J-A15043-17
2017 PA Super 302
FLORENCE A. GOOD, INDIVIDUALLY : IN THE SUPERIOR COURT OF
AND AS EXECUTRIX OF THE ESTATE OF : PENNSYLVANIA
BARRY D. GOOD, DECEASED, :
:
Appellant :
:
v. :
:
FRANKIE & EDDIE'S HANOVER INN, LLP :
:
RCA INSURANCE GROUP ON BEHALF :
OF STATE NATIONAL INSURANCE :
COMPANY : No. 2006 MDA 2016
Appeal from the Order entered November 15, 2016
in the Court of Common Pleas of Berks County,
Civil Division, No(s): 13-15184
BEFORE: MOULTON, SOLANO and MUSMANNO, JJ.
OPINION BY MUSMANNO, J.: FILED SEPTEMBER 21, 2017
Florence A. Good (“Good”), individually and as executrix of the Estate
of Barry D. Good, deceased (“the Estate”), appeals from the Order denying
Good’s Motion for Summary Judgment in a declaratory judgment action
against Frankie & Eddie’s Hanover Inn, LLP (“Hanover Inn”), and RCA
Insurance Group (“RCA”), on behalf of State National Insurance Company,
J-A15043-17
and denying as moot RCA’s Cross-Motion for Summary Judgment.1 We
affirm.
On April 4, 2012, at approximately 10:56 p.m., Barry D. Good (“the
Deceased”) was fatally injured when a Ford F250, driven by Francis Lynch
(“Lynch”), collided with the Deceased’s Kawasaki Vulcan Motorcycle. At the
time of the accident, Lynch was driving under the influence of alcohol, which
had been served to him at Hanover Inn.2
On the date of the accident, Hanover Inn was covered by a commercial
insurance policy (“the Policy”) issued by RCA. The Policy includes a Liquor
Liability Coverage Form,3 which provides for liquor liability coverage with an
1
“[A]n order denying summary judgment is ordinarily a non-appealable
interlocutory order.” McDonald v. Whitewater Challengers, Inc., 116
A.3d 99, 104 (Pa. Super. 2015). However, an order in a declaratory
judgment action that either affirmatively or negatively declares rights,
status, and other legal relations is a final order. See 42 Pa.C.S.A. § 7532;
see also Pa.R.A.P. 341(b)(1) (providing that “[a] final order is “any order
that disposes of all claims and of all parties[.]”); Nat’l Cas. Co. v. Kinney,
90 A.3d 747, 754 (Pa. Super. 2014). Here, in its Order denying summary
judgment, the trial court effectively resolved all of the claims presented in
the declaratory judgment action. Therefore, the Order is final and
appealable. See Kinney, 90 A.3d at 755 (concluding that trial court, by
denying motion for summary judgment in declaratory judgment action,
effectively resolved all issues, and therefore, the order was immediately
appealable).
2
Good filed a wrongful death and survival action against Lynch and Hanover
Inn.
3
The Liquor Liability Coverage Form appears to be a standard insurance
policy form provided by Insurance Services Office, Inc. (“ISO”).
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“Aggregate Limit,” as well as an “Each Common Cause Limit.” 4 The
Declarations page of the Policy specifies that the liquor liability coverage
limit for “Each Occurrence” is $500,000, and the “Aggregate” limit is
$1,000,000.
During the pendency of the wrongful death and survival action, a
dispute arose regarding the applicable amount of coverage under the Policy.
The parties entered into a settlement agreement for the underlying action,
whereby RCA agreed to pay the undisputed amount of $500,000 on behalf of
Hanover Inn. The parties also agreed that a court of competent jurisdiction
would resolve the dispute pertaining to the remaining $500,000. An
4
The relevant portion of the Policy’s Liquor Liability Coverage Form provides
as follows:
Section III – Limits of Insurance
1. The Limits of Insurance shown in the Declarations and the
rules below fix the most we will pay regardless of the number of:
a. Insureds;
b. Claims made or “suits” brought; or
c. Persons or organizations making claims or bringing “suits.”
2. The Aggregate Limit is the most we will pay for all “injury” as
the result of the selling, serving or furnishing of alcoholic
beverages.
3. Subject to the Aggregate Limit, the Each Common Cause Limit
is the most we will pay for all “injury” sustained by one or more
persons or organizations as the result of the selling, serving
or furnishing of any alcoholic beverage to any one person.
Liquor Liability Coverage Form at 3 (emphasis added).
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additional $15,000 was paid by Safe Auto Insurance Company, on behalf of
Lynch, for bodily injury.
On June 17, 2013, Good filed a Complaint, seeking relief in the nature
of a declaratory judgment that the applicable liability limit is the $1,000,000
“Aggregate Limit,” resulting in an additional payment of $500,000.
On July 23, 2013, RCA filed an Answer and Counterclaim for
Declaratory Relief, asserting that the applicable liability limit is the $500,000
“Each Occurrence Limit.”
Good filed a Motion for Summary Judgment on August 22, 2016,
alleging that there were no genuine issues of material fact in dispute. RCA
filed a Cross-Motion for Summary Judgment on September 19, 2016,
asserting that the Policy unambiguously provides for a lower “Each Common
Cause Limit,” and a higher “Aggregate Limit.” By Order dated November 15,
2016,5 the trial court denied Good’s Motion for Summary Judgment, denied
as moot RCA’s Cross-Motion for Summary Judgment, and determined that
the lower “Each Occurrence/Each Common Cause Limit” is applicable, rather
than the higher “Aggregate Limit.”
Good filed a timely Notice of Appeal and a court-ordered Pa.R.A.P.
1925(b) Concise Statement of errors complained of on appeal.
On appeal, Good raises the following issues for our review:
A. Whether the trial court erred in determining that the liquor
liability coverage available to [Good] is in the amount of
5
The Order was docketed on November 21, 2016.
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$500,000 [,] where the [L]iquor [L]iability [C]overage [F]orm
does not contain the term “occurrence[,]” and where[,] as
delineated in the [L]iquor [L]iability [C]overage [F]orm[,]
$1,000,000[] in liquor liability coverage was available to [Good,]
given the clear and unambiguous language contained in the
[L]iquor [L]iability [C]overage [F]orm[?]
B. In the alternative, whether the trial court erred in determining
the term “occurrence” was unambiguous in the absence of a
definition for that term in the [P]olicy[?]
C. Also, in the alternative, whether the trial court erred in
applying the “[E]ach [O]ccurrence” limit as the “[E]ach
[C]ommon [C]ause [L]imit” where those terms are not
interchangeable within the insurance industry[?]
Brief for Appellant at 5.
Our standard of review in evaluating a trial court’s grant or denial of
summary judgment 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 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.
Hall v. CNX Gas Co., LLC, 137 A.3d 597, 601 (Pa. Super. 2016) (citation
omitted).
We will address Good’s claims together. In her first claim, Good
asserts that the trial court erred in determining that liquor liability coverage
was available in the amount of $500,000, rather than $1,000,000. Brief for
Appellant at 13. Good claims that the language of the Policy, read in its
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entirety, provides liquor liability coverage in the amount of $1,000,000. Id.
at 15-16. Good points out that the Policy provides for payment of the
“Aggregate Limit,” unless the “Each Common Cause Limit” applies, but
argues that there is no definition of the “Each Common Cause Limit” in the
Declarations page of the Policy. Id. at 17. Good asserts that the language
of the Policy is unambiguous, and therefore, the trial court was only
permitted to look at the terms of the Policy itself. Id. at 20. Good also
contends that the trial court’s determination that the parties intended for
there to be two separate and distinct limits of liquor liability coverage was
mere speculation. Id. at 21.
In her second claim, Good argues, in the alternative, that the trial
court erred in determining that the term “occurrence” is unambiguous,
absent a definition in the Policy. Id. at 22. Good avers that the ambiguity
should be interpreted in favor of the insured, resulting in an available
$500,000 for each “category” of damage (i.e., wrongful death action and
survival action). Id.
In her third claim, Good contends that the trial court erred in applying
the “Each Occurrence” limit as the “Each Common Cause” limit, because
those terms are not interchangeable within the insurance industry. Id. at
23. Good cites to the report of Craig F. Stanovich, wherein Stanovich
provided the following opinions: 1) it is not insurance industry custom to use
the phrases “Each Occurrence” and “Each Common Cause” interchangeably
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in general liability insurance policies; 2) the definition of “occurrence” applies
only to the Commercial General Liability Coverage Form and cannot be
incorporated into and used with the Liquor Liability Coverage Form; and 3)
the Policy’s Declarations page is not an ISO form, and therefore is not
applicable to the Liquor Liability Coverage Form. Id. at 24-27.
The interpretation of an insurance contract is a matter of
law and is generally performed by a court. The goal of insurance
contract interpretation is to ascertain the intent of the parties as
manifested by the language of the written instrument. When
analyzing an insurance policy, a court must construe words of
common usage in their natural, plain, and ordinary sense. If the
language of the insurance contract is clear and unambiguous, a
court is required to give effect to that language. A court must
not distort the meaning of the language or resort to a strained
contrivance in order to find an ambiguity.
D’Adamo v. Erie Ins. Exch., 4 A.3d 1090, 1096 (Pa. Super. 2010)
(internal citations, quotation marks, and brackets omitted); see also
Mitsock v. Erie Ins. Exch., 909 A.2d 828, 831 (Pa. Super. 2006) (stating
that “courts should try to read policy provisions to avoid ambiguities, if
possible….” (citation and quotation marks omitted)). However, “where a
provision of a policy is ambiguous, the policy provision is to be construed in
favor of the insured and against the insurer, the drafter of the agreement.”
Windows v. Erie Ins. Exch., 161 A.3d 953, 957 (Pa. Super. 2017)
(citation, quotation marks and brackets omitted). Additionally, “[w]hen an
ambiguity in contractual language exists, parol evidence is admissible to
explain or clarify or resolve the ambiguity, irrespective of whether the
ambiguity is patent, created by the language of the instrument, or latent,
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created by extrinsic or collateral circumstances.” Id. (citation and quotation
marks omitted).
Here, the trial court considered Good’s claim, and determined that the
applicable coverage limit was the $500,000 “Each Occurrence/Each Common
Cause Limit,” rather than the $1,000,000 “Aggregate Limit,” stating the
following:
[The trial court] has examined the insurance policy in light
of the above [contract interpretation] standards and the mutual
intent of the parties to contract for insurance. It is clear … [that]
the intentions of the parties are clear and unambiguous. The
facts of this case make clear that a quote was obtained from
RCA for a policy of insurance that included liquor liability
coverage with two separate and distinct liquor liability limits.
Those limits being $500,000 per occurrence and $1,000,000
aggregate. … It is abundantly clear that at all times the parties
intended for there to be two separate and distinct limits of liquor
liability, an occurrence limit of $500,000 and an aggregate limit
of $1,000,000. There is no way that [the trial court] can
construe the facts to believe that the parties had only intended a
policy of liquor liability that contained only a single $1,000,000
limit.
….
[The trial court] has found the contract language to be
unambiguous. The [L]iquor [L]iability [C]overage [F]orm clearly
states that there are two limits of liquor liability coverage. The
[“Aggregate Limit”] is clearly $1,000,000. The lower limit,
although referenced as “[E]ach [O]ccurrence” in the [P]olicy, is
not reasonably susceptible of a different construction or capable
of being understood in more than one sense to mean anything
other than the “[E]ach [C]ommon [C]ause [L]imit[”] set out in
the [L]iquor [L]iability [Coverage F]orm. To hold otherwise
would defeat the clear and unambiguous intentions of the parties
to contract for two separate and distinct limits for liquor liability.
When viewed in the light of the intent of the parties and the
reasonable expectations of the insureds, it is clear that [Good’s]
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interpretation of the [P]olicy would lead to a result not
contemplated by the parties.
[RCA] contends, and [the trial court] agrees[,] that the
fact that the [D]eclaration[s] page of the [P]olicy does not
contain an express “[E]ach [C]ommon [C]ause [L]imit[”] does
not mean that it should be converted into something that it is
not—a policy with [neither an] “Each Occurrence [Limit,]” nor an
“[E]ach [C]ommon [C]ause [L]imit[”] for liquor liability
coverage. It is clear that RCA contemplates two separate limits.
The [D]eclaration[s] page includes two separate limits, one for
“[E]ach [O]ccurrence” and one for “[A]ggregate.” The only
reasonable conclusion, consistent with the intention of the
parties and the reasonable expectations of the insureds, is to
apply the “[E]ach [O]ccurrence [L]imit[”] as the “[E]ach
[C]ommon [C]ause [L]imit[”]. This is the only possible
interpretation that provides for two[] separate and distinct
limits, one higher and one lower[,] that is required by the
language of the [L]iquor [L]iability [C]overage [F]orm.
Trial Court Opinion, 1/25/17, at 6, 7-8. Upon review, we conclude that the
trial court’s interpretation is sound and free of legal error, and we affirm on
this basis as to Good’s claims. See id.6 Accordingly, the trial court properly
denied Good’s Motion for Summary Judgment.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 9/21/2017
6
We additionally observe that the trial court’s interpretation is consistent
with the definition of the “Each Common Cause Limit” set forth in the Liquor
Liability Coverage Form. See Liquor Liability Coverage Form at 3.
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