J-A29028-18

                                2019 PA Super 90

 MARGARET M. KIELY, ATTORNEY-IN-          :   IN THE SUPERIOR COURT OF
 FACT, ON BEHALF OF CHRISTINE             :        PENNSYLVANIA
 FEINSTEIN,                               :
                                          :
                    Appellant             :
                                          :
                                          :
              v.                          :
                                          :   No. 1957 EDA 2018
                                          :
 PHILADELPHIA CONTRIBUTIONSHIP            :
 INSURANCE COMPANY                        :

               Appeal from the Order Entered June 22, 2018
    In the Court of Common Pleas of Philadelphia County Civil Division at
                 No(s): December Term, 2016 No. 003446


BEFORE:    OTT, J., DUBOW, J., and STEVENS*, P.J.E.

OPINION BY DUBOW, J.:                               FILED MARCH 26, 2019

      In this declaratory judgment action, Appellant Margaret M. Kiely,

attorney-in-fact on behalf of Christine Feinstein, alleged that Appellee,

Philadelphia Contributionship Insurance Company (PCIC), improperly and in

bad faith denied Feinstein a defense in an underlying litigation. Following a

trial, the court entered a nonsuit in favor of PCIC. Appellant now appeals from

the Order entered June 22, 2018, denying her Post-Trial Motion to remove the

nonsuit. We affirm.

      Underlying Litigation

      In July 2015, Appellant negotiated an oral employment contract for

home aid services on behalf of Feinstein with Nydia Parkin. Upon agreeing to

terms, Parkin commenced employment.            In February 2016, however,




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* Former Justice specially assigned to the Superior Court.
J-A29028-18



Feinstein allegedly attacked Parkin, causing injuries.   Thereafter, Appellant

terminated Parkin’s employment.

      In May 2016, Parkin commenced litigation. Parkin filed a complaint in

five counts: asserting Assault and Battery, Intentional Infliction of Emotional

Distress (IIED), Breach of Contract, False Imprisonment, and Punitive

Damages. See Complaint, 12/30/16, Exh. C (Parkin v. Feinstein, Montg.

Cty. Ct. of Common Pleas, Dkt. No. 2016-10061, 5/19/16 (Underlying

Complaint)).

      Insurance Coverage

      At the time of the alleged assault, Feinstein maintained two insurance

policies with PCIC: a Homeowner’s Insurance Policy and an Umbrella Policy.

See Complaint, Exh. A (PCIC Policy No. HO00015503 (Homeowner’s Policy)),

Exh. B (PCIC Policy No. PE1060 (Umbrella Policy)).

      In relevant part, the Homeowner’s Policy provided coverage for personal

liability arising from bodily injury caused by an “occurrence.” Homeowner’s

Policy, Form HO 00 03 05 01, “Section II – Liability Coverages,” at 16.

“‘Occurrence’ means an accident, including continuous or repeated exposure

to substantially the same general harmful conditions[.]” Id., “Definitions,” at

2.   There were also exclusions limiting the coverage provided by the

Homeowner’s Policy.     For example, the policy excluded coverage for an

expected or intended injury. See id., “Section II – Exclusions,” at 18.




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       The Umbrella Policy extended coverage beyond the limits provided by

the Homeowner’s Policy for liability arising from bodily injury.1 In addition,

the Umbrella Policy provided coverage for liability arising from certain personal

injuries. Umbrella Policy, Form DL 98 01 06 98, “II. Coverages,” at 2. In

relevant part, the Umbrella Policy defined “personal injury” to include “injury

arising out of . . . [f]alse arrest, detention or imprisonment[.]”       Id., “I.

Definitions,” at 2.2     As with the Homeowner’s Policy, the Umbrella Policy

excluded coverage for an expected or intended injury, and it further excluded

coverage for a personal injury “[s]ustained by any person as a result of an

offense directly or indirectly related to the employment of this person by the

insured[.]” Id., “III. Exclusions,” at 3.

       Subject to certain distinctions not relevant here, both policies provided

that if a suit was brought against the insured, to which the policy applied,

PCIC would provide a defense to that suit. See Homeowner’s Policy, Form HO

00 03 05 01, “Section II – Liability Coverages,” at 16; Umbrella Policy, Form

DL 98 01 06 98, “II. Coverages,” at 2.

       Current Litigation

       Following its review of the allegations set forth in the Underlying

Complaint, PCIC refused to provide Feinstein with a defense. See PCIC Motion
____________________________________________


1The Homeowner’s Policy provided $500,000 in coverage for personal liability,
and the Umbrella Policy provided an additional $1,000,000. Homeowner’s
Policy, Declarations, at 1 (unpaginated); Umbrella Policy, Declarations, at 1.

2 By definition, there was no bodily injury component to these personal
injuries. See id. Thus, this was a distinct category of coverage.

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for Summary Judgment, Exh. C (Letter, dated 8/1/16 (Initial Denial Letter)

(denying coverage under Homeowner’s Policy)), Exh. D (Letter, dated

11/28/16 (Comprehensive Denial Letter) (explaining coverage denial under

Homeowner’s Policy and Umbrella Policy)).         According to PCIC, Parkin’s

allegations either did not trigger coverage under the policies or, alternatively,

were subject to certain policy coverage exclusions.        See Comprehensive

Denial Letter at 2-7 (unpaginated).

      In December 2016, Appellant commenced this litigation, seeking

declaratory judgment and further asserting breach of contract and bad faith.

PCIC filed an Answer and Counterclaim for declaratory judgment.

      The parties proceeded to discovery.       Appellant’s claim of damages

principally included attorney’s fees incurred when PCIC declined to provide

Feinstein with a defense in the underlying litigation.      However, Appellant

refused to produce timely documentation supporting her claim for attorney’s

fees. Following protracted motions practice, the trial court eventually issued

a Sanctions Order, precluding Appellant from “offering evidence regarding

alleged attorney’s fees as damages for failure to comply with two (2) prior

court orders requiring production of same.” Sanctions Order, 1/11/18.

      Both parties filed Motions for Summary Judgment, which were denied

by the trial court because it determined that genuine issues of material fact

remained in dispute. Order, 12/6/17; Order, 12/21/17. The Orders do not

identify what issues of fact remained.




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       In May 2018, a trial commenced. Appellant framed the issue before the

court as whether PCIC did an investigation to determine whether Feinstein

had “the mental capacity . . . to intentionally injure the claimant.” N.T. Trial,

5/24/18, at 7. In contrast, PCIC suggested that the court must determine

whether the alleged assault constituted an “occurrence” as defined by the

policies, i.e., whether the incident was an accident that triggered policy

coverage. Id. at 16-17.

       Appellant was the sole witness to testify.         According to Appellant,

Feinstein had a stroke in 2015 and suffered from bipolar disorder. N.T. Trial

at 41, 43.3 Appellant acknowledged that, on the day of the alleged incident,

she requested that Feinstein be held involuntarily at a hospital, but after a

psychiatric examination, Feinstein was released.          Id. at 85.    Thereafter,

Feinstein continued to live on her own.          Id. at 84-85.   Further, Appellant

acknowledged that Feinstein had never been declared incompetent. Id.

       Following Appellant’s presentation of evidence, PCIC moved for a

compulsory nonsuit.        Id. at 98.      According to PCIC, Appellant failed to

establish that Feinstein had such diminished mental capacity that she could

not appreciate the nature of her actions, and therefore, there was no

coverage. Id. at 99, see also N.T. Trial at 114-16 (clarifying PCIC’s position


____________________________________________


3 Appellant also suggested that Feinstein was diagnosed with dementia in
September or October 2016, some six to eight months after the alleged
assault and after PCIC denied her claim. Id. at 42-43. Appellant offered no
medical testimony to support these diagnoses.

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J-A29028-18



that the alleged assault did not constitute an occurrence).      The trial court

agreed and granted the nonsuit.

        Appellant filed a Post-Trial Motion, requesting removal of the nonsuit

and a new trial, which the trial court denied. Appellant timely appealed and

filed a court-ordered Pa.R.A.P. 1925(b) Statement.4         The court issued a

responsive Opinion.

        Appellant raises the following issues on appeal:

        1. Whether the trial court abused its discretion in granting PCIC a
           nonsuit where:

              a.   The allegations in the Underlying Complaint were
                   sufficiently broad that the allegations fell within the
                   scope of the Homeowner’s Policy and/or the Umbrella
                   Policy, thereby establishing a duty on PCIC to defend
                   the insured; and

              b.   The court erred in relying on the M’Naghten5 rule for
                   criminal insanity when determining whether PCIC had a
                   duty to defend the insured.

        2. Whether the trial court abused its discretion in precluding
           Appellant from introducing evidence of Appellant’s legal
           expenses.

____________________________________________


4 “Historically, Pennsylvania law has held that the entry of compulsory nonsuit
is not the ruling that is immediately appealable; rather, the appeal lies from
the trial court’s denial of the motion to remove the compulsory nonsuit.”
Murphy v. Int’l Druidic Soc’y, 152 A.3d 286, 289-90 (Pa. Super. 2016)
(citing, inter alia, Kukich v. Serbian E. Orthodox Church of Pittsburgh,
202 A.2d 77, 77 (Pa. 1964)). Here, the trial court denied Appellant’s Post-
Trial Motion seeking removal of the nonsuit. Thus, we have jurisdiction to
consider Appellant’s issues on the merits. Contra Murphy, supra at 292
(concluding we lacked jurisdiction where appellant failed to file motion seeking
removal of nonsuit).

5   See Regina v. M’Naghten, 10 Cl. & Fin. 200, 8 Eng.Rep. 718 (1843).

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J-A29028-18



See Appellant’s Br. at 4 (reordered and edited for clarity).

      Generally, the trial court will resolve a declaratory judgment action

involving an insurance coverage dispute on summary judgment. See, e.g.,

Donegal Mut. Ins. Co. v. Baumhammers, 938 A.2d 286, 288 (Pa. 2007)

(affirming in part summary judgment determination that allegations against

tortfeasor’s parents constituted an “occurrence” that triggered coverage);

Aetna Cas. & Sur. Co. v. Roe, 650 A.2d 94, 96 (Pa. Super. 1994) (affirming

trial court’s grant of summary judgment where third party claims did not

trigger insurer’s duty to defend insured).       Here, the trial court denied the

parties’ Motions for Summary Judgment, finding disputed issues of material

fact, and therefore, this matter proceeded to trial.        This led to the unique

procedural posture of this case.

      Pennsylvania Rule of Civil Procedure 230.1 provides that “on oral motion

of the defendant, [the court] may enter a nonsuit on any and all causes of

action if, at the close of the plaintiff’s case on liability, the plaintiff has failed

to establish a right to relief.” Pa.R.C.P. 230.1(a)(1). “On appeal, entry of a

compulsory nonsuit is affirmed only if no liability exists based on the relevant

facts and circumstances, with [the] appellant receiving the benefit of every

reasonable inference and resolving all evidentiary conflicts in [the] appellant’s

favor.” Scampone v. Highland Park Care Center, LLC, 57 A.3d 582, 595-

96 (Pa. 2012) (citation and quotation marks omitted). We will reverse the

trial court “only if the trial court abused its discretion or made an error of law.”




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J-A29028-18



Printed Image of York, Inc. v. Mifflin Press, Ltd., 133 A.3d 55, 59 (Pa.

Super. 2016) (citation omitted).

       Essentially, in her first issue, Appellant disputes PCIC’s decision to deny

Feinstein a defense in the underlying litigation. See Appellant’s Br. at 13.

According to Appellant, the allegations in the Underlying Complaint were

sufficiently broad so that a claim potentially fell within the scope of PCIC’s

coverage. See Appellant’s Br. at 19. Moreover, Appellant asserts, despite

the allegations of intentional conduct, PCIC had a duty to appoint

representation to Feinstein while it investigated her “mental status.” Id. at

18, 26. Appellant offers no legal authority in support of this assertion, and

we have found none. See id.

       The fundamental issue in this appeal involves the interpretation of an

insurance contract, which presents a question of law.        Erie Ins. Exch. v.

Muff, 851 A.2d 919, 925 (Pa. Super. 2004). Our standard of review is de

novo, and our scope of review is plenary. Donegal Mut. Ins. Co., supra at

290.

       “An insurer’s duty to defend an action against the insured is measured,

in the first instance, by the allegations in the plaintiff’s pleadings[.]” Gene’s

Restaurant, Inc. v. Nationwide Ins. Co., 548 A.2d 246, 246 (Pa. 1988)

(citation omitted). This duty is distinct from and broader than an insurer’s

duty to provide indemnification. Am. and Foreign Ins. Co. v. Jerry’s Sport

Ctr., Inc., 2 A.3d 526, 540-41 (Pa. 2010).             Provided the underlying

allegations encompass an injury that is actually or potentially within the scope

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J-A29028-18



of the policy, an insurer must defend its insured. Id. at 541. This duty to

defend persists “until the claim is confined to a recovery that the policy does

not cover.” Id. at 542.

      Initially, the insurer must consider the question of coverage. Id. at 541.

While this may be a difficult question to answer in the early stages of a claim,

“[i]nsurers are in the business of making this decision.”           Id. at 542.

Recognizing that an insurer’s decision to deny coverage is a perilous one, our

Supreme Court has described the process as follows:

      In some circumstances, an insurance company may face a difficult
      decision as to whether a claim falls, or potentially falls, within the
      scope of the insurance policy. However, it is a decision the insurer
      must make. If it believes there is no possibility of coverage, then
      it should deny its insured a defense because the insurer will never
      be liable for any settlement or judgment. This would allow the
      insured to control its own defense without breaching its
      contractual obligation to be defended by the insurer. If, on the
      other hand, the insurer is uncertain about coverage, then it should
      provide a defense and seek declaratory judgment about coverage.

Id. (internal citation omitted).

      In the context of a declaratory judgment action, the court resolves the

question of coverage.     Id.   By comparing the allegations to the insurance

policy provisions, we determine “whether, if the allegations are sustained,

the insurer would be required to pay [a] resulting judgment[.]”           Gene’s

Restaurant, Inc., supra at 246 (emphasis added). “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.”

Am. and Foreign Ins. Co., supra at 541.           We do not consider extrinsic

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evidence.     See Kvaerner Metals Div. of Kvaerner U.S., Inc. v.

Commercial Union Ins. Co., 908 A.2d 888, 896 (Pa. 2006).

      In Kvaerner Metals, the Supreme Court rejected this Court’s reliance

on extrinsic, expert reports that potentially brought a claim within the scope

of insurance coverage and thus triggered an insurer’s duty to defend.

Kvaerner Metals, supra at 896. According to the Supreme Court, in looking

beyond the allegations raised in the underlying complaint, we had “departed

from . . . well-established precedent . . . requiring that an insurer’s duty to

defend and indemnify be determined solely from the language of the complaint

against the insured.” Id. at 896 (citing in support Mut. Benefit Ins. Co. v.

Haver, 725 A.2d 743, 745 (Pa. 1999); Gen. Accident Ins. Co. of Am. v.

Allen, 692 A.2d 1089, 1095 (Pa. 1997); Wilson v. Md. Cas. Co., 105 A.2d

304, 307 (Pa. 1954)).

      Here, when this matter proceeded to trial, the court afforded Appellant

an opportunity to establish that Feinstein suffered from such diminished

mental capacity that she was unable to act intentionally.       However, the

allegations set forth in the Underlying Complaint do not aver or even suggest

that Feinstein lacked the mental capacity for intentional conduct. Thus, the

court erred in permitting Appellant to introduce extrinsic evidence into the




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J-A29028-18



record and further erred in considering this evidence in evaluating whether

the Underlying Complaint triggered PCIC’s duty to defend her.6 Id.

       PCIC provided liability coverage to Feinstein for bodily injury caused by

an occurrence, which both policies defined as an accident. An accident is “an

unexpected and undesirable event” or “something that occurs unexpectedly

or unintentionally.”      Kvaerner Metals, supra at 898.        The key term is

unexpected, “which implies a degree of fortuity.” Donegal Mut. Ins. Co.,

supra at 292; Kvaerner Metals, supra at 898.

       In the Underlying Complaint, Parkin described the assault by Feinstein

as follows:

       Feinstein became irate and irrational and attacked [Parkin] from
       behind. During the attack, Feinstein choked and punched [Parkin]
       while calling [her] racial slurs. [Parkin] did not provoke Feinstein,
       nor did she engage in mutual fighting or attempt to physically
       subdue Feinstein.

Underlying Complaint at ¶¶ 8-10. Similarly, in support of her claim of IIED,

Parkin alleged that “Feinstein attacked [her], grabbing her neck and punching

her face, all while calling [Parkin] racial slurs and promising to ‘kill her.’” Id.

at ¶ 29.

       Parkin’s allegations set forth a purposeful attack.     Feinstein’s assault

upon her was not an accident; rather, it was an intentional tort. Critically, if

____________________________________________


6 Nevertheless, we observe that, despite the opportunity afforded her by the
trial court, Appellant presented no medical testimony to support her
assertions. Rather, Appellant merely presented her own, uncorroborated
opinions and observations.

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her allegations were sustained, PCIC would not be required to pay a resulting

judgment. See Gene’s Restaurant, Inc., supra at 246. Accordingly, the

allegations did not trigger coverage under the policies, and PCIC owed no duty

to defend Feinstein. Id. at 247; see also State Farm Mut. Auto. Ins. Co.

v. Martin, 660 A.2d 66, 68 (Pa. Super. 1995) (quoting Nationwide Mut.

Ins. Co. v. Hassinger, 473 A.2d 171, 173 (Pa. Super. 1984) (“[I]t is against

the public policy of this Commonwealth to provide insurance coverage for

intentional acts.”).7

       Appellant also challenges the trial court’s reliance on the M’Naghten

Rule as the standard against which any evidence of diminished mental

capacity should be judged.8 See Trial Court Op., 7/2/18, at 1-2 (unpaginated)
____________________________________________


7 Appellant has not distinguished between the several claims brought by
Parkin. See generally Appellant’s Br. She has presented no specific
challenge to PCIC’s denial of coverage for Parkin’s claims of Breach of Contract
or False Imprisonment. See Appellant’s Br. at 13-27. Accordingly, we infer
that Appellant concedes that no coverage is available for these claims.
Nevertheless, we state clearly that no coverage is available.               The
Homeowner’s Policy provides coverage for bodily injury and property damage,
not contractual damages or personal injury. See, supra, n.2 (recognizing
personal injury as separate category of coverage defined in Umbrella Policy).
Further, we note that the Umbrella Policy excludes coverage for personal
injury sustained directly or indirectly through employment by the insured.
This exclusion is applicable.

8 The M’Naghten Rule defines the legal insanity defense to criminal conduct.
It has been codified as follows: “[T]he phrase “legally insane” means that,
at the time of the commission of the offense, the actor was laboring under
such a defect of reason, from disease of the mind, as not to know the nature
and quality of the act he was doing or, if the actor did know the quality of the
act, that he did not know that what he was doing was wrong.” 18 Pa.C.S. §
315(b) (emphasis in original).



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(citing Germantown Ins. Co. v. Martin, 595 A.2d 1172 (Pa. Super. 1991),

and concluding Appellant failed to establish that Feinstein “did not know right

from wrong”). However, in light of our legal determination that the allegations

set forth in the Underlying Complaint do not constitute an occurrence and as

it is inappropriate for this Court to consider extrinsic evidence, we do not reach

the question whether, under relevant circumstances, the M’Naghten Rule is

applicable.9

       PCIC owed no duty to defend Feinstein in the underlying litigation.

Therefore, Appellant’s second issue, in which she asserts the trial court abused

its discretion in precluding evidence of attorney’s fees, is moot.

       Order affirmed.


____________________________________________


9 In Germantown Ins. Co., supra at 1176, this Court characterized the
M’Naghten Rule as “applicable . . . in civil and criminal matters[,]” to the
extent an insanity standard was relevant. It is inapposite for numerous
reasons. In Germantown Ins. Co., we examined an insurance policy
exclusion, not whether an alleged assault constituted an occurrence, as we do
here. See id. at 1175 (“In this case, we are concerned only with the excluded
coverage portions of the policy, more specifically the stock phrase concerning
damage which is ‘expected or intended by the insured.’”). Further, our
discussion of the M’Naghten Rule was dicta. Id. (holding (1) that the insured
tortfeasor’s conduct produced “expected or intended” damages subject to a
policy’s exclusionary provisions and (2) in the alternative, barring coverage as
violative of public policy), id. at 1176 (thereafter suggesting M’Naghten Rule
applicable but observing that “psychiatric testimony [is] . . . irrelevant to issue
of coverage”); see also id. at 1176 (Beck, J., concurring) (recognizing
M’Naghten Rule discussion as dicta). Our Supreme Court has never adopted
the M’Naghten Rule in the context of an insurance coverage dispute, nor has
this Court cited Germantown Ins. Co. favorably in this regard. But see
Robinson v. Allstate Prop. & Cas. Ins. Co., 306 F.Supp.3d 672, 682
(E.D.Pa. 2018) (predicting the Pennsylvania Supreme Court will adopt the
reasoning in Germantown Ins. Co.).

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Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary



Date: 3/26/19




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