Wade Clark Mulcahy LLP

<p style="text-align: justify;">The Superior Court of Pennsylvania recently affirmed a trial court’s entry of compulsory nonsuit in favor of the carrier surrounding a coverage issue pertaining to both a Homeowner’s insurance policy and an Umbrella insurance policy. In <em><a href="https://www.wcmlaw.com/wp-content/uploads/2019/04/Kiely-on-Behalf-of-Feinstein-v-Philadelphia-Contributionship-Insurance-Company.pdf">Kiely on Behalf of Feinstein v Philadelphia Contributionship Insurance Company</a>,</em> the Court determined that the intentional tort allegations set forth in the underlying complaint did not constitute an occurrence triggering coverage by the insurance carrier.</p>
<p style="text-align: justify;">The underlying lawsuit arose when the plaintiff, Kiely, negotiated an oral employment contract for home aid services on behalf of Christine Feinstein with Nydia Parkin.  After Parkin began her employment, Feinstein allegedly attacked her.  Thereafter, Kiely terminated Parkin’s employment.  As a result of the attack, Parkin filed a lawsuit alleging the following claims: (1) assault and battery; (2) intentional infliction of emotional distress; (3) breach of contract; (4) false imprisonment; and (5) punitive damages.  At the time of the attack, Feinstein maintained two insurance policies with Philadelphia Contributionship Insurance Company (“PCIC”) which included a Homeowners policy and an Umbrella policy.  Under the Homeowner’s policy, coverage was available for personal liability resulting from bodily injury caused by an “occurrence.”  The “occurrence” language was defined as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.”  The policy also included limitations such as excluding coverage for an expected or intended injury.</p>
<p style="text-align: justify;">At the same time, the Umbrella policy provided extended coverage for liability arising from bodily injury as well as for liability arising from certain personal injuries.  The Umbrella policy also included limitations such as excluding coverage for an expected or intended injury as well as personal injuries “sustained by any person as a result of an offense directly or indirectly related to the employment of this person by the insured.”  As such, both policies provided coverage in the event a suit was brought against the insured in which the policies applied.</p>
<p style="text-align: justify;">In respect to the current lawsuit, PCIC declined to coverage to Feinstein under both policies.  In response, Kiely commenced this litigation seeking declaratory judgment and further asserting breach of contract and bad faith claims.  PCIC asserted that the intentional torts alleged in the underlying lawsuit were not “occurrences” as defined under the policies.  In contrast, Kiely introduced evidence that Feinstein lacked the mental capacity to intentionally assault Parkin in the underlying matter.  The trial court entered a nonsuit in favor of PCIC after finding that Kiely failed to introduce evidence of an “accident” which was required in order to trigger coverage for an “occurrence” under the policy.</p>
<p style="text-align: justify;">Upon review of the Superior Court, the trial court’s entry of a compulsory nonsuit was approved.  The Court held that, given the allegations set forth in her complaint, Feinstein’s assault on Parkin was an intentional tort rather than an accident which would not trigger any duty to defend or indemnify under the policies.  Furthermore, the Court noted that it was improper for the trial court to allow Kiely to attempt to introduce evidence of Feinstein’s lack of mental capacity for the purposes of committing intentional torts.  Rather, when insurance coverage issues are concerned within a declaratory judgment action, the allegations in the underlying lawsuit should control the analysis without the entrance of extrinsic evidence.  As the underlying lawsuit did not aver that Feinstein lacked the mental capacity for intentional conduct, such evidence cannot be introduced into the record or considered by the trial court.  Thanks to Zhanna Dubinsky for her contribution to this post.  Please email <a href="mailto:BGibbons@wcmlaw.com">Brian Gibbons</a> with any questions.</p>
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