J-A04037-15


NON-PRECEDENTIAL DECISION – SEE SUPERIOR COURT I.O.P. 65.37

PEERLESS INDEMNITY INSURANCE                :      IN THE SUPERIOR COURT OF
COMPANY,                                    :            PENNSYLVANIA
                                            :
                       Appellee             :
                                            :
                  v.                        :
                                            :
CINCINNATI INSURANCE COMPANY                :
AND WYATT, INC.,                            :
                                            :
                       Appellants           :      No. 1057 WDA 2014

                 Appeal from the Order Entered June 16, 2014,
              in the Court of Common Pleas of Allegheny County,
                      Civil Division at No(s): GD13-01706

BEFORE: BOWES, OLSON, and STRASSBURGER,* JJ.

MEMORANDUM BY STRASSBURGER, J.:                           FILED APRIL 06, 2015

     Cincinnati   Insurance       Company       (CIC)   and   Wyatt,   Inc.   (Wyatt)

(collectively Appellants) appeal from an order that, in effect, denied their

cross motion for summary judgment and granted the motion for summary

judgment filed by Peerless Indemnity Insurance Company (Peerless).                We

reverse.

     The trial court summarized the background of this matter as follows.

           The underlying lawsuit in this case stems from a
     construction project involving the renovation of several floors of
     a building in Downtown Pittsburgh. Wyatt was the general
     contractor for the renovation project.          One subcontract
     agreement that Wyatt entered into was with Franklin Electric
     (the original defendant in the underlying action, “Franklin”).
     Franklin purchased a commercial general liability policy from
     Peerless for the renovation project. On March 10, 2009[,] Paul
     Zern (plaintiff in the underlying action, “Zern”) was painting an



* Retired Senior Judge assigned to the Superior Court.
J-A04037-15


     area where Franklin had [done some] electrical work. Zern
     came into contact with a live electrical wire and was injured.

            On February 28, 2011[,] Zern filed suit against Franklin.
     Franklin then joined Wyatt as an additional defendant in the
     underlying action. After being joined in the underlying action,
     Wyatt sought defense and indemnification from Peerless,
     asserting that it was an additional insured pursuant to the
     commercial general liability policy issued to Franklin by Peerless.
     Peerless determined that Wyatt did not qualify for coverage as
     an additional insured[,] and on September 18, 2013[,] Peerless
     filed a complaint for declaratory judgment seeking a declaration
     that it did not owe any duty of coverage to Wyatt.

           On May 1, 2014[,] Peerless filed a motion for summary
     judgment. On May 20, 2014[, CIC, the company that insures
     Wyatt,] and Wyatt filed a cross-motion for summary judgment.
     On June 3, 2014, argument was held … on the motion and cross-
     motion for summary judgment. On June [16, 2014, the trial
     court] issued an order of court that granted Peerless[’] motion
     for summary judgment, thus relieving Peerless from any duty to
     provide coverage to Wyatt in the underlying action.

           On July 3, 2014[, Appellants] filed a notice of appeal. On
     July 24, 2014[, Appellants] timely filed a concise statement of
     the errors complained of on appeal[.             The trial court
     subsequently issued an opinion pursuant to Pa.R.A.P. 1925(a).]

Trial Court Opinion, 9/2/2014, at 1-2 (unnecessary capitalization omitted).1

     In their brief to this Court, Appellants ask us to consider these

questions:

     1. Is Wyatt an additional insured under the Peerless policy by
     operation of the “Additional Insured — Owners, Lessees Or
     Contractors — Automatic Status When Required In A
     Construction   Agreement     With   You    22-132     (01/08)”
     endorsement[]?



1
  We reorganized the trial court’s opinion from one paragraph to four
paragraphs.


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J-A04037-15


      2. Is Wyatt an additional insured under the Peerless policy by
      operation of the “Additional Insured — Automatic Status When
      Required In A Construction Agreement With You — Contractors
      — Completed Operations 22-135 (01/08)” endorsement[]?

Appellants’ Brief at 2-3 (trial court’s answers omitted).

      We review orders granting summary judgment as follows.

             The standards which govern summary judgment are well
      settled. When a party seeks summary judgment, a court shall
      enter judgment whenever there is no genuine issue of any
      material fact as to a necessary element of the cause of action or
      defense that could be established by additional discovery. A
      motion for summary judgment is based on an evidentiary record
      that entitles the moving party to a judgment as a matter of law.
      In considering the merits of a motion for summary judgment, a
      court views the record in the light most favorable to the non-
      moving party, and all doubts as to the existence of a genuine
      issue of material fact must be resolved against the moving party.
      Finally, the court may grant summary judgment only when the
      right to such a judgment is clear and free from doubt. An
      appellate court may reverse the granting of a motion for
      summary judgment if there has been an error of law or an abuse
      of discretion.…

Swords v. Harleysville Ins. Companies, 883 A.2d 562, 566-67 (Pa.

2005) (citations omitted).

      This Court has summarized the law regarding insurance contract

interpretation and an insurer’s duty to defend and indemnify an insured as

follows.

      The interpretation of an insurance contract regarding the
      existence or non-existence of coverage is generally performed by
      the court.

           Insurance policies are contracts, and the rules of contract
           interpretation provide that the mutual intention of the
           parties at the time they formed the contract governs its
           interpretation. Such intent is to be inferred from the


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J-A04037-15


        written provisions of the contract. If doubt or ambiguity
        exists it should be resolved in insured’s favor.

        An insurer’s duty to defend and indemnify the insured may
        be resolved via declaratory judgment actions. In such
        actions, the allegations raised in the underlying complaint
        alone fix the insurer’s duty to defend. As this Court has
        summarized:

         The duty to defend is a distinct obligation, separate and
         apart from the insurer’s duty to provide coverage.
         Moreover, the insurer agrees to defend the insured
         against any suit arising under the policy even if such
         suit is groundless, false, or fraudulent.       Since the
         insurer agrees to relieve the insured of the burden of
         defending even those suits which have no basis in fact,
         the obligation to defend arises whenever the complaint
         filed by the injured party may potentially come within
         the coverage of the policy.

          Pennsylvania recognizes that a duty to defend is broader
     than the duty to indemnify. Accordingly, even if there are
     multiple causes of action and one would potentially constitute a
     claim within the scope of the policy’s coverage, the insurer would
     have a duty to defend until it could confine the claim to a
     recovery excluded from the policy.

        The question of whether a claim against an insured is
        potentially covered is answered by comparing the four
        corners of the insurance contract to the four corners of the
        complaint. An insurer may not justifiably refuse to defend
        a claim against its insured unless it is clear from an
        examination of the allegations in the complaint and the
        language of the policy that the claim does not potentially
        come within the coverage of the policy.

     Significantly, [i]t is not the actual details of the injury, but the
     nature of the claim which determines whether the insurer is
     required to defend. In making this determination, the factual
     allegations of the underlying complaint against the insured are to
     be taken as true and liberally construed in favor of the insured.




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J-A04037-15


Penn-America Ins. Co. v. Peccadillos, Inc., 27 A.3d 259, 264-66 (Pa.

Super. 2011) (en banc) (citations and quotation marks omitted).

      Appellants contend that, when two endorsements in the Peerless policy

are compared to Zern’s complaint and the complaint to join Wyatt as an

additional defendant, it becomes clear that, for purposes of the underlying

action, Wyatt qualifies as an additional insured.   According to Appellants,

because of their status as an additional insured under the relevant policy,

Peerless is required to defend and, if necessary, indemnify Wyatt in the

underlying action.

      One of the endorsements Appellants rely upon in support of their

position is entitled “ADDITIONAL INSURED - AUTOMATIC STATUS WHEN

REQUIRED IN A CONSTRUCTION AGREEMENT WITH YOU - CONTRACTORS -

COMPLETED OPERATIONS [(Endorsement 22-135)].”              This endorsement

provides, in pertinent part, as follows:

      A. Paragraph 2. under SECTION II - WHO IS AN INSURED is
      amended to include any person or organization, when you and
      such person or organization have agreed in writing in a contract
      or agreement that such person or organization be added as an
      additional insured on your policy, but only with respect to
      liability for “bodily injury” or “property damage”:

         1. Caused by “your work” performed for that additional
         insured that is the subject of the written contract or
         agreement.

         2.    Included   in   the   “products-completed   operations
         hazard.”

                                      ***



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J-A04037-15


      B. With respect to the insurance provided by this endorsement,
      the following are added to paragraph 2. Exclusions under
      COVERAGE A. BODILY INJURY AND PROPERTY DAMAGE
      LIABILITY (SECTION I - COVERAGES):

         This insurance does not apply

         1. To “bodily injury” or “property damage” arising out of
         any act or omission of the additional insured or the
         additional insured’s employees.

                                      ***

         3. To “bodily injury” or “property damage” arising out of
         the rendering of, or the failure to render, any professional
         architectural, engineering or surveying services including …
         [s]upervisory, inspection, architectural or engineering
         activities[.]

Peerless’ Motion for Summary Judgment, 5/1/2014, at Exhibit D.

      The other endorsement Appellants rely upon in support of their

position is entitled “ADDITIONAL INSURED - OWNERS, LESSEES OR

CONTRACTORS - AUTOMATIC STATUS WHEN REQUIRED IN CONSTRUCTION

AGREEMENT WITH YOU [(Endorsement 22-132)].”               This endorsement

provides, in pertinent part, as follows:

      A. Paragraph 2. under SECTION II - WHO IS AN INSURED is
      amended to include as an additional insured any person or
      organization when you and such person or organization have
      agreed in writing in a contract or agreement that such person or
      organization be added as an additional insured on your policy.
      Such person or organization is an additional insured only with
      respect to liability for “bodily injury”, “property damage” or
      “personal and advertising injury” caused, in whole or in part, by:

         1. Your acts or omissions; or

         2. The acts or omissions of those acting on your behalf;



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J-A04037-15


         in the performance of your ongoing operations for the
         additional insured that are the subject of the written
         contract or agreement ….

                                     ***

      B. With respect to the insurance afforded to these additional
      insureds, the following additional exclusions apply:

         This insurance does not apply to:

         1. “Bodily injury” or “property damage” arising from the
         sole negligence of the additional insured.

                                     ***

         3. “Bodily injury”, “property damage,” or “personal and
         advertising injury” arising out of the rendering of, or the
         failure    to  render,    any   professional  architectural,
         engineering     or   surveying    services,  including    …
         [s]upervisory, inspection, architectural or engineering
         activities.

Peerless’ Motion for Summary Judgment, 5/1/2014, at Exhibit E.

      There is no dispute that Franklin and Wyatt agreed in writing that

Wyatt would be added to Franklin’s insurance policy as an additional insured

through Endorsements 22-135 and 22-132. However, these endorsements

clearly and unambiguously limit Wyatt’s status as an additional insured to

scenarios when Wyatt faces liability for, inter alia, bodily injury caused by

the work, acts, or omissions of Franklin or those acting on behalf of Franklin.

The plain language of these endorsements also excludes from coverage

bodily injury caused by the negligence of Wyatt or bodily injury arising out of

the rendering or failure to render, inter alia, supervisory activities. Stated




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J-A04037-15


succinctly, Wyatt is an additional insured under the Peerless policy only

when it is liable for bodily injury caused by Franklin.

      The complaint to join Wyatt as an additional defendant incorporated

the Zern complaint. To the extent that the Zern complaint is relevant to a

determination of whether Wyatt qualifies as an additional insured under the

Peerless policy, a comparison of that complaint to the Peerless policy clearly

indicates that the allegations raised therein do not qualify Wyatt as an

additional insured.

      The Zern complaint did not name Wyatt as a defendant and

indisputably claimed that Franklin’s negligence was the sole cause of Zern’s

injuries. Appellants acknowledge this fact. Appellants’ Brief in Opposition to

Peerless’ Motion for Summary Judgment and in Support of Appellants’ Cross

Motion for Summary Judgment, 5/20/2014, at 4 (“The Zerns sought to hold

Franklin solely liable for the March 10, 2009 incident.”).

      However, a comparison of the complaint to join Wyatt as an additional

defendant to the Peerless policy reveals that at least one allegation raised in

that document potentially constitutes a claim within the scope of the policy’s

coverage.   While Franklin dedicated a majority of the complaint to join to

outlining why Wyatt’s negligence caused Zern’s injuries,2 the complaint to

join also contained the following averment.


2
  See, e.g., Peerless’ Motion for Summary Judgment, 5/1/2014, Exhibit A,
at ¶17 (“If the plaintiff has sustained alleged injuries and damages as
alleged, which are again denied, then said injuries and damages were


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J-A04037-15


      19. In the alternative, if [Franklin] is found to be negligent and
      liable to the plaintiff for his alleged injuries and damages, which
      is again denied, then [Wyatt] is also liable to the plaintiff for his
      alleged injuries to [(sic)] the negligence of [Wyatt] as set forth
      above, or liable over to [Franklin] for contribution and
      indemnification.

Peerless’ Motion for Summary Judgment, 5/1/2014, Exhibit A, at ¶19

(emphasis added).

      This averment leaves open the possibility that Wyatt could be found

liable for Zern’s bodily injury, even if Franklin caused the injury. Because

the averment could potentially constitute a claim within the scope of the

policy’s coverage, Peerless has a duty to defend Wyatt unless and until the

parties have confined the action to a claim to recovery which is excluded

from the policy.   Consequently, the trial court erred by granting Peerless’

motion for summary judgment and, effectively, denying Appellants’ cross

motion for summary judgment.         For these reasons, we reverse the trial

court’s order.

      Order reversed. Case remanded. Jurisdiction relinquished.

Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary

Date: 4/6/2015



directly and proximately caused by the negligence, carelessness, gross
negligence and recklessness of [] Wyatt ….”).


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