J-A24040-14


NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

CONSTRUCTURAL DYNAMICS, INC.,                      IN THE SUPERIOR COURT OF
                                                         PENNSYLVANIA

                   v.


LIBERTY MUTUAL INSURANCE COMPANY
AND ISRAEL SANTIAGO

APPEAL OF: LIBERTY MUTUAL
INSURANCE COMPANY

                                                       No. 423 EDA 2014


                   Appeal from the Order December 10, 2013
             in the Court of Common Pleas of Philadelphia County
            Civil Division at No.: November Term, 2012, No. 01715


BEFORE: GANTMAN, P.J., BENDER, P.J.E., and PLATT, J.*

MEMORANDUM BY PLATT, J.:                           FILED DECEMBER 19, 2014

        Appellant, Liberty Mutual Insurance Company, appeals from the trial

court’s    order   granting    the    summary   judgment   motion   of   Appellee,

Constructural Dynamics, Inc. (CDI) and denying Appellant’s cross-motion in

this action for declaratory judgment. CDI has filed a motion to quash the

appeal. After careful review, we affirm the trial court’s order and deny CDI’s

motion to quash.

        The trial court summarized the factual and procedural history as

follows:

____________________________________________


*
    Retired Senior Judge assigned to the Superior Court.
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              [CDI] commenced the current declaratory judgment action
        seeking [a] declaration that [Appellant] is required to defend and
        indemnify CDI in an underlying litigation . . . [arising] out of an
        accident involving . . . Israel Santiago (hereinafter
        “Santiago”).[1]

              CDI leased a space to Clarence J. Venne, LLC (hereinafter
        “Venne”) in the Riverside Industrial Complex. The lease required
        Venne to obtain commercial general liability insurance, “with a
        [t]wo [m]illion ($2,000,000) [d]ollar combined single limit” and
        required Venne to name CDI as an additional named insured.
        Moreover, “[a]ll insurance carried by [t]enant pursuant to [the]
        [l]ease shall be primary, not contributory with, and not in excess
        of, any coverage which [l]andlord may carry in [l]andlord’s sole
        discretion.”

              The lease further provides:

              17. INDEMNITY BY TENANT; EXONERATION
              (a) Tenant hereby agrees to indemnify, defend and
              hold [l]andlord harmless from and against any and
              all claims, actions, damages, losses, liability,
              penalties, fines, costs and expenses, including
              reasonable attorneys’ fees and other professional
              fees and court costs, to the extent arising directly or
              indirectly from (i) any loss of life, personal injury or
              property damage occurring (a) in the [b]uilding or at
              the [c]omplex other than in, on, or upon the
              [p]remises, to the extent caused, directly or
              indirectly, by any act or omission of [t]enant, its
              officers, employees, agents, invitees, licensees or
              contractors; or (b) in, on, or [upon] the [p]remises
              [to the] extent caused, directly or indirectly, by any
              act or omission of [t]enant, its officers, employees,
              agents, invitees, licensees or contractors . . .

              Moreover, [p]aragraph 17(d) of the lease provides:

              (d) It is the intention of the parties that the provision
              of this [s]ection 17 shall require [t]enant to
____________________________________________


1
    Santiago was a defendant in this action, but is not a party in this appeal.



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           indemnify and hold [l]andlord harmless with regard
           to acts, including negligence of [t]enant (and
           negligence of [l]andlord, solely in connection with
           any work-related injury or illness suffered by an
           employee of [t]enant due to [l]andlord’s negligence
           where such injury or illness is typically treated as a
           workman’s compensation claim), which result in
           harm to any employee of [t]enant. This [p]rovision
           shall be deemed to fulfill the requirements requiring
           or permitting contribution or indemnity as set forth
           in, and constitutes an express waiver of defenses
           and/or immunity afforded [t]enant by, the
           Pennsylvania Workers’ Compensation Act, 77 P.S.
           Section 481(b), or any similar provision of any
           similar act.

           Subsequently, Venne obtained commercial general liability
     insurance policy no. YY7-Z31-509641-029 (hereinafter “the
     policy”)[,] which provides that, “SECTION II – WHO IS AN
     INSURED is amended to include as an insured any manager or
     lessor of premises leased by you in which the written lease
     agreement obligates you to procure additional insured
     coverage.” Although Venne did not name CDI as an additional
     named insured, as required by the lease, the policy named CDI
     as an additional insured. The policy had a coverage period from
     April 1, 2009 through April 1, 2010. The policy further provides
     that, “[i]f the written agreement to indemnify an additional
     insured requires that you indemnify the additional insured for its
     sole negligence, then coverage for the additional insured shall
     conform to that agreement.” Moreover, the policy provided that
     the policy will not be excess and will be primary if a “written
     agreement . . . requires that the insurance provided for the
     additional insured be primary concurrent or primary non
     contributory.”

           In the underlying complaint, Santiago alleges that on
     August 31, 2009, during the course of his employment with
     Venne, he was injured while moving “skids loaded with heavy
     boxes from the first floor to the second floor using freight
     elevators at the [s]ubject [p]remises.” Santiago brought suit
     against defendants, Elevator Construction and Repair Company,
     Riverside Industrial Complex Inc., PKB Contractors Inc. and CDI,
     for various counts of negligence. Venne was not a party to the
     underlying litigation. Moreover, the underlying litigation settled

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       and thus[,] determinations of the duty to indemnify and the duty
       [to] defend are both ripe.

(Trial Court Opinion, 12/10/13, at 1-3) (record citations omitted).

       On January 8, 2014, Appellant timely appealed.2

       Appellant raises the following question for our review:

       Is additional insured coverage triggered where there is no
       allegation that the named insured caused or contributed to the
       liability of the purported additional insured, and the applicable
       policy includes additional insured coverage only for situations
       where the named insured caused or contributed to the liability of
       the purported additional insured?

(Appellant’s Brief, at 4).

       Preliminarily we note that in its motion to quash the appeal, CDI

asserts that the trial court’s December 10, 2013 order is not a final order

because a hearing on damages and the amount recoverable by CDI has not

been held. (See CDI’s Motion to Quash, 3/10/14, at 1-2). We disagree.

       The Declaratory Judgments Act provides:

       § 7532. General scope of declaratory remedy

              Courts of record, within their respective jurisdictions, shall
       have the power to declare rights, status, and other legal
       relations whether or not further relief is or could be claimed. No
       action or proceeding shall be open to objection on the ground
       that a declaratory judgment or decree is prayed for.             The
       declaration may be either affirmative or negative in form
       and effect, and such declarations shall have the force and
       effect of a final judgment or decree.
____________________________________________


2
  The trial court did not order Appellant to file a Rule 1925(b) statement of
errors, but it filed a Rule 1925(a) opinion in which it relied on its opinion
dated December 6, 2013 and filed on December 10, 2013. See Pa.R.A.P.
1925.



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42 Pa.C.S.A. § 7532 (emphasis added).

      . . . Consequently, a trial court order is final and immediately
      appealable pursuant to Pa.R.A.P. 341(b)(2), when the court
      enters a declaratory judgment order either affirmatively or
      negatively declaring the rights and duties of the parties,
      effectively disposing of the claims presented, even if the order
      does not expressly dispose of all claims or specify that the claims
      were declaratory in nature.

Nat’l Casualty Co. v. Kinney, 90 A.3d 747, 754 (Pa. Super. 2014) (case

citations omitted).

      Here, the trial court, by granting CDI’s motion and denying Appellant’s

cross-motion for summary judgment, in effect ruled Appellant has a legal

obligation to defend and indemnify CDI in the underlying Santiago matter.

Thus, the decision concerning CDI’s legal obligation constituted a final order

under the Declaratory Judgments Act.         See 42 Pa.C.S.A. § 7532; Nat’l

Casualty Co., supra at 754. Therefore, the court’s order was immediately

appealable and we deny CDI’s motion to quash.

      Accordingly, we will review Appellant’s issue regarding the denial of

additional insured’s coverage where there is no allegation of the named

insured causing or contributing to the additional insured’s liability.

      In reviewing the merits of the appeal, we note that our standard of

review for an order granting or denying summary judgment of an additional

insured’s coverage is well-settled:

            We view the record in the light most favorable to the
            nonmoving party, and all doubts as to the existence
            of a genuine issue of material fact must be resolved
            against the moving party. Only where there is no


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           genuine issue as to any material fact and it is clear
           that the moving party is entitled to a judgment as a
           matter of law will summary judgment be entered.
           Our scope of review of a trial court’s order granting
           or denying summary judgment is plenary, and our
           standard of review is clear: the trial court’s order will
           be reversed only where it is established that the
           court committed an error of law or abused its
           discretion.

           When interpreting an insurance policy, we first look to the
     terms of the policy. When the language of the policy is clear and
     unambiguous, we must give effect to that language. However,
     when a provision in the policy is ambiguous, the policy is to be
     construed in favor of the insured. Also, we do not treat the
     words in the policy as mere surplusage and, if at all possible, we
     construe the policy in a manner that gives effect to all of the
     policy’s language.

           We then compare the terms of the policy to the allegations
     in the underlying complaint. It is well established that an
     insurer’s duties under an insurance policy are triggered by the
     language of the complaint against the insured. In determining
     whether an insurer’s duties are triggered, the factual allegations
     in the underlying complaint are taken as true and liberally
     construed in favor of the insured. It does not matter if in reality
     the facts are completely groundless, false or fraudulent. It is the
     face of the complaint and not the truth of the facts alleged
     therein.

Indalex Inc. v. Nat’l Union Fire Ins. Co. of Pittsburgh, PA, 83 A.3d

418, 420-21 (Pa. Super. 2013), appeal denied, 99 A.3d 926 (Pa. 2014)

(citations and quotation marks omitted).

     Here, Appellant argues that the trial court committed an error of law in

misapplying Pennsylvania law and misreading the policy language.           (See

Appellant’s Brief, at 11-26).     Specifically, it contends that the policy

language only extends coverage to an additional insured when either (1)

Venne negligently caused CDI’s liability, or (2) Venne agreed in writing to

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indemnify CDI for the additional insured’s own negligence and the

agreement comports with applicable state law.      (See id. at 11-12).    This

issue does not merit relief.

      We first address Appellant’s argument that the underlying complaint

filed by Santiago is devoid of any allegation of Venne’s negligence. (See id.

at 12-13).     In support of this assertion, Appellant cites to Santiago’s

amended complaint.     (See id. at 13-14).   Our independent review of the

“factual allegations in the underlying complaint” uncovered no allegation of

Venne’s negligence.    Indalex Inc., supra at 421; (see also Appellant’s

Motion for Summary Judgment, 10/21/13, at Exhibit A).         Therefore, the

record does support Appellant’s claim that it is not required to indemnify CDI

under paragraph 17(a) of the lease.     (See Lease Agreement, 2/11/09, at

16-17 ¶ 17(a)); see also Indalex Inc., supra at 420-21.                Hence,

Appellant’s first argument is legally persuasive. However, that does not end

our inquiry.

      With respect to Appellant’s second argument, that the lease does not

provide indemnification to CDI for its negligence absent Venne’s negligence,

a review of the lease reflects that the language is clear and unambiguous.

(See Lease Agreement, 2/11/09, at 16-17 ¶ 17). Therefore, “we must give

effect to that language.”      Indalex Inc., supra at 420.        Specifically,

paragraph 17(d) states that Venne will indemnify CDI for CDI’s negligence

“solely in connection with any work-related injury or illness suffered by an

employee of [Venne] . . . where such injury . . . is typically treated as a

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workman’s compensation claim[.]”     (Lease Agreement, 2/11/09, at 17 ¶

17(d)).   Here, Santiago’s claim would typically be treated as a workman’s

compensation claim.       (See Appellant’s Motion for Summary Judgment,

10/21/13, at Exhibit A). Therefore, the plain terms of this provision create

Appellant’s obligation to indemnify CDI even in the absence of Venne’s

negligence.

      Based on the foregoing, we conclude that the trial court properly

determined that Appellant is obligated to indemnify CDI pursuant to

paragraph 17(d) of the lease. (See Trial Ct. Op., at 5); see also Indalex

Inc., supra at 420-21. Accordingly, we discern no error of law or abuse of

discretion in the trial court’s decision granting CDI’s summary judgment

motion and denying Appellant’s cross-motion in this declaratory judgment

action. See Indalex Inc., supra at 420-21. Therefore, we affirm the order

of the trial court.

      Order affirmed. Motion to quash appeal denied.

Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary



Date: 12/19/2014




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