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Home My WebLink About04-0905RITE AID CORPORATION IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PA Plaintiff V. : No.: 014 - 406 CIu'L`,VX CIVIL ACTION - LAW ERIE INSURANCE EXCHANGE 2200 W. Broad Street Bethlehem, PA 18018-0286 Defendant JURY TRIAL DEMANDED NOTICE TO DEFEND YOU HAVE BEEN SUED IN COURT. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this complaint and Notice are served, by entering a written appearance personally or by an attorney, and filing in writing with this Court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so, the case may proceed without you and a judgment may be entered against you by the Court without further notice for any money claimed in the Complaint or for any other claim or relief requested by the Plaintiff. You may lose money or property or other rights important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP. Cumberland County Bar Association 32 S. Bedford Street Carlisle, PA 17013 800-990-9108 THC AS, THOMAS & HAFER, LLP by. P?41 . Walker, Esquire I.D. No. 88714 305 North Front Street, 6m Floor POB 999 Harrisburg, PA 17108-0999 (717) 237-7100 Date: March 2, 2004 NOTICIA Le han demando a usted en la corte. Si usted quiere defendrse de estas demandas expuestas en las paginas siguientes, usted tiene viente (20) dias de plaza al partir de la fecha de la demanda y la notificacion. Usted debe presentar una apariencia escrito a en persona o por obogado y archivar en la corte en forma escrita sus defensas o sus objectiones a las demandas en contra de su persona. Sea avisado que si usted no se defiende, la corte tomara medidas y puede entrar una orden contra usted sin previo aviso o notificacion y por cualquier queja o alivio que es pedido en la peticion de demanda. USTED PUEDE PERDER DINERO O SUS PROPIEDADES O OSTROS DERECHOS IMPORTANTES PARA USTED. LLEVE ESTA DEMANDA A UN ABOGADO IMMEDIATEMENTE. SI NO TIENE ABOGADO O SI NO TIENE EL DINERO SUFICIENTE DE PAGAR TAL SERVICIO, VAYA EN PERSONA OR LLAME POR TELEFONO A LA OFICINA CUYA DIRECCION SE ENCUENTRA ESCRITA ABAJO PARA AVERIGUAR DONDE SE PUEDE CONSEGUIR ASISTENCIA LEGAL. Cumberland County Bar Association 32 S. Bedford Street Carlisle, PA 17013 800-990-9108 RITE AID CORPORATION IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, PA Plaintiff V. : No.: 04 - 90S L rvLrce CIVIL ACTION - LAW l ERIE INSURANCE EXCHANGE, 2200 W. Broad Street Bethlehem, PA 18018-0286 Defendant JURY TRIAL DEMANDED COMPLAINT Plaintiff, Rite Aid Corporation ("Rite Aid"), through its undersigned attorneys, avers the following as its Complaint. 1. This action arises out of Defendant Erie Insurance Exchange ("Erie")'s wrongful violation of its duty to defend and/or indemnify Rite Aid against certain claims brought against Rite Aid brought by Mark Heiser and Donna Heiser (the "Heisers"). 2. Rite Aid has its headquarters and principal place of business at 30 Hunter Lane, Camp Hill, Pennsylvania 17011. 3. Defendant Erie Insurance Exchange ("Erie") is a reciprocal or inter- insurance exchange domiciled in Pennsylvania, with its principal place of business at 100 Erie Insurance Place, Erie, Pennsylvania 16530. 4. The Heisers have filed a civil action against Rite Aid of Pennsylvania, Inc. in the Court of Common Pleas for Lehigh County, 2002, C 1494, seeking personal injuries arising out of an alleged slip and fall on or about April 27, 2001, by Mark Heiser related to a landscape tie located at a Rite Aid store located at 701 Hanover Avenue, Allentown, Pennsylvania ("Heiser Lawsuit"). A copy of the Complaint filed in the Heiser Lawsuit is attached as Exhibit "A", and is incorporated solely for reference only, and without admission of any allegations contained in such Complaint. 5. The Complaint in the Heiser Lawsuit, in part, alleges that on April 27, 2001, Mark Heiser was walking across the parking lot of Rite Aid's store location at 701 Hanover Avenue, Allentown ("Rite Aid Store"), coming from the pharmacy. He alleges that he tripped on a portion of steel rebar extending from a wood section resembling a railroad tie which was lying flat and formed a border between the paved parking lot and a landscaped, unpaved portion of the premises, causing him to fall. 6. The Complaint in the Heiser Lawsuit alleges, in part, negligence as follows: 16. The carelessness and negligence of the Defendant, as aforesaid, consisted of the following: (a) Failing to maintain its premises in a safe condition; (b) Failing to inspect its premises in a prompt and thorough manner; (c) Causing or permitting a hazardous condition in the form of the wooden section containing exposed rebar to exist or remain upon its real property in an area where business invitees and other persons lawfully upon their premises would be exposed to the said hazard; (d) Failing to remove the above-described hazardous condition from its premises in a timely manner; (e) Failing to warn persons lawfully traversing its premises of the hazardous artificial condition which then and there existed; (f) Violating the Codified Ordinances of the City of Allentown relative to the maintenance of real property. 2 7. At the time of the accident alleged in the Heiser Lawsuit, Joseph W. Burbella dba Bell Landscaping & Construction ("Bell") and Rite Aid had a contract, dated November 10, 2000, entitled "Landscape/Lawncare/Parking Lot Agreement", which required Bell to maintain the parking lot and landscaping, including the railroad tie referred to in the Heiser Lawsuit, at the Rite Aid Store. A copy of such contract is attached as Exhibit "B" and incorporated here. 8. Bell and its representatives visited the Rite Aid Store approximately 4 to 5 times per month to perform maintenance, including the day before the alleged accident in the Heiser Lawsuit. 9. Erie issued an insurance policy to Bell, its named insured, effective June 22, 2000 to June 22, 2001, policy number Q30 2200488 A (the "Erie Policy"). A copy of the Erie Policy is attached as Exhibit "C" and incorporated here by reference. 10. The damages sought in the Heiser Lawsuit fall within the Erie Policy's insuring agreement, which provides that "We will pay for damages because of bodily injury or property damage for which the law holds anyone we protect responsible and which are covered by your policy." 11. Rite Aid is insured by the Erie Policy. In part, the applicable additional insured endorsement, CG 20 10 (Ed. 4/98), provides: The definition of anyone we protect and Insured is amended to include as an Insured the person or organization shown in the Schedule on the Declarations, but only with respect to liability arising out of your ongoing operations performed by you or your employees for that person or organization. Rite Aid is specifically identified in the declarations of the Erie Policy and qualifies as anyone we protect and an Insured with respect to the Heiser Lawsuit. 3 12. On or about September 16, 2003, Rite Aid tendered the defense and indemnity of the Heiser Lawsuit to Erie. A copy of such tender is attached as Exhibit T". Erie denied such tender on September 29, 2003. A copy of such denial is attached as Exhibit "E". 13. Rite Aid followed such tender with additional correspondence dated September 29, 2003, a copy of which is attached as Exhibit T" 14. Rite Aid requested reconsideration of Erie's denial by letter dated October 3, 2003, a copy of which is attached as Exhibit "G". 15. Erie again denied the tender on October 27, 2003, a copy of which denial is attached as Exhibit "H". 16. On December 10, 2003, and January 5, 2004, Rite Aid (through undersigned counsel) requested reconsideration by Erie of its denial. Copies of these requests are attached as Exhibits "I" and "J". Erie has refused to respond to these requests by its insured, Rite Aid. 17. Rite Aid has been required to hire counsel to represent its interests in the Heiser Lawsuit, and has incurred attorneys fees, costs, and other expenses in the defense of the Heiser Lawsuit which should be borne by Erie under the Ede Policy. 18. Rite Aid denies any and all liability in the Heiser Lawsuit, and the factual allegations in this Complaint with respect to the Heiser Lawsuit are set forth only to reference the allegations contained in the Heiser Lawsuit, and without admission of the same by Rite Aid. 19. Rite Aid anticipates that trial will be scheduled on or after March 2004 in the Heiser Lawsuit. Due to Erie's continuing refusal to defend or indemnify Rite Aid, 4 Rite Aid reserves the right to amend this Complaint to allege any indemnity expense, if any, which may be incurred by Rite Aid in the Heiser Lawsuit. COUNTI Breach of Contract 20. Rite Aid incorporates by reference its allegations contained in paragraphs 1 through 19 above as though fully set forth here. 21. The allegations show that there is a potential for coverage under the Erie Policy for the Heiser Lawsuit, so as to require Erie to defend Rite Aid in the Heiser Lawsuit. 22. The allegations of the Heiser Lawsuit also require Erie to indemnify Rite Aid with respect to the Heiser Lawsuit. 23. Erie has retained defense counsel to defend Bell in the Heiser Lawsuit, and through such counsel and by the correspondence received from Rite Aid, is fully aware of the nature of the allegations, and subsequent discovery and depositions which confirm that Erie has an obligation to defend and indemnity Rite Aid with respect to the Heiser Lawsuit. 24. Erie's failure to defend and indemnify Rite Aid is a breach of its insurance contract and an abandonment of its insured, Rite Aid. 25. As a result of the aforesaid, Erie breached its contract, the Erie Policy, which has resulted in monetary loss to Rite Aid. WHEREFORE, its is prayed that judgment be entered in favor of Rite Aid and against Erie in an amount in excess of that requiring compulsory referral to arbitration. A jury trial is hereby demanded. 5 COUNT II Bad Faith Pursuant to 42 Pa.C.S.A. § 8371 26. Plaintiff incorporates by reference its allegations in paragraphs 1 through 25 above as though fully set forth here. 27. Rite Aid's damage and loss is directly and proximately caused by the reckless, wanton and/or willful misconduct of Erie, which has acted without regard to the rights of its insured, Rite Aid. 28. The actions of Erie were recklessly, wantonly and willfully done for the purpose of causing harm to its insured, Rite Aid. 29. Having full knowledge of the nature of the claims made against its insured, Rite Aid, Erie did recklessly, wantonly and willfully fail to take any steps, let alone reasonable and necessary steps, to defend Rite Aid in the Heiser Lawsuit or settle the underlying action. Erie's conduct, and acts and omissions, in this regard are continuing in nature. 30. Erie's failure to respond to requests for reconsideration by Rite Aid by itself amounts to bad faith and a breach of its fiduciary duty owed to its insured, Rite Aid. 31. Erie did not commence a declaratory judgment action to determine what, if any obligations, it had to Rite Aid under the Erie Policy. 32. The conduct of Erie is outrageous, oppressive and recklessly indifferent to the rights of its insured, Rite Aid. 33. As a direct and proximate result of Erie's reckless, wanton and willful disregard for the rights of its insured, the aforesaid loss did occur and Rite Aid was 6 required to defend the Heiser Lawsuit, and is faced with allegations that the Heisers are entitled to a judgment in the Heiser Lawsuit. 34. Rite Aid requests all remedial relief as provided in 42 Pa.C.S.A. § 8371 for bad faith and an award of compensatory and punitive damages including but not limited to: 1. an award of interest on the amount of the claim from the date the claim was made by the insured in an amount equal to the prime rate of interest plus three percent; 2. an award of punitive damages against the insurer; and 3. an assessment of court costs and attorney's fees against the insured. WHEREFORE, its is prayed that judgment be entered in favor of Rite Aid and against Erie in an amount in excess of that requiring compulsory referral to arbitration. A jury trial is hereby demanded. Respectfully submitted, & HAFER, LLP by: Js nibs K. Tho s, Esquire Paul R. Walker, Esquire I.D. Nos. 15613/88714 305 North Front Street, 6'" Floor POB 999 Harrisburg, PA 17108-0999 (717) 237-7100 Attorneys for Plaintiff Date: March 2, 2004 274392.1 7 VERIFICATION I, Mark E. Hennessy, on behalf of Rite Aid Corporation, verify that the foregoing Complaint and the attached documents are based upon the information which has been gathered by me, my counsel and/or others on my behalf in preparation of this lawsuit. The language of the Complaint is that of counsel and is not mine. I have read the Complaint, and to the extent that it is based upon information which i have given to my counsel, it is true and correct to the best of my knowledge, information, and belief, To r. the extent that the contents of the Complaint are that of counsel, I have relied upon 7 counsel in making this Verification. I understand that intentional false statements herein are made subject to the u penalties of 18 Pa. G.S. §4904 relating to unworn falsifications made to authorities. Y.?F Y ?3 pp8 Cl r f C-J ` ?,/ IN THE COURT OF COMMON PLEAS OF LEHIGH COUNTY PENNSYLVANIA CIVIL DIVISION-LAW 4AW OFFICES SCHERLINE & ASSOC. c / vsy JURY OF ' EL RITE AID CORPORATION, t/d/b/a RITE AID PHARMACY, Defendant. P Q NOTICE TO DEFEND YOU HAVE BEEN SUED IN COURT. IF YOU WISH TO DEFEND AGAINST THE CLAIMS SET FORTH IN THE FOLLOWING PAGES, YOU MUST TAKE ACTION ;WITHIN TWENTY (20) DAYS AFTER THIS COMPLAINT AND NOTICE ARE SERVED, BY ENTERING A WRITTEN APPEARANCE PERSONALLY OR BY ATTORNEY AND FILING IN WRITING WITH THE COURT YOUR DEFENSES OR OBJECTIONS TO THE CLAIMS SET FORTH AGAINST YOU. YOU ARE WARNED THAT IFYOU FAIL TO DO SO THE CASE MAY PROCEED WITHOUT YOU AND A JUDGMENT MAY BE ENTERED AGAINST YOU BY THE COURT WITHOUT FURTHER NOTICE gFOR ANY MONEY CLAIMED IN THE COMPLAINT OR FOR ANY OTHER CLAIM O RELIEF REQUESTED BY THE PLAINTIFF. YOU MAY LOSE MONEY OR PROPERTY OR OTHER RIGHTS IMPORTANT TO YOU. MARK W. HEISER and NO. DONNA M. HEISER, h/w, o` Plaintiffs, JURY TRIAL BY VS. 12 DEMANDED YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHOkE THE OFFICE SET FORTH BELOW TO FIND OUT GET LEGAL HELP. i i d ONCE. IF YOU WHERE YOU CAN LAWYER REFERRAL SERVICE LEHIGH COUNTY BAR ASSOCIATION 1114 WALNUT STREET ALLENTOWN, PA 18102 (610) 433-7094 JOIN W. HOLLAWELL, ES UIRE I.D. No.: 51961 ATTORNEY FOR PLAINTIFF SCHERLINE & ASSOCIATES 512 WALNUT STREET ALLENTOWN, PA 18101 (610) 437-1100 LAW omcC SCHERLINE 6 A 50C. IN THE COURT OF COMMON PLEAS OF LEHIGH COUNTY PENNSYLVANIA CIVIL DIVISION-LAW MARK W., HEISER and NO. DONNA M. HEISER, h/w, Plaintiffs, JURY TRIAL BY JURY OF VS. 12 DEMANDED RITE AID CORPORATION, t/d/b/aRITE AID PHARMACY, Defendant. COMPLAINT AND NOW, come the Plaintiffs, Mark W. Heiser and Donna M. Heiser, by and through their counsel, Scherline & Associates, upon a cause of action whereof the following is a statement. 1.? i Plaintiff Mark W. Heiser is an adult individual residing at 2123 West Broad Street, Bethlehem, Lehigh County, Pennsylvania. 2.i Plaintiff Donna M. Heiser is an adult individual residing at 2123 West Broad Street, Bethlehem, Lehigh County, Pennsylvania. 3. At all times material hereto, Plaintiffs were, and are, husband and wife. 4. Defendant, Rite Aid Corporation, is a corporation LAW OFFICES organized and existing under the laws of the SCHERLINE 6 ASSOC. Commonwealth of Pennsylvania, and at all times material hereto, was trading and doing business as Rite Aid Pharmacy, with a business address situated at 701 Hanover Avenue, in the City of Allentown, Lehigh County, Pennsylvania. 5. At all times material hereto, the Defendant owned and maintained the premises situate at 701 Hanover Avenue, Allentown, Lehigh County, Pennsylvania. 6.,," Or about April 27, 2001, a approximately 5:00 p.m., Plaintiff Mark W. Heiser was walking across the parking lot of Defendant's premises situate at 701 Hanover Avenue, in the City of Allentown, Lehigh County, Pennsylvania, having previously entered the Rite Aid Pharmacy at that address for the purpose of transacting business therein. 7. As Plaintiff Mark W. Heiser was traversing the parking lot at 701 Hanover Avenue, as aforesaid, he tripped upon a portion of steel rebar extending from a wooden section resembling a railroad tie which was lying flat and forming a border between the parking lot paved and LAW QWICE SCHEM-INE 6 ASSOC. an unpaved portion of Defendant's premises, and fell with great force to the ground. 8. As a direct and proximate result of his tripping and falling, as aforesaid, Plaintiff Mark W. Heiser sustained serious injuries which include, but are not limited to, the following: (a) Torn medial meniscus of the left knee, requiring surgical correction; (b) Class II strain and sprain of the left ankle; and (c) Trauma to his nerves and nervous system, all or some of which may be of permanent nature. 9. As a direct and proximate result of the injuries which he sustained in the aforesaid trip and fall, Plaintiff Mark W. Heiser has incurred medical and surgical bills and expenses for the treatment of his injuries, and he may continue to incur medical and surgical bills and expenses for the treatment of his injuries for an indefinite period, all to his great detriment and loss. 10. As a direct and proximate result of the injuries which LAW OFFICES he sustained in the aforesaid trip and fall, Plaintiff SCHERLINE 6 ASSOC. Mark W. Heiser has been unable to perform his usual and daily occupations and duties, and he may continue to be unable to perform his usual and daily occupations and duties for an indefinite period, all to his great detriment and loss. 11. As a further direct and proximate result of the injuries which he sustained in the aforesaid trip and fall, Plaintiff Mark W. Heiser has suffered, and may continue to suffer, a severe loss of earnings and/or impairment of his earning capacity and power, all to his great detriment and loss. 12. As a further direct and proximate result of the injuries which he sustained in the aforesaid trip and r fall, Plaintiff Mark W. Heiser has suffered great bodily pain, mental anguish and disfigurement, and has suffered the loss of life's pleasures and enjoyment, and he may continue so to suffer for an indefinite period, all to his great detriment and loss. 13. Plaintiff's within claim for damages exceeds the jurisdictional amount requiring arbitration by local LAW OWIC6 SCHERUNE & ASSOC. rule and pursuant to Rule 1021 of the Pennsylvania Rules of Civil Procedure. COUNT I MARK W. HEISER v. RITE AID CORPORATION, t/d/b/a RITE AID PHARMACY 14. Plaintiff incorporates by reference the contents of paragraphs 1 through 13 hereof as though the same were fully set forth at length. 15. Plaintiff's trip and fall and resulting injuries, as aforesaid, were the direct and proximate result of the carelessness and negligence of the Defendant. 16. The carelessness and negligence of the Defendant, as aforesaid, consisted of the following: (a) Failing to maintain its premises in a safe condition; (b) Failing to inspect its premises in a prompt and thorough manner; (c) Causing or permitting a hazardous condition in the form of the wooden section containing exposed rebar to exist or remain upon its real property LAW OFFICES SCHERLINE E ASSOC. ln' an area where business invitees and other persons lawfully upon their premises would be exposed to the said hazard; (d) Failing to remove the above-described hazardous condition from its premises in a timely manner; (e) Failing to warn persons lawfully traversing its premises of the hazardous artificial condition which then and there existed; and (f) Violating the Codified Ordinances of the City of Allentown relative to the maintenance of real property. WHEREFORE, Plaintiff, Mark W. Heiser, demands judgment against the Defendant, Rite Aid Corporation, t/d/b/a Rite Aid Pharmacy, in an amount in excess of $50,000.00, plus interest and the costs of suit. LAW OFFICES SCHERLINE 6 ASSOC. COUNT II LAW OMCES ?CHERUNE & ASSOC. DONNA M. HEISER v. RITE AID CORPORATION, t/d/b/a RITE AID PHARMACY 17. Plaintiff incorporates by reference the contents of paragraphs 1 through 16 hereof as though the same were fully set forth at length. i 18. As a direct and proximate result of the carelessness and negligence of the Defendant, as aforesaid, Plaintiff Donna M. Heiser has been deprived of the society, comfort, companionship and servicesI of Plaintiff Mark W. Heiser, all to her great detriment and loss. WHEREFORE, Plaintiff, Donna M. Heiser, demands judgment in her favor and against the Defendant, Rite Aid Coporation, t/d/b/a Rite Aid Pharmacy, in an amount in excess of $50,000.00, plus interest and the costs of suit. Rejspectful ys?ubmittred, By Jot W. HOLLAWELL, ESQUIRE SC ERLINE & ASSOCIATES Attorney for Plaintiff 512 Walnut Street Allentown, PA 18101 I.D. #: 51961 (610)437-1100 VERIFICATION We verify that the statements made in this pleading are true and correct. We understand that false statements herein are made subject to the penalties of 18 Pa.C.S. 4904, relating to unsworn falsification to authorities. Dated: MARK W. H ISER DONNA M. HEAER LAW QFFICE =HER INE B A 50C. FEB c£ ' o 1 1°16 04 FP r LANDSCAPE/LAWN( THIS )GP,2ZME_NT made this betwee}' BELL LANDSCAPING STROUIISBURG, FA and Rite collectively referred to :ARE/PARKING LOT AGREEMENT 10th day o£ NOV21VLSER, 2 o o 0 by and & CONSTRUCTION, R.R. 1 BOX 1473, , Aid Corporation hereinafter as "Rite Aid"). In con ideration of the mutual promises and agreements made herei- and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto, intending to be legally bound, do hereby agree as follows: 11 The term of this Agreement shall commence upon the date hereof and shall be for a period of three (3) years, with an option, at Rite Aid's discretion, to extend it an additional two (2) years. A. Not withstanding the foregoing, Rite Aid may cancel and terminate this Agreement upon thirty (30) days prior written notice. 3. Not withstanding the foregoing, BELL LANDSCAPING & CONSTRUCTION may discontinue service hereunder and cancel and terminate this Agreement, upon thirty (30) days prior written notice. 2. BELL LANDSCAPING & CONSTRUCTION agrees to render the facility services described in SCHEDULE A, based upon the land proposal(s) for such retail Rite Aid stores as may be designated in writing by Rite Aid following the execution of this Agreement. Rite Aid may close stores or relocate stores and, in such event, such stores shall be deleted from the stores serviced under this Agreement unless otherwise specifically designated in writing by Rite Aid. 11 3,< Rite Aid shall, during the course of this ag eement, agree to permit access to the work area and provide reasonable cooperation for the performance of the activities described in this Agreement. +v•e.4 z`St y5 - TO TO ?i5?;:_a515°1 P. 0,4 y: 4Z. The parties additionally agree: A. The term of this Agreement shall commence upon the date hereof and shall be for a period of three (3) years and will renew automatically during the initial term unless terminated by either party upon written notification 30 days prior to any renewal date. Rite Aid at its discretion may extend the Agreement an additional two years. 5. On each service visit to a Rite Aid store, BELL LANDSCAPING & CONSTRUCTION shall comply with the following procedures: A. Check in with the manager/assistant manager present. B. Complete all services as outlined in this Agreement. C. Have the manager sign the service ticket, together with a complete Rite Aid Form #221 to be attached to the service ticket, as a pre-requisite for payment. 6. All invoices shall be submitted to the Rite Aid Store Planning office, Attn: Retail Facilities, P.O. Box 1169 Camp Hill, PA 17001-1169. 7. BELL LANDSCAPING & CONSTRUCTION To the fullest extent permitted by law, the contractor shall indemnify and hold harmless Rite Aid and its agents and employees from and against all claims, damages, losses and/or in part by any negligent act or omission of the contractor, any sub-contractor, anyone directly or indirectly employed by any of them or anyone for whose acts any of them may be liable, regardless of whether or not it is caused in part by a party indemnified hereunder. Such obligation of indemnity which would otherwise exist as to any party or person described in this paragraph. In any and all claims against Rite Aid or any of their agents or employees by any employee of the Contractor, any sub- contractor, anyone directly or indirectly =E& Eb 15 37F9695 TO 91`u52aE1581 P.05 employed by any of them or anyone whose acts any of them may be liable, the indemnification's obligation under this paragraph shall not be limited in any way by any limitation on the amount or type of damages, compensation or benefits payable by or for the Contractor or any sub-contractor under workers or workmen's compensation acts, disability benefit acts or other employee benefit acts. A. BELL LANDSCAPING & CONSTRUCTION further agrees to procure and maintain, at its cost and expense, Comprehensive Public Liability insurance, in amounts reasonably acceptable to Rite Aid, but with limits of liability of not less than $1,000,000 bodily injury per occurrence, and appropriate property damage per occurrence with an insurance company reasonably satisfactory to Rite Aid. Said policy of insurance shall name Rite Aid as an additional insured and shall provide that it may not be canceled unless thirty (30) days prior written notice has been given to Rite Aid. Such policy or duly executed certificate of insurance shall be delivered tc Rite Aid within fifteen (15) days from the date of the Agreement and renewals thereof shall be delivered at least thirty (30) days prior to the expiration of the policy term. B_ BELL LANDSCAPING & CONSTRUCTION further agrees to procure and maintain all insurance required by law for claims under workers' or workmen's compensation, disability benefit and other similar employee benefit act. Certificates evidencing such insurance shall be delivered to Rite Aid within fifteen (15) days from the date of this Agreement and renewals thereof shall be delivered at least thirty (30) days prior to the expiration of the policy term. 8. Neither this Agreement nor the duties and obligations of BELL LANDSCAPING & CONSTRUCTION thereunder may be assigned by BELL LANDSCAPING & CONSTRUCTION without the prior written consent of Rite Aid. ^17c7"c'--qF Ti: 91'072461'El P.06 L 9. T_hIs Agreement constitutes the entire agreement between the parties and maj, riot be modified or amended except in writing executed by both parties. 10. This Agreement shall be construed according to the, Laws of, and by the Courts of, The Commonwealth of Pennsylvania. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. WITNESS: BELL LANDSCAPING & CONSTRUCTION EY: RITE AID CORPORATION BY: AS/ agreement rtD ¢50 UJ 1h=L= -R rir. 7?`,0-_GF L O 9150324615191 P.0^ r Schedule A 10-Nov-00 BELL LANDSCAPING & CONSTRUCTION Store # address 01742 701 HANOVERAVENUr- ALLENTOWN PA 181032006 P-LOTS106/1st VISIT;S58/2nd VISIT;LANDSC.4PE/LAVIgNCARE S394.29,'NIONi TH 'A ERIE INSURANCE EXCHANGE Erie Indemnity Company, Attorney-in-Fact Members Erie Insurance Group Home Office • 100 Erie Insurance Place Erie, Pennsylvania 16530 • (814) 870-2000 • Toll Free 1-800-458-0811 ERIE October 14, 2003 Y Re: ERIE Clainr #010180613896 ERIE Policy #Q30-2200488 ERIE Insured. Bell Landscaping & Construction, Joseph W. Burbella d/b/a Date of Loss: 0412712001 I am Lucia M. Knouse, Property & Casualty Records Coordinator for the Erie hisurance Group. I hereby certify that on April 27, 2001 the enclosed Declarations, policy forms and endorsements were in effect under ERIE Policy Number Q30-2200488. These are true and exact copies of the documents issued to Bell Landscaping and Construction, Joseph W. Burbella d/b/a. Sincerely, i is M. Knouse P & C Records Coordinator Litigation/Claims Examination Dept. (814) 870-4638 /Inilc Enclosures: 1. Amended Declarations (effective 04/24/01) 2. Commercial General Liability Policy, CGL (6/97) 3. UP9468 (8/99), CG3002 (7/97), GU15 (12/85), GU18 (1/96), GU32 (3/95), GLAC (4/99), GU56 (5/96), GU75 (10/98), GU84 (4/00), CG50 (7/97), CG2010 (4/98), CG2011 (1/96), CG2026 (1/87), CG2616 (1/94) Sworn to and subscribed before me this Wk day of Q0 ftw , 2003. NOTARIALSEAL y t Y' , INOMAS KR,ELNotary Pt6k C:My of Erie, Erie County My Commission Expires March 2A, 2007 Not Public Thr, ERIE Is Above P-II In ?ER?rI?E, Since 132b DECLARATIONS GLGRP ERIE INSURANCE EXCHAN 9 ERIE GENERAL LIABILITY POLI INSURANCE GROUP AMENDED DECLARATIONS * * EFFECTIVE 04/24/01 100 Elie ins. Pi. ATTACH THIS TO YOUR POLICY. Eric. PA 16530 - EPJF-m REASON FOR AMENDMENT - ADDED ADDITIONAL INSURED ' .s-, w 9. .+ 9r v c ,.,-x?1 i •.. ; ""Za"t' v i' + v ?} ti .. 35 f .d+q€.ACiEN7.._,sc?3€F.,,,ITENI?dfPOL•d('iY?PERIOD? ? OLIGY NUMBER ':.t AA8480 JAMES & RAE INS., INC. 06/22/00 TO 06/22/01 Q30 2200486 A BELL LANDSCAPING & CONST JOSEPH W BURBELLA D/B/A RD 1 BOX 1473 STROUDSBURG PA 18360-9641 PULIUX YBRIUD BEUINS AND ENDS AT 12.U1 A.M. STANDARD 'EIMS AT ThE STNi'Zo ADDRESS OF THE NAMED INSURED. ------------------------------------------------------------------------------ TYPE OF POLICY - OCCURRENCE BUSINESS TYPE - INDIVIDUAL COUNTY - MONROE THE ERIE'S LIMIT OF PROTECTION FOR EACH COVERAGE IS STATED BELOW. THIS IS SUBJECT TO ALL APPLICABLE TERMS OF THE POLICY AND ATTACHED FORMS. ------------------------------------------------------------------------------. COVERAGES ------------------------------------------------------------------------------ A. BODILY INJURY LIABILITY D. ADVERTISING INJURY LIABILITY B. PROPERTY DAMAGE LIABILITY E. MEDICAL PAYMENTS C. PERSONAL INJURY LIABILITY COMBINED SINGLE LIMITS ------------------------------------------- -------- ------ PREMISES/OPERATIONS $ 392. PRODUCTS/COMPLETED OPERATIONS $ 324. COVERAGES A,B,C,D,E $1,000,000 EACH OCCURRENCE $1,000,000 EACH AGGREGATE COVERAGE E $ 5,000 EACH PERSON ------------------------------------------------------------------ OPTIONAL COVERAGES - ADDITIONAL INSUREDS $ 100. TOTAL DEPOSIT PREMIUM - - - - - $ 816. NO DIFFERENCE IN PREMIUM DUE TO THE CHANGE - - - - - $ 0. APPLICABLE FORMS - SEE SCHEDULE OF FORMS ***ADDED ADD'L INS FOR NEPA MGMT ASSOC SEE REVERSE SIDE BMZ 05/10/0 030923 08 BELL LANDSCAPING 042974B134 --------------------- -- -------------- SCHEDULE OF IN ----- SURED ------------------- 'S OPERATIONS ----------------- PREMISES/OPERATIONS AND PRODUCTS/COMP LETED OPERATIONS HAZARDS ARE INCLUDED OR EXCLUDED AS INDICATED ------------------------ BELO ----- W. --------- ---------- --------- ------------- LOCATION * -------- INSURED OPERATIONS * * 1. SAME AND VARIOUS * 097047A - LANDSCAPE GARDENING * INCLUDING PRODUCTS AND/OR * COMPLETED OPERATIONS * * 091342A - CARPENTRY * * 091581A - CONTRACTORS-SUBCONTRACTED * WORK - IN CONNECTION * WITH CONS TRUCTION, * RECONSTRU CTION, ERECTION * OR REPAIR - NOT BUILDINGS * INCLUDING PRODUCTS AND/OR * COMPLETED OPERATIONS * * * * * * * * --------------------- -- -------------- LOCATION ----- 1 --------- ---------- ----------------- CLASS CODE * 097047A 091342A 091581A PREMIUM BASES * PAYROLL PAYROLL COST EXPOSURE * IF ANY 6,000 1,550 PREMISES/OPERATIONS RATE * 16.205 30.118 .730 PREMISES/OPERATIONS PREMIUM * INCLUDED 392. MINIMUM INCLUDED PRODUCTS/COMPLETED OPERATIONS RATE * INCLUDED 3.914 INCLUDED PRODUCTS/COMPLETED OPERATIONS PREMIUM * INCLUDED 324. MINIMUM INCLUDED 88 CONTINUED ON NEXT PAGE 030923 06 BELL LANDSCAPING 042974BI34 ERIE INSURANCE EXCHANGE GENERAL LIABILITY POLICY AMENDED DECLARATIONS * * EFFECTIVE 04/24/01 ATTACH THIS TO YOUR POLICY. REASON FOR AMENDMENT - ADDED ADDITIONAL INSURED AA8480 JAMES & RAE INS., INC. 06/22/00 TO 06/22/01 Q30 2200488 A BELL LANDSCAPING & CONST JOSEPH W BURBELLA D/B/A RD 1 BOX 1473 STROUDSBURG PA 18360-9641 ------------------------------------------------------------------------------- SCHEDULE OF INSURED'S OPERATIONS PREMISES/OPERATIONS AND PRODUCTS/COMPLETED OPERATIONS HAZARDS ARE INCLUDED OR EXCLUDED AS INDICATED BELOW. ------------------------------------------------------------------------------- LOCATION * INSURED OPERATIONS * * SAME AND VARIOUS * 099303A - SNOW PLOWING - RATED * AS STREET CLEANING - * INCLUDING PRODUCTS AND/OR * COMPLETED OPERATIONS * * * * * * * * * * * * * * * * ------------------------------------------------------------------------------ LOCATION 1 CLASS CODE * 099303A PREMIUM BASES * PAYROLL EXPOSURE * 6,000 PREMISES/OPERATIONS RATE * 32.361 PREMISES/OPERATIONS PREMIUM * INCLUDED PRODUCTS/COMPLETED OPERATIONS RATE * INCLUDED PRODUCTS/COMPLETED OPERATIONS PREMIUM * INCLUDED SEE REVERSE SIDE BMZ 05/10/01 030923 08 BELL LANDSCAPING 04297413134 FORM NUMBER EDITION DATE CGL 06/97 UF9468 08/99 CG3002 07/97 GU15 12/85 GU18 01/96 GU32 03/95 GLAC 04/99 GU56 05/96 GU75 10/98 GU84 04/00 CG50 07/97 END103P CG2010 04/98 CG2011 01/96 * CG2026 01/87 CG2616 01/94 SCHEDULE OF FORMS DESCRIPTION COMMERCIAL GENERAL LIABILITY POLICY IMPORTANT NOTICE FOR PUNITIVE DAMAGES AMENDATORY DECLARATIONS SUPPLEMENT- DUTY TO DISCLOSE PENNSYLVANIA NOTICE PENNSYLVANIA AMENDATORY ENDORSEMENT LEAD LIABILITY EXCLUSION ENDORSEMENT COVERAGE FOR PUNITIVE DAMAGES EMPLOYMENT-RELATED PRACTICES EXCLUSION PROFESSIONAL SERVICES EXCLUSION AMENDMENT OF POLLUTION EXCLUSION - EXCEPTION FOR BUILDING HEATING EQUIPMENT COMBINED SINGLE LIMIT LONG NAMED ADDITIONAL INSURED ENDORSEMENT ADDITIONAL INSURED - OWNERS, LESSEES OR CONTRACTORS (FORM B) ADDITIONAL INSURED - MANAGERS OR LESSORS OF PREMISES ADDITIONAL INSURED - DESIGNATED PERSON OR ORGANIZATION PENNSYLVANIA CHANGES-PESTICIDE APPLICATOR COVERAGE IMPORTANT - PLEASE READ YOUR RATE FOR YOUR COMMERCIAL GENERAL LIABILITY POLICY IS DETERMINED BY USING ONE OF THE FOLLOWING BASES OF PREMIUM - A) AREA - RATES ARE PER 1000 SQUARE FEET OF AREA B) PAYROLL - RATES ARE PER $1000 OF PAYROLL C) SALES - RATES ARE PER $1000 OF SALES D) ADMISSIONS - RATES ARE PER 1000 ADMISSIONS E) COMMISSIONS - RATES ARE PER $1000 COMMISSIONS F) COST - RATES ARE PER $1000 COST G) EXPENDITURES - RATES ARE PER $1000 EXPENDITURES H) OTHER - SEE PREMIUM BASES 88 CONTINUED ON NEXT PAGE 030923 08 BELL LANDSCAPING 042974B134 ERIE INSURANCE EXCHANGE GENERAL LIABILITY POLICY AMENDED DECLARATIONS * * EFFECTIVE 04/24/01 ATTACH THIS TO YOUR POLICY. REASON FOR AMENDMENT - ADDED ADDITIONAL INSURED AA8480 JAMES & RAE INS., INC. 06/22/00 TO 06/22/01 Q30 2200488 A BELL LANDSCAPING & CONST JOSEPH W BURBELLA D/B/A RD 1 BOX 1473 STROUDSBURG PA 18360-9641 ENDORSEMENT #103P ----------------- IT IS AGREED THAT THE ADDITIONAL INSURED - CONTRACTUAL LIABILITY SHALL READ AS FOLLOWS- STROUD MALL LLC, CBL & ASSOCIATES PROPERTIES INC, CBL & ASSOCIATES MANAGEMENT INC, CBL & ASSOCIATES LTD PTSHP & CBL HOLDINGS INC RECORD OF ADDITIONAL INSUREDS - CONTRACTUAL LIABILITY OWNERS, LESSEES OR CONTRACTORS ------------------------------ UNITED STEEL PRODUCTS COMPANY DIV OF UNITED STEEL ENTRP P 0 BOX 407 EAST STROUDSBURG PA 18301-0407 TRAMMELL CROW CORP SERVS & CVS PHARMACY & CVS INC P 0 BOX 3500 WOONSOCKET RI 02895-0050 STROUD MALL LLC & END103P RT 611 STROUDSBURG PA 18360 PNC BANK NA P 0 BOX 8874 CAMP HILL PA 17001-8874 DENT ENTERPRISES INC 1940 SNOW RD LANSING MI 48917-9505 FIRST UNION NATIONAL BANK 1420 FIRST UNION CENTER 16TH FLOOR CHARLOTTE NC 28288 PNC BANK ATTN: THOMAS P DANIELSON 201 PENN AVE SCRANTON PA 18503-1919 PNC BANK 639 MAIN ST STROUDSBURG PA 18360-2005 RITE AID CORP RITE AID RETAIL FACILITY 451 SOUTH ST JOHNS RD CAMP HILL PA 17011-1330 SEE REVERSE SIDE BMZ 05/10/01 030923 08 BELL LANDSCAPING 042974BI34 RECORD OF ADDITIONAL INSUREDS - DESIGNATED PERSON OR ORGANIZATION FIRST FIDELITY BANK ATTN: MS GRACE ANDREWS 123 SOUTH BROAD ST PHILADELPHIA PA 19109-1029 RECORD OF ADDITIONAL INSUREDS - MANAGERS OR LESSORS OF PREMISES --------------- - ----------------------------------------------- NEPA MANAGEMENT ASSOCIATES 304 PARK AVE STROUDSBURG PA 18360-1524 88 M 5 4.. i. , * - - { ; ' ' _ } yry . y 3 t a• +:i :J r ' tfj + a 10 - VI VO Too WHERE TO LOOK IN YOUR POLICY DEFINITIONS ..................... . 4 ADDITIONAL ERIE INSURANCE EXCHANGE DEFINITIONS ......... . 7 ADDITIONAL ERIE INSURANCE PROPERTY & CASUALTY COMPANY DEFINITIONS ................. . 7 OUR PROMISE ................. . 7 WHAT WE ALSO PAY ............ . 8 WHAT WE DO NOT COVER - EXCLUSIONS .................. . 8 LIMITS OF PROTECTION .. .. .. . . . 11 PREMISES/OPERATIONS .......... 11 PRODUCTS HAZARD/COMPLETED OPERATIONS HAZARD 11 WHEN AND WHERE THIS POLICY APPLIES 12 RIGHTS AND DUTIES - CONDITIONS .... . 12 Your Right to Cancel or Refuse Renewal 12 Our Right to Cancel or Refuse to Renew 12 Method of Giving Notice . . . . ... . . . 13 Return of Premium . . .. . .. . . . . . . . 13 ADDITIONAL ERIE INSURANCE EXCHANGE CONDITIONS ........ . 14 ADDITIONAL ERIE INSURANCE PROPERTY & CASUALTY COMPANY CONDITION . . ... . . . . .. . . . . .. . 15 3 ERIE INSURANCE GROUP is proud to present this COMMERCIAL GENERAL LIABILITY POLICY. This important contract between you and The ERIE is written in plain, simple terms so that it can be easily understood. We urge you to read it. Your policy contains XTRA PROTECTION FEATURES developed by The ERIE®. Wherever an "X" appears in the margin of this policy, you receive XTRA PROTECTION, either as additional coverage or as a coverage that is not in most commercial general liability policies. Your policy provides liability protection for all operations and all locations. For coverage to apply, you must tell us about all your operations and locations you are aware of at the beginning of the policy period. If you acquire additional locations or perform any new operations during the policy period, they are automatically covered for the rest of the policy period. At renewal time you must tell us about these additional locations and new operations in order for cov- erage to continue. If you do not tell us about these additional locations and new operations, coverage for them stops at the end of the policy period. Your policy is subject to the following terms, including those which may be added by an endorsement form. DEFINITIONS Throughout your policy and its endorsement forms, the following words have a special meaning in your policy when they appear in bold type. • "Advertising injury" means injury arising out of 1. oral or written publication of material that slanders or libels a person or organization or disparages a person's or organization's goods, products or services; 2, oral or written publication of material that vio- lates a person's right of privacy; 3. misappropriation of advertising ideas or style of doing business; or 4. infringement of copyright, title or slogan. • "Aircraft" means any machine or device capable of atmospheric flight except model airplanes. • "Anyone we protect" and "Insured" means; 1. you; 2. your spouse with respect to the conduct of your business, if you are doing business as an indi- vidual; 3. all partners, members, and their spouses, if doing business as a partnership or joint venture, but only while acting within the scope of their duties; 4, all members, their spouses and managers while doing business as a limited liability company, but only while acting within the scope of their duties; 5. executive officers, trustees or directors if doing business as a corporation, association or other entity, but only while acting within the scope of their duties. Stockholders are also Insureds, but only with respect to their liability as stock- holders; 6. your employees while in the course of their employment. Employees are not Insureds for: a. bodily injury to you, to your members or to a co-employee while that co-employee is in the course of his or her employment or the spouse, child, parent, brother or sister of that co-employee as a consequence of such bodily injury, or for any obligation to share damages with or repay someone else who must pay damages because of the injury; b. bodily injury arising out of their rendering of or failure to render professional health care services; or c. property damage to property; 1) owned, occupied or used by 2) rented to, in the care, custody or control of, or over which physical control is being exercised for any purpose by you, any of your employees, partners, or members; 7. your real estate manager; 8. any person or organization having proper tem- gorary custody of the insured property if you die, ut only: a. with respect to liability arising out of the maintenance or use of the insured property; and b. until a legal representative has been appointed; 9. your legal representative if you die, but only while performing duties as your representative; 10. any person operating upon a public highway, with your permission, mobile equipment that is registered in your name under a motor vehicle registration law. Anyone we protect includes any person or organization responsible for the opera- tion of mobile equipment, but only if loss is not recoverable under any other kind of insurance. Anyone we protect does not include any person or organization with respect to; a. bodily injury to a co-employee of the person operating the mobile equipment; or b. property damage to property owned by, rented to, in the charge of or occupied by you or the employer of any person who is an Insured under this provision; and 4 11, any organization you acquue venture or or form, other than a partnership, joint limited liability company,_.and-over-whichyouu_maintain. owner- ship or majority interest. This insurance does not apply to: a, the new organization if it is also an Insured under other similar insurance; b, the -organization 90 days, after the date the organization is acquired or formed by you; c: bodily injury or property damage under Bodily Injury Liability (Coverage A) and Property Damage Liability (Coverage B) which occurred before you acquired or formed the organization; and d. personal injury or advertising injury under Personal Injury Liability (Coverage C) and Advertising Injury Liability (Coverage D) arising out of an offense committed before you acquired or formed the organization. This insurance does not apply to any partner- ship, joint venture or limited liability company not shown on the Declarations. • "Automobile" means a land motor vehicle, trailer or semi-trailer- designed for travel on public roads (including any attached machinery or equipment), but does not include mobile equipment, "Bodily injury" means physical harm, sickness or disease sustained by a person. Bodily injury also includes care and loss of services and death at any time resulting from bodily. injury: "Completed operations hazard" includes all bodily injury and property damage occurring away from premises you own or rent arising out of your work that has been completed or abandoned, Your work-will-be considered completed at the-ear- liest of the following times: 1. when all of the work called for in your contract has been completed; 2. when all of the work to be done at the job site has been completed, if your contract calls for work at more than one site; 3. when that part of the work done at a job site has been put to its intended use by any person or organization other than another contractor or subcontractor working on the same project. Work which may need further service, maintenance, correction, repair or replacement, but which is other- wise complete, will be considered completed. The completed operations hazard does not include bodily injury or property damage arising out of. 1, the transportation of property, unless the bodily injury or property damage arises out of a condi- tion in or on a vehicle not owned or operated by you, and that condition was created by the loading or unloading of that vehicle by any insured; 2. the existence of tools, equipment not installed, or materials abandoned or unused; or 3. operations for which the classification stated on the Declarations specifies "including completed operations." • "Declarations", "Amended Declarations", "Revised Declarations" and "Renewal Certificate" means the form which shows your coverages, limits of pro- tection, premium charges, and other information. This form is part of your policy. • "Impaired property" means tangible property, other than your product or your work, that cannot be used or is less useful because: 1. the impaired property incorporates your product or your work that is known or thought to be defective, deficient, inadequate or dangerous; or 2. you have failed to fulfill the terms of a contract or agreement; if such property can be restored to use by: 1, repairing, replacing, adjusting or removing your product or your work; or 2. your fulfilling the terms of the contract or agree- ment. • "Executive Officer" means a person holding any of the officer positions created by your charter, consti- tution, by-laws, or any other similar governing docu- ment, • "Insured motract" means:_ _ ..-- 1. a lease of premises; 2. a sidetrack agreement; 3. any easement or license ageement, except in connection with construction or demolition operations on or within 50 feet of a railroad; 4. an obligation to indemnify a municipality which is required by municipal ordinance. This does not apply to work performed for the munici- pality; 5, an elevator maintenance agreement; or 6. that part of any contract or agreement relating to the conduct of your business (including a con- tract or agreement to indemnify a municipality in connection with work performed for a municipality) under which you assume the tort liability of another to pay damages because of bodily injury or property damage to a third person or organization. Tort liability means a liability that would be imposed by law in the absence of any contract or agreement. An insured contract does not include that part of any contract or agreement: 1. that indemnifies any person or organization for bodily injury or property damage arising out of construction or demolition operations, within 50 feet of any railroad property and affecting any railroad bridge or trestle, tracks, road beds, tunnel, underpass or crossing; 2. that indemnifies an architect, engineer or sur- veyor for bodily injury or property damage arising out of: a, preparing, approving or failing to prepare or approve maps, shop drawings, opinions, reports, surveys, field orders, change orders, or drawings and specifications; or h. giving or failing to give directions or instructions, if that is the primary cause of the bodily injury or property damage; 3. under which anyone we protect, as an architect, engineer or surveyor, assumes liability for bodily injury or property damage arising out of anyone we protect's rendering of or failure to render pro- fessional services, including: a. preparing, approving or failing to prepare or approve maps, drawings, opinions, reports, surveys, change orders, designs or specifica- tions; and b. supervisory, inspection, architectural or engi- neering activities; or 4. that indemnifies any person or organization for damage by fire to premises rented or loaned to you. "Mobile equipment" means any of the following types of land vehicles (including any attached machinery or equipment): 1. bulldozers, farm machinery, forklifts and other vehicles designed for use principally off public roads; 2. vehicles maintained for use solely on or next to premises you own or rent; 3. vehicles that travel on crawler treads; 4, vehicles, whether self-propelled or not, main- tained primarily to provide mobility to perma- nently mounted: a. power cranes, shovels, loaders, diggers or drills; or b. road construction or resurfacing equipment, such as graders, scrapers or rollers; 5. vehicles not described in l., 2., 3. or 4. above that are not self-propelled and are maintained primarily to provide mobility to permanently attached equipment of the following types: a. air compressors, pumps and generators, including spraying, welding, building cleaning, geophysical exploration, lighting and well-servicing equipment; or b. cherry pickers and similar devices used to raise or lower workers, 6. vehicles not described in 1., 2., 3. or 4, above maintained primarily for purposes other than the transportation of persons or cargo. However, self-propelled vehicles with the following types of permanently attached equipment are not mobile equipment but are considered automobiles: a. equipment designed primarily for: 1) snow removal; 2) road maintenance, but not construction or resurfacing; • 3) street cleaning; b. cherry pickers and similar devices mounted on an automobile or truck chassis and used to raise or lower workers; and c. air compressors, pumps and generators, including spraying, welding, building cleaningg, geophysical exploration, lighting and we11-servicing equipment. • "Occurrence" means an accident, including contin- uous or repeated exposure to the same general, harmful conditions. • "Personal injury" means injury arising out of 1. libel, slander, defamation of character; 2. false arrest, wrongful detention or imprisonment, malicious prosecution, racial or religious discrim- ination, wrongful entry or eviction, invasion of privacy, or humiliation caused by any of these. • "Pollutants" means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed. • "Products hazard" includes all bodily injury and property damage occurring away from premises you own or rent and arising out of your product, except products that are still in your physical possession. • "Property damage" means: 1. physical injury to or destruction of tangible property including loss of its use. All such loss of use shall be deemed to occur at the time of the physical injury that caused it; or 2. loss of use of tangible property which is not physically injured or destroyed. All such loss of use shall be deemed to occur at the time of the occurrence that caused it. • "Suit" means a civil proceeding in which damages are alleged because of bodily injury, property damage, personal injury or advertising injury to which this insurance applies. Suit includes: 1. an arbitration proceeding in which such damages are claimed and to which anyone we protect must submit or does submit with our consent; or 2, any other alternative dispute resolution pro- ceedirrg in which such damages are claimed and to which anyone we protect submits with our consent. • "Your product" means: 1. any goods, other than real property, manufac- tured, sold, handled, distributed or disposed of by: a. you; b. others trading under your name; or 6 e. a person or organization whose business or assets you have acquired; and 2. any containers (other than vehicles), materials, parts or equipment furnished in connection with such goods or products. Your product includes: 1. warranties or representations made at any time with respect to the fitness, quality, durability, performance or use of your products; and 2, the providing of or failure to provide warnings or instructions. Your product does not include vending machines or any other property rented to you or located on your premises for use by others but not sold. • "Your work" means: 1. work or operations performed by you or on your behalf; 2. materials, parts or equipment furnished in con- nection with such work or operations. Your work includes: 1. warranties or representations made at any time with respect to the fitness, quality, durability, performance or use of your work; and 2. the providing of or failure to provide warnings or instructions. ADDITIONAL ERIE INSURANCE EXCHANGE DEFINITIONS The following words have this special meaning in poli- cies issued by Erie Insurance Exchange when they appear in bold type. • "Subscriber" means the person who signed, or the partnership, firm or corporation that authorized the signing of, the application for this policy. • "We", "us" and "our" means the Subscribers at Erie Insurance Exchange as represented by their common Attomey-in-Fact, Erie Indemnity Company. • "You", "your" and "named Insured" means the Sub- acn'ber and others named on the Declarations under Named Insured, and any other person or organiza- tion qualifying as a Named Insured under this policy. ADDITIONAL ERIE INSURANCE PROPERTY & CASUALTY COMPANY DEFINITIONS The following words have this special meaning in poli- cies issued by the Erie Insurance Property & Casualty Company when they appear in bold type. • we, "us" and "our" means Erie Insurance Property & Casualty Company. • "You", "your" and "named Insured" means the persons named in Item 1 on the Declarations. Except in the GENERAL POLICY CONDITIONS Section, these words include your spouse if a resident of the same household. OUR PROMISE Bodily Injury Liability - Coverage A Property Damage Liability - Coverage B We will pay for damages because of bodily injury or property damage for which the law holds anyone we protect responsible and which are covered by your policy. We cover only bodily injury and property damage which occurs during the policy period. The bodily injury or property damage must be caused by an occurrence which takes place in the covered territory. We will pay any additional sums or perform any addi- tional acts or services that are explicitly covered under WHAT WE ALSO PAY, and nothing else. Personal Injury Liability - Coverage C Advertising Injury Liability - Coverage D We will pay for damages because of personal injury or advertising injury for which the law holds anyone we protect responsible and which are covered by your policy. We cover only personal injury caused by an offense committed during the policy period and which takes place in the covered territory. We cover only advertising injury caused by an offense committed during the policy period and in the course of advertising your goods, products or services and which takes place in the covered territory. We will pay any additional sums or perform any addi- tional acts or services that are explicitly covered under WHAT WE ALSO PAY, and nothing else. Medical Payments - Coverage E We will pay all reasonable medical expenses to any person injured by an occurrence. We cover only medical expenses resulting from an occurrence which takes place during the policy period and in the covered territory, The services must be rendered within three years of the occurrence. The occurrence must arise from a condition in the premises or operations shown on the Declarations. The three year limitation does not apply to funeral expenses. Medical expenses include: 1. medical, surgical, x-ray and dental services, including prosthetic devices; and 2. ambulance, hospital, professional nursing and funeral services. Coverages A, B, C, D and E We may investigate or settle any claim or suit for damages against anyone we protect, at our expense. If anyone we protect is sued for damages covered by this policy, we will defend with a lawyer we choose, even if the allegations are not true. However, we will have no duty to defend anyone we protect against any suit for damages because of bodily injury, property damage, personal injury or advertising injury to which this policy does not apply. Our obligation to pay any claim or judgment or defend any suit ends when we have used up our limit of ppro- tection by paying judgments or settlements under Cov- erage A, B, C, D or E. The amount we pay for damages is limited as described in LIMITS OF PROTECTION. WHAT WE ALSO PAY Payment for the following is in addition to the limits of protection shown on the Declarations. A. Fire Legal Liability - X We will pay all sums, up to the Property Damage Liability limit shown on the Declarations, which anyone we protect becomes legally obligated to pay for damage to buildings rented to or occupied by anyone we protect, which are described on the Declarations. The damage must be caused by fire, lightning, windstorm, hail, explo- sion, riot, civil commotion, vehicles, aircraft, smoke, vandalism, malicious mischief or elevator collision, We do not cover liability assumed by anyone we protect. B. Claim Expenses We will pay: 2. 3. 4. 1. court costs, to defend or settle as we believe proper, any-claim..or- sult__againat. anyone we protect,_.for damages covered under this policy. Our payment of the limit of protection for a settlement, judgment, or deposit in court ends our duty to pay under this item. expenses incurred, to investigate and defend or settle as we believe proper, any claim or suit against anyone we protect for damages covered under this policy. Our payment of the limit of protection for a settlement, judgment, or deposit in court ends our duty to pay under this item. post-judgment interest, but only that .portion of the post-judgment interest which accrues on that part of any judgment that does not exceed the limit of pro- tection on a suit we defend. Our payment, offer in writing, or deposit in court of that part of the judg- ment which does not exceed the limit of protection ends our duty- to pay, any post-judgment interest which accrues after the date of our payment, written offer or deposit. prejudgment interest or delay damages awarded on that part of any judgment that does not exceed the limit of protection. If we offer in writing to pay the applicable limit of protection, we will not pay any prejudgment interest or delay damages for the period of time after the offer. 5. reasonable expenses anyone we protect may incur at our request to help as investigate or defend a claim or suit. This includes up to 5150 a day for actual loss of earnings. 6. For on the following types of bonds, but not for bond amounts greater than the limit of pro- tection: a. appeal bond in a suit we defend; b, bail bond (with premium of $500 or less) required due to an accident or related traffic vio- lation arising out of the use of a vehicle covered by this policy; c. attachment bond to release property of anyone we protect due to an accident or related traffic violation arising out of the use of a vehicle covered by this policy. We have no duty to apply for or furnish such bonds. reasonable lawyers' fees up to $50 which anyone we protect incurs because of arrest, resulting from an accident involving a vehicle covered by this policy. C. First Aid Expenses We will pay reasonable expenses for first aid to other people and animals at the time of an accident involving anyone we protect. WHAT WE DO NOT COVER - EXCLUSIONS A. We do not cover under Bodily Injury Liability (Cov- erage A), Property Damage Liability (Coverage B) and Medical Payments -(Coxerage-E)c- 1, injury or damage expected or intended from the standpoint of anyone we protect. This does not apply to bodily injury or property damage resulting from your protecting persons or property. 2. the ownership, maintenance, use or entrustment to others of an automobile, aircraft or watercraft owned or operated by or rented or loaned to anyone we protect. Use includes operation and loading or unloading. "Loading or unloading of an automobile, aircraft or watercraft" means the handling of prop- erty: a. after it is moved from the place where it is accepted for movement into or on an automo- bile, aircraft or watercraft; or b. while it is in or on an automobile, aircraft or watercraft; or c. while it is being moved from an automobile, air- craft or watercraft to the place where it is finally delivered. Loading or unloading of an automobile, aircraft, or watercraft does not include the movement of prop- erty by means of a mechanical device (other than a hand truck) not attached to the automobile, aircraft or watercraft. This exclusion does not apply to: a. parking. an automobile on premises owned or rented by you, or while parking- arking the automobile on the ways and means adjoining your premises, if the automobile is not owned by or rented or loaned to anyone we protect; b. liability assumed under an insured contract for the ownership, maintenance or use of aircraft or watercraft; c. liabili ty arising out of the operation of eq ' - ment listed under parts 6.b. and c. of the defi- nition of "mobile equipment"; X d. Watercraft while ashore on premises you own or rent; or X e. the use of non-owned watercraft 32 feet or under in length that is not being used to carry persons or property for a charge. 3. the use of mobile equipment while used in or pre- paring for a prearranged racing, speed or demolition contest or stunting activity. 4. the transportation of mobile equipment by an auto- mobile owned, rented, borrowed or operated by anyone we protect. 2) supervisory, inspection or engineering ser- vices. B. We do not cover under Bodily Injury Liability (Cov. erage A) and Property Damage Liability (Coverage B): 1. liability assumed by anyone we protect in a contract or agreement. This exclusion does not apply to liability; a. that anyone we protect would have in the absence of the contract or agreement; or 5. damages for which anyone we protect may be liable by reason of: a. causing or contributing to the intoxication of 2 any person; b. the furnishing of alcoholic beverages to a person under the legal drinking age or under the influ- ence of alcohol; or c. any statute, ordinance or regulation relating to the sale, gift, distribution or use of alcoholic beverages. This exclusion applies only if anyone we protect is engaged in the business of manufacturing, distrib- uting, selling, serving or furnishing alcoholic beverages. This exclusion does not apply to liability of anyone we protect or the indemnitee of anyone we protect arising out of the giving or serving of alcoholic beverages at functions incidental to your business, provided you are not engaged in the business of manufacturing, distributing, selling or serving of alcoholic beverages. 6. damages resulting from war, whether declared or undeclared, discharge of a nuclear weapon (even if accidental), hostile or warlike action in time of peace or war, insurrection, rebellion, revolution, civil war, usurped power, including action taken by govern. mental authority in defending against such an occur- rence. 7. damages due to a. the rendering of or failure to render. 1) diagnostic, medical, surgical, dental, x-ray or nursing service or treatment, or the fur- nishing of food or beverages with them, or 2) ambulance, paramedical, rescue squad or other service or treatment conducive to health; b, the furnishing or dispensing of drugs or medical, dental, or surgical supplies or appliances; c. the handling of or performing of autopsies; d. the rendering of or failure to render cosmetic, ear piercing, tonsorial, massage, physiotherapy, chiropody, hearing aid, optical or optometncal services or treatments; or e. any service of a professional nature, including but not limited to: 1) the preparation or approval of maps, plans, opinions, reports, surveys, designs or specifi- cations, and b, assumed in a contract or agreement that is an insured contract, provided the bodily injury or property damage occurs after the execution of the contract or agreement. a. damages arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of pollutants: 1) at or from any premises, site or location which is or was at any time owned or occu- pied by, or rented or loaned to, anyone we protect; 2) at or from any premises, site or location which is or was at any time used by or for anyone we protect or others for the handling, storage, disposal, processing or treatment of waste; 3) which are or were at any time transported, handled, stored, treated, disposed of, or processed as waste by or for anyone we protect or any person or organization for whom you may be legally responsible; or 4) at or from any premises, site or location on which anyone we protect or any contractors or subcontractors working directly or indi- rectly on anyone we proteces behalf are per- forming operations: a) if the pollutants are brought on or to the premises, site or location in connection with such operations by such insured, contractor or subcontractor; or b) if the operations are to test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of pollutants; b, any loss, cost or expense arising out of any: 1) request, demand or order that anyone we protect or others test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of pollutants; or 2) claim or suit by or on behalf of a govem- mental authority for damages because of testing for, monitoring, cleaning up, removm*, containing, treating, detoxifying or neutralizing or in any way responding to, or assessing the effects of pollutants. Subparagraph 4) a) of paragraph a. does not apply to bodily Injury or property damage arising out of the escape of fuels, lubricants or other operating fluids which are needed to perform the normal electrical, hydraulic or mechanical functions necessary for the operation of mobile equipment or its parts, if such fuels, lubricants or other operating fluids escape from a--vehicle part -designed to hold, store- or-receive them. This exception does not apply if the fuels, lubricants or other operating fluids are intentionally discharged, dispersed or released, or if such fuels, lubricants or other operating fluids are brought on or to the premises, site or location with the intent to be discharged, dispersed or-released as part of the. oper- ations being performed by such insured, contractor or subcontractor. Subparagraphs 1) and 4) a) of paragraph a. of this exclusion do not apply to bodily injury or property damage caused by heat, smoke or fumes from a hostile fire. As used in this exclusion, a "hostile fire" means one which becomes uncontrollable or breaks out from where it was intended to be. 3. any obligation of anyone we protect under any workers compensation, unemployment compen- sation, disability benefits law or any similar law. 4. a. bodily injury to employees of anyone we protect arising out of their employment by anyone we protect for which anyone we protect may be held liable as an employer or in any other capacity, b. any obligation of anyone we protect to indemnify or contribute with another because of damages arising out of bodily injury; c. bodily injury sustained by the spouse, child, parent, brother or sister of an employee_ of anyone we protect as a consequence of bodily injury to the employee arising out of employ- ment by anyone we protect. This exclusion applies to all claims and suits by an person or organization for damages because of such bodily injury, including damages for care and loss of services. This exclusion does not apply to liability assumed by anyone we protect under an insured contract. 5. property damage to property anyone we protect owns,-rents or--occupies.- - This - exclusion . does not apply to protection provided in WHAT WE ALSO PAY - A. Fire Legal Liability. 6. property damage to: a. premises you sell, give away or abandon if the property damage arises out of any part of those premises. We will cover those premises which are your work and which were never occupied, rented or held for rental by you; b. property which is loaned to anyone we protect; c. personal property in-anyone we protect's care, custody or control; d. that particular part of real property upon which operations are being performed by you or any contractor or subcontractor working directly or indirectly on your behalf, if the property damage arises out ofthose operations; e. that particular part of any property that must be restored, repaired or replaced because your work was faulty. We will cover property damage included in the products hazard and completed operations hazard. This exclusion does not apply to liability assumed under a sidetrack agreement. 7. property damage to your product arising out of such product or any part or portion of it. S, property damage to your work arising out of your work or any portion of it but only with respect to the completed operations hazard. This exclusion does not apply if the damaged work or the work out of which the damage arises was per- formed on your behalf by a subcontractor. 9, property damage to impaired property or tangible property not physically injured or destroyed, resulting from:-- a. delay in or lack of performance on a contract or agreement by or for you; or b. a defect, deficiency, inadequacy or dangerous condition in your product or your work. We will pa for loss of use of impaired property or other tangible property resulting from sudden and accidental physical damage to your product or your work after it has been put to its intended use. 10, damages claimed for any loss, cost or expense incurred by yop-or-others for the loss of use, with- drawal, inspection, replacement, recall, repair, adjust- ment, removal or disposal of a. your product; b. your work; or c. impaired property; if such product, work, or property is withdrawn or recalled from the market or from use by any person or organization because of a known or suspected defect, deficiency, inadequacy or dangerous condition in it. C. We do not cover under Personal Injury Liability (Coverage C) and Advertising Injury Liability (Coverage D): 1. liability assumed by anyone we protect under any contract or agreement. This exclusion does not apply to liability: a. assumed in a contract or agreement that is an insured contract, provided the personal injury or advertising injury occurs after the execution of the contract or agreement; or b. feat -anyone - we protect would have in the absence of the contract or agreement. 2. personal injury or advertising injury arising out of the willful violation of a penal statute or ordinance com- mitted by or with the knowledge or consent of anyone weprotect. 3. personal injury or advertising injury arising out of oral or written publication of material whose first publication took place before the beginning of the policy period. 4. personal injury or advertising injury arising out of oral or written publication of material, if done by or at the direction of anyone we protect with the know- ledge that it is false. 5. personal injury or advertising injury arising out of an offense committed by anyone we protect whose busi- 10 ness as advertising, broadcasting, publishing or tele- casting. 6, personal injury or advertising injury arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of pollutants at any time. 7, personal injury or advertising injury arising out of any loss, cost or expense arising out of any: a, request, demand or order that any insured or others test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of pollutants; or b. claim or suit on behalf of a govemmental authority for damages because of testing for, monitoring, cleaning up, removing, containing, treating, detoxifying or neutralizing, or in any way responding to, or assessing the effects of pollutants. 8, advertising injury arising out of., a. breach of a contract, other than misappropri- ation of advertising ideas under an implied con- tract b, the failure of goods, products or services to conform with advertised quality or performance; c. the wrong description of the price of goods, pro- ducts or services. D. We do not cover under Medical Payments (Coverage E) expenses for bodily injury to: 1. anyone we protect; 2, any person: a. injured on that part of premises you own or rent and that the person normally occupies; b. hired to do work for or on behalf of anyone we protect or a tenant of anyone we protect; c. if benefits are payable under any workers com- gensation, unemployment compensation, disa- ility benefits law or similar law; or d, injured while taking part in athletics. LIMITS OF PROTECTION Our duty to pay the sums recoverable under this policy for which the law holds anyone we protect responsible is subject to the limits shown on the Declarations. For the purpose of determining our limit of liability, all bodily injury, property damage, personal injury, advertising injury and medical payments arising out of continuous or repeated exposure to the same general harmful condi- tions shall be considered one occurrence. Our limit of liability is not increased regardless of the number of people we protect, claims made or persons injured as a result of an occurrence. PREMISES/OPERATIONS Bodily Injury Liability - Coverage A Personal Injury Liability - Coverage C Advertising Injury Liability - Coverage D Medical Payments - Coverage E The amount shown on the Declarations for EACH OCCURRENCE is the total limit of protection for all damages because of bodily injury or medical expense to one or more persons or organizations as a result of any one occurrence or because of personal injury or adver- tising injury sustained by any one person or organization as a result of an offense. This amount does not apply to bodily injury covered under the products hazard or the completed operations hazard. The amount shown on the Declarations for AGGRE- GATE is the total limit of protection for all damages because of all bodily injury or medical expense as a result of one or more occurrences or because of all personal injury or advertising injury as a result of one or more offenses. The AGGREGATE Limit does not apply to: 1. bodily injury covered under the products hazard or the completed operations hazard; or 2. coverage provided under the bodily injury definition. Medical Payments - Coverage E The amount shown on the Declarations for EACH PERSON is the total limit of protection for all medical expenses to any one person as a result of any one occur- rence. Property Damage Liability - Coverage B The amount shown on the Declarations for EACH OCCURRENCE is the total limit of protection for all losses arising out of damage to property of one or more parties as a result of one occurrence. The amount shown on the Declarations for AGGRE- GATE is the total limit of protection for all damages because of all property damage as a result of one or more occurrences. These amounts do not apply to property damage covered under the products hazard or the completed operations hazard. PRODUCTS HAZARD/COMPLETED OPERATIONS HAZARD Bodily Injury Liability - Coverage A The amount shown on the Declarations for EACH OCCURRENCE is the total limit of protection for all damages because of all bodily injury covered under the products hazard and completed operations hazard as a result of any one occurrence. 11 X X X The amount shown on the Declarations for AGGRE- GATE is the total limit of protection for all damages because of all bodily injury covered under the products hazard and completed operations hazard as a result of one or more occurrences. Property Damage Liability - Coverage B The amount shown on the Declarations for EACH OCCURRENCE is the total limit of protection for all damages because of property damage covered under the products hazard and completed operations hazard as a result of any one occurrence. The amount shown on the Declarations for AGGRE- GATE is the total limit of protection for all damages because- of all_property. damage covered under. the pro- ducts hazard and completed operations hazard as a result of one or more occurrences. The Limits of Protection for this policy apply separately to each consecutive annual period and to any remaining period less than 12 months, starting with the inception date of the policy period shown on the Declarations. If the policy period is extended after the policy is issued for an additional period of less than 12 months, then the additional period will be deemed part of the last pre- ceding period for purposes of determining the Limits of Protection. WHEN AND WHERE THIS POLICY APPLIES WHEN This policy applies to losses that occur during the policy period. The policy period is shown on the Declarations, Renewal Certificate, Amended Declarations, Revised Declarations or endorsement. An Amended Declarations or endorsement tells you that the policy has been changed. A Renewal Certificate tells you that the policy is being renewed for another -policy.per(od,- WHERE This policy applies: 1. within the United States of America, its territories or possessions, Puerto Rico or Canada, or 2. in international waters or a' ace if damages do not occur while traveling to and from other countries, states or nations, or 3. anywhere in the world if: a. the bodily injury, property damage, personal injury or advertising injury -arises out of. 1) a product made or sold by you in the United States of America, its territories or pos- sessions, Puerto Rico or Canada, or 2) the activities of any person whose home is in the United States of America, its territories or possessions, Puerto Rico or Canada, but is temporarily away on your business; and b. anyone we protect's responsibility to pay damages is determined on the merits of a suit in the United States of America, its territories or possessions, Puerto Rico or Canada, or in a settlement we agree to. RIGHTS AND DUTIES - CONDITIONS (1) AUTOMATIC RENEWAL POLICY (3) CANCELLATION Your policy will be automatically renewed at the end of the policy period, unless terminated by you or us in accordance with the steps explained in the Cancellation Condition. Each year, we will send you a Renewal Certificate which shows the premium due for the next policy period. This is a service that we provide for you so that your insurance protection does not stop. If you do not want the renewal policy, you must mail our Agent or us written notice in advance of the new policy period. If you do not notify us, your policy remains in effect. You must pay us the earned premium due us for this time. (2) BANKRUPTCY OF ANYONE WE PROTECT Bankruptcy or insolvency of anyone we protect or anyone we protect's estate will not relieve us of any of our obligations. Your Right to Cancel or Refuse Renewal The first named Insured shown on the Declarations may cancel this policy or any coverage by mailing our Agent or us written notice stating at what future date you want the cancellation to take effect. Our Right to Cancel or Refuse to Renew We may cancel or refuse to renew by mailing the first named Insured written notice stating the effective date of the cancellation. Notice will be sent to your last known address. Cancellations and nonrenewals will comply with the laws of the state in which your business is located. The cancellation will not take effect until at least 30 days (Maryland and Virginia - 45 days, except for nonpayment of premium - 30 days) after we send it, For states that require a different number of days for notification of cancellation or nonrenewal or specify the reasons for cancellation or nonvenewal, an Amendatory Endorsement is attached. 12 X X Method of Giving Notice Mailing notice will be sufficient proof of notice. Delivery of the notice by you or us will be equivalent to mailing. Return of Premium If-yotw -policy is canceled, we will return the pro rata unused share of your premium. The cancellation will be effective even if we have not given or offered the return premium. (4) CONCEALMENT, FRAUD or MISREPRESEN- TATION This entire policy is void if before or after a loss anyone we protect has intentionally concealed or misrepresented any material fact or circumstance concerning this insur- ance. In the event of a fraudulent claim, we will not make payment for the loss. (5) HOW YOUR POLICY MAY BE CHANGED The terms of the -policy which are in conflict with the laws of the state in which it is issued are automatically changed to agree with the laws. We will automatically give you the benefit of any increase in coverage made by us or by law, if there is no added premium charge. Asking one of our Agents to make a change in your policy is like asking us. Your request must contain enough information to identify you. We will issue an Amended Declarations or Notice of Change Endorse- ment. (6) INSPECTION AND AUDIT We have the right but are not obligated to: 1. make inspections and surveys at any time; 2, give you reports on the conditions we find; and 3, recommend changes. Any inspections; surveys, reports or recommendations relate only to insurability and the premiums to be charged:-. We do not make safety inspections. We do not undertake to provide for the health or safety of workers or the public. We do not warrant that your property or operations are safe, healthful or in compli- ance with any law, regulation, code or standard. Inspections, surveys, reports or recommendations are for our benefit only: This condition also applies to any rating, advisory, rate service or similar organization which makes insurance inspections, surveys, reports or recommendations. We may examine and audit your books and records at any time during or within three years after the policy period, as they relate to this insurance, (7) LAWSUITS AGAINST US No person or organization has a right under this policy: 1, to join us as a party or otherwise bring us into a suit asking for damages from anyone we protect; or 2. to sue us unless all the terms of this policy have been fully complied with. A person or organization may sue us to recover on an agreed settlement or on a final judgment against anyone we protect obtained after an actual trial; but we will not be liable for damages that are not payable under the terms of this policy or that are in excess of the applicable limit of protection. An agreed settlement means a settle- ment and release of liability signed by as, anyone we protect and the claimant or the claimant's legal represen- tative. Virginia Only: Any parson, organization or legal representative thereof who has secured a judgment against anyone we protect is then entitled to bring action against us to recover damages up to the amount of insurance available under this policy. (8) MEDICAL PAYMENTS - COVERAGE E The injured person will submit to examinations by doctors selected by us, as often as reasonably required. 'der We will pay either the injured person or the pprof of the services. Payment is not an admission of liability. (9) OTHER INSURANCE We will pay those sums not covered by other valid and collectible insurance, up to the applicable limits of this policy. When this insurance and other valid and collectible insurance apply to the loss on the same basis, our obli- gations are as follows: a. Primary Insurance This insurance is primary except when part b, below applies. When this insurance and the other insurance are both primary, we will follow the method described in part c. below. b. Excess Insurance This insurance is excess over any other insurance, whether primary, excess, contingent or on any other basis: 1. that, is _Fire,_Extended- Coverage, -Builders' -Risk, Installation Risk or similar coverage for your work; 2. that is Fire insurance for premises rented to you or temporarily occupied by you with permission of the owner; or I - if flte loss- arises from the maintenance or use of air- craft, automobiles or watercraft to the extent that it is not subject to Exclusion A.2. of your policy. When this insurance is excess, we will have no duty under Coverages A, B, C or D to defend anyone we protect against any suit if any other insurer has a duty to 13 defend anyone we protect against that suit. If no other insurer defends you, we will defend you, but we will be entitled to the rights to recover of anyone we protect against all those other insurers. When this insurance is excess over any other insurance, we will pay only our share of the loss, if any, that exceeds the sum of. 1. the total amount that all the other insurance would pay for the loss in the absence of this insurance; and 2. the total of all deductibles and self-insured amounts under all the other insurance. We will share the remaining loss, if any, with any other insurance that is not described in this Excess Insurance Provision and which was not bought specifically to apply in excess of the Limits of Protection shown on the Dec- larations. c. Method of Sharing 1. If the other insurance provides for contribution by equal shares, we will pay our equal share of the loss. Each insurer will pay equally with the others up to its limit of protection or until the loss is paid, which- ever comes first. 2. If the other insurance does not provide for contrib- ution by equal shares, we will pay the proportion of the loss that the applicable limit of protection of this policy bears to the total limit of protection of all applicable insurance. (10) OUR RIGHT TO RECOVER FROM OTHERS If anyone we protect has a right to recover all or part of any payment we have made under this policy, the right to recover is transferred to us. Anyone we protect must do nothing to harm that right. Anyone we protect will bring suit or transfer the right to recover to us and help us enforce the right to recover. (11) POLICY ACCEPTANCE By accepting this policy, you agree that the statements on the Declarations are accurate and complete and are based on the facts you have given us. This policy is issued in reliance on these facts. (12) PREMIUM The premium of your policy may be provisional. It may have been based on estimates of your sales, costs, payroll, receipts, units, hazards to be covered and oper- ations you were conducting when the policy was written. If your premium is estimated, the estimate is shown on the Declarations as "deposit premium." At the end of the policy period, we will determine your actual premium. Tf the estimate was too low, you are obligated to pay additional premium computed in accordance with our rules and rates. If the estimate was too high, we will retum the unearned premium subject to any minimum premiums that apply. The first named Insured is required to keep proper records so the correct premium can be calculated. (13) PRIORITY At our option, this insurance will first protect you, and secondly others listed under the definition of anyone we protect. (14) SEVERABILITY OF INSURANCE This insurance applies separately to anyone we protect. This condition shall not increase our liability limits for any one occurrence. (15) TIME OF INCEPTION If this policy replaces another policy ending at noon on the date of this policy, we will protect you as of that time. (16) WHAT TO DO WHEN AN ACCIDENT HAPPENS When there is an accident, occurrence or offense, anyone we protect will: a. notify us or our Agent in writing as soon as possible, stating: 1. your name and policy number; 2. the time, place and circumstances of the accident or occurrence or offense; 3, names and addresses of injured persons and wit- nesses. b. send us any papers that relate to the accident or occurrence or o ense, c. at our request: L assist in malting settlement; 1 help us enforce any right of recovery against any party liable to anyone we protect; 3. assist in the conduct of lawsuits; 4. attend hearings and trials; 5. secure and give evidence and obtain the attendance of witnesses; 6. submit to statements under oath; 7. authorize us to obtain records and other information. Anyone we protect will not make payments, assume obli- gations or incur expenses, other than for first aid, except at their own cost. ADDITIONAL ERIE INSURANCE EXCHANGE CONDITIONS The following conditions apply only to policies issued by Erie Insurance Exchange. (1) ACCOUNTING Erie Indemnity Company, as attorney-in-fact, may keep up to 25% of the premium in return for agreeing to rep- resent you. This amount will be used to pay expenses of management, including sales commissions, salaries, and other employment costs, the cost of supplies, and other administrative costs. 14 X Tlie rest df the premium will be placed on the books of Your responsibility as a Subscriber is determined by this Erle Insurance Exchange. We will deposit or invest this policy alone. You cannot be held responsible for the amount as permitted by law. liability of the other Subscribers. This amount will be used to pay losses, adjustment expenses, legal expenses, court costs and reinsurance. The remainder, if any, will be used for purposes Erie Indemnity Company decides are to the advantage of the Subscribers. (2) NO CONTINGENT LIABILITY You will not be assessed for the losses of Subscribers. This agreement is made in reliance on the facts you have given us, and is subject to all terns of this policy. ADDITIONAL ERIE INSURANCE PROPERTY & CASUALTY COMPANY CONDITION The following condition apppl1ies only to policies issued by Erie Insurance Properly A Caswa ty Company. (3) RECIPROCAL AGREEMENT in return for your premium payment and your signing a power of attorney to Erie Indemnity Company, we e to provide the coverages you have chosen. Yow cho ces are shown on the Declarations, which are part of this policy. Your signing the power of attorney permits Erie Indem- nity Company to represent you and to arrange reciprocal insurance contracts between you and the other Sub- scribers. AGREEMENT In return for your timely premium payment and your compliance with all of the provisions of this policy, we agree to provide the coverages you have purchased. Your coverages and limits of protection are shown on the Declaration, which are part of this policy. This agreement is made in reliance on the information you have given us and is subject to all the terms of this policy. This policy and all endorsements to it constitute the entire agreement between you and us. This policy has been signed on our behalf at Erie, Pennsylvania by on President and Secretary. If required by law, it has been countersigned on the Dedaratloes by our duly authorized Agent. Secretary President CGL (Ed. 6/97) OF-8121 414 ERIE, ERIE INSURANCE GROUP Home Office • 100 Erie Insurance Place • Erie. PA 16530 (810) 8]02000 • w ..erieinsurance.com 15 ERIE INSURANCE GROUP BUSINESS CATASTROPHE LIABILITY COMMERCIAL GENERAL LIABILITY FIVESTAR CONTRACTORS' ULTRAFLEX PACKAGE ULTRAPACK BUSINESS ULTRASURE FOR LANDLORDS ULTRASURE FOR PROPERTY OWNERS (Ed. 8/99) OF-9468 IMPORTANT NOTICE FOR PUNITIVE DAMAGES ATTENTION ILLINOIS, INDIANA, PENNSYLVANIA POLICYHOLDERS At no additional cost to you, coverage for vicarious liability for punitive or exemplary damages is now included under Bodily Injury Liability, Personal Injury Liability, Property Damage Liability and Advertis r4 Injury Liability. Coverage for punitive or exemplary damages caused by an occurrence covered by your policy is subject to the Limits of Pro- tection purchased for these Liability coverages and will be provided to the extent allowed by law. The Coverage for Punitive Damages Endorsement adds this coverage to your policy. This coverage was previously excluded under The ERIE's Commercial General Liability, Fivestar Contractors', Ultraflex Package, Ultrapack Busi- ness, Ultrasure for Landlords, and Ultrasure for Property Owners policies. Your payment of the premium for this policy acknowledges your understanding and acceptance of this change. Should you have any questions regarding this coverage, please contact your Agent. ERIE INSURANCE GROUP E* COMMERCIAL GENERAL LIABILITY CG 30 02 (Ed. 7/97) UF•5905 AMENDATORY DECLARATIONS SUPPLEMENT DUTY TO DISCLOSE The following is added to your Commercial General tell us about these additional locations and new Liability Policy Declarations: operations in order for coverage to continue; Item 4. 1. The schedule on the Declarations discloses all hazards insured hereunder known to exist at the effective date of this policy. If you acquire additional locations or perform any new operations during the policy period, they are automatically covered for the rest of the policy period. At renewal time, you must 2. The Named Insured does not use the premises for any undisclosed purposes, and does not conduct any business operations at any undisclosed location. If there are any exceptions to 1, or 2. above, please see Exceptions to Duty to Disclose Declarations Supplement CG 30 03. I) I ERIE INSURANCE GROUP PENNSYLV, The ERIE, its Agents, Employees or service contractors actutg on its behalf, may provide services to reduce the lilreldrood of injury, death or loss. These services may include any of the following or related services incident to the application for, issuance, renewal or continuation of, a policy of insurance: 1. surveys; 2. consultation or advice; or 3. inspections. The "Insurance Consultation Services Exemption Act" of Pennsylvania provides that The ERIE, its Agents, Employees or service contractors acting on its behalf, is not liable for damages from injury, death or loss occur- GENERAL USE GU-1511LO910 (Ed. 12/85) OF-5582 ANIA NOTICE ring as a result of any act or omission by any person in the famishing of or the failure to furnish these services. The Act does not apply: 1. if the injury, death or loss occurred during the actual performance of the services and was caused by the negligence of The ERIE, its Agents, Employees or service contractors; 2. to consultation services required to be performed under a written service contract not related to a policy of insurance; or 3. if any acts or omissions of The ERIE, its Agents, Employees or service contractors are judicially deter- mined to constitute a crime, actual malice or gross negligence. ERIE INSURANCE GROUP GENERAL USE GU-18 (Ed. 1/96) OF-5691 PENNSYLVANIA AMENDATORY ENDORSEMENT - - - CONDITIONS The CANCELLATION CONDITION in your basic policy is deleted and-replaced.by.the following_.___ CANCELLATION Your Right to Cancel or Refuse Renewal The first named Insured shown on the Declarations may cancel this policy or any coverage by mailing our Agent or as written notice stating at what future date you want the cancellation to take effect. Our Right to Cancel or Refuse to Renew We may cancel or refuse to renew by mailing you written notice stating the effective date of the cancellation. Notice will be sent to your last known address. Cancel- lation and nomenewals will comply with the laws of the state in which your business is located. The cancellation or nomenewal will not take effect until at least 60 days after we send it, unless one or more of the following exist. The cancellation will not take effect until at least 30 days after we send it, if 1. anyone we protect has made a material misrepresen- tationwhich affects the insurability of the risk; 2. anyone we protect has failed to pay a premium when due; or 3, the policy has been in effect less than 60 days, unless it is a renewal. We will send the notice no later than the 60th day. We may also cancel this policy for your material failure to comply with safety standards and/or Loss Control recommendations, provided that: 1. we send you written notice concerning your failure to comply with safety standards and/or Loss Control recommendations; and 2. we have provided you with a reasonable opportunity to correct deficiencies with respect to safety standards - and/or Loss Control recommendations; and -. - 3. you have failed to correct these deficiencies. Nothing shall restrict our right to rescind an insurance policy upon discovery that the policy was obtained through fraudulent statements, omissions or concealment of fact material to the acceptance- of the-risk or to the hazard assumed by us, Method of Giving Notice Mailing notice will be sufficient proof of notice. Delivery of the notice by you or us will be equivalent to mailing. Return of Premium If your policy is canceled, we will return the pro rata unused share of your premium. Any unearned pre mium will be returned at the time we cancel or within 10 busi- ness days after the effective date of cancellation, unless a longer time period is permitted by law. Increase of Renewal Premium We will notify you of our intent to increase your renewal premium at least 30 days in advance of the renewal date of this policy. ?a I ERIE INSURANCE GROUP BUSINESS CATASTROPHE LIABILITY COMMERCIAL GENERAL LIABILITY FIVESTAR CONTRACTORS' ULTRAFLEX PACKAGE ULTRAPACK BUSINESS ULTRASURE FOR LANDLORDS ULTRASURE FOR PROPERTY OWNERS GU-32 (Ed. 3195) OF-6189 LEAD LIABILITY EXCLUSION ENDORSEMENT LIABILITY PROTECTION - SECTION If b. manufacture, distribution, sale, resale, rebranding, installation, repair, removal, WHAT WE DO NOT COVER -- EXCLUSIONS encapsulation, abatement, replacement or han- dling of lead, paint containirt? lead, or any other We do not cover: material or substance containing lead 1. actual or alleged bodily injury arising out of the ingestion, inhalation or absorption of lead or lead compounds in any form; 2. actual or alleged property damage, personal injury or advertising injury arising out of any form of lead or lead compounds; 3, any legal obligation of anyone we protect for indemnification or contribution due to damages arisin4 out of bodily t' ury, property damage or per- sonal injury caused by lead, resulting from paint con- taining lead or contributed to by any other substance or material containing lead; 4. bodily injury, property damage or personal injury arising out of the actual or alleged: a. exposure to or existence of lead, paint containing lead, or any other material or substance con- taining lead, or whether or not the lead is now or was at any time airbome as a particle, contained as a product, ingested, inhaled, transmitted in any fashion, or found in any form whatsoever, 5. any loss, cost or expense arising out of any: a. request, demand or order that anyone we protect or others test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, y or in an way respond to, or assess the effects of, lead or lead compounds; b. claim or suit by or on behalf of any govern- mental authority for damages resulting from testing for, monitoring, cleaning up, removing, con g, treating, detoxifying or neutralizing, or in any way responding to, or assessing the effects of, lead or lead compounds in any form. ERIE INSURANCE GROUP ERIEe COMMERCIAL GENERAL LIABILITY GL-AC (Ed. 4/99) OF-9458 COVERAGE FOR PUNITIVE DAMAGES (IN, PA) Words in bold type are used as defined in the basic policy, unless otherwise defined in this endorsement. OUR PROMISE BODILY INJURY LIABILITY -- COVERAGE A PROPERTY DAMAGE LIABILITY -- COVERAGE B This section in your basic policy is deleted and replaced by: We will pay for damages, including vicarious liability for punitive or exemplary damages to the extent allowed by law, because of bodily injury or property damage for which the law holds anyone we protect responsible and which are covered by your policy, subject to the Limits of Protection. We cover only bodily injury and property damage which occurs during the policy period. The bodily injury or property damage must be caused by an occurrence which takes place in the covered territory. PERSONAL INJURY LIABILITY -- COVERAGE C ADVERTISING INJURY LIABILITY - COVERAGE D This section in your basic policy is deleted and replaced by: We will pay for damages, including vicarious liability for punitive or exemplary damages to the extent allowed by law, because of personal injury or advertising injury for which the law holds anyone we protect responsible and which are covered by your policy, subject to the Limits ofProtection:_ We cover only personal injury caused by an offense com- mitted during the policy period which takes place in the covered territory. We cover only, -advertising injury caused by an offense committed during the policy period, and in the course of advertising your goods, products, or services and which takes place in the covered territory. We will pay any additional sums or perform any addi- tional acts or services that are explicitly covere any under WHAT WE ALSO PAY, and nothing else. We will pay any additional sums or perform any addi- tional acts or services that are explicitly-covered-under WHAT WE ALSO PAY, and nothing else. The following is added to this section in your basic policy: Coverage for punitive or exemplary-damages does not include loss caused intentionally by or at the direction of anyone we protect. OTHER PROVISIONS All other provisions of the policy apply. rI ERIE INSURANCE GROUP SUE* BUSINESS CATASTROPHE LIABILITY COMMERCIAL GENERAL LIABILITY FIVESTAR CONTRACTORS ULTRAFLEX PACKAGE ULTRAPACK BUSINESS ULTRASURE PACKAGE FOR LANDLORDS ULTRASURE PACKAGE FOR PROPERTY OWNERS GU-56 (Ed. 5/96) OF-8648 EMPLOYMENT-RELATED PRACTICES EXCLUSION (Words in bold type are used as defined in the basic policy, unless defined in this endorsement.) WHAT WE DO NOT COVER - ADDITIONAL 2. the spouse, child, parent, brother or sister of that EXCLUSION person as a consequence of bodily Injury or personal injury to that person at whom any of the We do not cover under Bodil Injury Liability and Per- employment-related practices described in paragraphs sonal Injury Liability bodily Injury or personal injury to: a., b., or c. above is directed. 1. any person arising out of any: This exclusion applies: a. refusal to employ that person; 1. whether the Insured may be liable as an employer or b. termination of that person's employment; or in any other capacity; and c, employment-related practices, policies, acts or 2. to any obligation to share damages with or repay omissions, such as coercion, demotion, failure to someone else who must pay damages because of the promote, negligent evaluation, reassignment, dis- injury. cipline, defamation, harassment including sexual harassment, humiliation or discrimination directed at that person; or COMMERCIAL GENERAL LIABILITY GU-75 (Ed. 10(98) OF-9163 FRM. ERIE INSURANCE GROUP PROFESSIONAL SERVICES EXCLUSION Words in bold type are used as defined in the basic 2) supervisory, inspection, or engineering services; policy, unless defined in this endorsement. 3) the servicing, installation or maintenance of computer WHAT WE DO NOT COVER-EXCLUSIONS hardware or software; and Under Part A. in your basic policy, 7.e. is deleted and 4) the selling, designing, licensing, consulting, franchising, replaced by; famishing or creation of computer hardware or software, including electronic data processing programs, designs, 7.e, damages due to any service of a professional nature, specifications, manuals or instructions. including but riot limited to: 1) the preparation or approval of mars, plans, opinions, reports, surveys, designs, or specifications; 111 I? ERIE INSURANCE GROUP +- m* COMMERCIAL GENERAL LIABILITY FIVESTAR CONTRACTORS ULTRAFLEX PACKAGE ULTRAPACK BUSINESS ULTRASURE FOR PROPERTY OWNERS GU-84 (Ed. 4/00) OF-9559 AMENDMENT OF POLLUTION EXCLUSION _--_EXCEPTION FOR BUILDING HEATING EQUIPMENT Words in bold type are used as defined in the basic 1) request, demand or order that anyone we policy, unless defined in this endorsement. protect or others test for, monitor, clean-up, remove, contain, treat, detoxify or neutralize, LIABILITY PROTECTION -- SECTION 11 or in any way respond to, or assess the effects of, pollutants; or WHAT WE 00 NOT COVER -- EXCLUSIONS Exclusion B.3. in your basic policy is deleted and replaced by the following: 3. a. damages arising out of the actual, alleged or threatened discharge, dispersal, release or escape of pollutants: 1) at or from premises you own, rent or occupy; 2) at or from any site or location used by or for you or others for the handling, storage, dis- posal, processing, or treatment of waste; 3) which are at any time transported, handled, stored, treated, disposed of, or processed as waste by or for you or any person or organ- ization for whom you may be legally respon- sible; or 4) at or from any site or location on which you or any contractors or subcontractors working directly or indirectly on your behalf are performing operations; a) if the pollutants are brought on or to the - - - -site -or location- in connection with such operations; or b) if the operations are to test for, monitor, clean-up, remove, contain, treat, detoxify or neutralize the pollutants, b. any loss, cost, or expense arising out of any: 2) claim or suit by or on behalf of a govern- mental authority for damages because of testing for, monitoring, cleaninmgg up, removing, xontainitsg, tremiing; detoxifying or neutralizing, or in any wap responding to, or assessing the effects of pollutants. Subparagraphs 1) and 4) a) of paragraph a. of this exclusion does not apply to bodily hi if sustained within a building and caused by smoke, fumes,. vapor or soot from equipment used to heat that building. Subparagraphs 1) and 4) a) of paragraph a. of this exclusion does not apply to bodily injury or property damage caused by heat, smoke, or fumes from a hostile fire. As used in this exclusion, a hostile fire means one-which becomes uncontrollable or breaks out from where it was intended to be. Subparagraph 4) a) of this exclusion does not apply to bodily injury or property damage arising out of the escape of fuels, lubricants, or other operating fluids whichare needed. to_ perform the. normal electrical, hydraulic, or mechanical functions necessary for the operation of mobile equipment or its parts if such fuels, lubricants, or other operating fluids escape from a vehicle part designed to hold, store, or receive them. This exception does not apply if the fuels; lubricants or other operating fluids are intentionally discharged, dispersed, or released, or if such fuels, lubricants, or other operating fluids are brought on or to the prem- ises, site or location with the intent to be discharged, dispersed, or released as part of the operations being performed by such Insured, contractor, or subcon- tractor. I ERME ERIE INSURANCE GROUP COMMERCIAL GENERAL LIABILITY CG-50 (Ed. 7/97) OF-732 COMBINED SINGLE LIMIT LIMITS OF PROTECTION Our duty to pay the sums recoverable under this policy for which the law holds anyone we protect responsible is subject to the limits shown on the Declarations. For the purpose of determining our limit of liability, all personal u jury, bodily injury, property damage, and advertising injury and medical payments arising out of continuous or repeated exposure to the same general harmful condi- tions shall be considered one occurrence. Our limit of liability is not increased regardless of the number of people we protect, claims made or persons injured as a result of an occurrence. PREMISES/OPERATIONS Bodily Injury Liability - Coverage A Property Damage Liability - Coverage B Personal Injury Liability - Coverage C Advertising Injury Liability - Coverage D Medical Payments - Coverage E The amount shown on the Declarations for EACH OCCURRENCE is the total limit of protection for all damages because of bodily injury or property damage or medical expense to one or more persons or organizations as a result of any one occurrence or because of personal injury or advertising injury sustained by any one person or organization as a result of an offense. The amount does not apply to bodily injury covered under the products hazard or the completed operations hazard. The amount shown on the Declarations for AGGRE- GATE is the total limit of protection for all damages because of all bodily injury or property damage or medical expense as a result of one or more occurrences or because of all personal injury or advertising injory as a result of one or more offenses. The AGGREGATE Limit does not apply to: 1, bodily injury and property damage covered under the products hazard or the completed operations hazard; or 2. coverage provided under the bodily injury definition. PRODUCTS HAZARD/COMPLETED OPERATIONS HAZARD Bodily Injury Liability - Coverage A Property Damage Liability - Coverage B The amount shown on the Declarations for EACH OCCURRENCE is the total limit of protection for all damages because of all bodily injury or property damage covered under the products hazard and completed oper- ations hazard as a result of any one occurrence. The amount shown on the Declarations for AGGRE- GATE is the total limit of protection for all damages because of all bodily injury or property damage covered under the products hazard and completed operations hazard as a result of one or more occurrences. The Limits of Protection for this policy apply separately to each consecutive annual period and to any remaining period of less than 12 months, starting with the inception date of the policy period shown on the Declarations. If the policy period is extended after the policy is issued for an additional period of less than 12 months, then the additional period will be deemed part of the last pre- ceding period for purposes of determining the Limits of Protection. Fn a a: zo r4 Q U 0.' O U 1.L Z) O CC 0 W U Z Z) CO W cr W G't7 0 V o a 9 0 Q p ri .C ` O e o ?o W W U) d W a 4, W 'UT -6 (of O 7 O ix d Y w Kt;c Z d ? y-w M 3 cl: NA a Z z J 3 d'O Q °' q ?- o H o 0 d T G F.?aA ?o a a Cl O V ?pp N G O U COMMERCIAL GENERAL LIABILITY CG 20 11 (Ed. I/96) UF•9667 tI ERIE INSURANCE GROUP ffe. THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURED - MANAGERS OR LESSORS OF PREMISES This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART SCHEDULE 1. Designation of Premises (Part Leased to You): 2. Name of Person or Organization (Additional Insured): 3. Additional Premium: (If no entry appears above, the information required to complete this endorsement will be shown in the Declarations as applicable to this endorsement.) WHO IS AN INSURED (Section II) is amended to include as an insured the person or organization shown in the Schedule but only with respect to liability arising out of the ownership, maintenance or use of that part of the premises leased to you and shown in the Schedule and subject to the following additional exclusions: This insurance does not apply to: 1. Any "occurrence" which takes place after you cease to be a tenant in that premises. 2. Structural alterations, new construction or demolition operations performed by or on behalf of the person or organ- ization shown in the Schedule. Copyright, Insurance Services Office, Inc., 1994 F° Q a? a? z?c Wry N UU a O V Z O _N Z Q O O O N a a W ? U Z Z _ Z ..1 w z O LU h ?I O / ` Q 2 Q W in 3 ° ° N o o O 00 ~ Oep ?..a T ?pp C? O ?a ? Or 5 U c0 .O O '- 2 r•r °ed o a T c.. O ? .? v O u a m'a C 92.s P W o\ ti U H U CIO U _q T c U COMMERCIAL GENERAL LIABILITY CG 26 16 (Ed. 1194) OF-8419 Nj ERIE INSURANCE GROUP ERIE. PENNSYLVANIA CHANGES - PESTICIDE APPLICATOR COVERAGE WHAT WE DO NOT COVER - EXCLUSIONS With respect to the use of pesticides, paragraph a. 4)a) of exclusion B.2, under WHAT WE DO NOT COVER - EXCLUSIONS does not apply If: 1. You are certified, or your employees performing operations are certified or registered by a federal or state agency to use pesticides. 2. Your noncertified or nonregistered "employees" are performing operations under the instruction and control of a certified a licator who is physically present at any premises, site or location at which such operations are being performed The term pesticide refers to pesticide as defined in the Pennsylvania Pesticide Control Act of 1973. Copyright, Insurance Services Office, Inc., 1993 Pinnacle Risk Management Services September 16, 2003 Ms. Cheryl Kistler, Claim Representative Erie Insurance Company P. O. Box 4286 Bethlehem, PA 18018-0286 VIA FAX & REGULAR MAIL RE: Our Client: Rite Aid Corporation Claimant: Mark Heiser D/Incident: 04/27/2001 Location: Rite Aid Store 1742 - Allentown, PA File #: 30117289 Erie Insureds: Joseph Brubella and Todd Salvo (d/b/a Bell Landscaping) Erie Policy #: Fivestar Contractors Q271420210A Dear Ms. Kistler: Pinnacle Risk Management Services is the claims administrator for Rite Aid Corporation, your additional insured. This correspondence shall serve to submit a formal request for coverage as an additional insured under the above referenced policy. Mark Heiser alleges he slipped and fell on rebar protruding from landscape railroad ties at the Rite Aid store on Hanover Street in Allentown, PA on 4/27/2001. He sustained injuries complained of in his lawsuit, filed in Lehigh County at #2002-C1454. John Hoilawell. Esq. represents Mr. Heiser in this matter. Lois Shenk represents Rite Aid of PA, Inc. in this matter, who joined Bell Landscaping into this lawsuit. Rite Aid contracted with Bell Landscaping to perform landscape and parking lot maintenance under the tens of the enclosed contract. Schedule A shows that Bell Landscaping agreed to Parking Lot and Landscape /Lawncare maintenance at location 1742 on Hanover Ave in Allentown. This is clear evidence that Rite Aid's intent was to have Bell maintain the landscaping. At issue in this case was an alleged piece of rebar that stood up from a landscape railroad tie. It does not matter whether Bell installed said landscape tie or not. Bell agreed to the maintenance of the landscaping and lawn care. That would include inspection of the landscaped area, and remedying any hazards arising out of the landscape. Indeed, Bell Landscaping sent an invoice for all of these services dated 4/30/2001, copy enclosed. Said invoice confirms Bell Landscaping billed for landscape / Lawncare maintenance service in April 2001. NOTE, the last such date was one day PRIOR to the date of loss. I am sure you will agree that Rite Aid can get a juryto believe that Bell Landscaping had the opportunity to observe the defect and correct it just ONE DAY prior to the alleged fall. Page two Ms. Cheryl Kistler September 16, 2003 The fact that Bell Landscaping now insists they knew nothing of the alleged rebar, is not germane to the issue of whether they were responsible for the maintenance of the area. Since it is rather clear from the contract that this area was their responsibility, the remainder of the contract requires that Rite Aid's defense and indemnity be assumed by Bell and its carrier - Erie Insurance. The Landscape/Lawncare/Parking Lot Agreement between Bell Landscaping & Construction and Rite Aid Corporation indicates that your insured has agreed to defend, indemnify and hold harmless Rite Aid in claims of this type. That is regardless of whether there is any portion of liability on the part of Rite Aid, which we strictly deny. In addition, the contract states that Rite Aid shall be named as an additional insured under your policy. Please see the contract copy enclosed. Rite Aid hereby demands coverage as an additional insured under the terms of the policy of insurance issued to Bell Landscaping. We request an immediate coverage decision from your home office and that Rite Aid be treated as any other Erie insured would be treated. This shall also serve as a formal request by Rite Aid, as an insured under the policy, for a complete copy of the policy at issue in this case. As I am sure you are aware, any insured is entitled to receive a complete copy of the policy at issue, upon request. Further, if you contend that Bell Landscaping has not properly added Rite Aid as an additional insured to the policy, then we remind you of the direct cross-claim Rite Aid has filed against Bell Landscaping for Breach of Contract for failure to name Rite Aid as a Additional Insured under their policy, as required by the contract enclosed herein. Please acknowledge receipt of this letter and your decision regarding coverage in writing within 10 days. In any event, we request a copy of the policy be forwarded to me as soon as possible. Your failure to respond could open Erie up to a claim for bad faith failure to respond and unfair claims practices. If Rite Aid is forced to resolve this matter with the claimant directly, Rite Aid will seek reimbursement from Erie for the damages paid and the costs incurred to defend and adjust it. Please consider this formal notice of Rite Aid's intent to pursue under the contract. Thank you for your immediate attention to this matter. Should you or your agent have any questions, please contact me immediately. ncerel ' odd A. i?ittl , AIC` Branch Manager - Pennsylvania 717 703-0330 P 717-703-0332 F TR/s Pinnacle Risk Management Services, hic. PO Box 62103 Harrisburg, PA 17106-2103 Telephone 717-703-0330 Facsimile 717-703-0332 Page two Enclosure - Contract, Bell Invoice CC: Ms. Cheryl Kistler September 16, 2003 Lois M. Shenk, Esq. -Post & Schell, PC Pinnacle Risk Management Services, Inc. PO Box 62103 Harrisburg, PA 17106-2103 Telephone 717-703-0330 Facsimile 717-703-0332 ERIE INSURANCE GROUP Branch Office • 2200 W 6reao SI. • F.O. E 4286 • P II Ire FA Ott- f256 • (610) 865-19 i 1 Toll Fiee 1-800-322-9026 • Fa, (61M 97:- p5 • htr0 !? .u eri_ asr ai _om ERIE September 29, 2003 Pinnacle Risk Management Services ATTN: Todd Rittle, Branch Manager P.O. Box 62103 Harrisburg, PA 17106-2103 Re: ERIE Claim ERIE Insured: Date of Loss Claimant: Your Client: Your File Dear Mr. Rittle: #010180613896 Bell Landscaping & Construction 4/27/01 Mark Heiser Rite-Aid Corporation #30117289 Your letter dated September 16, 2003 was forwarded to me for handling. We are writing to advise you that we are denying your request for indemnification and defense. Based on our policy language, we feel that the insured's work fits within the definition of completed operations. The applicable Additional Insured endorsement applies to ongoing operations. Furthermore, it is our position that the Hold Harmless and Indemnification Clause in the contract is only invoked if the loss arises from the negligence of our insured, its subs and employees. We maintain that the maintenance of the tie was outside the scope of the insured's work and, therefore, there was no duty to correct it. In view of the above, we are denying your request. Sincerely, fir' ?,', i , -.' SJ::' Robert Beretski Commercial Liability Claims Specialist Allentown/Bethlevm Branch Claims (570) 696-2611 RB:scm cc: John Fisher Home Office cc: R. Beretski cc: File 7605591 TI /e r'' .'IC` JnCE Pinnacle Risk Management Services September 29, 2003 Mr. Robert Beretski, Claim Representative Erie Insurance Company P. O. Box 4286 Bethlehem, PA 18018-0286 VIA FAX & REGULAR NLAIL RE: Our Client: Rite Aid Corporation Claimant: Mark Heiser D/Incident: 04/27/2001 Location: Rite Aid Store 1742 - Allentown, PA File #: 30117289 Erie Insureds: Bell Landscaping Erie Policy #: Q30-2200488 File # 010180613896 Dear Mr. Beretsld: Pimtacle Risk Management Services is the claims administrator for Rite Aid Corporation, your additional insured. This correspondence shall serve to submit a formal request for coverage as an additional insured under the above referenced policy. This also confirms receipt of Chervl Kistler's letter of September 22, 2003, on which you were copied. Mark Heiser alleges he slipped and fell on rebar protruding from landscape railroad ties at the Rite Aid store on Hanover Street in Allentown, PA on 4/27/2001. He sustained injuries complained of in his lawsuit, filed in Lehigh County at #2002-C1454..iohn Hollawell, Esq. represents Mr. Heiser in this matter. Lois Shenk- represents Rite Aid of PA, Inc. in this matter, who joined Bell Landscaping into this lawsuit. Rite Aid contracted with Bell Landscaping to perform landscape and parking lot maintenance under the ternis of the enclosed contract. Schedule A shows that Bell Landscaping agreed to Parking Lot and Landscape /Lawncare maintenance at location 1742 on Hanover Ave in Allentown. This is clear evidence that Rite Aid's intent was to have Bell maintain the landscaping. At issue in this case was an alleged piece of rebar that stood up from a landscape railroad tie. It does not matter whether Bell installed said landscape tie or not. Bell agreed to the maintenance of the landscaping and lawn care. That would include inspection of the landscaped area, and remedying any hazards arising out of the landscape. Indeed, Bell Landscaping sent an invoice for all of these services dated 4/30/2001, copy enclosed. Said invoice confirms Bell Landscaping billed for landscape / Lawncare maintenance service in April 2001. NOTE, the last such date was one da PRIOR to the date of loss. I am sure you will agree that Rite Aid can get a juryto believe that Bell Landscaping had the opportunity to observe the defect and correct it just ONE DAY prior to the alleged fall. Page two Mr. Robert Beretski September 29, 2003 The fact that Bell Landscaping now insists they knew nothing of the alleged rebar, is not germane to the issue of whether they were responsible for the maintenance of the area. Since it is rather clear from the contract that this area was their responsibility, the remainder of the contract requires that Rite Aid's defense and indemnity be assumed by Bell and its carrier - Erie Insurance. The Landscape/Lawncare/Parking Lot Agreement between Bell Landscaping & Construction and Rite Aid Corporation indicates that your insured has agreed to defend, indemnify and ]told harmless Rite Aid in claims of this type. That is regardless of whether there is any portion of liability on the part of Rite Aid, which we strictly deny. In addition, the contract states that Rite Aid shall be named as an additional insured under your policy. Please see the contract copy enclosed. Rite Aid hereby demands coverage as an additional insured under the terms of the policy of insurance issued to Bell Landscaping. We request an immediate coverage decision from your home office and that Rite Aid be treated as any other Erie insured would be treated. This shall also serve as a formal request by Rite Aid, as an insured under the policy, for a complete copy of the policy at issue in this case. As I am sure you are aware, any insured is entitled to receive a complete copy of the policy at issue, upon request, Further, if you contend that Bell Landscaping has not properly added Rite Aid as art additional insured to the policy, then we remind you of the direct cross-claim Rite Aid has filed against Bell Landscaping for Breach of Contract for failure to name Rite Aid as a Additional Insured under their policy, as required by the contract enclosed herein. Please acknowledge receipt of this letter and your decision regarding coverage in writing within 10 days. In any event, we request a copy of the policy be forwarded to me as soon as possible. Your failure to respond could open Erie up to a claim for bad faith failure to respond and unfair claims practices. If Rite Aid is forced to resolve this matter with the claimant directly, Rite Aid will seek reimbursement from Erie for the damages paid and the costs incurred to defend and adjust it. Please consider this formal notice of Rite Aid's intent to pursue under the contract. Tharik you for your immediate attention to this matter. Should you or your agent have any questions, please contact me immediately. Sincerely, Todd A. Rittle, Ali Branch Manager - ]Pennsylvania 717 703-0330 P 717-703-0332 F TR/s Pinnacle Risk Management Services, hic. PO Box 62103 Harrisburg, PA 17106-2103 Telephone 717-703-0330 Facsimile 717-703-0332 Page two Enclosure - Contract, Bell Invoice CC: Mr. Robert Beretski September 29, 2003 Lois M. Shenk, Esq. -Post & Schell, PC Pinnacle Risk Management Services. Inc. PO Box 62103 Harrisburg, PA 17106-2103 Telephone 717-703-0330 Facsimile 717-703-0332 (q C Risk Management Services October 3, 2003 Mr. Robert Beretski, Claim Representative Erie Insurance Company P. O. Pox 4250 Bcthlcllcm, P: I S01 S 1286 VIA FAX & REGULAR MAIL RE: Our Client: Rite Aid Corporation Claimant: Mark Heiser D/Incident: 04/27/2001 Location: Rite Aid Store 1742 - Allentown, PA [rile #: 30117289 Erie Insureds: 13 ell Landscaping Erie Policv #: Q30-2200488 File # 010180613896 Dear 1\9r. Beretski: This confirms receipt oFyour letter dated September 29, 2003, den in Rite Aid's tender for defense and indemnification AND Rite Aid `s request for coverage under the Additional Insured provisions of the Erie Policy. First - wu have failed to provide a copy of the policy at issue, and upon which you rely for the denial. We again demalrl a complete copy of the policy as soon as possible. Failure to cooperate may lead to a count for had faith in any Declaratory 7udament Action that Rite Aid contell plates. Second - your letter does not cite the pertinent policy language on which you base your opinion. Third - your opinion is that the HHA and Indemnification clause is only invoked if the loss arises out of the negligent acts of your insured, its sub-contractors or employees. This case is about a Eailure to maintain landscaping - the exact services your client was contracted to perform for Rite Aid. It cannot _-et any clearer than that. You take the position that the landscape railroad tie is not a part o l the Ikindscaping. What else could it be a part of? If you suggest the parking lot, then },our insured has contracted to maintain that too. You take the position that your insured had completed its operations. This contract was a month to month landscape / lawn care contract for which a flat fee was billed, regardless of the number of times your insured hrid to come. It is our position this constitutes "on-going operations" to maintain the kr,,? n care :md landscaping, per the contract. I would note that Bell Landscaping was paid the month'-:lec fo: April 2001. Pinnacle Risk Management Services, Inc. PO Box 62103 Harrisburg PA 17106-2103 Telephone 717-703-0330 Facsimile 717-703-0332 Paae two NIr. Robert Beretski October 3, 2003 Rite Aid personnel will testify that the intent of this landscape contract is for the contractor to inspect aid maintain the landscaping. Your insured cannot escape the fact that a landscape railroad tie is a part of the landscaping. All of these facts trigger coverage for Rite Aid tinder the Additional Insured portion of the contract with Bell Landscaping. At a minimum, there is a question of coverage for which a Reservation of Ri,hts would be in order, rather than an outrisht denial, Therefore, we request an immediate reconsideration of Your denial, and re- request you assume the defense of Rite Aid per the policy until the coverage issues are resolved. Please be advised that N,: e will recommend to Rite Aid that it pursue this matter via a Declaratory 7udgnlcut Action. NVe %,, it] recommend that Rite Aid request reimbursement for: • al", settlenunt ; judgment it must pay, • all defense Dees incarred ill the handling of this case, • Interest. Finally. we %? ill recon.:.rend that counsel include a count for Bad Faith, if you refuse to provide the policy at issue in the request for coverage. This will necessarily include a count to recover fees for die co%cruge eipiuion / deciaratoryjudgnient action I look forward to a copy of the policy and your re-considered coverage opinion. Sincerely, Todd A. Rittle, AiC Branch Manager - Pen,lsylvania 717 703-03.30 P 717-703-0332 F TR's CC: Lois M. Shenk, Fsq. -Post R Schell, PC Mark E. Hennessv Sr. Director of Claims Rite Aid Corporation 30 Hunter Lane Camp Hill, PA 17011 Pimma ie Risk Nana:ement Services, Inc. PO Box 62103 Harrisburg, PA 17106-2103 Telephone 717-703-0330 Facsimile 717-703-0332 PnU?c t?v0 Karen A-Altemose, Esq. Contracts Malvuer Rite Aid Corporation 30 Hunter Lane Camp Hill, PA 17011 Mr. John Fisher Erie IFISUrance Group -Home Office 100 Erie Insurance Place Erie, PA 16530-0001 Mr. Robert Beretski October 3, 2003 Pinnacle Risk Management Services, Inc. PO Box 62103 Hanisburg, PA 17106-2103 Telephone 717-703-0330 Facsimile 717-703-0332 0- ERIE INSURANCE GROUP Brant`, OT'ICe • 22200 yr orcao 51 • P.O 5cr 4266 • cethlenenr. FN, !dote-C2es • (610) e65.19>> T011 Feu 1•ee0-522-9026 (EtC)574-7,55 wiry envnevre:nce ccm ERIE October 27, 2003 Pinnacle Risk Management Services Attention: Mr. Todd Rittle, Branch Manager P.O. Box 62103 Harrisburg, PA 17106-2103 Re: ERIE Claim ERIE Insured Date of Loss Claimant: Your Client: Your File Dear Mr. Rittle: #010180613896 Bell Landscaping & Construction 4/27/01 Mark Heiser Rite Aid Corporation #30117289 In response to your letter dated October 3, 2003, please be advised that under a cover letter dated October 23, 2003, we mailed to you a certified copy of The ERIE policy. Please note that we continue to stand on our denial for your request for indemnification and defense. This loss did not arise from Bell's operations, whether completed or ongoing. The scope of contract and the hold harm less language is ambiguous and not specific to warrant consideration for your tender. Sincerely, Robert Beretski Commercial Liability Claims Specialist Allentown/Bethlehem Branch Claims (570) 696-2611 RB: gmb cc: Home Office cc: R. Beretski cc: File 77830-71 The ERIE 18 Above All jr, SERVICE, • Since '1925 ,r, r. fJ0,i?00'd 8[1Ci# C(;:01 800%/OE:/01 Z 111'0 ",'L L1L 111311 N I'V ;dr` ]T)V4NJd:L1c 1J THOMAS, THOMAS & HAFER LLP ATTORNEYS AT LAW 305 North Front Street, P.O. Box 999, Harrisburg, PA 17108 Phone: (717) 237-7100 Fax: (717) 237-7105 December 10, 2003 VIA CERTIFIED MAIL - RETURN RECEIPT REQUESTED AND VIA FACSIMILE (610) 974 - 7355 Robert Beretski Commercial Liability Claims Specialist Erie Insurance Group 2200 W. Broad Street P.O. Box 4286 Bethlehem, PA 18018-0286 Re: Mark Heiser and Donna Heiser vs. Rite Aid Corporation Our Client and Your Additional Insured: Rite Aid Corporation Your Named Insured: Bell Landscaping & Construction Rite Aid Claim No.: GCRAC30117289 Erie Claim No.: 010180613896 Date of Loss: 4/27/2001 Our File No.: 924-31341 Dear Mr. Beretski: www.tthlaw.com James K. Thomas, Il (717) 255-7617 jthomas@tthlaw.com This firm has been retained to represent the interests of Rite Aid Corporation ("Rite Aid") with respect to the above claim. The defense and indemnity of the above-captioned lawsuit ("Heiser Lawsuit") were tendered to Erie Insurance Group on September 16, 2003. A response was forwarded on September 22, 2003 clarifying that Todd Sallo dba Sallo Landscaping is insured under policy number Q27 1420210, and that Rite Aid is not an additional insured under that policy. Rite Aid's tender was forwarded to you for a response. You denied Rite Aid's tender on September 30, 2003 under policy number Q30 2200488 A, issued by Erie Insurance Exchange ("Erie") effective June 22, 2000 to June 22, 2001 (the "Erie Policy"), issued to Joseph W. Burbella dba Bell Landscaping & Construction (`Bell"). Your denial was made on the basis that the additional insured endorsement only applies to Bell's ongoing operations, and that this was a completed operations hazard. You also responded that the indemnity provision contained in a contract between Rite Aid and Bell only applies to the negligence of the insured, and that the maintenance of the landscape tie identified in the Heiser Lawsuit was outside the scope of the contract with Rite Aid. Lehigh Valley Office: 3400 Bath Pike, Suite 302, Bethlehem, PA 18017 • Phone: (610) 868-1675 • Fax: (610) 868-1702 THOMAS, THOMAS & HAFER LLP December 10, 2003 Page 2 After Rite Aid requested reconsideration, you again denied the tender on October 27`", stating that the loss did not arise from Bell's operations, and that the scope of the indemnity provision is ambiguous. As explained below, Erie's denial is in error. Erie has an immediate duty to defend Rite Aid, which is self-insured for this claim. This will serve to again request that Erie immediately assume the defense and indemnity of your insured, Rite Aid, under policy number Q30 2200488 A issued by Erie Insurance Exchange ("Erie"), and that Rite Aid be reimbursed its costs of defense to date. 1. THE ERIE POLICY PROVIDES PRIMARY COVERAGE EVEN FOR RITE AID'S OWN ALLEGED NEGLIGENCE The coverage provided to Rite Aid as an additional insured must be examined independently from the issue of whether Rite Aid will be able to obtain contractual indemnity for this claim from Bell based on the contract between Bell and Rite Aid. Under Pennsylvania law, the Erie Policy provides broad primary coverage to Rite Aid as an additional insured, whether or not Bell is contractually liable to Rite Aid. While Bell might be able to argue that the indemnity provision in the contract with Rite Aid must be narrowly construed in favor of the indemnitor, Bell, the insurance coverage afforded by Erie must be broadly interpreted in favor of the party seeking coverage. A. The Erie Policv Provides Coveraee for the Accident and Damages Claimed in the Heiser Lawsuit The damages sought in the Heiser Lawsuit fall within the Erie Policy's insuring agreement, which provides that "We will pay for damages because of bodily injury or property damage for which the law holds anyone we protect responsible and which are covered by your policy." The Erie Policy also provides for payment of defense expense in addition to the indemnity limit of insurance: WHAT WE ALSO PAY Payment for the following is in addition to the limits of protection shown on the Declarations. B. Claim Expenses We will pay: 1. court costs, to defend or settle as we believe proper, any claim or suit against anyone we protect, for damages covered under this policy.... 2 expenses incurred, to defend or settle as we believe proper, any claim or suit against anyone we protect, for damages covered under this policy.... `THOMAS, THOMAS & HAFER LLP December 10, 2003 Page 3 B. The Erie Policy is Rite Aid's Only Primary Insurance The Erie Policy contains an "other insurance" clause which provides that the Erie Policy provides primary insurance, unless there is "other valid and collectible insurance". Rite Aid is self-insured for the Heiser Lawsuit, and there is no "other valid and collectible insurance." C. The Coverage Afforded Under the Erie Policy to Rite Aid Extends to Rite Aid's Own Alleged Ne¢lieence Rite Aid is specifically endorsed on the schedule as an additional insured. The applicable additional insured endorsement, CG 20 10 (Ed. 4/98), provides: The definition of anyone we protect and Insured is amended to include as an Insured the person or organization shown in the Schedule on the Declarations, but only with respect to liability arising out of your ongoing operations performed by you or your employees for that person or organization. Based on this endorsement, Rite Aid qualifies as anyone we protect and an Insured if the liability asserted against Rite Aid in the Heiser Lawsuit arises, in part, out of "ongoing operations" performed by Bell for Rite Aid. There is no limitation in this endorsement that coverage does not extend to any independent negligence of Rite Aid; i.e., that coverage only extends to vicarious liability for the acts or omissions of Bell. In fact, Pennsylvania courts have consistently construed the effect of similar additional insured endorsement broadly, absent specific language excluding coverage for the additional insured's own negligence. There is no limitation in the endorsement that the coverage extended to Rite Aid is limited to contract between Rite Aid and Bell, or that "operations" is confined only to what Bell subjectively believes were its contract duties. Rather, if there is a potential that the accident arose, in part, out of the "operations" of Bell, Erie has a duty to defend and indemnify Rite Aid. Pennsylvania courts have imposed a very liberal reading of what might be considered to be "operations" of the named insured. In City of Philadelphia v. Charter Oak Fire Ins. Co., 6 Pa. C&D3d 304 (C. C. P. 1977), the Court considered the effect of a license agreement and an additional insured endorsement in a situation where the non-employee claimant fell on the sidewalk six feet west of the west entrance steps of the Philadelphia Civil Center after leaving a performance. The licensor was the City of Philadelphia. The licensee was Shipstads & Johnson Ice Follies, Inc., and the license agreement granted permission to use "all that certain space of the Philadelphia Civic Center ... and such other parts of that structure as may be permitted by licensor for the purpose incident to the use to be made of the licensed space ...." The agreement also required that the Licensee agree to maintain liability insurance under which the City of Philadelphia was to be named an insured. `THOMAS, THOMAS & HAFER LLP December 10, 2003 Page 4 The City of Philadelphia defended the personal injury claim, and filed suit against Shipstad's insurance company. The additional insured endorsement included the City of Philadelphia "but only with respect to liability arising out of the ownership, maintenance or use of that part of the premises leased by [the City of Philadelphia] to the named insured [licensee]." The Court acknowledged that under Pennsylvania law, a landlord retains possession and control of all portions not specifically leased, as well as all common access ways, including adjacent sidewalks. However, the Court nonetheless concluded that the claimant's injury arose out of Shipstad's use of that part of the premises "leased," and the City of Philadelphia was covered by the policy. In Township of Springfield v. William Ersek, et al., 660 A.2d 672 (Pa. Cmwlth. Ct. 1995), alloc. denied 675 A. 2d 1254 (1996), the Court found that an insurer was required to defend and indemnify the additional insured for its own negligence, even where contractual indemnity between the parties was denied. The Township, as lessor, sought indemnity from Ersek, the lessee of a golf pro shop, for injuries sustained by Ersek's employee when the employee slipped and fell on the steps leading from the front door of the pro shop into its parking lot. The lease agreement contained an indemnity clause. The Township was an additional insured under the lessee's insurance policy, "but only with respect to liability arising out of the operations performed by the named insured." This language is similar to the Erie Policy. The Springfield Court found that the lease agreement did not obligate Ersek to indemnify the Township. The Township then brought a lawsuit against Ersek and his insurer based on the requirement to provide an additional insured endorsement. The Court first found that its previous holding disallowing contractual indemnity collaterally estopped any further Township claim against Ersek based on the contact. Ersek's insurer then tried to argue that any claim on the additional insured endorsement was also collaterally estopped. The Court held that the lease agreement did not control the legal relationship or obligations between the Township and the insurer. The Township's rights under the policy did not rest on a showing that Ersek was negligent in causing the injury. Those rights also did not rest upon a showing that Ersek had an obligation to indemnify the Township based upon contract or common law. The Court held that the insurance contract between the insurer and the Township provided independent rights to the Township: "The clear language of the policy requires [the insurer] to defend and indemnify the Township for the Township's own alleged negligence ...." Id. at 676. [The insurer] does not dispute that it issued a policy to Ersek and named the township as an additional insured. The Township is named as an additional insured "with respect to liability arising out of operations performed by the named insured." Those operations are broadly defined in the policy as "Golf Pro Shop operations conducted by the insured...." (141a, 172a). This policy clearly provides coverage to the Township where an injury occurs on the Pro Shop premises as a result of the Pro THOMAS, THOMAS & HAFER LLP December 10, 2003 Page 5 Shop's operations, regardless of whether the negligence which gives rise to the claim rests with Ersek or with the Township. Had Phoenix sought to restrict coverage to only claims arising from the negligence of Ersek, it could have clearly so stated in the additional insured endorsement language, rather than stating that the Township was insured with "respect to liability arising out of Ersek's operations." It is the law of Pennsylvania that exceptions to general liability of the insured are to be strictly construed against the insurance company. Miller v. Prudential Ins. Co. of America, 239 Pa.Super. 467, 362 A.2d 1017 (1976). Id. at 676. The Court concluded that "arising out of" has been defined as "causally connected", not "proximately caused by": The language in the policy issued by Phoenix covers the township as an additional insured "with respect to liability arising out of operations performed by the named insured." (170a) (emphasis added). "Arising out of" has been defined as causally connected with, not proximately caused by. McCabe v. Old Republic Ins. Co., 425 Pa. 221, 228 A.2d 901 (1967), n8 We believe that not only Pennsylvania but other jurisdictions have interpreted similar insurance provisions such as the one found in the Phoenix policy to require the insurer to provide a defense and indemnify an additional insured for the additional insured's negligence which occurred on the covered premises.... Id. at 676 - 677. In Pennsylvania Turnpike Commission v. Transcontinental Ins. Co., et al., 1995 U.S. Dist. LEXIS 11089 (E.D. Pa 1995), two employees of a painting subcontractor, Corcon, were injured while painting a turnpike overpass bridge. Corcon, the employer, was a subcontractor to Inorganic Coating, Inc., which had signed a prime contract with the Pennsylvania Turnpike Commission ("PTC"). Transcontinental issued a policy to Corcon which contained an additional insured endorsement in favor of PTC. The Court applied Ohio law, but it relied on Pennsylvania authority due to the absence of applicable Ohio law in discussing the additional insured issues. The additional insured endorsement contained the limitation that PTC was additionally insured "but only with respect to liability arising out of' work or operations performed by Corcon or on Corcon's behalf for the PTC. Transcontinental argued that the phrases "but for" and "your work" operated to limit the "arising out of phrase such that coverage existed for PTC only with respect to acts or omissions committed by Corcon. The complaints in the underlying injury actions alleged that the accident was caused by PTC's negligence in designing, implementing and enforcing a traffic control plan for the work site, and did not allege that the accident was caused by Corcon's work. The Pennsylvania Turnpike Court found that the additional insured endorsement was ambiguous as to whether an additional insured was covered for independent acts of negligence. The Court found that a fair and reasonable reading of the endorsement could support either proximate or "but for" causation. THOMAS, THOMAS & HAFER LLP December 10, 2003 Page 6 The Court further found that the endorsement could have been made more clear by the inclusion of express language limiting coverage for the additional insured where the claims arose for independent acts of negligence. In discussing Pennsylvania law, the court considered Harbor Ins. Co. v. Lewis, 562 F.Supp. 800 (E.D. Pa. 1983). In Harbor, the Court interpreted an additional insured endorsement which provided coverage to the additional insured "but only to the extent of liability resulting from occurrences arising out of negligence of Reading Company and/or its fully owned subsidiaries." The Harbor Court denied coverage under this endorsement to the additional insured as it found that the additional insurer's negligent maintenance of a fence caused the accident. The Court in Pennsylvania Turnpike rejected Transcontinental's reliance on the Harbor decision, stating that the Harbor endorsement contained clear and unambiguous language, as contrasted with the Transcontinental endorsement. That (Harbor's] endorsement's express reference to negligence required the court to apply a proximate cause analysis to the claims presented. There, the contract terms explicitly extending coverage to the City of Philadelphia only if the Reading Company was negligent and the court found an affirmative link between the alleged injury in that negligence. The Transcontinental endorsement does not contain such an express limitation. Consequently, Harbor is limited by its facts and its analysis is inapplicable to the Transcontinental endorsement. Id. The Pennsylvania Turnpike Court also considered Philadelphia Electric Co. ("PECO ") v. Nationwide Mutual Ins. Co., 726 F. Supp. (E.D. Pa. 1989), in light of the Harbor decision. In PECO, an underlying injury action alleged that the accident was caused "solely and exclusively" by the negligence of various defendants, including PECO, but not the named insured. A Nationwide policy additionally insured PECO "but only with respect to ... any work performed" by the named insured on behalf of the additional insured. The PECO Court found that the Nationwide endorsement "contemplated a wider scope of coverage" than the Harbor policy because it did not contain an express reference to negligence. The underwriting risk classifications under the Erie Policy for which a premium was received are: "landscape gardening including products and/or completed operations, carpentry, and contractors - subcontracted work - in connection with construction, reconstruction, erection or repair - not buildings including products and/or completed operations." These underwriting classifications are broad enough, similar to Springfield, to include all allegations in the Heiser Lawsuit. Based on the pleadings and discovery, as discussed below, the accident occurred, at least in part, at a location maintained as part of Bell's operations. As such, the additional insured endorsement is satisfied and Rite Aid is covered even for its own alleged negligence. THOMAS, THOMAS & HAFER LLP December 10, 2003 Page 7 IL THE ERIE POLICY PROVIDES COVERAGE TO RITE AID FOR THE HEISER LAWSUIT Based on the pleadings and the factual information available to Erie, the potential exists that the injury arose out of Bell's operations. Erie cannot rest on a factual dispute which may be raised by Mr. Burbella's contention that his contract with Rite Aid did not require him to warn of any defects or problems.' The underlying Complaint was filed in the Court of Common Pleas of Lehigh County on July 3, 2002. The plaintiffs are Mark W. Heiser and Donna M. Heiser. The sole defendant is Rite Aid. The Complaint generally alleges that on April 27, 2001, Mark Heiser was walking across the parking lot of Rite Aid's store location at 701 Hanover Avenue, Allentown, coming from the pharmacy. He alleges that he tripped on a portion of steel rebar extending from a wood section resembling a railroad tie which was lying flat and formed a border between the paved parking lot and a landscaped, unpaved portion of the premises, causing him to fall. There are two counts pled. The first is for negligence: 16. The carelessness and negligence of the Defendant, as aforesaid, consisted of the following: (a) Failing to maintain its premises in a safe condition; (b) Failing to inspect its premises in a prompt and thorough manner: (c) Causing or permitting a hazardous condition in the form of the wooden section containing exposed rebar to exist or remain upon its real property in an area where business invitees and other persons lawfully upon their premises would be exposed to the said hazard; (d) Failing to remove the above-described hazardous condition from its premises in a timely manner; (e) Failing to warn persons lawfully traversing its premises of the hazardous artificial condition which then and there existed; (f) Violating the Codified Ordinances of the City of Allentown relative to the maintenance of real property. The second count is for loss of consortium, which has been subsequently withdrawn, as the plaintiffs are now separated. i In fact, the deposition testimony and contract with Rite Aid, set forth below, contradict Mr. Burbella's apparent view conveyed to Erie.. THOMAS, THOMAS & HAFER LLP December 10, 2003 Page 8 Rite Aid filed a joinder complaint against Bell Landscaping & Construction ("Bell"), based on the contract with Rite Aid dated November 10, 2000, and alleging that Bell is liable to the Plaintiffs. The bases of that liability are found in the plaintiff's complaint, including the failure to maintain, the failure to inspect, the failure to remove, and the failure to warn of the condition. Pennsylvania case law imposes a duty to defend whenever there is a potential for coverage. There does not have to be actual or proven indemnity coverage under the policy. If any of the claims are potentially covered by the policy, then the insurer must defend all the claims, unless and until the possible bases of recovery are confined to uncovered claims. Sphere Ins. Co. v. Rosen, 1985 U.S. District LEXIS 14124 (E.D. Pa. 1985), reconsideration denied, 1986 U.S. District LEXIS 25403 (E.D. Pa. 1986). In PECO, supra, the plaintiff sued various defendants. Nationwide's named insured, Davey Trees, was joined as a third party defendant. The Court found a duty to defend under the Nationwide policy, even though Davey Trees denied that it was liable: "At this point, it is unclear who is ultimately responsible for [the plaintiff's] injuries. In order to determine Nationwide's duty to defend, however, this Court need look only to the allegations in the underlying action." Id at **6. See also, Maryland Cas. Co. v. Regis Ins. Co., 1997 U.S.Dist. LEXIS 4359 (E.D. Pa. 1997) (duty to defend additional insured where the responsibility to maintain a parking lot where the claimant slipped is alleged to be joint obligation of named insured and additional insured). Erie's obligation to provide coverage to Rite Aid under Pennsylvania law is confirmed by the factual information available to Erie. A number of depositions have been taken which confirm both a duty to defend and a duty to indemnify under the Erie Policy. I understand that Erie is defending Joseph Burbella dba Bell Landscaping & Construction in the underlying lawsuit, and has access to the various deposition transcripts and other documents generated in discovery. A. The Depositions of Mark and Donna Heiser Confirm that the Accident Occurred at a Location Maintained by Bell Mr. Heiser testified that the date of the incident was his first visit to this store location. After visiting the store, he and his wife decided to go to a pizza place located across the street. They walked across the Rite Aid parking lot, past the landscaped portion of the lot. They arrived at the pizza place but decided not to eat there because it did not look clean. Mr. and Mrs. Heiser retraced their steps back to the Rite Aid parking lot, and Mr. Heiser was walking about 1 foot from the edge of the landscaped portion of the parking lot, bordered by a wooden railroad tie, when his foot got stuck on a 4 inch piece of metal rebar, which was bent so that it extended into the landscaped area. Mr. Heiser testified that the rebar was originally protruding into the parking lot, but when it caught his shoe, he rotated the rebar while attempting to dislodge his foot. Ms. Heiser has withdrawn her loss of consortium claim because she and Mark Heiser separated in December, 2002. In other respects, Ms. Heiser's testimony reflects that of Mr. Heiser. THOMAS, THOMAS & HAFER LLP December 10, 2003 Page 9 This deposition testimony, by itself, confirms that the accident arose at a location maintained by Bell; i.e., at a location covered by Bell's "operations." As such, coverage is afforded under the additional insured endorsement. B. The Deposition of Joseph Burbella Confirms That Either Bell Assumed a Contractual Duty to Warn Rite Aid of Defects or, in the Alternative, That Bell Assumed an Obligation To Warn Aside From Any Perceived Contractual Obligation Mr. Burbella is the owner of Bell Landscaping & Construction, a sole proprietorship. He testified that he has been in business for 16 years, and performs various services including parking lot clean up, weed control, lawn maintenance, and snow removal. He signed the contract with Rite Aid that provided for parking lot maintenance, landscaping and weeding. The contract between Bell and Rite Aid is dated November 10, 2000 and entitled "Landscape/Lawncare/Parking Lot Agreement". The agreement states, in part: 2. BELL LANDSCAPING & CONSTRUCTION agrees to render the facility services described in SCHEDULE A ... Schedule A states: "P-LOT $106/1St VISIT; $58/2nd VISIT; LANDSCAPE/LAWNCARE $394.29/MONTH." Monthly invoices from Bell to Rite Aid have been produced, showing 4 to 5 visits per month at this location starting in January, 2001, and including the day before the incident. For example, the April, 2001, invoice shows a charge for repeat visits for "PARKING LOT MAINTENANCE" of $424.00, and a separate charge of $394.29 for "Monthly Contract - April". Erie has taken the position in its denial that the contracted services did not include any duty to inspect or warn of conditions in the landscape or parking lot areas maintained by Bell. The contract language can reasonably be read to include such duties, and clearly the potential exists that a Court could find that Bell had the duty to notify Rite Aid of any problems or defects it noticed while performing landscape and parking lot maintenance. Erie has taken the position by your letter of October 27th that the "scope of the contract and the hold harmless language is ambiguous". Course of conduct of the parties will then be admissible to give meaning to the contract terms. See, Fort Washington Resources, Inc. v. Tannen, 901 F. Supp. 932 (E.D. Pa. 1995).2 Although an ambiguity might prevent acceptance of Bell's obligation to indemnify Rite Aid under the contract at this time, that very ambiguity recognizes that one reasonable result is that indemnity may be afforded if the Court finds that the accident resulted from Bell's operations under the contract. As to Erie's coverage obligations to Rite Aid, Erie's position that there is an ambiguity necessarily shows that there is at least a potential for coverage, and thus a duty to defend. THOMAS, THOMAS & HAFER LLP December 10, 2003 Page 10 The course of conduct between the parties shows that Bell, in fact, did notify Rite Aid of defects or problems as part of its ongoing operations. Mr. Burbella testified that someone from Bell usually went twice a week to perform services at this location. He tried to inspect each client location at least once per month. He then testified on pages 50 and 51 of his deposition that as part of its operations at this site, Bell assumed the obligation to report to Rite Aid certain defects. However, there is no indication that Mr. Burbella ever told Rite Aid that his reporting of defects was limited to only certain defects or problems. Q: Prior to Todd taking over the Rite Aid work, either you or one of your employees were out in the parking lot, would you, if you saw any defects in the property, a crack in the sidewalk, a pothole in the parking lot, is that something you would report? A: In some cases. Q: Can you give me examples of when you would report something like that? A: When or what type? Q: Well, I guess what type.... A: Lighting or signage. Mr. Burbella then further explained his custom and practice later in the deposition at pages 79 to 81, and acknowledges that on occasion he might report defects other than lighting or signage to Rite Aid, including defects or conditions such as a cracked sidewalk. Q: And you testified that the only things that you probably would bring to the attention of Rite Aid ... a sign problem or a light problem, is that right? [Counsel objection] Q: Those are examples of things that you would bring to their attention, if you saw a problem with lighting or signs? A: That's correct. Q: ... Why those particular things? What would separate those things from, say, a cracked sidewalk, where someone might trip and fall? A: And I might bring that to their attention as well. Q: What in your mind, would characterize the defects on or about the - on or adjacent to the actual parking lot that you would bring to the attention of the corporate people? A: There was no particular rating of urgency or - I don't know. THOMAS, THOMAS & HAFER LLP December 10, 2003 Page 11 Q: If you thought something needed to be brought to their attention, you would bring it, some defect and, if another defect you thought that you didn't want to bring to their attention, you wouldn't bring it to their attention, is that right? A: I don't think that is correct. Q: Okay. A: Not that I didn't want to bring it. Q: Or that you wouldn't? A: Yeah. Q: Some you would, some you wouldn't, is that right? A: Yes. Q; And, essentially, I think you testified that it is not your job to bring any type of defect to Rite Aid's attention, is that right? A: More a courtesy. A party to a contract has two duties: a contractual duty, and a legal duty to act without negligence toward both the other party and third parties. Reformed Church of Ascension v. Theodore Hooven & Sons, Inc., 764 A. 2d 1106 (Pa. Super. 2000). Mr. Burbella's testimony establishes that Bell did assume under its contract the obligation to notify Rite Aid of certain defects. There is no indication during the course of Bell notifying Rite Aid of defects that Rite Aid was told that Mr. Burbella was not going to report all defects or problems. Even if the contract is ambiguous, as Erie claims, the course of conduct between the parties shows that Bell performed the duty to warn of defects or problems. Even if Mr. Burbella and Erie take the position that the Bell contract did not require Bell to notify Rite Aid of defects, Mr. Burbella gratuitously (as a "courtesy"), assumed that obligation and has the duty to perform that obligation without negligence. See, Shaw v. Kirschbaum, 653 A.2d 12 (Pa. Super. 1994), appeal denied 664 A.2d 542. Aside from any subjective intent by Mr. Burbella as to what the contract required him to report, he did in fact assume the duty to report defects, even such as a cracked sidewalk. Bell's voluntary assumption of notifying Rite Aid of defects or problems means that Bell assumed a duty which it has an obligation to perform properly and without negligence. Whether based on the express contract language, course of conduct between the parties to aid in the interpretation of an ambiguous contract, or the voluntary assumption of a duty to notify Rite Aid of problems or defects, coverage exists under each circumstance as the accident necessarily arose out of Bell's operations. THOMAS, THOMAS & HAFER LLP December 10, 2003 Page 12 C. The Deposition of Connie Zeneski Confirms that the Bell Contract Included the Duty to Notify Rite Aid of Any Problems or Defects Connie Zeneski's deposition was taken on November 13, 2003. She is the Rite Aid employee who signed the Bell Contract. She testified in part that notification of any problems or defects at the Rite Aid property was within the scope of the Bell contract and Bell's operations. Her testimony is confirmed by the fact that Bell did in fact report defects to Rite Aid. D. The Deposition of Todd Sallo Confirms that Joseph Burbella Did Instruct That Defects Be Reported as Part of the Landscape and Parking Lot Maintenance Performed Under the Bell Contract Todd Salto's deposition was also taken on November 13, 2003. Please note that Mr. Salto is not an employee or agent of Rite Aid. He was formerly employed by Mr. Burbella, and currently has his own landscape company and acted as Bell's subcontractor. Belt subcontracted the maintenance of the particular Rite Aid location involved in the Heiser Lawsuit to Mr. Salto. Accordingly, Mr. Salto will be considered to be Bell's agent. Mr. Salto testified, in part, that Mr. Burbella instructed Mr. Salto to notify him of any problems or defects he noticed at this Rite Aid location. He also testified that he replaced landscape timbers at this particular property in 1999, and that he gave the invoice to Mr. Burbella for payment. His testimony confirms, via evidence independent of any Rite Aid testimony, that Mr. Burbella did view that his contractual obligations included the duty to notify of any problems or defects. In view of his testimony, it is inconceivable that Erie does not have an obligation to provide defense and indemnity to Rite Aid. III. CONCLUSION Erie has an immediate duty to defend Rite Aid. There is clearly a potential that the liability alleged against Rite Aid could arise out of Bell's "operations", whether those operations are spelled out in the contract, or otherwise assumed by Bell. The accident occurred at a location maintained by Bell. Indemnity coverage also exists. Bell's subcontractor, Todd Salto, testified that Mr. Burbella told him to report any problems or defects at the Rite Aid property. Mr. Burbella has testified that as part of his operations at this site, he would notice certain conditions and report those conditions to Rite Aid. He assumed that obligation, and did not tell Rite Aid that his notification and warnings were limited to only signage or lighting, or that his notification of other defects was simply a "courtesy". Whether Mr. Burbella believed that this notification was simply a "courtesy", or whether inspecting and warning was expressly stated in the contract, or be deemed to be part of the contract based on the performance of the contract, Bell assumed the duty to inspect and warn as part of its operations at this site. THOMAS, THOMAS & HAFER LLF December 10, 2003 Page 13 Even if there is a concurrent duty on the part of Rite Aid to ensure that its premises do not have a dangerous condition, full indemnity coverage is afforded under the Erie Policy. The additional insured endorsement is not limited to indemnifying Rite Aid for Bell's negligence, but extends to Rite Aid's own alleged negligence. I look forward to your prompt acknowledgement of Erie's duty to defend and indemnity Rite Aid. Very truly yours, THOMAS, THOMAS & HAFER LLP By: James K. Thomas, II 266235.2 THOMAS, THOMAS & HAFER LLP ATTORNEYS AT LAW www.tthlaw.com 305 North Front Street, P.O. Box 999, Harrisburg, PA 17108 Phone: (717) 237-7100 Fax: (717) 237-7105 James K. Thomas, 11 (717) 255-7617 jthomas@tthlaw.com January 5, 2004 VIA FED EX - OVERNIGHT DELIVERY AND VIA FACSIMILE (610) 974 - 7355 RESPONSE REQUIRED BY JANUARY 9, 2004 Robert Beretski Commercial Liability Claims Specialist Erie Insurance Group 2200 W. Broad Street P.O. Box 4286 Bethlehem, PA 18018-0286 Re: Mark Heiser and Donna Heiser vs. Rite Aid Corporation Our Client and Your Additional Insured: Rite Aid Corporation Your Named Insured: Bell Landscaping & Construction Rite Aid Claim No.: GCRAC30117289 Erie Claim No.: 010180613896 Date of Loss: 4/27/2001 Our File No.: 924-31341 Dear Mr. Beretski: This firm has been retained to represent the interests of Rite Aid Corporation ("Rite Aid") with respect to the above claim. On December 10, 2003, we forwarded a letter to you requesting that Erie Insurance Group immediately assume the defense and indemnity of Rite Aid Corporation in the above- captioned suit. No response has been received. Since the date of that letter, we have received copies of the deposition transcripts of Constance ("Connie") Zeneski Murdorf and Todd Sallo. Defense counsel retained by Erie to defend Bell Landscaping was in attendance at those depositions and had the opportunity to ask questions. Both Ms. Murdorf s and Mr. Sallo's deposition testimony confirms that Erie has an obligation to defend and indemnify Rite Aid Corporation. Lehigh Valley Office: 3400 Bath Pike, Suite 302, Bethlehem, PA 18017 • Phone: (610) 868-1675 • Fax: (610) 868-1702 THOMAS, THOMAS & HAFER LLP January 5, 2004 Page 2 Ms. Murdorf's testimony includes the following: Q: Had you negotiated directly with Mr. Burbella prior contracts before November 10, 2000. A: Yes. Q: Were they for parking lot maintenance and landscaping maintenance? A: Yes. Q: When you negotiated the contracts with Mr. Burbella, did you give Mr. Burbella any guidelines or instructions as to what Rite Aid expected should he agree to the contract? A: Yes We discussed the services that the contract was to be for, what was included with the different services, the cost from the bids that he submitted. We also discussed how Rite Aid felt about the contractors on site, that they are the eyes of Rite Aid. Should they see anything out of the norm or of a safety hazard or liability issue, they were to call and report immediately what they observed. Q: This was told to Mr. Burbella by you? A: Yes. [page 8, line 21 through page 10, line 24] Ms. Murdorf further testified: Q: Now, do you have an understanding of the terms of the contract marked Murdorf-1? A: Yes. Q: Okay. And was it your understanding that under the terms of the contract marked Murdorf-1 between Rite Aid and Bell Landscaping that as part of the operations that were to be performed by Bell Landscaping that Bell landscaping was to check the landscaping, including any railroad ties, and report back to Rite Aid corporate offices any safety hazards? A: Yes. [page 15, line 5 through line 15]. THOMAS, THOMAS & HAFER LLP January 5, 2004 Page 3 Q: Over the years in your contact with Mr. Burbella, did Mr. Burbella bring problems to your attention? A: Yes. Q: Okay. Based upon your discussions with Mr. Burbella, did Mr. Burbella give you the impression that he understood the importance of bringing problems to the attend of Rite Aid? A: Yes. [page 16, line 21 through page 17, line 91. Todd Sallo, Bell Landscaping's subcontractor at thirteen Rite Aid locations for six years, also confirms that Mr. Burbella's operations included notifying Rite Aid Corporation of any hazards or safety problems. Q: Did Mr. Burbella tell you that at Rite Aid locations if you saw a problem, such as a pothole, you were to bring it to Mr. Burbella's attention? A: Yes. Q; Did Mr. Burbella tell you that when you were performing work at any of the Rite Aid locations if you saw any problems with the landscaping that you were to bring it to Mr. Burbella's attention? A: Yes. Q: So was it your understanding from Mr. Burbella that if you saw something that posed a hazard at a Rite Aid location concerning the landscaping or the parking lots, you were to let Mr. Burbella know about that? A: Yeah. Q: Did you do that? A: Yes. [page 26, line 5 through fine 21]. The additional insured endorsement contained within the Erie policy is not limited to Mr. Burbella's contractual obligations, rather it only requires that the liability arise out of Bell Landscaping's ongoing operations. Nonetheless, Ms. Murdorf testified that she and Mr. Burbella had discussions prior to this injury that Mr. Burbella was to report any hazards. She testified that, in fact, Mr. Burbella did report hazards. THOMAS, THOMAS & HAFER LLP January 5, 2004 Page 4 Mr. Sallo, Mr. Burbella's subcontractor and agent at the Rite Aid locations, and an individual who has no connection with Rite Aid, testified that Mr. Burbella told him to report any hazards or problems to Mr. Burbella. Mr. Sallo thus confirms and admits that notification of problems or hazards at the Rite Aid locations was part of Bell Landscaping's ongoing operations. This case continues to proceed rapidly. The Court has recently assigned this case to arbitration, which will take place in the near future. Please advise by no later than 5 p.m. on Friday, January 4, 2004, whether Erie will accept the defense and indemnity of Rite Aid Corporation in this suit. I look forward to your prompt acceptance. Very truly yours, THOMAS, THOMAS & HAFER LLP By: James K. Thomas, 11 268425.1 p O ? x n ' -C i 3 SHERIFF'S RETURN - OUT OF COUNTY CASE NO: 2004-00905 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND RITE AID CORPORATION VS ERIE INSURANCE EXCHANGE R. Thomas Kline , Sheriff or Deputy Sheriff who being duly sworn according to law, says, that he made a diligent search and and inquiry for the within named DEFENDANT , to wit: ERIE INSURANCE EXCHANGE but was unable to locate Them deputized the sheriff of LEHIGH in his bailiwick. He therefore County, Pennsylvania, to serve the within COMPLAINT & NOTICE On March 18th , 2004 this office was in receipt of the attached return from LEHIGH Sheriff's Costs: Docketing 18.00 Out of County 9.00 Surcharge 10.00 Dep Lehigh County 30.00 .00 67.00 03/18/2004 THOMAS THOMAS HAFER Sworn and subscribed to before me this Iq day of .2oV A. D. Prothonotary So answ s_: ? _. R. Thomas Kline Sheriff of Cumberland County SHERIFF OFFICE COURTHOUSE -- 5TH & HAMILTON STREETS 455 W HAMILTON SST ROOM 1 06 ALL.ENTOWN PA 18101-1114 RITE. AID CORP., DOC9# e 0004 -CV--our --, VS CASEi : 2004-NC-1021 ERIE INSURANCE EXCHANGE: E XPIR: 01-Apr-2004 (CUMBERLAND CO--04-905) DEPOSIT: 30.00 ENTRY: 09-Mar-200q WRIT a COMPLAINT IN CIVIL.. ACTION AND NOTICE. SERVE: ERIE INSURANCE EXCHANGE AT : 2200 W BROAD ST BETHLEHEM, Po --------------------------------------------------------------------------- REETiURN OF SERVICE i.., R{/-ll°kE OF INDIVIDUAL. :ERE F_Li ? __ ?} _ e. -----------,--------°-, E. RELATIONSHIP TO f.E1rC:IVDAIVI ?qea? ' -- _. / 3. DATE; 3.11 20 Oy- /TIME. 112-/`?/ HOURS: 4. LOCATION OF SERVICE. 5. UNABLE TO LOCATE: ( ) NUMBER OF ATTEMPTS TO LOCATE DEFENDANT AT LAST KNOWN ADDRESSa 1. DATE. P TIME. 3. .DAT'. & TIME. . DATE. & TIME 2.. DATE: & TIME 4,. DATE & TIME:' 6.. DATE & TIME ACCEPTANCE OF SERVICE I HEREBY ACCEPT iERVICE. OF THE LEGAL PROCESS AS OUTLINED ON THE FRONT OF THE. DOCUMENT. THIS SERVICE IS ACCEPTED ON BEHALF OF THE LISTED DEFENDANT(S) AND I HEREBY CERTIFY THAT I AM AUTHORIZED O DO SO.. PRINTED NAME OF AUTHORIZED AGENT DATE: SIGNATURE Or AUTHORIZED AGENT TIME. ....... SO ANSWER`..: ?....,/:!_._.._. ........ ....................._....._ Df. F Y SH/E SHERIFF OF' LEHIC-H COL.INTY -- ,II F( 'I'5 I t 011 TIOUSE 0Ti 6 IlAMH TOW ::7R U Q, 454 I i 1 f :' OWi`t r l ALLE1TOWN PA ;l''i. -fol'4 =; wwfig I I ?I- I 1 AN 1 •CH NBI : < Pli l rll? 1 1 'I'!1zl I? l??l i] ?? y ,I j I't ?.Ilri ' ?::) I' I I',(lhl I' L I_ 111111, 1_ q i?ATI - i 1 11 [ I°4 ( ' ill 1 L I I?i' fl I I ?-?lA ?? •-_ i .. I , . • . !-i DATE 'Fti L9 11E ^Ot /r!/ l?r?a?J S?• U2 ? •. N(jMl;l R {]F Ai It!MP'I4 VO LOCATE DEFENDANT AT LAS" KNOWN ADDRESS,, L. ?ATV ?!IMF D AX TINE unit ' f ii r: ;:ATE TII°I'c ACCEPTANCE III SaEr;'VI r::_ i I!.u:E! cmi .'I pv f F for THE LEGAL FP(1C E ':.'> ; O1V INE-bi ON THE I DHT _. Ii-! "1f .ll'9LN CHIC 1ipy,I1.1 1.8 AL.L1.:PTED ON BEHAL..F OF THE ' 1STED C11'4-F"Pdf.AN ,6) ANI-I .. SO,. T• , L--? I r TFifl F?-..'4 liL1TF?iC.lf 1 F: II ft i , ir7 E I '', r:il- l'.`„Ii?:'? 'i FlU"!hi 1• I rri F?.(:,?rd'T "1 Fi T FS- ? C.Fir::;.T.? I(,I CJi:r r d ? I I-P=)i ? L.L? :?? 1 :PIT RITE AID CORPORATION, IN THE COURT OF COMMON PLEAS Plaintiff, OF CUMBERLAND COUNTY, PENNSYLVANIA Vs. CIVIL ACTION - LAW ERIE INSURANCE EXCHANGE, NO. 04-905 JURY TRIAL DEMANDED Defendant STIPuLATION/AGREEMENT AND NOW, this -? day of , 2004, plaintiff and through their counsel, Rite Aid Corporation ("Plaintiff"), by Paul R. Walker, Esquire (Plaintiff's counsel) and Defendant Erie Insurance Exchange ("Erie"), by and through its counsel Lee E. Ullman, Esquire (Defendant's counsel), collectively the parties hereto, hereby agree and stipulate that COUNT II entitled BAD FAITH, (Paragraphs 26-34) of Plaintiff's Complaint, is hereby withdrawn, stricken and dismissed with prejudice. THOMAS MAS & HAFER, P.C. By: Pa R. Walker, Esquire 305 North Front Street P.O. Box 999 Harrisburg, PA 17108 (717) 237-7100 Attorney for Plaintiff FORRY, ULLMAN & FORRY By: Lee E. Ullman, Esquire 540 Court Street P.C. Box 542 Reading, PA 19603 (61.0) 777-5700 Attorney for Defendant Date: ///0` Date: r /pZ 7/0/ Curtis R. Long Prothonotary office of the Protbonotarp Cumberlaub Couutp Renee K. Simpson Deputy Prothonotary John E. Slike Solicitor OL4 + 90S CIVIL TERM ORDER OF TERMINATION OF COURT CASES AND NOW THIS 5TH DAY OF NOVEMBER 2007 AFTER MAILING NOTICE OF INTENTION TO PROCEED AND RECEIVING NO RESPONSE - THE ABOVE CASE IS HEREBY TERMINATED WITH PREJUDICE IN ACCORDANCE WITH PA R C P 230.2. BY THE COURT, CURTIS R. LONG PROTHONOTARY One Courthouse Square • Carlisle, Pennsylvania 17013 • (717) 240-6195 • Fax (717) 240-6573