First Liberty Ins. Corp. v. Coll, M.

• Court: Superior Court of Pennsylvania
• Decided: August 7, 2015
• Docket: 1622 EDA 2014
• Status: Unpublished

Opinion

J-A17015-15

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

THE FIRST LIBERTY INSURANCE IN THE SUPERIOR COURT OF CORPORATION PENNSYLVANIA

v.

MICHAEL COLL AND COLLEEN COLL

JAYDEN ALKER, A MINOR BY HIS PARENTS AND NATURAL GUARDIANS, KEVIN ALKER AND TARA ALKER IN THEIR OWN RIGHT

Appellants No. 1622 EDA 2014

Appeal from the Order Dated April 14, 2014 In the Court of Common Pleas of Philadelphia County Civil Division at No(s): September Term, 2012 No. 003400

BEFORE: GANTMAN, P.J., BENDER, P.J.E., and OTT, J.

MEMORANDUM BY OTT, J.: FILED AUGUST 07, 2015

Jayden Alker, a minor by his parents and natural guardians, Kevin

Alker and Tara Alker, in their own right (Alkers) appeal the order dated April

14, 2014, in the Court of Common Pleas of Philadelphia County, granting

declaratory judgment in favor of the First Liberty Insurance Corporation

(First Liberty).1 Specifically, the trial court determined the homeowner’s

insurance policy in question contained a valid and enforceable exclusion

regarding Jayden Alker’s injuries suffered through the Colls’ operation of a ____________________________________________

1 Michael Coll and Colleen Coll are not part of this appeal. J-A17015-15

home day care business. The Alkers claim the trial court erred because (1)

there was no proof the day care service operated on a profit motive, and (2)

the term “Home Daycare Business” was inherently ambiguous. After a

thorough review of the submission by the parties, relevant law, and the

certified record, we affirm based upon the sound reasoning of the Honorable

Alice Beck Dubow in her Pa.R.A.P. 1925(a) opinion, dated January 6, 2015.2

Briefly, we note that the Alkers had left their child, Jayden, in the care

of Colleen Coll at the Colls’ home. The Alkers paid Coll $25.00 per day for

this care and on the date of the injury, the arrangement had been in place

____________________________________________

2 Our standard of review for declaratory judgment is well-established:

Our standard of review in a declaratory judgment action is limited to determining whether the trial court clearly abused its discretion or committed an error of law. We may not substitute our judgment for that of the trial court if the court's determination is supported by the evidence. Pocono Summit Realty, LLC v. Ahmad Amer, LLC, 52 A.3d 261, 265 (Pa. Super. 2012)(citations and quotation marks omitted).

Additionally,

[w]e will review the decision of the lower court as we would a decree in equity and set aside the factual conclusions of that court only where they are not supported by adequate evidence. The application of the law, however, is always subject to our review. Id. (citations and quotation marks omitted).

Erie Insurance Group v. Catania, 95 A.3d 320, 322 (Pa. Super. 2014).

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for approximately two years. On October 11, 2010, while under the Colls’

care, in the Colls’ home, the Colls’ dog bit the child on the face, causing

physical and emotional injury. The Alkers filed suit against the Colls who

sought defense and indemnification through their homeowner’s insurance,

issued by First Liberty.

First Liberty filed this declaratory judgment action seeking a

declaration of rights and duties pursuant to the exclusion noted above.

Specifically, the relevant language of the policy is:

NO SECTION II – LIABILITY COVERAGES FOR HOME DAY CARE BUSINESS. LIMITED SECTION I – PROPERTY COVERAGES FOR HOME DAY CARE BUSINESS

If an “insured” regularly provides home day care services to a person or persons other than “insureds” and receives monetary or other compensation for such services, that enterprise is a “business.” Mutual exchange of home day care services, however, is not considered compensation. The rendering of home day care services by an “insured” to a relative of an “insured” is not considered a “business.”

Therefore, with respect to a home day care enterprise which is considered to be a “business,” this policy:

1. Does not provide Section II – Liability Coverages because a “business” of an “insured” is excluded under exclusion 1.b. of Section II – Exclusions[.]

See First Liberty Policy, Endorsement HO 04 96 04 91.

The relevant language of exclusion 1.b. is as follows:

1. Coverage E – Personal Liability and Coverage F – Medical Payments to Others do not apply to “bodily injury” or “property damage”:

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....

b. Arising out of or in connection with a “business” engaged in by an “insured.” This exclusion applies but is not limited to an act or omission, regardless of its nature or circumstance, involving a service or duty rendered, promised, owed, or implied to be provided because of the nature of the “business[.]”

Id., Endorsement HO 00 03 04 91, Section II, 1.b., at 12 of 18.

The trial court has provided a proper analysis regarding the Alkers’

first contention regarding the application of the “profit motive” as a defining

factor for the application of a business exclusion. See Trial Court Opinion,

1/6/2015, at 3-5, 6-8.

Regarding the Alkers’ second issue; although the trial court opinion

does not specifically address the nature of a home day care business, it is

nonetheless clear reading the entire decision that the trial court determined

the child care services Coll provided fit the description. Our review of the

certified record finds no error therein.

Throughout the 1925(a) opinion, the trial court refers to the regularly

provided, paid, services supplied by Coll as babysitting the child. We believe

that this alone fairly encompasses home day care services. However, the

certified record provides a more complete description of those services. The

record demonstrates that Coll cared for the child on a regular basis in her

home. She was paid for the service. See Answers to Interrogatories,

5/28/2013, at 4-7. She admitted she provided paid babysitting services to

both the Alkers and the child of another couple. Id. at 9. She had no

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restrictions on how she cared for the children, including the ability to take

them on daytrips, such as to the park. Id. at 8; N.T., Deposition of Colleen

Coll, 6/21/2013, at 16. She provided food, shelter and attention to the

children. Answers to Interrogatories, 5/28/2013, at 8; N.T. Deposition Coll,

6/21/2013, at 26. She provided medicine, as needed, to the Alkers’ child.

N.T. Deposition Coll, 6/21/2013, at 25. All of these facts support the

determination that Coll provided home day care services to the Alkers.3

Order affirmed. Parties are directed to attach a copy of the trial court

opinion in the event of further proceedings.

Judgment Entered.

Joseph D. Seletyn, Esq. Prothonotary

Date: 8/7/2015

3 Alkers opine, in part, that because the Coll situation does not meet the statutory definition of “Family child day care home,” see 55 Pa.C.S. § 3209.4, Coll did not provide home day care services. This fact only demonstrates Coll did not provide licensed day care services.

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IN THE COURT OF COMMON PLEAS OF PHILADELPHIA COUNTY FIRST JUDICIAL DISTRICT OF PENNSYLVANIA TRIAL DIVISION - CIVJL

THE FIRST LIBERTY JNSURANCE SUPERIOR COURT CORPORATION 1622 EDA 2014

Plaintiff v. SEPTEMBER TERM, 2012 No. 3400 MICHAEL COLL, COLLEEN COLL t

and - r

- J.A., a minor by his parents : and natural guardians, KEVIN ALKER and ., ··-' I ·_, -:~ TARA ALKER in their own right ;, ;

Defendants. r·· : c.

OPINION

III IllIll1209(:>:~40000071 Ill l II lllllllII I II Ill I. PROCEDURAL HISTORY AND FACTS

This appeal arises from a Declaratory Judgment Action that The First Liberty Insurance

Corporation, a homeowner insurance carrier, filed in order to determine whether the insurance

carrier must provide coverage for an incident that occurred in the insured's home while the

insured was providing home daycare services. Since the insurance policy unambiguously

excludes coverage for incidents occurring while the insured is providing home daycare services,

the trial court ordered that the insurance company was not required to provide coverage and

indemnify the insured.

COPIES SENT PURSUANT TO Pa.R.C.P. 236(b) D. SPARACINO' 01/08/2015 Circulated 07/06/2015 11:02 AM

In particular, on October I I. 20 I 0. Colleen. Coll was providing daycare services for J.A.

in her home and Ms. Cotl's dog bit J.A. on the cheek . .I.A. sustained physical and emotional

injuries as a result of the dog bite. At the Lime. Ms. Coll had a homeowners insurance policy

with The First Liberty Insurance Company.

On September 28. 20 I::?. The First Liberty Insurance Company filed a Declaratory

Judgment Action against Michael and Colleen Coll as well as .J.A. and his parents lo determine

whether The First Liberty Insurance Company had to provide insurance coverage for the claim

arising out of the dog bite. "\

The parties stipulated to the above-referenced facts of the case at the bench trial on

March 15, 2014 and the parties agreed to introduce into evidence Plainti rr s Exhibits t through

10. (N.T. 3/14/14 p. 5-6).

On March 31. 2014, the trial court ordered that The First Liberty Insurance Company was

not obligated to defend further and indemnify its insureds'. Michael Coll and Colleen Coll, in the

action that J .A. 's parents tiled against the Col ls. (Order. J/3 I/ 14 ).

On April 9.2014. J.A. a minor by his parents and natural guardians. Kevin Alker and

Tara A Iker r·A/ker Appellants") filed a Motion for Post-Trial Relief requesting that the trial

court reconsider its March 31, 2014 Order. (See Alker Defendants' Motion for Post Trial Relief.

4/9/ l 4). On April I 4. 2014. the trial court denied the A Iker Appel I ants' Motion for Post Trial

relief. (Order. 4/14/14.) On May 9. 2014, the A Iker Appellants filed a Notice of Appeal, (See

Docket). Circulated 07/06/2015 11:02 AM

II. STATEMENT OF FACTS

The undisputed and relevant facts in this case arc as follows.

A. Facts Surrounding the Homeowners' Insurance Policv

The First Liberty Insurance Corporation issued a Liberty Guard Deluxe Homeowners

Insurance Policy ("the policy") to Michael and Colleen Coll with effective dates December 13.

2009 through December 13. 2010. designated as policy number 11]6-288-319145-409 .5.

(Plaintiffs Exhibit I). The policy was valid and in effect at the time of the incident that is the

subject of this Declaratory Judgment Action. Id. ., The policy does not provide coverage for incidents arising from any business in which

the insured engages. The specific language oft he policy provides that the policy does not

provide coverage for bodily injury or property damage ''urisin!! Olll of or in conneclron \\.illi u

'business engaged' in by an 'insured:·· Id. at Section II - Exclusions l(b) (emphasis added).

The policy details this exclusion by providing that the policy does not cover "an act or omission

regardless of its nature or circumstance, involving a service or duty rendered. promised. owed. or

implied to he provided because ot"tht! nature o/'1hc ·business .:" Ld_. (emphasis added).

The policy defines "business" as including a "trade. profession, or occupation." Id. at

Definitions.

The policy also contains an endorsement that addresses "home daycare business" and

precludes coverage for home day care activities that the insured regularly provides for

compensation. In particular, the policy does not provide liability coverage for a home daycare

business in a situation in which an "insured reJ,:ul<1rlv provides home day care services ton

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person or persons other than the insureds and receives moneturv or other compensalillll for such

services." Id. at Endorsement. Section II (emphasis added).

B. Facts Surrounding the Home Davcare Set-vices

At the time of the incident Col ken Coll had been babysi Hing for J. I\. for more than two

years in Ms. Col l's home. (Plaintiffs Exhibit 6 al ~5-7: Plaintiff s Exhibit 8 alp. l J-15). The

mother of .I.A. paid Ms. Coll $25/day to babysit IorJ.A. from 8:00 AM. to 5:00 P.!vf. during the

school year. (Plaintiffs Exhibit 6 at ~5-7: Plaintiffs Fxhibit 8 at p. 13-15: 26).

Before babysitting for J.A. in her home. Ms. Coll babysat for another child five days a

week for one and a half to two years. The parents of that chi Id also paid Ms. Coll $:f~/da).

(Plaintiffs Exhibit 6 at ~9: Plaintiffs Exhibit 8 at p. 10).

On the day of the incident. Ms. Coll was also providing home daycare services for her

nephew and a child of a family friend.' (Plaintiffs Exhibit 6 al i]8).

Ms. Colls friend referred the motherolf.A. to Ms. Corl to babysit forJ.A. (Plaintiffs

Exhibit 9 at p. 8). Consequently. Ms. Coif and the mother of .f.A. only knew each other through

the babysitting arrangement and did not socialize "outside of the babysitting." !_cl. at p. 22.

At the time of the incident. Ms. Coif owned a pit bull/lab mix. who was nine months old

and lived in the house with her. (Plaintiff's Exhibit 8 at p.17. 22). The dog bit .I.A. on his cheek

and .I.A. sustained ongoing physical and psychological injuries as a result of the dog bite.

(Plaintiffs Exhibit 9 al p. 34 ).

I Although Ms. Coll provided home daycare services to her nephew and u lamily friend without churging their or .I .I\. and another child $25 'day 10 provide parents. Hint does not override the fact that Ms. Coll charged the parents home daycare services. --,- ! Circulated 07/06/2015 11:02 AM '

III. STATEMF.NT OF ERRORS COMPLAINF-D OF ON APPEAL

The Appellants raise the following issues on Appeal:

I. .. This Court erred hy denying the Alker Defendants Yzvppellants Motion for

reconsideration:"

2. "This Court erred by rinding as a matter of fact that Ms. Coll provided 'home day care

services· to f J.A. I:"

J. "This Court erred by holding that Ms. Colls activity fell within the business pursuits

exclusion of the appl icablc policy: ..

4. "This Court erred by holding-that the "continuity prong of the business pursuits

exception had been satisfied by Ms. Cell's actions:"

5. "This Court erred by holding that the 'profit motive' prong ofthe business pursuits

exception had been satisfied by Ms. Col l's actions:"

6. "This Cou11 erred by not holding that the business exclusion and home day care exclusion

are against public policy: ..

7. "The Court erred by holding that (.I.A.J's injuries 'arose out of and in connection with

Ms. Cali's daycare business' because {.1.Aj's injuries in fact arose out of and were in

connection to the negligent supervision ofa dog that had nothing to do with the alleged

'home daycare bus i ncss. · ·· Circulated 07/06/2015 11:02 AM

IV. LEGAL DISCUSSION

A. The Trial Court Properly Interpreted the Unambiguous Language of the Horncowncrts Insurance Policy.

The trial court properly entered dee laratory judgment and ordered that The First l.iberty

Insurance Company was not obligated to defend further or indemnify Michael and Colleen Coll

because Ms. Coll was consistently providing home daycare services in her home for

compensation and thus, the Business Pursuit Exclusion from her policy applied.

The Pennsylvania Supreme Court has held that when the language or an insurance contract is clear and unambiguous, the trial court must give effect lo the language:

The principles governing our interpretation of a contract o? insurance are familiar and well settled. The [ask of interpreting a contract is generally performed by a court rather than by a jury. The goal of that task is, of course, to ascertain the intent of the parties as manifested by the language of the written instrument, Where a provision of a policy is ambiguous, the policy provision is to be construed in favor of the insured and against the insurer, the drafter of the agreement. Whc:re. however. the la11guauc of the contract is clear and unambiguous. a court is required to give effoct to that language.

Standard Venetian Blind Co. v. Am. Empire Ins. Co., 503 Pa. 300, 304-05, 469

A .2d 563. 566 ( 1983) (internal citations and quotations omitted: emphasis

added).

The courts. in interpreting insurance policies, have examined "business pursuit

exclusions" and considered I\VO factors when determining whether an insureds activities me a

"business." The courts first consider the con ti nuity of services Iha! the insured has provided and

second, whether the insured provided such services with a profit motive. '111e courts have defined

"profit motive" as a means of I ivcl ihood. a means or earning a living. procuring subsistence or

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profit. commercial transactions or engagements. Sun Alliant'.e Ins. Co. v. Soto. 836 F.2d 834,

836 (3d Cir. 1987).

In the context of providing home daycare services. the courts have held that the "profit

motive" prong is met when an insured is motivated to babysit by a desire for compensation rather

than emotional ties. Travelers lndcm. Co. v. Fantozzi By & Through_ F

85 (E.D. Pa. 1993).

ln this ease. the literal words of the insurance policy address coverage when an insured

provides home daycare services and precludes coverage for home daycare services when the

insured I) regularly provides home day care services to a person or persons other LIFm the

insured: and 2) receives monetary or other compensation tor such services. (Plain ti !rs Exhibit

I ).

The undisputed facts in this case demonstrate that the exclusion for home daycare

services applies. For over two years. Ms. Coll babysat for .I.A. in her home three to lour days a

week during the school year for the entire duy and received compensation. (Plaintiff's Exhibit 6

at f5- 7: Plaintiffs Exhibit 8 at p.13-15. 26). Ms. Coll. prior to providing home day care services

to J.A., provided similar services to another child five days a week for the entire day for one and

a half to two years and was paid for such services. (Plaintiffs Exhibit 6 nt f9: Plaintiffs fxhibi!

8 at p, 10). Therefore, Ms. Coll consistently and regularly provided home daycare services not

only to .I .A. but also to another chi Id.

Additionally. the parents of J.A. and the other child paid Ms, Coll for these home day

care services. specifically at a rate of $25.00 per day. (Plaintiff's l.xhibit 6 at VS- 7. ,;9: Circulated 07/06/2015 11:02 AM

Plaintiff's Exhibit 8 at p. 10. [J.JS. 26). Thus. Ms.Coll received compensation in exchange for

providing home daycare services.

Additionally. when applying these facts to the courts· interpretation ofvbusi ness pursuit"

exclusions in insurance policies. the result is the same. Ms. Coll provided home daycare services

consistently, was paid for those services. and charged only individuals who were not relatives or

close family friends. (Plaintiffs Exhibit 6 at ~5-9) .. Therefore. Ms. Coll was being

compensated for services and engaged in a "business pursuit."

Therefore. the trial court properly entered declaratory judgment in favor of lhe First

I .ibcrty Insurance Company.

B. The Trial Court Properly Found That .J.A.'s Injuries Arose Out of and in Connection With the Home Daycare Business.

The Alker Appellants argue that the business exclusion of the horneowner's policy only

applies lo injuries "arising out ofor in connection with a business." (Plaintiffs Exhibit I at

Section I! - Exclusions 1 (b)). The Alker Appellants conclude that since .I.A.'s injuries arose out

of the neg] igent supervision of a dog and not out of the operation of a home daycare center. the

exclusion docs not apply. (Statement of Errors at il7). This is incorrect.

Pennsylvania courts have determined that the term ..arising out of· is unambiguous and

indicates a "but for" or .. cause and result" relationship between the alleged injuries and the

business activities of the insured. Madison Construction Co. v. Harleysville Mutual lnsurance

Co .. 735 A.2d I 00 (Pa. 1999) (citing McC'nbc v. Old Republic Insurance Co .. 425 Pa. 22 I. :?28

A.2d. 90 I. 903 ( Pa. I 96 7)). --,

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In this case. J.A. 's injuries would not have occurred "bu! for" the fact that Ms. Coll was

providing babysitting services to him. JI\. was in Ms. Coll's home on the day the dog bit him

because Ms. Coll was babysitting for him. Consequently. the dog would not have bitten J.A. "but

for" Ms. Coll's babysitting for .I.A.

lherefore. the trial court properly dcterrni ned that J.A. 's inj uries arose out of and in

connection with Ms. Coll 's daycare business.

C. The Trilli Court's Decision Was Not Against Puhlic Policy

The Pennsylvania Supreme Court is hesitant to permit courts to declare contracts contrary to

public policy:

Public policy is to be ascertained by reference lo the laws and legal precedents and not from general considerations of supposed pub I ic interest. As the term "public policy" is vague, there must be found definite indications in the law or the sovereignty to justify the invalidation of a contract as contrary to that policy .... Only dominant public policy would justify such action. In the absence of a plain indication of that policy through long governmental practice or statutory enactments. or of violations of obvious ethical or moral standards. the Court shou lcl not assume to dee I are contracts ... contrary to public pol icy."

Hall v. Amica Mutual Insurance Co .. 538 Pn. 337, 347-48. 648 A.2d 755, 760

(1994) (quoting Muschanv v. United Slates. 324 U.S. 49. 66-67. 65 S.Ct. 442.

451. 89 I..F.d. 744, 756 ( 1945) (footnotes and citations omitted).

Further. "Ir is only when a given policy is so obviously for or against the public health,

safety, morals or wel fore that there is a virtual unanimity of opinion in regard to it. that a court

may constitute itself the voice of the cornmuni ty in so decluri ng ... Only in the dearest cases,

therefore, may a court make an alleged public policy the basis of'judicial decision." Hall at 347-

348 (quoting Mamlin v. Genoe, 340 Pn. 320, 325. 17 A.2d 407. 409 ( 1941 » () Circulated 07/06/2015 11:02 AM

Here. the A Iker Appellants claim that "this Court erred by not holding that the business

exclusion and home day care exclusion arc against public policy .' (Statement or Errors at ~6).

The Alker Appellants, however, fail to articulate which "public: policy" that the trial court is

allegedly violating by enforcing the terms of the horneowncrs policy. Without a clearer

argument. the trial court cannot evaluate whether the provision violates public policy and the

Alker Appellants have waived this argument.

D. The Trial Court Properly Denied the Motion fur Reconsideration

The Superior Court has made it clear that "'the standard of review of a motion for

reconsideration is limited to whether the trial court manifestly abused its discretion or committed ., an error oflaw," Dahl v. AmcriOucst Mortgage Co .. 2008 PA Super 142. 954 A.2~1 588. 593 (Pu.

Super. Ct. 2008) citing Koresl

Further. an abuse of discretion ··is not merely an error of'judgnient." Drelles v.

Manufacturers Life Ins. Co., 2005 PA Super 249, 881 A.2d 822. 830 ( Pa. Super. Ct. 2005) citing

In re Deed of Trust of Rose I Ii 11 Cemetery Association. 52 7 Pu. 21 I. 116. 590 A.1d I. J ( 1991 ).

Ruther. the standard lor abuse or discretion is. "i l. in reaching a conclusion. the lav .. i~ overridden

or misapplied. or the judgment exercised is manifestly unreasonable or lacking in reason.

discretion must be held to have been abused. Id. at 830-83 I,

For the reasons above. the trial courtdid not abuse its discretion or commit an error or

law. Therefore, the trial court properly denied the Alker Appellants' Motion for

Reconsideration. --~ . .,

V. CONCLUSION

The trial court properly entered Declaratory Judgment and the Superior Court should

uphold its decision.

BY;zcRTflr-- ALICE BECK DUBOW . .JUDGE

Dated: