Raymont, R. v. Nationwide

Opinion

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

RICHARD RAYMONT T/D/B/A RAYMONT : IN THE SUPERIOR COURT OF CONSTRUCTION COMPANY : PENNSYLVANIA :

v. :

:

NATIONWIDE MUTUAL INSURANCE : COMPANY AND WILLIAM WILKINSON :

:

APPEAL OF: NATIONWIDE MUTUAL : INSURANCE COMPANY : No. 725 WDA 2013

Appeal from the Judgment Entered April 5, 2013 In the Court of Common Pleas of Greene County Civil Division at No(s): A.D. 1169-2011

BEFORE: GANTMAN, P.J., FORD ELLIOTT, P.J.E., and OLSON, J. MEMORANDUM BY GANTMAN, P.J.: FILED SEPTEMBER 15, 2014

appeals from the summary judgment entered in the Greene County Court of Common Pleas, in favor of Appellee, Richard Raymont t/d/b/a Raymont Construction Company, in this declaratory judgment action. We reverse and remand for entry of judgment in favor of Nationwide.

The relevant facts and procedural history of this appeal are as follows.

In 2007, Appellee entered into a contract with Southwest Regional Medical

contract ran from December 1, 2007 until March 31, 2008.

On December 7, 2009, William Wilkinson started a civil action against

Appellee by filing a writ of summons. Mr. Wilkinson subsequently filed a

parking lot on Dec attempting to traverse [the parking lot] when he was caused to fall on the surface of the parking lot by an accumulation of snow and/or ice and/or upport of

Summary Judgment Motion, filed 12/14/12, at Exhibit A; R.R. at 6a). Mr.

to clear the ice and snow from the parking lot and failed to warn him about the dangerous conditi contract count, asserting Appellee breached the contract with Hospital, to which Mr. Wilkinson was a third party beneficiary.

insurance provider. Nationwide had issued Appellee a commercial general

purported accident occurred. By letter dated June 16, 2010, Nationwide denied coverage. Regarding the breach of contract claim, Nationwide

policy. (Id. at Exhibit D; R.R. at 61a). Regarding the negligence claim, Nationwide emphasized that the policy contained a designated work

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operations.

On March 9, 2011, Mr. Wilkinson filed an amended complaint. The amended complaint was virtually identical to the original complaint, but Mr.

(Id. at Exhibit E; R.R. at 67a). Appellee sent the amended complaint to Nationwide. By letter dated May 25, 2011, Nationwide continued to deny coverage.

On December 2, 2011, Appellee initiated a declaratory judgment action against Nationwide, maintaining the exclusion was ambiguous:

10. In denying coverage and a defense to [Appellee],

11. The First Amended Complaint filed by William Wilkinson against [Appellee] does not allege a claim against [Appellee] for failing to remove snow. To the contrary, it alleges that [Appellee] was negligent in failing to remove ice.

12. In its disclaimer of coverage letter of May 25, 2011,

insurance policy contains Endorsement C.G. 2134, which excludes from coverage any snow removal procedures.

Snow removal includes the whole process of snow and ice removal or treatment with salt, cinders, anti-skid, ice melt

13. No such definition of snow removal including ice removal is contained anywhere in the policy.

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14. The snow removal exclusion relied upon [by]

Nationwide is ambiguous and this ambiguity is reflected by

ambiguity in its disclaimer of coverage letter by stating that snow removal includes the process of ice removal.

(Declaratory Judgment Complaint, filed 12/2/11, at 2-3; R.R. at 93a-94a). On March 30, 2012, Nationwide filed an answer and new matter. The new matter indemnification. Appellee filed a reply to the new matter on April 26, 2012.

On December 14, 2012, Nationwide filed a summary judgment motion.

In it, Nationwide asked the court to declare that Nationwide had no duty to

his own summary judgment motion on January 17, 2013. On April 5, 2013, the court entered summary judgment in favor of Appellee and against Nationwide. The court concluded as follows:

permits it to decline coverage can be summarized as:

s letter

of May 25, 2011, denying coverage, felt the need to expand on the terse language in the exclusion

of snow and ice removal or treatment with salt, cinders, anti-skid, ice melt, and/or other subs language been included in the endorsement, this litigation might not have occurred.

* * *

We note also that the Amended Complaint indicts [Appellee] for more than failing to keep the lot free from ice. It also charges [Appellee] with failure to warn and to

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these allegations are exclud

plows or shovels. Perhaps the hospital arranged otherwise for ice control, such as by sending out a custodian with a bucket of salt. Ice control might be a separate operation altogether, undertaken by different entities.

(Trial Court Opinion, filed April 5, 2013, at 3-4) (internal citation omitted).

determin

indemnify [Appellee] against liability Id. at 5).

Nationwide timely filed a notice of appeal on April 26, 2013. The court did not order Nationwide to file a concise statement of errors complained of on appeal, pursuant to Pa.R.A.P. 1925(b).

Nationwide raises one issue for our review:

DID THE TRIAL COURT ERR IN FINDING THAT

INJURY LAWSUIT, DESPITE A VALID AND UNAMBIGUOUS

FORTH IN THE COMMERCIAL GENERAL LIABILITY INSURANCE POLICY ISSUED BY NATIONWIDE TO [APPELLEE]?

Initially, we observe:

Our scope of review of an order granting summary judgment is plenary. [W]e apply the same standard as the trial court, reviewing all the evidence of record to

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determine whether there exists a genuine issue of material fact. We view the record in the light most favorable to the non-moving 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 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. All doubts as to the existence of a genuine issue of a material fact must be resolved against the moving party.

Motions for summary judgment necessarily and directly

of action. Summary judgment is proper if, after the completion of discovery relevant to the motion, including the production of expert reports, an adverse party who will bear the burden of proof at trial has failed to produce evidence of facts essential to the cause of action or defense which in a jury trial would require the issues to be submitted to a jury. In other words, whenever there is no genuine issue of any material fact as to a necessary element of the cause of action or defense, which could be established by additional discovery or expert report and the moving party is entitled to judgment as a matter of law, summary judgment is appropriate. Thus, a record that supports summary judgment either (1) shows the material facts are undisputed or (2) contains insufficient evidence of facts to make out a prima facie cause of action or defense.

Upon appellate review, we are not bound by the trial

conclusions. The appellate Court will disturb the trial buse of

discretion.

Judicial discretion requires action in conformity with law on facts and circumstances before the trial court after hearing and consideration. Consequently, the court abuses its discretion if, in resolving the issue for decision, it misapplies the law or exercises its discretion in a manner lacking reason. Similarly, the trial court abuses its discretion if it does not follow legal procedure.

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* * *

Where the discretion exercised by the trial court is challenged on appeal, the party bringing the challenge bears a heavy burden.

[I]t is not sufficient to persuade the appellate court that it might have reached a different conclusion e duty imposed on the court below; it is necessary to go further and show an abuse of the discretionary power. An abuse of discretion is not merely an error of judgment, but if in reaching a conclusion the law is overridden or misapplied, or the judgment exercised is manifestly unreasonable, or the result of partiality, prejudice, bias or ill-will, as shown by the evidence or the record, discretion is abused.

* * *

Glaab v. Honeywell Intern., Inc., 56 A.3d 693, 696-97 (Pa.Super. 2012) (quoting Chenot v. A.P. Green Services, Inc., 895 A.2d 55, 60 62 (Pa.Super. 2006) (internal citations and quotation marks omitted)).

On appeal, Nationwide contends basic contract interpretation principles support its conclusion that the exclusion precluded coverage for any claims

by shovel or plow, and the treatment of ice, whether by salting or

was clear, unambiguous, and susceptible to one reasonable interpretation.

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To support its policy interpretation, Nationwide relies o deposition testimony, where he essentially admitted that the exclusion

business of paving driveways, parking lots, and sidewalks; Appellee expressly stated it did not perform snow plowing. Under these

for claims related to the business activities listed in the application materials Id. at 17).

from the amended complaint amounts to artful pleading designed to avoid

the exclusion. Nationwide concludes the court improperly entered summary

1

We

agree.

resolved via Erie Ins. Exchange v. Claypoole, 673 A.2d 348, 355 (Pa.Super. 1996) (en banc).

than, its duty to indemnify an insured. An insurer is not obligated to defend all claims asserted against its insured;

its duty is determined by the nature of the allegations in the underlying complaint. An insurer must defend its insured if the underlying complaint alleges facts which, if

1 breach of contract claim.

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true, would actually or potentially bring the claims within the policy coverage.

An insurer who refuses to defend its insured from the

remains with the insurer until it is clear the claim has been narrowed to one beyond the terms of the policy. An insurer who disclaims its duty to defend based on a policy exclusion bears the burden of proving the applicability of the exclusion.

Belser v. Rockwood Cas. Ins. Co., 791 A.2d 1216, 1219-20 (Pa.Super. 2002) (internal citations omitted) (emphasis in original). declaratory judgment action concerning insurance coverage is to determine

the court must examine the complaint in the underlying action to ascertain if it tr American States Ins. Co. v. State Auto Ins. Co., 721 A.2d 56, 59 (Pa.Super. 1998) (quoting General Accident Ins. Co. v. Allen, 547 Pa. 693, 706, 692 A.2d 1089, 1095 (1997)).

aw and is

Kropa v. Gateway Ford, 974 A.2d 502, 505 (Pa.Super. 2009), appeal denied, 605 Pa. 701, 990 A.2d 730 (2010).

parties as manifested by the language of the written instrument Madison Const. Co. v. Harleysville Mut. Ins. Co., 557 Pa. 595, 606, 735 A.2d 100,

unambiguous, but to interpret it in favor of the insured, if otherwise. Ambiguity exists if the language at issue could reasonably be construed in

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Lititz Mut. Ins. Co. v. Steely, 567 Pa. 98, 104, 785

instead be considered in reference to a specific set of Id.

Continental Cas. Co. v. Pro Machine, 916 A.2d 1111, 1118 (Pa.Super. 2 the [insurance] contract is clear and unambiguous, a court is required to Mitsock v. Erie Ins. Exchange, 909 A.2d 828, 831 (Pa.Super. 2006) (quoting Madison Const. Co., supra at 606, 735 A.2d at 106). A court must not distort the meaning of the language or resort to a strained contrivance to find an ambiguity. Mitsock, supra.

[T]he proper focus regarding issues of coverage under insurance contracts is the reasonable expectation[s] of the insured. In determining the reasonable expectations of the insured, courts must examine the totality of the insurance transaction involved. However, while reasonable expectations of the insured are focal points in interpreting the contract language of insurance policies, an insured

frustrated by policy limitations, which are clear and unambiguous. Like every other contract, the goal of interpreting an insurance contract is to ascertain the intent of the parties as manifested by the language of the policy.

St. Paul Mercury Ins. Co. v. Corbett, 630 A.2d 28, 30 (Pa.Super. 1993) (en banc) (internal citations omitted).

Instantly, Appellee applied for insurance coverage in 2004. The insurance application submitted to Nationwide indicated Appellee was in the

11

See

of Summary Judgment Motion at Exhibit H; R.R. at 81a). A supplemental cavating areas for

pouring/preparing drains for basement floors, etc. before pouring/pouring Id.; R.R. at 85a). Appellee

Id.; R.R. at 88a). Nationwide subsequently provided Appellee with insurance coverage.2

accident, included the following exclusion:

THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.

EXCLUSION DESIGNATED WORK

This endorsement modifies insurance provided under the following:

COMMERCIAL GENERAL LIABILITY COVERAGE PART PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE PART

SCHEDULE

Description of your work:

SNOW REMOVAL OPERATIONS

* * *

2 In its brief, Nationwide asserts the policy renewed annually based on the 2004 application. In support of this assertion, Nationwide relies on a portion

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completed

the Schedule.

(Id. at Exhibit C; R.R. at 34a) (emphasis in original). In response to

liability protection for snow and ice removal services. (Id. at Exhibit I; R.R. at 169a).

In October 2007, Appellee entered into the snow removal contract with

specific terms demonstrating Appellee was responsible for treating the parking lots for ice. plowed for $100.00 per plow per hour. Parking lots will be salted or cindered for Id. at Exhibit B; R.R. at 14a). The contract also stated,

cost will be a Id.) At his deposition, Mr. Raymont elaborated on the obligations under the contract:

In regards to snow removal, does that also include removal of ice?

[MR. RAYMONT]: Salt. I spread salt.

[NATIONW So what about cinders, is that also used to treat ice?

[MR. RAYMONT]:

-skid. It does not remove the ice, it just puts a non-skid finish on the ice.

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Nevertheless, salt and cinders are used for snow and ice, are they not?

[MR. RAYMONT]: Correct.

And a plow obviously, is

used if you have a large accumulation of snow?

[MR. RAYMONT]: Correct.

Would you agree both

e that. Would [you] agree that snow and ice removal kind of go hand-in-hand?

[MR. RAYMONT]: I guess, yes.

(Id. at Exhibit J; R.R. at 152a-153a.) Mr. Raymont also testified that he would treat the parking lots in wintery conditions other than snow, including Id.; R.R. at 155a). Moreover, Mr. Raymont conceded he was unaware that the policy contained the exclusion, and he did not inform his insurance agents about the snow and ice removal business. (Id.; R.R. at 157a-158a).

Here, the exclusion unambiguously rendered the policy inapplicable to

the whole process of snow removal and ice treatment. See Continental Cas. Co, supra; St. Paul Mercury, Ins. Co., supra. To the extent the court found otherwise, it erred by distorting the meaning of the words in the exclusion. See Mitsock, supra

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veiled attempt to avoid the exclusion. See Erie Ins. Exchange v. Fidler,

manner in which the complainant frames the request for damages to control the coverage question, we would permit insureds to circumvent exclusions

Based upon the foregoing, the court should have determined that the exclusion was a valid policy provision precluding coverage for all activities

did not trigger a duty on the part of Nationwide to defend or indemnify. Accordingly, we reverse and remand for entry of judgment in favor of Nationwide.

Judgment reversed; case remanded. Jurisdiction is relinquished.

Judgment Entered.

Joseph D. Seletyn, Esq. Prothonotary

Date: 9/15/2014