Federal Eastern District of PA Court Addresses Coverage Question in Slip and Fall Case

In his recent decision in the case of Sabia Landscaping v. Merchants Mut. Ins., PICS Case No. 13-3167 (E.D. Pa. Nov. 6, 2013 DuBois, J.), Judge Jan E. DuBois denied a insurance company’s federal court’s Motion to Dismiss in a coverage action and found that the Defendant carrier had a duty to defend its insured against claims asserted in an underlying slip and fall case.  

The insured, Sabia Landscaping, brought suit against its carrier, Merchants Mutual Insurance Company, seeking a declaratory judgment that the carrier had a duty to defend Sabia Landscaping in the underlying tort action, and if necessary, to indemnify it for any damages for which it may be found liable.   The insured also asserted claims due to contracting bad faith.  

The carrier argued that the allegations of the underlying Complaint did not come within the insured’s policy because the policy excluded for coverage for bodily injury arising out of a “completed” snow plowing operations.   The carrier asserted that the underlying Plaintiff’s alleged injuries occurred after the landscaping company’s work was complete and, as such, the exclusion applied.

Judge DuBois rejected the carrier’s argument after comparing the insurance policies against the allegations in the underlying Complaint.  The Court found that the claims asserted in the Complaint could potentially come within the coverage of the policy based upon the factual allegations in the Complaint which appeared to indicate that the injury may have occurred before the landscaping company’s work was complete.  

Accordingly, the Court ruled that the carrier had a duty to defend Sabia Landscaping until such time as the claims were confined to a recovery that the policy did not cover.  

Having ruled in favor of the insured in this regard, the Court also found that the insured was entitled to a reimbursement from the carrier for attorney’s fees and costs the insured had incurred to date in defending the underlying claim.  

The Court declined to find that the carrier had a duty to indemnify the insured as the issue of whether or not the insured was liable remained pending in the underlying action.  

The Court also denied the carrier’s Motion to Dismiss the breach of contract claim and the bad faith claim asserted by the insured as the Court found that the Plaintiff had properly pled those types of claims.  

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Source: "Case Digests" Pennsylvania Law Weekly (12/10/13).