the issue of the
ownership of the trail.

On remand, the District Court found that the only possible distinction between

MacDonald and the instant dispute “is the fact that the trail in the [Drumheller] case was

within an easement acquired by the municipality.” App. 32. The court believed that

“possible distinction” was one “not material.” Id.

Allstate submits that the distinction is material and cites two cases which it claims

have held that publicly-owned property can never be an “insured premises.” Allstate’s

Br. at 16 (citing U.S.S.A. v. Parry, 761 P.2d 157 (Ariz. Ct. App. 1988) (drainage basin)

and Safeco v. Birmie, 516 N.E.2d 577 (Ill. App. Ct. 1987) (public school playground)).

However, both cases are from state intermediate appellate courts outside of Pennsylvania,

and therefore are not as persuasive as to how the Pennsylvania Supreme Court would

rule if faced with Drumheller’s case as MacDonald is.

Allstate also submits that a public street and a public right-of-way cannot be a part

of an insured’s premises. In fact, Allstate claims to have litigated that issue on several

occasions and prevailed. Allstate’s Br. at 16-17 (citing cases). However, with one

6
(...continued)
premises without regard to the insured’s legal interest in such property. If the insurance
company doesn’t require a legal interest in its definition, we will not interpret the policy
in a manner that writes that limitation into the contract of insurance absent evidence that
such a limitation was intended by the parties and consistent with the reasonable
expectations of the insured. See Canal Insurance Co., v. Lloyds of London, 435 F.3d
431, 440 (3d Cir. 2006).

14
exception, the cases cited by Allstate are decisions of state intermediate appellate courts.

Therefore, as noted above, they cannot be used to predict how the Pennsylvania Supreme

Court would rule if confronted with this coverage dispute. The only state supreme court

case cited by Allstate is Falkosky v. Allstate Ins. Co., 439 S.E.2d 836 (S.C. 1993).

However, the issue there was whether an off-road motorcycle was “being used away

from an insured premises” when the rider had an accident on a vacant lot near the

insured’s premises. The issue was not, as here, whether an ATV accident occurred on

property “used by an insured person in connection with the residence premises.” Thus,

Falkosky is not as helpful as MacDonald.

Moreover, we doubt that the easement obtained by the municipal authority here

can be characterized as either a public road or a public right-of-way. It was a municipal

easement obtained to construct a sewer line. The fact that there was a municipal

easement does not mean that the MacElhenneys were not still the private owners of that

land for the purpose of predicting whether the Pennsylvania Supreme Court would apply

the reasoning of MacDonald.

D. Better reasoned decisions.

Allstate argues that even assuming that the MacElhenney’s property is

“sufficiently proximate, adjacent to or ‘connected with’ the Drumheller property, better

reasoned judicial opinions than MacDonald compel judgment” in its favor. Allstate’s Br

at 18-19 (citing cases). The “better reasoned judicial opinions” cited by Allstate are

15
decisions of state intermediate appellate courts or District Courts not located in

Pennsylvania that are not applying Pennsylvania law. We don’t find them very helpful in

predicting the outcome here.

Even the case most heavily relied upon by Allstate does not significantly advance

its position. In Massachusetts Prop. Ins. Underwriting Assoc. v. Wynn, 806 N.E.2d 447

(Mass. App. Ct. 2004), the court held that the term “insured location” was limited to the

residence and premises integral to its use as a residence. Thus, a beach 500 feet away

that was owned by an owner’s association and regularly used by the insured, was not

used in connection with the residence premises.

To adopt the reasoning of Wynn, we would have to re-write the terms of

Drumheller’s policy to limit coverage to the residence premises and premises integral to

its use as a residence. The instant policy does not refer to property that is “an integral

part” of Drumheller’s residence; it refers to property that is regularly used “in connection

with” it. It is clear that Drumheller’s regular recreational use of the property in question

was “in connection with” his residence.

E. Drumheller’s status as a trespasser.

The District Court initially noted that Drumheller was a trespasser while riding on

the trail. On remand, however, the court did not repeat that observation, either because

it felt that Drumheller’s status as a “trespasser” was irrelevant to its analysis or because it

did not consider the issue. In either event, Allstate argues here that the District Court’s

16
statement in its first opinion that Drumheller was a trespasser was significant because it

is against public policy to allow a trespasser, through repeated trespass, to transform

another’s property into a place that is used “in connection with” the trespasser’s

residence. However, it offers no authority for that public policy argument.

In addition, Allstate claims that the owner of the adjacent field in MacDonald,

conferred the status of a licensee upon the ATV users by extending permission to them to

drive the ATVs on the field. Therefore, Allstate argues that, under MacDonald,

Drumheller’s status as a trespasser has to be considered in determining whether the trail

was “used in connection with” Drumheller’s property. Allstate’s argument that the

MacDonald ATV users were licensees on the adjacent field is based upon the following

snippet of MacDonald’s deposition testimony discussing the adjacent field:

I did meet one of the farmers – I don’t remember what year . . . they were
on their tractor . . . and what I remember is, as long as we stayed on the
perimeters of the fields . . . nobody had a problem with that.

MacDonald, 850 A.2d at 711. However, there is no indication who the farmers were or

if they were in fact the owners of the adjacent field, and the court certainly did not factor

that into its analysis. We are not willing to attach more importance to that testimony than

did the court that decided the case.

Moreover, even if we assume arguendo that Drumheller was a trespasser on the

trail, we do not believe that he would be excluded from coverage under the policy.

Given the language of the policy, the issue would remain whether he used the trail “in

17
connection with” his residence premises. He clearly did.

E. To be a “premises used in connection with”
requires that the insured have some legal
interest in the accident location.

Despite the fact that MacDonald held that the insured did not need a legal interest

in the place where the accident occurred in order for it to be a premises used in

connection with the insured’s residence premises, Allstate argues that the terms of its

policy require that the insured have such a legal interest. In making that argument,

Allstate points to the definition of “insured premises” contained in the policy, which

reads:

8. “Insured premises” – means:

a) the residence premises; and

b) under Section II only:

1) the part of any other premises, other structures and grounds, used by you
as a residence. This includes premises, structures, and grounds you acquire
for your use as a private residence while this policy is in effect;

2) any part of a premises not owned by an insured person but where an
insured person is temporarily living;

3) cemetery plots or burial vaults owned by an insured person;

4) vacant land, other than farmland, owned by or rented to an insured
person;

5) land owned by or rented to an insured person where a one, two, three or
four family dwelling is being built as that person’s residence;

6) any premises used by an insured person in connection with the residence

18
 premises;

7) any part of a premises occasionally rented to an insured person for other
than business purposes.

App. at 50.

However, even the most cursory glance at this provision of the policy shows that

this argument is meritless. Although many of these sub paragraphs clearly require or

anticipate a legal interest, the provision at issue here, ¶ 8.b.6, clearly does not. This

argument appears to be yet another attempt to have us amend the policy language,

something we cannot do. “Any premises used by an insured person in connection with

the residence premises,” is not restricted to premises in which the insured has a legal

interest. “Any” means “any.”

F. Inconsistent Superior Court opinions.

Finally, Allstate contends that two pre-MacDonald Superior Court opinions are

inconsistent with MacDonald because they support the proposition that a legal interest is

a relevant consideration. The cases Allstate considers inconsistent with MacDonald are

Federal Kemper Ins. Co. v. Derr, 563 A.2d 118 (Pa. Super. 1989) and Uguccioni v.

United States Fidelity and Guaranty Co., 597 A.2d 149 (Pa. Super. 1991). Presumably,

Allstate is arguing that because of the alleged inconsistency, the District Court erred in

applying MacDonald and by predicting that the Pennsylvania Supreme Court “will

follow the same reasoning as the Superior Court of Pennsylvania” did in MacDonald.

App. 300. However, neither case is inconsistent with MacDonald.

19
 In Federal Kemper, Hanna, while operating an ATV owned by Derr, struck

Gappa, causing personal injuries and ultimately her death by suicide. At the time of the

accident, Gappa was walking along a private road leading to a ten acre tract of land

owned by Derr, located in the Roaring Creek Forest Preserve. Derr had given Hanna

permission to operate the ATV.

The private road was the only means of ingress and egress to the Derr land, and

likewise served about ninety other adjoining landowners in the Forest Preserve, all of

whom possessed an easement over the private road for access to their properties. Derr,

for many years before and after the accident, used a camper on his tract as a weekend and

summer retreat. Derr’s principal residence was elsewhere.

Gappa’s estate sued Derr for negligence in allowing Hanna to operate the ATV.

After Derr notified Federal Kemper, it sought a declaration that it had no duty to defend

or to indemnify Derr. Federal Kemper’s complaint alleged that the location was not an

“insured location” as defined by ¶ 4 of the policy and, coverage was, therefore, excluded.

The parties stipulated that any exclusion would arise from ¶¶ 4(b), 4© and/or 4(e).

Paragraph 4 read, in pertinent part:

4. “insured location” means:

a. the residence premises;
b. the part of any other premises, other structures, and grounds, used by you
as a residence and which is shown in the Declarations or which is acquired
by you during the policy period for your use as a residence;
c. any premises used by you in connection with the premises included in 4a
or 4b. . . .

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 e. vacant land owned by or rented to any insured other than farm land[.]

563 A.2d at 120.

The Superior Court affirmed the trial court’s finding that Derr’s property was not

an insured location because it had not been purchased within the policy period so as to

qualify as an insured location under ¶ 4b,7 and therefore the court refused to find that the

private road was an insured location under ¶ 4c. Accordingly, Federal Kemper is not

inconsistent with MacDonald. Federal Kemper had nothing to do with whether the

insured must have a legal interest in the place where the accident occurred to be

considered premises “used in connection with” residence premises.

In Uguccioni, the Superior Court had to decide whether a private road in a private

residential development was an insured location under a homeowner’s policy. The

Superior Court held:

The language used in the policy to define an “insured
location” clearly is broad enough to include roads in a private
development which are available for use in achieving access
to the insured residence.

Id. Uguccioni is not inconsistent with MacDonald because there is nothing in the

Uguccioni opinion suggesting that the insured owned the private road on which the

accident occurred. In fact, the opinion is silent as to ownership of the private road.

7
The policy period was June 23, 1982 to June 23, 1983. However, Derr purchased
his tract in 1979.

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 III. CONCLUSION

We believe that the District Court correctly predicted that the Pennsylvania

Supreme Court would following the Superior’s Court’s reasoning in MacDonald.

Accordingly, we will affirm the District Court

22
 Allstate v. Drumheller, et al., 05-2591

GARTH, Circuit Judge, dissenting

I am compelled to dissent. My colleagues in the majority hold that Allstate has a

duty to defend and indemnify Drumheller for the injuries suffered by Katzenmoyer. They

so hold even though Allstate’s policy does not cover losses that occur on land not used by

an insured person in connection with his “residence premises,” as the land at issue here

was not.

The phrase “land used in connection with residence premises” has recently been

interpreted by the Pennsylvania Superior Court to mean land (1) that the insured uses

regularly, and (2) that is adjacent to the insured’s residence premises. State Farm Fire

and Casualty Co. v. MacDonald, 850 A. 2d 707, 711 (Pa. Super. Ct. 2004). Thus, the test

of whether liability attaches or not is comprised of two criteria – not one criterion, as my

colleagues have limited it.

My dissent is driven by MacDonald’s interpretation of the policy provision, by

sheer logic and by pragmatism. As neither my colleagues nor I can determine from the

submissions of the parties whether the “residence premises” are adjacent to the area

where the accident occurred and if that “adjacency” comports with MacDonald’s

instruction, I believe it is incumbent upon us not to decide whether Allstate has a duty to

defend and indemnify, but rather to remand to the District Court for a determination of

whether the areas in question are touching and whether they meet the standard of

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adjacency as MacDonald has decreed it.

I.

The majority has concluded that the “crucial inquiry” in the test established by

MacDonald is only the first criterion (i.e., regular use). The record demonstrates that

Drumheller regularly drove his ATV on the part of the trail where the accident occurred.

The majority does not read MacDonald as imposing a second criterion, adjacency.

Contrary to MacDonald’s holding, the majority claims that the MacDonald court did not

intend “adjacent” to mean “adjoining” or “touching.”

I agree with the majority that the first criterion of the MacDonald test (regular use)

clearly is fulfilled here; Drumheller regularly drove his ATV on the land where the

accident occurred. My agreement ends there, however.

II.

It is crystal clear to me that the MacDonald court’s test for land “used in

connection with the residence premises” includes an adjacency requirement in addition to

its “regular use” requirement. If it did not, the universe of what would constitute “land

used in connection with the residence premises” would expand to include every place an

insured visits and rides his ATV regularly. Under that test, if Drumheller regularly drove

his ATV in, say, Naples, Florida – more than 1,200 miles from his residence premises –

and an accident occurred there, Allstate would be required to defend him in a suit brought

by the injured party! That a person visits a place regularly, does not mean the person uses

24
that place “in connection with his residence premises” in any ordinary sense of that

phrase. I am confident this cannot be what the MacDonald court intended.

I not only contend that “adjacency” is a primary requirement under the MacDonald

test; I disagree that “adjacency” does not mean “adjoining” or “touching.” The majority’s

primary reason for concluding that the MacDonald court did not mean “adjoining” or

“touching” when it used the word “adjacent” is that it believed the land where the

accident occurred in MacDonald was not adjoining or touching the insured’s residence

premises – when it was!

The text of the MacDonald opinion directly contradicts the majority’s reading. It

reports that MacDonald rode his ATV on his property “and the adjoining properties,

including the adjacent field where the accident occurred.” Id. It also states that “the

perimeter of the field upon which the accident occurred starts on the MacDonald []

property and continues on the adjacent field.” Id. The clear meaning of this language is

that the adjacent field touched – adjoined – MacDonald’s property. Though I concede

that the dictionary contains some definitions of “adjacent” that do not require touching, I

cannot conclude, based on the context of its ruling, that the MacDonald court had these

definitions in mind when it used the word “adjacent.” Indeed, their absence from the

MacDonald opinion lends stark weight to my dissent.

For these reasons, I would hold that, under MacDonald, land “used in connection

with the residence premises” means land which the insured used regularly, and land that

25
is adjacent to – meaning touching, adjoining, contiguous with – the residence premises.

III.

In their briefs and at oral argument, the question of whether the insured property

and the land where the accident occurred were touching, was sharply disputed. The

Appendix submitted to us – which included unreadable maps and vague oral descriptions

of the relative location of the properties in question – were of no help to the panel in

resolving this dispute. Prior to the oral argument, Allstate had moved to permit additional

exhibits in the form of colored and enlarged maps to be used during the oral argument.

The accuracy of these maps was disputed, but what was not disputed was the fact that

they had not appeared in the record below. The maps, if accepted by our panel (and they

were not), would have indicated that the residence premises and the MacElhenney

property (where the accident occurred) were not adjacent – they did not touch or adjoin.

In light of this continuing controversy between the parties, I believe it to be only

fair and just to both parties that we remand to the District Court with leave to the parties

to submit relevant maps and evidence to determine whether the properties in question are

“adjacent” to each other under the MacDonald two-criteria standard.

I therefore respectfully dissent, for the purpose stated above, and urge my

colleagues to remand to the District Court.

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