HomeMy WebLinkAbout04-6162SOUTHCENTRAL EMPLOYMENT IN THE COURT OF COMMON PLEAS
CORPORATION, CUMBERLAND COUNTY,
PLAINTIFF PENNSYLVANIA
V. ACTION FOR
DECLARATORY JUDGMENT
BIRMINGHAM FIRE INSURANCE NO. 2004 - 6/6 .z- CIVIL TERM
COMPANY OF PENNSYLVANIA,
DEFENDANT
NOTICE
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 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
D4 NOT HAVE A LAWYER, GO TO OR TELEPHONE THE OFFICE SET FORTH
BELOW.
IF YOU CANNOT AFFORD TO HIRE A LAWYER, THIS OFFICE MAY BE
ABLE TO PROVIDE YOU WITH INFORMATION ABOUT AGENCIES THAT MAY
OFFER LEGAL SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR NO
FEE.
Cumberland County Bar Association
32 S. Bedford Street
Carlisle, Pennsylvania 17013
Phone: 717.249.3166
SAIDIS
SHUFF, FLOWER
& LINDSAY
ArrORNEYS•AT•LAW
26 W. High Street
Carlisle, PA
SAIDIS, SHUFF, FLOWER & LINDSAY,
1
Date: By:
f2.c Caffrey, Esquire
Attorney I.D. 442667
26 West High Street
Carlisle, Pennsylvania 17013
Phone: 717.243.6222
Attorneys for Plaintiff
SOUTHCENTRAL EMPLOYMENT IN THE COURT OF COMMON PLEAS
CORPORATION, CUMBERLAND COUNTY,
PLAINTIFF PENNSYLVANIA
V. ACTION FOR
DECLARATORY JUDGMENT
BIRMINGHAM FIRE INSURANCE NO. 2004 - We, L CIVIL TERM
COMPANY OF PENNSYLVANIA,
DEFENDANT
COMPLAINT
NOW COMES the Plaintiff, Southcentral Employment Corporation, through its
attorneys, Saidis, Shuff, Flower & Lindsay and states the following cause of action.
Plaintiff, Southcentral Employment Corporation ("SEC") is a non-profit
corporation organized and existing under the laws of the Commonwealth of Pennsylvania
having an office at 1 Alexandra Court, Carlisle, Cumberland County, Pennsylvania 17013.
2. Defendant, Birmingham Fire Insurance Company of Pennsylvania
("Birmingham") is a corporation with an administrative office at 70 Pine Street, New
York, NY 10270.
3. Birmingham does business in Pennsylvania, and particularly in
Cumberland County, Pennsylvania.
4. On September 3, 1999 the Susquehanna Employment and Training
SAIDIS
Corporation ("SETCO") filed articles of amendment with the Pennsylvania Department of
SHUFF, FLOWER
& LINDSAY
ATTORNEYS-AT-LAW State, which changed SETCO's name to SEC.
26 W. High Street
Carlisle, PA
5. The business of SEC is to provide and coordinate workforce investment in
Central Pennsylvania, including the expenditure of funds made available to it by the
United States Department of Labor, acting through the Commonwealth of Pennsylvania,
2
Department of Labor and Industry, as well as, the Commonwealth of Pennsylvania
Department of Welfare.
6. Effective March 17, 2003 until March 17, 2004, in consideration of SEC's
payment of the appropriate premium, Birmingham issued to SEC a Not-for-Profit
Protector policy, policy no. 263-37-50 (the "Policy"), a copy of which is attached hereto
and incorporated herein as Exhibit "A."
7. The Policy provides in part as follows:
COVERAGE C: ORGANIZATION ENTITY COVERAGE
This policy shall pay on behalf of the Organization Loss arising from a Claim first
made against the Organization during the Policy Period or the Discovery Period (if
applicable) and reported to the Insurer pursuant to the terms of this policy for any
actual or alleged Wrongful Act of the Organization. The Insurer shall, in
accordance with and subject to Clause 8, advance Defense Costs of such Claim
prior to its final disposition.
Policy, Exhibit "A," p. 1.
8. The policy further provides:
"Wrongful Act" means: ...
(2) With respect to the Organization under Coverage C, any breach of duty,
neglect, error, misstatement, misleading statement, omission or act by or on behalf
of the Organization;
Policy, Exhibit "A," Clause 2 (u) (2), p. 5.
SAIDIS 9. The Policy also provides:
SHUFF, FLOWER
& LINDSAY
ArrORNEYS•AT•LAW When the Insurer has not assumed the defense of a Claim pursuant to Clause 8, the
26 W. High Street Insurer shall advance nevertheless, at the written request of the Insured, Defense
Carlisle, PA Costs prior to the final disposition of a Claim.
Policy, Exhibit "A," Clause 8, p. 10.
10. On or about March 8, 2004 the Pennsylvania Depart of Labor & Industry,
Bureau of Workforce Investment issued a Final Determination for resolution of the single
audits that were conducted on SETCO for the years ending June 30, 1997, 1998 and 1999,
and the single audit of SEC for the year ended June 30, 2000.
11. The Final Determination resulted from expenditures by SETCO and/or
SEC which were questioned by the audit firm.
12. In its March 8, 2004 letter enclosing the Final Determination Summary, the
Bureau of Workforce Investment ("BWI") states:
BWI issued a Initial Determination on April 29, 2003, which identified each
finding and the expenditures which were questioned by the audit firm of KPMG.
The total amount of questioned costs was $600,368.00. Of this amount, BWI was
able to approve $3,095.00 of questioned costs, which left a remainder of
$597,273.00 to be paid. The attached Final Determination lists each finding and
the amount due from each finding. SEC is required to pay the remaining
$597,273.00, from non-Federal funds, within 30 days of issuance of the Final
Determination.
13. The basis alleged by BWI for its order to SEC to pay $597,273.00, namely
excess revenue drawn down on various unidentifiable contracts, uncategorized expenses
and unsupported debits and credits and accruals and payables, inability to account for
classroom training funds, and inability to justify cost allocation basis adjustment, constitute
"Wrongful Acts" under the Policy.
SAIDIS 14. On March 12, 2004, pursuant to the terms of the Policy, SEC provided
SHUFF, FLOWER
& LINDSAY written notice to Birmingham of the Final Determination of the Bureau of Workforce
AMR YS•AT•LAW
26 W. High Street
Carlisle, PA Investment.
4
SAIDIS
SHUFF, FLOWER
& LINDSAY
ATTORNEYS-AT-LAW
26 W. High Street
Carlisle, PA
15. On May 10, 2004 AIG Technical Services, Inc., on behalf of Birmingham,
denied coverage of SEC's claim.
16. Under the terms of the policy, Birmingham is required to indemnify SEC
for the amount assessed in the Final Determination by the Bureau of Workforce
Investment, $597,273.00, and to provide a legal defense for SEC in connection with
SEC's opposition to and appeal of the Bureau's determination.
WHEREFORE, SEC requests the Court to enter judgment:
(a) Declaring that Birmingham has a duty to defend SEC in the administrative
proceedings which have been and are being prosecuted against SEC by the Department of
Labor & Industry, to pay the costs of such defense, and to reimburse SEC for its costs and
legal fees incurred in such proceedings and in pursuing the instant declaratory judgment
action;
(b) Declaring that Birmingham shall be required to indemnify SEC from and
against any and all liability arising out of such proceedings, to the extent of the Policy
limits; and
(c) Granting such further relief as the Court may deem appropriate.
Respectfully submitted,
SAIDIS, SHUFF, FLOWER & LINDSAY,
Date: 1,2, Y/ 6)I
By:
;rian :CCaffrey, Esquire
Attorney I.D. #42667
26 West High Street
Carlisle, Pennsylvania 170
Phone: 717.243.6222
Attorneys for Plaintiff
1 -7
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e PC Y NUMBER:
263-3t-50 '
REPLACEMENT OF POLICY NUMBER:
214-16-21 6
LQ American International Companies °
NOT-FOR-PROFIT INDIVIDUAL AND ORGANIZATION INSURANCE POLICY i
D
INCLUDING EMPLOYMENT PRACTICES LIABILITY INSURANCE .?
o
NOT-FOR-PROFIT PROTECTOR sm 1
O AIU Insurance Company O Granite State insurance Company
O American Home Assurance Company O Illinois National insurance Company
(3 American international Pacific Insurance Company []National Union Fire Insurance Company of Pitts., Pa ® A
O American International South Insurance Company []National Union Fire Insurance Company of Louisiana
® Birmingham Fire Insurance Company of Penns, O New Hampshire Insurance Company
(each of the above being a capital stock company)
g NOTICE: EXCEPT TO SUCH EXTENT AS MAY OTHERWISE BE PROVIDED HEREIN, THE
COVERAGE OF THIS POLICY IS GENERALLY LIMITED TO LIABILITY FOR ONLY THOSE CLAIMS
THAT ARE FIRST MADE AGAINST THE INSURED DURING THE POLICY PERIOD AND REPORTED
IN WRITING TO THE INSURER PURSUANT TO THE TERMS HEREIN. PLEASE READ THE POLICY
CAREFULLY AND DISCUSS THE COVERAGE THEREUNDER WITH YOUR INSURANCE AGENT OR
S BROKER.
i
NOTICE: THE LIMIT OF LIABILITY AVAILABLE TO PAY JUDGMENTS OR SETTLEMENTS SHALL
a BE REDUCED BY AMOUNTS INCURRED FOR LEGAL DEFENSE. AMOUNTS INCURRED FOR LEGAL e
Id DEFENSE SHALL BE APPLIED AGAINST THE RETENTION AMOUNT. p
NOTICE: THE INSURER DOES NOT ASSUME ANY DUTY TO DEFEND. HOWEVER, THE. INSUREDS i
MAY UNDER CERTAIN CONDITIONS TENDER THE DEFENSE OF A CLAIM. IN ALL EVENTS, THE
INSURER MUST ADVANCE DEFENSE COSTS PAYMENTS PURSUANT TO THE TERMS HEREIN
PRIOR TO THE FINAL DISPOSITION OF A CLAIM.
DECLARATIONS
ITEM 1. NAMED ORGANIZATION: SUSQUEHANNA E YMENT & TRAINING CORP
MAILING ADDRESS: 100 NORTH CAMERON STREET
FIRST FLOOR
HARRISBURG, PA 17101-2424
STATE OF INCORPORATION OF THE NAMED ORGANIZATION: S
Pennsylvania
ITEM 2.
ITEM 3.
SUBSIDIARY COVERAGE: any past, present or future Subsidiary of the Named
Organization
POLICY PERIOD: From. March 17, 2003 To: March 17, 2004
(12.01 A.M. standard time at the address stated in Item 1.)
ITEM 4. LIMIT OF LIABILITY: $2,000,000
7075549
aggregate for each Policy Year Coverages A, B and C combined (including Defense
Costs) &Ipgmmkmmmmuk
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MAY 01 2003 09:41 FR AIG SBUC
900 679 9275 TO 917176494949 P.01
Birmingham Fire Insurance Company
of Pennsylvania
Executlvo Offices
175 Water Strut
Now York, NY 10M
0M ? c«A.w so
AlIN,4Nw.r.rN=h*w" G+?one
May 1, 2003
Direct Dial:
MARY HOOKER
THE GLATFELTER AGENCY
221 WEST PHILADELPHIA ST
4TH FLOOR
YORK PA 17406
RE: SOUTHCENTRAL EMPLOYMLMT CORPORATION
Policy Number. 261-'7-1110
Dear MARY
Enclosed please find the original and copy(los) of the policy and/or andorsement(s) for the
captioned account.
If you have any questions, please feel free to contact me at the above listed number.
Very truly yours,
Enc.
MARK COKEINO
Underwriter
7076649 Draft Copy - 05/0112003
DRAFT COPY
MAY 01 2003 09:41 FR AIG SBUC 908 679 9275 TO 917178494949 P.02
tNDORSlE ENTO 17
This endorsement effective 12:01 a.or. Narck 17, 2003 forms a pert of
policy number 262-3740
Issued to SMUCENTRAL EN°LOYNENT CORPORATION
by Bipsiepbsa Ffps 123UPORCS COMP00y of P8N03y1V&#fa
NAMED INSURED AMENDIED
In consideration of the premium charged. it is hereby agreed and understood that the
Named Insured Is amended to reflect the following:
NAMED INSURED: SOUTHCENTRAL EMPLOYMENT CORPORATION
ALL OTHER TERMS. CONDITIONS AND EXCLUSION REMAIN UNCHANGED.
SWAT Copy - 05/01/2003 AUTHORIZED REPRESENTATIVE
DRAFT COPY
** TOTAL PAGE.02 **
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B. ADDITIONAL PREMIUM FOR PUNITIVE, EXEMPLARY AND MULTIPLIED DAMAGES
i (included in above) (No punitive damages coverage provided X )
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ITEM 5. RETENTION: i
c A Judgments, Settlements and Defense Costs None p
(Non-Indemnifiable Loss or indemnifiable Loss ?
2 incurred solely by Organizations in Financial a
Insolvency} i
B. Judgments, Settlements and Defense Costs
(Coverage C and all other Indemnlfiable Loss) i10,000
for Loss arising from
Claims alleging the same ?
Wrongful Act or related
Wrongful Acts (waivable
- under Clause 6 in certain d
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ITEM 6. CONTINUITY DATES:
i
5 A Coverages A and B: Mach 17, 2003 a
? B. Coverage C: March 17, 2003
ITEM 7. A PREMIUM: 1 Year Premium ,f7 200
3 Year Premium Prepaid n/a.
3 Year Premium Installments payable each anniversary
1st nla. inception
! 2nd n18-
3rd n/a. ?
5 ;
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? Premium for Certified Acts of Terrorism Coverage under Terrorism Risk In;urar?Je Act
2002: $ e 0 included in policy premium.
Any coverage provided for losses caused by an act of terrorism as defined by TRIA (TINA
? Losses) may be partially reimbursed by the United States under a formula established by
? TRIA as follows: 90% of TRlA Losses in excess of the insurer deductible mandated by TRIA,
the deductible to be based on a percentage of the insurer's direct earned premiums for the
$ year preceding the act of terrorism. ?
A copy of the TRIA disclosure sent with the original quote is attached hereto ?
7075549
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ITEM 8. NAME AND ADDRESS OF INSURER (hereinafter "Insure
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THE GLATFELTER AGENCY
221 WEST PHILADELPHIA ST
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2
7075549
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ENDORSEMENT# 1
This endorsement, effective 12:01 a.m. March 17, 2003 forms a part of
policy number 263-37-50
issued to SUSQUEHANNA EMPLOYMENT & TRAINING Cow
by Birmingham fire Insurance Company of Pennsylvania
PENNSYLVANIA CANCELLATION/NONRENEWAL
AMENDATORY ENDORSEMENT
Wherever used In this endorsement: 1) "we", "us", "our", and "Insurer" mean the insurance
company which issued this policy, and 2) "you", "your "named Insured", "First Named
Insured", and "insured" mean the Named Corporation, Named Organization, Named
Sponsor, Named insured, or Insured stated in the Declarations page; and 3) "Other
Insured(s)" means all other persons or entities afforded coverage under the policy.
Cancel lation/Nonrenewal
The cancellation provision of this policy is amended as follows:
Cancelling a policy midterm is prohibited except if:
1) A condition material to insurability has changed substantially,
2) Loss of reinsurance or a substantial decrease in reinsurance has occurred;
3) Material misrepresentation by the Insured;
4) Policy was obtained through fraud;
5) The Insured has failed to pay a premium when due;
6) The Insured has requested cancellation;
7) Material failure to comply with terms;
8) Other reasons that the commissioner may approve.
Notice Requirements for Midterm Cancellation and Nonrenewal
Notice shall be mailed by registered or first class mail by the Insurer directly to the
named Insured. Written notice will be forwarded directly to the named Insured at least
sixty (60) days in advance of the termination date unless one or more of the following
exists:
1) The Insured has made a material misrepresentation which affects the insur-
ability of the risk, in which case the prescribed written notice of cancellation
shall be forwarded directly to the named Insured at least fifteen (15) days in
advance of the effective date of termination.
2) The Insured has failed to pay a premium when due, whether the premium is
payable directly to the Insurer or its agents or indirectly under a premium
finance plan or extension of credit, in which case the prescribed written notice
of cancellation shall be forwarded directly to the Named Insured at least
fifteen (15) days in advance of the effective date of termination.
3) The policy was cancelled by the named Insured, in which case written notice
of cancellation shall not be required and coverage shall be terminated on the
- date requested by the Insured. Nothing In these three sections shall restrict
the Insurer's right to rescind an insurance policy ab initio upon discovery that
the policy was obtained through fraudulent statements, omissions or
END 001
52165 (11/96) COPY - 1 -
ENDORSEMENT# I (continued)
concealment of fact material to the acceptance of the risk or to the hazard
assumed by the Insurer.
The notice shall be clearly labeled "Notice of Cancellation" or "Notice of Nonrenewal". A
midterm cancellation or nonrenewal notice shall state the specific reasons for the
cancellation or nonrenewal. The reasons shall identify the condition or loss experience
which caused the midterm cancellation or nonrenewal. The notice shall provide sufficient
information or data for the Insured to correct the deficiency.
A midterm cancellation or nonrenewal notice shall state that, at the Insured's request, the
Insurer shall provide loss information to the Insured for at least three years or the period
of time during which the Insurer has provided coverage to the Insured, whichever is less.
Loss information on the Insured shall consist of the following:
1) Information on closed claims, including date and description or occurrence,
and any amount of payments, If any;
2) Information on open claims, including date and description or occurrence,
amount of payment, If any, and amount or reserves, If any,
3) Information on notices of occurrence, including date and description of
occurrence and amount of reserves, if any.
The Insured's written request for loss information must be made within ten (10) days of
the insured's receipt of the midterm cancellation or nonrenewal notice. The Insurer shall
have thirty (30) days from the date of receipt of the Insured's written request to provide
the requested information.
Notice of Increase in Premium
The Insurer shall provide not less than sixty (60) days notice of intent to increase the
Insured's renewal premium with thirty (30) days notice of an estimate of the renewal
premium. The notice of renewal premium increase will be mail or delivered to the
Insured's last known address. If notice is mailed, it will be by registered or first class mail.
Return of Unearned Premium
Cancellation Initiated by Insurer -- Unearned premium must be returned to the Insured
not later than ten (10) business days after the effective date of termination.
Cancellation Initiated by Insured -- Unearned premium must be returned to the Insured
not later than thirty (30) days after the effective date of termination.
ALL OTHER TERMS, CONDITIONS AND EXCLUSIONS SHALL REMAIN UNCHANGED.
AUTHORIZED REPRESENTATIVE
END 001
52165 (11/96) COPY - 2 -
ENDORSEMENT# 2
This endorsement, effective 12:01 a.m, Merch 17, 2003 forms a part of
policy number 263-37-50
Issued to SUSQUEHANNA EMPLOYMENT & TRAINING CORP
by Birmingham fire Insurance Company of Pennsylvania
CAPTIVE INSURANCE COMPANY EXCLUSION
In consideration of the premium charged, it is hereby understood and agreed that the
Insurer shall not be liable to make any payments for Loss In connection with any Claim(s)
made against any Insured alleging, arising out of, based upon, or attributable to the
ownership, management, maintenance and/or control by the Organization of any captive
insurance company or entity, including but not limited to any Claim(s) alleging the
insolvency or bankruptcy of the Organization as a result of such ownership, operation,
management and control.
ALL OTHER TERMS, CONDITIONS AND EXCLUSIONS REMAIN UNCHANGED.
AUTHORIZED REPRESENTATIVE
END 042
COPY
ENDORSEMENT# 3
This endorsement, effective 12:01 a.m. March 17, 2003 forms a part of
policy number 263-37-50
Issued to SUSPENANNA EMPLOYMENT & TRAINING CORP
by Birmingham fire Insurance Company of Pennsylvania
COMMISSIONS EXCLUSION
In consideration of the premium charged, it is hereby understood and agreed that the
Insurer shall not be liable to make any payment for Loss in connection with any Claim(s)
made against any Insured alleging, arising out of, based upon, or attributable to:
(i) payments, commissions, gratuities, benefits or any other favors to or for the
benefit of any full or part-time domestic or foreign governmental or armed
services officials, agents, representatives, employees or any members of their
family or any entity with which they are affiliated; or
(ii) payments, commissions, gratuities, benefits or any other favors to or for the
benefit of any full or part-time officials, directors, agents, partners, represent-
atives, members, principal shareholders, owners or employees, or affiliates (as
that term is defined in the Securities Exchange Act of 1934, including any of
their officers, directors, agents, owners, partners, representatives, principal
shareholders or employees) or any customers of the Organization or any
members of their family or any entity with which they are affiliated; or
(iii) political contributions, whether domestic or foreign.
ALL OTHER TERMS, CONDITIONS AND EXCLUSIONS REMAIN UNCHANGED.
AUTHORIZED REPRESENTATIVE
END 003
COPY
ENDORSEMENT# 4
This endorsement, effective 12:01
policy number 263-37-50
issued to SUSQUEHANNA EMPLOYMENT
M. March 17, 2003 forms a part of
& TRAINING CORP
by Birmingham fire Insurance Company of Pennsylvania
NUCLEAR ENERGY LIABILITY EXCLUSION ENDORSEMENT
(BROAD FORM)
In consideration of the premium charged, it is hereby understood and agreed that this
policy does not apply to any Claim(s):
A. alleging, arising out of, based upon, attributable to, or in any way involving, directly
or Indirectly the hazardous properties of nuclear material, including but not limited
to:
(1) nuclear material located at any nuclear facility owned by, or operated by or on
behalf of, the Organization, or discharged or dispersed therefrom; or
(2) nuclear fuel contained in spent fuel or waste which was or is at any time
possessed, handled, used, processed, stored, transported or disposed of by or
on behalf of the Organization; or
(3) the furnishing by an Insured or the Organization of services, materials, parts
or equipment in connection with the planning, construction, maintenance,
operation or use of any nuclear facility; or
(4) claims for damages to the Organization or its members which alleges, arises
from, is based upon, is attributed to or in any way involves, directly or
indirectly, the hazardous properties of nuclear material.
B. (1) which is insured under a nuclear energy liability policy issued by Nuclear
Energy Liability Insurance Association, Mutual Atomic Energy Liability
underwriters, or Nuclear Insurance Association of Canada, or would be insured
under any such policy but for its termination upon exhaustion of its Limit of
Liability; or,
(2) with respect to which (a) any person or organization Is required to maintain
financial protection pursuant to the Atomic Energy Act of 1954, or any law
amendatory thereof, or (b) the Organization or any insured is, or had this
policy not been issued would be, entitled to indemnity from the United States
of America, or any agency thereof, under any agreement entered into the
United States of America, or any agency thereof, with any person or
organization.
As used in this endorsement:
"hazardous properties" include radioactive, toxic or explosive properties;
"nuclear material" means source material, special nuclear material or byproduct
material;
"source material", "special nuclear material", and "byproduct material" have the
meanings given them in the Atomic Energy Act of 1954 or in law amendatory
thereof;
END 004
51681 (4/91) Copy - 1 -
ENDORSEMENT# 4 (continued)
"spent fuel" means any fuel element or fuel component, solid or liquid, which has
been used or exposed to radiation In a nuclear reactor;
"waste" means any waste material (1) containing byproduct material and (2) resulting
from the operation by any person or organization of any nuclear facility included
within the definition of nuclear facility under paragraph (a) or (b) thereof;
"nuclear facility" means -
(a) any nuclear reactor,
(b) any equipment or device designed or used for (1) separating the isotopes of
uranium or plutonium, (2) processing or utilizing spent fuel, or (3) handling,
processing or packaging waste,
(c) any equipment or device used for the processing, fabricating or alloying of
special nuclear material If at any time the total amount of such material in the
custody of the Insured at the premises where such equipment or device is
located consists of or contains more than 25 grams of plutonium or uranium
233 or any combination thereof, or more than 250 grams of uranium 235,
(d) any structure, basin, excavation, premises or place prepared or used for the
storage or disposal of waste, and includes the site on which any of the
foregoing is located, all operations conducted on such site and all-premises
used for such operations;
"nuclear reactor" means any apparatus designed or used to sustain nuclear fission in a
self- supporting chain reaction or to contain a critical mass of fissionable material.
ALL OTHER TERMS, CONDITIONS AND EXCLUSIONS REMAIN UNCHANGED.
AUTHORIZED REPRESENTATIVE
END 004
51681 (4191) COPY -2-
ENDORSEMENT# 5
This endorsement, effective 12:01 ax, March 17, 2003 forms a part of
policy number 263-37-50
issued to SUSQUEHANNA EMPLOYMENT & TRAINING CORP
by Birmingham Fire Insurance Company of Pennsylvania
PRIOR ACTS EXCLUSION
(BACKDATED)
In consideration of the premium charged, it is hereby understood and agreed that the
Insurer shall not be liable to make any payment for Loss in connection with any Claim(s)
alleging any Wrongful Act(s) which occurred prior to September 3, 1999 . This policy
only provides covera a for Loss arising from Claims, which allege Wrongful Act(s)
occurring on or after Teptember 3, 1999 and prior to the end of the Policy Period and
otherwise covered by this policy. Loss(es) arising out of the same or Related Wrongful
Act(s) shall be deemed to arise from the first such same or Related Wrongful Act(s).
ALL OTHER TERMS, CONDITIONS AND EXCLUSIONS REMAIN UNCHANGED.
AUTHORIZED REPRESENTATIVE
END 005
COPY
ENDORSEMENT# 6
This endorsement, effective 12:01 a.m. March 17, 2003 forms a part of
policy number 263-37-50
Issued to SUSQUEHANNA EMPLOYMENT & TRAINING CORP
by Birmingham fire Insurance Company of Pennsylvania
OUTSIDE ENTITY ENDORSEMENT
In consideration of the premium charged, it is hereby understood and agreed that the
following entities shall be deemed an "Outside Entity" with respect to its corresponding
Continuity Date below:
OUTSIDE ENTITY CONTINUITY DATE
1) a not-for-profit organization March 17, 2000
ALL OTHER TERMS, CONDITIONS AND EXCLUSIONS REMAIN UNCHANGED.
AUTHORIZED REPRESENTATIVE
END 006
62790 (6/95) COPY
ENDORSEMENT# 7
This endorsement, effective 12:01 a.m. March 17, 2003 forms a part of
policy number 263-37-50
Issued to SUSQUEHANNA EMPLOYMENT & TRAINING CORP
by Birmingham fire Insurance Company of Pennsylvania
"NO LIABILITY" PROVISION DELETED
In consideration of the premium charged, It is hereby understood and agreed that the
policy is hereby amended as follows:
(1) The Definition of "No Liability" Is hereby deleted in its entirety; and
(2) The last paragraph of Clause 6. RETENTION CLAUSE Is hereby deleted in Its
entirety.
ALL OTHER TERMS, CONDITIONS AND EXCLUSIONS REMAIN UNCHANGED.
AUTHORIZED REPRESENTATIVE
END 007
COPY
ENDORSEMENT# 8
This endorsement, effective 12:01 a.m. March 17, 2003 forms a part of
policy number 283-37-50
issued to SUSQUENANNA EMPLOYMENT & TRAINING CORP
by Birmingham fire insurance Company of Pennsylvania
RELIANCE ENDORSEMENT-NOT-FOR-PROFIT ORGANIZATIONS
(STANDARD FORM)
In consideration of the premium charged, it is hereby understood and agreed that this
policy is issued in reliance upon the accuracy of the statements made and materials
furnished to the Insurer by the Named Organization in connection with all Not-For-Profit
Organization and/or Directors and Officers and/or Trustees Insurance applications or
requests furnished to the Insurer including all prior insurance applications or requests,
and all statements made and materials incorporated In the following specific documents
issued or filed by the Named Organization whether furnished directly to the Insurer or
indirectly to the Insurer from public resources available to the Insurer at the time of such
request(s):
1. The Organization's audited annual report(s) or audited financial statements;
2. The Organization's interim financial statements;
3. The Organization's indemnification provisions (and contracts, If any).
ALL OTHER TERMS, CONDITIONS AND EXCLUSIONS REMAIN UNCHANGED.
AUTHORIZED REPRESENTATIVE
END 008
COPY
ENDORSEMENT# 9
This endorsement, effective 12:01 a.m. March 17, 2003 forms a part of
policy number 263-37-50
issued to SUSQUEHANNA EMPLOYMENT & TRAINING CORP
by Birmingham fire Insurance Company of Pennsylvania
PENNSYLVANIA AMENDATORY ENDORSEMENT
Not-For-Profit Individual and Organization Insurance Policy
The policy is hereby amended as follows:
Section (a) of Clause 7., NOTICE/CLAIM REPORTING PROVISIONS, is deleted in entirety and
replaced with the following:
(a) The Insureds shall, as a condition precedent to the obligations of the Insurer
under this policy, give written notice to the Insurer of any Claim made against
an Insured as soon as practicable and either:
(1) anytime during the Policy Year or during the Discovery Period (if
applicable); or
(2) within 60 days after the end of the Policy Year or the Discovery Period
(if applicable), as long as such Claim is reported no later than 60 days
after the date such Claim was first made against an Insured.
The first paragraph of Clause 10., DISCOVERY CLAUSE, is deleted in entirety and replaced
with the following:
(a) Automatic Discovery Period
If the Company or the Named Organization shall cancel or refuse to renew this
policy and the Named Organization does not obtain replacement coverage as
of the effective date of such cancellation or nonrenewal, the Named
Organization shall have the right to a period of sixty (60) days following the
effective date of such cancellation or nonrenewal in which to give written
notice to the Company of any Claim made against the Insured during said
sixty (60) day period for any Wrongful Act before the end of the Policy Period.
(b) Optional Discovery Period
Except as indicated below, if the Named Organization shall cancel or the
Insurer or the Named Organization shall refuse to renew this policy, the
Named Organization, upon payment of the respective "Additional Premium
Amount" described below, shall have the right to a period of one, two or three
years after the expiration of the Automatic Discovery Period (herein referred to
as the "Optional Discovery Period") in which to give the Insurer written notice
of Claims first made against the Insureds during the selected period for any
Wrongful Act occurring prior to the end of the Automatic Discovery Period and
otherwise covered by this policy. The rights contained In this paragraph shall
terminate, however, unless written notice of such election together with the
additional premium due Is received by the Insurer within sixty (60) days of the
effective date of cancellation or nonrenewal. The Additional Premium Amount
for the Discovery Period shall be fully earned at the inception of the Discovery
Period. The Discovery Period is not cancelable.
END 009
69584 (1/98) COPY
LNDORSEMENT# 9 (continued)
In the event of cancellation or nonrenewal by the Company for the nonpayment of
premium or other monies due to the Company, the right to either Discovery Period
Option under this Clause 10. is available to any Insured upon payment of an amount
equal to (a) the premium for the Discovery Period plus (b) any earned premium for
the policy period which has not yet been paid.
ALL OTHER TERMS, CONDITIONS AND EXCLUSIONS REMAIN THE SAME
AUTHORIZED REPRESENTATIVE
END 009
69584 (1/98) COPY 2
ENDORSEMENT# 10
This endorsement, effective 12:01 a.m. March 17, 2003 forms a part of
policy number 263-37-50
issued to SUSQUEHANNA EMPLOYMENT & TRAINING CORP
by Birmingham fire Insurance Company of Pennsylvania
CLAUSE 9 - AMENDED TO REQUIRE PANEL COUNSEL FOR ALL CLAIMS
In consideration of the premium charged, it is hereby understood and agreed that Clause
9. PRE-AUTHORIZED CLASS ACTION DEFENSE ATTORNEYS is deleted in its entirety and
replaced with the following:
9. PRE-AUTHORIZED DEFENSE ATTORNEYS FOR ALL CLAIMS
This Clause applies to all Claims made under the policy.
Affixed as Appendix A hereto and made part of this policy is a list of Panel Counsel
law firms ("Panel Counsel Firms") from which a selection of legal counsel shall be
made to conduct the defense of any Claim made against an Insured pursuant to the
terms set forth below.
In the event the Insurer has assumed the defense pursuant to Clause 8 of this
policy, then the Insurer shall be obligated to select a Panel Counsel Firm to defend
the Insureds. In the event the Insureds are defending a Claim, then the Insureds
shall select a Panel Counsel Firm to defend the insureds.
The selection of the Panel Counsel Firm, whether done by the Insurer or the
j Insureds, shall be from the jurisdiction in which the Claim is brought. In the event a
Claim is brought in a jurisdiction not included on the list, the selection shall be
made from a fisted jurisdiction which Is the nearest geographic jurisdiction to either
where the Claim is maintained or where the corporate headquarters or state of
formation of the Named Organization is located.
With the express prior written consent of the Insurer, an Insured may select (in the
case of the Insured defending the Claim), or cause the Insurer to select (in the case
of the Insurer defending the Claim), a Panel Counsel Firm different from that
selected by other Insured defendants if such selection is required due to an actual
conflict of interest.
The list of Panel Counsel Firms may be amended from time to time by the Insurer.
However, no change shall be made to the specific list attached to this policy during
the Policy Period without the consent of the Named Organization.
ALL OTHER TERMS, CONDITIONS AND EXCLUSIONS REMAIN UNCHANGED.
AUTHORIZED REPRESENTATIVE
END 010
COPY
ENDORSEMENT# 11
This endorsement, effective 12:01 a.m. March 17, 2003 forms a part of
policy number 263-37-50
Issued to SUSQUEHANNA EMPLOYMENT & TRAINING CORP
by Birmingham Fire Insurance Company of Pennsylvania
GOVERNMENTAL FUNDING DEFENSE COST COVERAGE
In consideration of the premium charged, It is understood and agreed that the Loss shall
not include the return funds which were received by the Organization or any other entity
from any federal, state, or local governmental agency; provided, however, that with regard
to Claims arising out of the return, or request to return, such funds, subject to a retention
amount of $1,000,000, this policy shall pay Defense Costs up to $1,000,000 on a 50%
coinsurance basis with 50% of such Defense Costs to be borne by the Insured and to
remain uninsured; and the remaining 50% of such Defense Costs to be covered by the
Insurer subject to all other terms, conditions and exclusions of the policy.
It is further understood and agreed that the Clause 6 provisions for a retention waiver
upon finding of No Liability shall not apply to the above separate retention.
ALL OTHER TERMS, CONDITIONS, AND EXCLUSIONS REMAIN UNCHANGED
AUTHORIZED REPRESENTATIVE
END 011
COPY
ENDORSEMENT# 12
This endorsement, effective 12:01 a,m. March 17, 2003 forms a part of
policy number 263-37-50
issued to SUSQUEHANNA EMPLOYMENT & TRAINING CORP
by Birmingham Fire Insurance Company of Pennsylvania
THIS ENDORSEMENT CHANGES THE POLICY, PLEASE READ CAREFULLY.
THIS IS ACCIDENT ONLY COVERAGE. IT DOES NOT COVER SICKNESS OR DISEASE
TRAVEL ACCIDENT INSURANCE ENDORSEMENT
Not-for-Profit Protector®
The Policy is amended as follows:
1. ADDITIONAL DECLARATIONS - For the purpose of the coverage provided by this
Endorsement, the following is added to the Declarations page:
1. Travel Accident Insurance Effective Date: March 179 2003
2. Classification of Eligible Persons:
All current, duly elected and appointed Directors, Corporate Officers, Trustees
and Trustee Emeritus of the Named Organization.
3. Principal Sum Amount (per Covered Person): $100,000
4. Covered Hazard(s):
Coverage is provided for Injury sustained by a Covered Person While on the
Business of the Named Organization including traveling to, during the course
of, and while returning from:
(a) meetings of the Named Organization's or any Subsidiary's Board of
Directors or any of its' committees; and
(b) any Trip taken at the direction of the Named Organization or any
Subsidiary for which the Named Organization or Subsidiary reimburses
expenses incurred by the Covered Person for that Trip.
With respect to any period of time such Covered Person is traveling on a
conveyance during the course of any such Trip, coverage applies only with
respect to Injury sustained by the person:
1. While operating or riding in or on (including getting in or out of, or on or
off of), or by being struck or run down by any conveyance being used as
a means of land or water transportation, except:
a. Any such conveyance the Covered Person has been hired to
operate or for which the Covered Person has been hired as a crew
member;
END 012
79199 (9/02) CQPy 1
ENDORSEMENT# 12 (continued)
b. Any such conveyance the Covered Person is operating, or for
which the Covered Person is performing as a crew member,
(including getting in or out of, or on or off of) for the
transportation of passengers or property for hire, profit or gain; or
2. While riding as a Passenger in or on (including getting In or out of, or
on or off of):
a. Any Named Organization or any Subsidiary Aircraft
b. Any Civilian Aircraft; or
c. Any Military Air Transport Aircraft; or
3. By being struck or run down by any aircraft.
5. Accident Aggregate Limit: 10 times Principal Sum per accident.
II. INSURING AGREEMENT - TRAVEL ACCIDENT INSURANCE - For the purpose of the
coverage provided by this Endorsement, the following is added to the end of Clause
1., INSURING AGREEMENTS:
• TRAVEL ACCIDENT INSURANCE
This Policy insures Covered Persons against a covered Accidental Death or
Dismemberment or Paralysis loss arising from an Injury that results from an
accident that occurs on or after the Travel Accident Insurance Effective Date and
during a Covered Hazard as set out below. The Principal Sum Amount and the
Covered Hazard(s) applicable to each Covered Person are set out in the Schedule.
A. Accidental Death Benefit. If Injury to the Covered Person results in death
within 365 days of the date of the accident that caused the Injury, the Insurer
will pay 100% of the Principal Sum.
B. Accidental Dismemberment and Paralysis Benefit. If Injury to the Covered
Person results, within 365 days of the date of the accident that ca used the
Injury, in any one of the Injury Losses specified below, the Insurer will pay
the percentage of the Principal Sum shown below for that Injury Loss:
For Injury Loss of Percentage of Principal Sum
Both Hands or Both Feet ____________________________________ 100%
Sight of Both Eyes ---------------------------------------- 100%
One Hand and One Foot _____________
-------------------____ 100%
One Hand and the Sight of One Eye __________________________ 100%
One Foot and the Sight of One Eye __________________________ 100%
Speech and Hearing in Both Ears _____________________________ 100%
One Hand or One Foot-------------------------------------- 50%
Sight of One Eye______________ _____ 50%
Speech or Hearing in Both Ears ------------------------------ 50%
Hearing in One Ear ______-___
--------------------------_____ 25%
Thumb and Index Finger of Same Hand ------------------------ 25%
Quadriplegia ---------------------------------------------- 100%
Paraplegia ------------------------------------------------ 50%
Hemiplegia ----------------------------------------------- 50%
Uniplegia ------------------------------------------------- 25%
END 012
79199 (9/02) COPY 2
ENDORSEMENT# 12 (continued)
"Injury Loss" of a hand or foot means complete severance through or above the
wrist or ankle joint. "Injury Loss" of sight of an eye means total and irrecoverable
loss of the entire sight in that eye. "Injury Loss" of hearing in an ear means total
and irrecoverable loss of the entire ability to hear in that ear. "injury Loss" of
speech means total and irrecoverable loss of the entire ability to speak "Injury
Loss" of thumb and index finger means complete severance through or above the
metacarpophalangeal joint of both digits.
"Quadriplegia" means the complete and irreversible paralysis of both upper and
both lower limbs. "Paraplegia" means the complete and Irreversible paralysis of both
lower limbs. "Hemiplegia" means the complete and irreversible paralysis of the
upper and lower limbs of the same side of the body. "Uniplegia" means the
complete and irreversible paralysis of one limb. "Limb" means entire arm or entire
log.
If more than one Injury Loss is sustained by a Covered Person as a result of the
some accident, only one amount, the largest, will be paid.
III. DEFINITIONS - For the purpose of the coverage provided by this Endorsement, the
following is added to the end of Clause 2., DEFINITIONS:
• Airworthiness Certificate means the "Standard" Airworthiness Certificate issued by
the Federal Aviation Agency of the United States of America or its equivalent issued
by the governmental authority having jurisdiction over civil aviation in the country
of registry.
• Civilian Aircraft means a civil or public aircraft having a current and valid
Airworthiness Certificate and piloted by a person who has a current and valid
medical certificate and pilot certificate with appropriate ratings for the aircraft. A
Civilian Aircraft does not Include a Named Organization Aircraft.
¦ Immediate Family Member means a person who is related to the Covered Person
in any of the following ways: spouse, brother-in-law, sister-in-law, son-in-law,
daughter-in-law, mother-in-law, father-in-law, parent (includes stepparent), brother
or sister (includes stepbrother or stepsister), or child (includes legally adopted or
stepchild).
Injury - means bodily injury: (1) which is sustained as a direct result of an
unintended, unanticipated accident that is external to the body and that occurs while
the injured person's Travel Accident coverage is in force; (2) which occurs under the
circumstances described in a Covered Hazard applicable to that person; and (3)
which directly (independent of sickness, disease or any other cause) causes a
covered loss under a Benefit applicable to such Covered Hazard.
• Covered Person means a person: (1) who is a member of an eligible class of
persons as described in the Classification of Eligible Persons section of the
Schedule; (2) for whom premium has been paid; and (3) while such person's Travel
Accident coverage is in force.
• Military Air Transport Aircraft means an aircraft having a current and valid
Airworthiness Certificate; piloted by a person who has a current and valid medical
certificate and pilot certificate with appropriate ratings for the aircraft; and operated
by the United States of America, or by the similar air transport service of any duly
constituted governmental authority of any other recognized country.
END 012
79199 (9/02) COPY
3
ENDORSEMENT# 12 (continued)
¦ Passenger means a person not performing as a pilot, operator or crew member of a
conveyance.
¦ Physician means a licensed practitioner of the healing arts acting within the scope
of his or her license who is not: (1) the Covered Person; (2) an Immediate Family
Member; or (3) retained by any Named Organization or any Subsidiary.
¦ Schedule - means the Additional Declarations section of this Travel Accident
Insurance Endorsement.
¦ Named Organization Aircraft - means any aircraft with a current and valid
Airworthiness Certificate and owned, leased or operated by the Named
Organization or any Subsidiary.
¦ Trip - means a trip taken by a Covered Person which begins when the Covered
Person leaves his or her residence or place of regular employment for the purpose
of going on the trip (whichever occurs last), and is deemed to end when the
Covered Person returns from the trip to his or her residence or place of regular
employment (whichever occurs first). However, the trip is deemed to exclude any
period of time during which the Covered Person is on an authorized leave of
absence or vacation or travel to and from the Covered Person's place of regular
employment.
• While on the Business of the Named Organization - means while on assignment
by or at the direction of the Named Organization or any Subsidiary for the purpose
of furthering the business of the Named Organization or any Subsidiary, but does
not include any period of time: (1) while the Covered Person is working at his or
her regular place of employment; (2) during the course of everyday travel to and
from work; or (3) during an authorized leave of absence or vacation.
IV. EXCLUSIONS - For the purpose of the coverage provided by this Endorsement,
Clause A, EXCLUSIONS, is deleted in its entirety and replaced with the following
Exclusions:
¦ EXCLUSIONS No coverage shall be provided for Travel Accident insurance and no
payment shall be made for any Travel Accident loss resulting in whole or in part
from, or contributed to by, or as a natural and probable consequence of any of the
following excluded risks:
1. suicide or any attempt at suicide or intentionally self-inflicted injury or any
attempt at Intentionally self-inflicted injury or auto-eroticism.
2. war, whether declared or not, or any act or condition Incident to war, civil war,
insurrection, act of foreign enemy, civil commotion, factional civil commotion,
military or usurped power, rebellion or revolution.
3, full-time active duty in the armed forces, National Guard or organized reserve
corps of any country or international authority (unearned premium will be
returned if the Covered Person enters military service), (National Guard or
reserve active duty for regularly scheduled training purposes is not excluded.)
4. the Covered Person being under the influence of intoxicants while operating
any vehicle or means of transportation or conveyance.
END 012
79199 (9/02) COPY
4
ENDORSEMENT# 12 (continued)
5. the Covered Person being under the influence of drugs unless taken under the
advice of and as specified by a Physician.
6. the Covered Person's commission of or attempt to commit a crime.
7. travel or flight in or on (including getting in or out of, or on or off of) any
vehicle used for aerial navigation, whether as a pilot, operator or crew
member.
8. sickness, or disease, mental incapacity or bodily infirmity whether the loss
results directly or indirectly from any of these.
9. infections of any kind regardless of how contracted, except bacterial infections
that are directly caused by botulism, ptomaine poisoning or an accidental cut
or wound independent and in the absence of any underlying sickness, disease
or condition including but not limited to diabetes.
10. the medical or surgical treatment of sickness, disease, mental incapacity or
bodily infirmity whether the loss results directly or indirectly from the
treatment.
11. stroke or cerebrovascular accident or event; cardiovascular accident or event;
myocardial infarction or heart attack; coronary thrombosis; aneurysm.
V. LIMITS OF INSURANCE - For the purpose of the coverage provided by this
Endorsement, the following is added to the end of Clause 5., LIMIT OF LIABILITY
(FOR ALL LOSS - INCLUDING DEFENSE COSTS):
¦ Travel Accident Aggregate Limit. The maximum amount payable under the Travel
Accident Benefit may be reduced if more than one Covered Person suffers a loss as
- a result of the same accident. The maximum amount payable for all such losses for
all Covered Persons will not exceed the amount shown as the Accident Aggregate
Limit in the Schedule. If the combined maximum amount otherwise payable for all
Covered Persons must be reduced to comply with this provision, the reduction will
be taken by applying the same percentage of reduction to the individual maximum
amount otherwise payable for each Covered Person for all such losses. The Travel
Accident Aggregate Limit is in addition to the Policy's Limit of Liability.
VI. CLAIMS PROVISIONS - For the purpose of coverage provided by this Endorsement,
Clause 7., NOTICE OF CLAIM/REPORTING PROVISIONS, is deleted in its entirety and
replaced with the following:
Notice of Claim. Written notice of a claim for benefits must be given to the Insurer
within 20 days after a Covered Person's loss, or as soon thereafter as reasonably
possible. Notice given by or on behalf of the claimant to the Insurer at American
International Companieso, Accident and Health Claims Division, P.O. Box 15701,
Wilmington, DE 19850-5701, with information sufficient to identify the Covered
Person, is deemed notice to the Insurer,
¦ Claim Forms. The Insurer will send claim forms to the claimant upon receipt of a
written notice of claim. If such forms are not sent within 15 days after the giving of
notice of a claim, the claimant will be deemed to have met the proof of loss
requirements upon submitting, within the time fixed herein for filing proof of loss,
written proof covering the occurrence, the character and the extent of the loss for
which claim is made. The notice should include the Covered Person's name, the
Named Organization name and the Policy number.
END 012
79199 (9/02) COPY 5
ENDORSEMENT# 12 (continued)
• Proof of Loss. Written proof of loss must be furnished to the Insurer within 90
days after the date of the loss. If the loss is one for which this Endorsement
requires continuing eligibility for periodic benefit payments, subsequent written
proofs of eligibility must be furnished at such intervals as the Insurer may
reasonably require. Failure to furnish proof within the time required neither
invalidates nor reduces any claim if it was not reasonably possible to give proof
within such time, provided such proof is furnished as soon as reasonably possible
and in no event, except in the absence of legal capacity of the claimant, later than
one year from the time proof is otherwise required.
Payment of Claims. Upon receipt of due written proof of death, payment for loss
of life of a Covered Person will be made, In equal shares, to the survivors in the
first surviving class of those that follow: the Covered Person's (1) spouse; (2)
children; (3) parents; or (4) brothers and sisters. If no class has a survivor, the
beneficiary is the Covered Person's estate.
Upon receipt of due written proof of loss, payments for all losses, except loss of
life, will be made to (or on behalf of, if applicable) the Covered Person suffering
the loss. If a Covered Person dies before all payments due have been made, the
amount still payable will be paid as described above for loss of life.
If any payee is a minor or is not competent to give a valid release for the payment,
the payment will be made to the legal guardian of the payee's property. If the
payee has no legal guardian for his or her property, a payment not exceeding $1,000
may be made, at the Insurer's option, to any relative by blood or connection by
marriage of the payee, who, in the Insurer's opinion, has assumed the custody and
support of the minor or responsibility for the incompetent person's affairs.
Any payment the Insurer makes in good faith fully discharges the Insurer's liability
to the extent of the payment made.
• Time of Payment of Claims. Benefits payable for any loss other than loss for which
this Endorsement provides any periodic payment will be paid immediately upon the
Insurer's receipt of due written proof of the loss. Subject to the Insurer's receipt
of due written proof of loss, all accrued benefits for loss for which this Endorsement
provides periodic payment will be paid at the expiration of each month during the
continuance of the period for which the Insurer is liable and any balance remaining
unpaid upon termination of liability will be paid immediately upon receipt of such
proof.
• Physical Examination and Autopsy. The Insurer at its own expense has the right
and opportunity to examine the person of any individual whose loss is the basis of
claim hereunder when and as often as it may reasonably require during the
pendency of the claim and to make an autopsy in case of death where it is not
forbidden by law.
VII. ADDITIONAL PROVISIONS - For the purpose of the coverage provided by this
Endorsement, the following is added to the Policy:
Covered Person's Effective Date. A Covered Person's Travel Accident Insurance
coverage begins on the latest of: (1) the Travel Accident Insurance Effective Date;
(2) the date the person becomes a member of an eligible class of persons as
described in the Classification of Eligible Persons section of the Schedule; or (3)
the date the appropriate premium is paid for the Covered Person.
END 012
79199 (9/02) COPY 6
ENDORSEMENT# 12 (continued)
¦ Covered Person Termination Date. A Covered Person's Travel Accident Insurance
coverage ends on the earliest of: (1) the date the Policy is terminated; (2) the date
this Endorsement is terminated; (3) the premium due date if premiums for this
coverage are not paid when due; or (4) the date the Covered Person ceases to be a
member of any eligible class of persons as described in the Classification of
Eligible Persons section of the Schedule.
Termination of coverage will not affect a claim for a covered loss that occurred
while the Covered Person's Travel Accident Insurance coverage was In force.
All other terms, conditions, and exclusions of the Policy shall remain unchanged. However,
Clauses 6, S, 9, 10, 12, 13, 14, 17 and 19 of the Policy do not apply to the coverage
provided by this Endorsement.
AUTHORIZED REPRESENTATIVE
END 012
79199 (9/02) Cony 7
ENDORSEMENT# 13
This endorsement, effective 11:01
policy number 263-37-50
issued to SUSQUENANNA EMPLOYMENT
a. In. March 17, 2003 forms a part of
& TRAINING CORP
by Birmingham Fire Insurance Company of Pennsylvania
EXCLUSION 0) AMENDED
(FAIR LABOR STANDARDS ACT)
In consideration of the premium charged, it is hereby understood and agreed that
notwithstanding any other provision of this policy (including any endorsement attached
hereto whether such endorsement precedes or follows this endorsement in time or
sequence), Clause 4. EXCLUSIONS, is hereby amended by deleting Exclusion 0) In its
entirety and replacing It with the following:
(j} for violation(s) of any of the responsibilities, obligations or duties Imposed by
the Employee Retirement Income Security Act of 1974, the Fair Labor
Standards Act (except the Equal Pay Act), the National Labor Relations Act, the
Worker Adjustment and Retraining Notification Act, the Consolidated Omnibus
Budget Reconciliation Act, the Occupational Safety and Health Act, any rules or
regulations of the foregoing promulgated thereunder, and amendments thereto
or any similar federal, state, local or foreign statutory law or common law;
provided, however, this exclusion shall not apply to a Claim for Retaliation;
provided, further, however, there is no coverage provided under this policy for
any Claim related to, arising out of, based upon, or attributable to the refusal,
failure or inability of any Insured(s) to pay wages or overtime pay for services
rendered (hereinafter, "earned Wages") (as opposed to tort-based back pay or
front pay damages) or for improper payroll deductions taken by any Insured(s)
from any Employee(s) or purported employee(s), including, but not limited to,
(i) any unfair business practice claim alleged because of the failure to pay
Earned Wages, or (ii) any Claim seeking earned Wages because any
Employee(s) or purported employee(s) was improperly classified or mislabeled
as "exempt;"
ALL OTHER TERMS, CONDITIONS AND EXCLUSIONS REMAIN UNCHANGED.
AUTHORIZED REPRESENTATIVE
END 013
(10/02) COPY 1 of 1
ENDORSEMENT# 14
This endorsement, effective 12:01 a.m. March 17, 2003
policy number 263-37-50
Issued to SUSQUENANNA EMPLOYMENT & TRAINING CORP
by Birmingham fire Insurance Company of Pennsylvania
forms a part of
EMPLOYMENT PRACTICES CLAIMS SEPARATE RETENTION
In consideration of the premium charged, it is hereby understood and agreed that Item 5.
of the Declarations page is deleted in its entirety and replaced with the following:
ITEM 5. RETENTION:
A. Judgments, Settlements and None
Defense Costs (Non-Indemnifiable Loss or
Indemnifiable Loss incurred solely by Organizations
In Financial Insolvency)
B. EMPLOYMENT PRACTICES CLAIMS
Judgments, Settlements and Defense Costs
(Coverage C and all Indemnifiable Loss) $25.000
for Loss arising from Claims
alleging the same Wrongful
Act or Related Wrongful
Acts (waivable under Clause
6 in certain circumstances)
C. ALL CLAIMS (OTHER THAN
EMPLOYMENT PRACTICES CLAIMS):
Judgments, Settlements and Defense Costs
(Coverage C and Indemnifiable Loss) $10,000
for Loss arising from Claims
alleging the same Wrongful
Act or Related Wrongful
Acts (waivable under Clause
6 in certain circumstances)
It is further understood and agreed that Clause 6. RETENTION CLAUSE is amended by
deleting the first paragraph in its entirety and replacing it with the following:
The Insurer shall only be liable for the amount of Loss arising from a Claim which is
in excess of the Retention amounts stated in Item 5.13. and 5.C. of the
Declarations, such Retention amounts to be borne by the Organization and shall
remain uninsured, with regard to all Loss for which the Organization has
indemnified or is permitted or required to indemnify the Individual Insureds
("Indemnifiable Loss") and Loss under Coverage C. A single Retention shall apply to
Loss arising from all Claims alleging the same Wrongful Act or Related Wrongful
Acts. In the event a Claim triggers more than one (1) amount stated in Item 5. Of
END 14
COPY
ENDORSEMENT# 14 (Conti"'9d)
This endorsement, effective 12:01 a.m. March 17, 2003 forms a part of
policy number 263-37-50
issued to SUSQUEHANNA EMPLOYMENT & TRAINING CORP
by Birmingham Fire Insurance Company of Pennsylvania
the Declarations page, only the highest such amount shall apply, which amount
shall apply to all Loss under such Claim.
ALL OTHER TERMS, CONDITIONS AND EXCLUSIONS REMAIN UNCHANGED.
END 14
COPY AUTHORIZED REPRESENTATIVE
ENDORSEMENT# 15
This endorsement, effective 12:01 a.m. March 17, 2003
policy number 263-37-50
issued to SUSQUEHANNA EMPLOYMENT & TRAINING CORP
by Birmingham fire Insurance Company of Pennsylvania
AFFILIATE ENDORSEMENT
forms a part of
In consideration of the premium charged, it is hereby understood and agreed that
Definition 2(n), "Organization" shall include following entity(ies), which are "Affiliates" as
defined in Definition 2(a):
AFFILIATE CONTINUITY DATE
Workforce Investment Board 03-17-2000
Youth Council 03-17-2000
It is further understood and agreed that only as respects any additional coverage granted
by this endorsement, the Insurer shall not be liable for any Loss in connection with any
Claim(s) made against any entity listed above or any Claim(s) made against any Individual
Insured of such entity alleging, arising out of, based upon or attributable to as of each
entity's respective Continuity Date listed above, any pending or prior: (1) litigation; or (2)
administrative or regulatory proceeding or investigation of which an Insured had notice, or
alleging any Wrongful Act which is the same or Related Wrongful Act to that alleged in
such pending or prior litigation or administrative or regulatory proceeding or investigation.
All other, terms, conditions and exclusions remain the same.
END 15
AUTHORIZED REPRESENTATIVE
COPY
ENDORSEMENT# 16 -
This endorsement, effective 12:01 a.m. March 17, 2003 forms a part of
policy number 263-37-50
issued to SUSQUEHANNA EMPLOYMENT & TRAINING CORP
by Birmingham Fire Insurance Company of Pennsylvania
Discovery Amended - Premium to be Determined
In consideration of the premium charged, it is hereby understood and agreed that the
policy (and any endorsement amending Clause 10. DISCOVERY CLAUSE) is hereby
amended to the extent necessary for the policy to provide the following:
1. Clause 10. DISCOVERY CLAUSE, is deleted in its entirety and replaced with the
following:
10. DISCOVERY CLAUSE
Except as indicated below, if the Named Entity shall cancel or the Named Entity or the
Insurer shall refuse to renew this policy, the Named Entity shall have the right to a
period of either one, two or three years following the effective date of such
cancellation or nonrenewal (herein referred to as the "Discovery Period") upon
payment of an additional premium amount as shall be determined by the Insurer in its
sole and absolute discretion (the "Additional Premium Amount") in which to give to
the Insurer written notice of Claims first made against the Insureds during said
Discovery Period for any Wrongful Act occurring prior to the end of the Policy Period
and otherwise covered by this policy. The rights contained in this paragraph shall
terminate, however, unless written notice of such election together with the additional
premium due is received by the Insurer within 30 days of the effective date of
cancellation or nonrenewal. The Additional Premium Amount for the Discovery Period
shall be fully earned at the inception of the Discovery Period. The Discovery Period is
not cancelable. This clause and the rights contained herein shall not apply to any
cancellation resulting from non-payment of premium.
In the event of a Transaction, as defined in Clause 12, the Named Entity shall have
the right, within 30 days before the end of the Policy Period, to request an offer from
the Insurer of a Discovery Period (with respect to Wrongful Acts occurring prior to the
effective time of the Transaction) for a period of no less than three years or for such
longer or shorter period as the Named Entity may request. The Insurer shall offer such
Discovery Period pursuant to such terms, conditions and premium as the Insurer may
reasonably decide. In the event of a Transaction, the right to a Discovery Period shall
not otherwise exist except as indicated in this paragraph.
ALL OTHER TERMS, CONDITIONS AND EXCLUSIONS REMAIN UNCHANGED.
TEND 16
AUTHORIZED REPRESENTATIVE
COPY
POLICYHOLDER DISCLOSURE STATEMENT
UNDER
TERRORISM RISK INSURANCE ACT OF 2002
You are hereby notified that under the federal Terrorism Risk Insurance Act of 2002
(the "Act") effective November 26, 2002, you now have a right to purchase insurance
coverage for losses arising out of an Act of Terrorism, which is defined in the Act as an act
certified by the Secretary of the Treasury (i) to be an act of terrorism, (ii) to be a violent act
or an act that is dangerous to (A) human life; (B) property or (C) infrastructure, (iii) to have
resulted in damage within the United States, or outside of the United States in case of an air
carrier or vessel or the premises of a U. S. mission. and (iv) to have been committed by an
individual or individuals acting on behalf of any foreign person or foreign interest, as part of
an effort to coerce the civilian population of the United States or to influence the policy or
affect the conduct of the United States Government by coercion. You should read the Act for
a complete description of its coverage. The Secretary's decision to certify or not to certify
an event as an Act of Terrorism and thus covered by this law is final and not subject to
review. There is a $100 billion dollar annual cap on all losses resulting from Acts of Terrorism
above which no coverage will be provided under this policy and under the Act unless Congress
makes some other determination.
For your information, coverage provided by this policy for losses caused by an Act of
Terrorism may be partially reimbursed by the United States under a formula established by
the Act. Under this formula the United States pays 90% of terrorism losses covered by this
m law exceeding a statutorily established deductible that must be met by the insurer, and which
deductible is based on a percentage of the insurer's direct earned premiums for the year
preceding the Act of Terrorism.
Unless you sign this form and return it to us rejecting Terrorism Coverage under the
Federal Act, you will be covered for Terrorism as defined in the Act and your premium for
that coverage is $
_ I hereby reject coverage in accordance with the Act.
Signature of Insured
Print Name/Title
Date
COPY OF DISCLOSURE SENT WITH ORIGINAL QUOTE
81285 (1/03)
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s a
R D
01M D
? AMERICAN INTERNATIONAL COMPANIES
NOT-FOR-PROFIT INDIVIDUAL AND ORGANIZATION INSURANCE POLICY i
INCLUDING EMPLOYMENT PRACTICES LIABILITY INSURANCE
NOT-FOR-PROFIT PROTECTORsM i
5 In consideration of the payment of the premium, and in reliance upon the statements made to
the Insurer by application forming a part hereof and its attachments and the material
incorporated therein, the insurance company designated in Item 8 of the Declarations, herein
called the "Insurer", agrees as follows:
1. INSURING AGREEMENTS
y COVERAGE A: INDIVIDUAL INSURED INSURANCE
This policy shall pay on behalf of each and every Individual Insured Loss arising from a
Claim first made against such Individual Insured during the Policy Period or the Discovery
Period (if applicable) and reported to the Insurer pursuant to the terms of this policy for
any actual or alleged Wrongful Act in his/her respective capacities as an Individual
Insured of the Organization, except when and to the extent that the Organization has
indemnified the Individual Insured. The Insurer shall, In accordance with and subject to
Clause 8, advance Defense Costs of such Claim prior to its final disposition.
COVERAGE B: ORGANIZATION INDEMNIFICATION REIMBURSEMENT INSURANCE
This policy shall pay on the behalf of the Organization Loss arising from a Claim first
made against an Individual Insured during the Policy Period or the Discovery Period (if
a applicable) and reported to the Insurer pursuant to the terms of this policy for any actual
P or alleged Wrongful Act in his/her respective capacities as an Individual Insured of the
Organization, but only when and to the extent that the Organization has indemnified such
Individual Insured for such Loss pursuant to law, common or statutory, or contract, or the
1 Charter or By-laws of the Organization duly effective under such law which determines
and defines such rights of indemnity. The Insurer shall, In accordance with and subject to
Clause 8, advance Defense Costs of such Claim prior to Its final disposition.
COVERAGE C: ORGANIZATION ENTITY COVERAGE a
P
This policy shall pay on behalf of the Organization Loss arising from a Claim first made
against the Organization during the Policy Period or the Discovery Period (if applicable) ,
and reported to the Insurer pursuant to the terms of this policy for any actual or alleged
Wrongful Act of the Organization. The Insurer shall, in accordance with and subject to
Clause 8, advance Defense Costs of such Claim prior to its final disposition. „
DEFENSE PROVISIONS
The Insurer does not assume any duty to defend; provided, however, the Named Organiza-
tion may at its sole option, and in accordance with Clause 8, tender to the Insurer the
defense of a Claim for which coverage is provided by this policy. Regardless of whether
the defense is so tendered, the Insurer shall advance Defense Costs (excess of the
Retention amount) of such Claim prior to its final disposition. Selection of counsel to
defend a "Class Action Claim", as defined In Clause 9, shall be made in accordance with
Clause 9 of the policy.
68467 (8/97) Copy
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G '
5 2. DEFINITIONS
(a) "Affiliate" shall mean any not for profit organization other than a Subsidiary which:
I
(1) the Named Organization or any Subsidiary controls or otherwise has the
ability to direct the financial or managerial decisions of such entity, whether
through the operation of law, contract or agreement, stock ownership or
membership, charter, articles of incorporation, or by-law provisions; or
(2) is granted by contract the right to control the financial or managerial
decisions of the Organization or any Subsidiary.
Provided, however that such coverage as is provided by sections (1) and (2) above
shall be limited solely to Wrongful Acts occurring in the course of the exercise of
such control of financial or managerial decisions.
(b) "Claim" means:
(1) a written demand for monetary relief; or
(2) a civil, criminal, regulatory or administrative proceeding for monetary or
non-monetary relief which is commenced by:
(i) service of a complaint or similar pleading; or
(ii) return of an indictment (in the case of a criminal proceeding); or
(Iii) receipt or filing of a notice of charges; or
(3) any request to toll or waive any statute of limitations.
The term "Claim" shall include an Employment Practices Claim, provided however,
that in no event shall the term "Claim" include any labor or grievance proceeding
which is subject to a collective bargaining agreement.
(c) "Continuity Date" means the date set forth in:
(1) Item 6A of the Declarations with respect to all coverages other than Coverage
C; or
(2) Item 6B of the Declarations with respect to Coverage C only.
(d) "Defense Costs" means reasonable and necessary fees, costs and expenses consented
to by the Insurer (including premiums for any appeal bond, attachment bond or similar
bond, but without any obligation to apply for or furnish any such bond) resulting solely
from the investigation, adjustment, defense and appeal of a Claim against the Insureds,
but excluding salaries of Individual Insureds.
(e) "Employee(s)" means any past, present or future employee of the Organization,
whether such employee is in a supervisory, co-worker or subordinate position or
otherwise, including any full-time, part-time, seasonal and temporary Employee of the
Organization In his or her capacity as such.
(f) "Employment Practices Claim" means a Claim alleging an Employment Practices
Violation.
(g) "Employment Practices Violation(s)" means any actual or alleged:
(1) wrongful dismissal, discharge or termination (either actual or constructive) of
employment, including breach of an implied contract;
(2) harassment (including sexual harassment whether "quid pro quo", hostile work ++
environment or otherwise);
rya
68467 (8/97) 2 9
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4 II 1 ? T 7
a
If an additional premium is stated in Item 7B of the Declarations page, then Loss shall
specifically include, (subject to the policy's other terms, conditions and exclusions)
punitive, exemplary and multiple damages. It is further understood and agreed that the
enforceability of the foregoing coverage shall be governed by such applicable law
which most favors coverage for punitive, exemplary and multiple damages. If an ;
additional premium is not stated in Item 7B of the Declarations, then Loss shall not
include punitive, exemplary damages or the multiplied portion of multiple damages. In P
all events, coverage shall not be provided to any particular Insured who has been
adjudicated to have obtained a profit or advantage or committed a fraudulent or
dishonest act or a willful violation of any statute, rule or law.
(1) "No Liability" means: (1) a final judgment of no liability obtained prior to trial, in favor
of all Insureds, by reason of a motion to dismiss or a motion for summary judgment,
after the exhaustion of all appeals; or (2) a final judgment of no liability obtained after
trial, In favor of all Insureds, after the exhaustion of all appeals. In no event shall the
term "No Liability" apply to a Claim made against an Insured for which a settlement
has occurred.
(m) "Non-Employment Discrimination" means any actual or alleged sexual harassment or
i unlawful discrimination, as described in paragraphs (2) and (3) of the definition of
Employment Practices Violation, or the violation of the civil rights of a person relating
p to such sexual harassment or discrimination, when such acts are alleged to be
committed against anyone other than an Individual insured, or applicant for
employment with the Organization or an Outside Entity, including, but not limited to:
i students, patients, members, customers and suppliers.
e
i (n)
The "Organization" means: (1) the Named Organization designated In Item 1 of the
Declarations; (2) any Subsidiary thereof; and (3) and Affiliate thereof listed by
' endorsement to this policy.
(o) "Outside Entity" means a not-for-profit organization, other than a Subsidiary or listed
I- Affiliate, on which an Individual Insured serves, at the specific written request of the
Organization, as a director, trustee, trustee emeritus or governor. Such coverage as is
provided by this policy shall be specifically excess of any insurance in force as
respects such Outside Entity and any Indemnification provided by such Outside Entity.
(p) "Policy Period" means the period of time from the Inception date shown In Item 3 of
the Declarations to the earlier of the expiration date shown in Item 3 of the
Declarations or the effective date of cancellation of this policy.
(q) "Policy Year" means a period of one year, within the Policy Period, commencing each
E year on the day and hour first named in Item 3. of the Declarations, or if the time
between the effective date or anniversary and termination of the Policy is less than
one year, then such lesser period.
(r) "Related Wrongful Acts" shall mean Wrongful Acts which are the same, related or
continuous, or Wrongful Acts which arise from a common nucleus of facts. Claims can
allege Related Wrongful Acts regardless of whether such Claims involve the same or
different claimants, Insureds or legal causes of action.
(s) "Retaliation" means a Wrongful Act of an Insured relating to or alleged to be in
response to any of the following activities: (1) the disclosure or threat of disclosure by
an Employee to a superior or to any governmental agency of any act by an Insured
which Is alleged to be a violation of any federal, state, local or foreign law, common or
statutory, or any rule or regulation promulgated thereunder; (2) the actual or attempted
exercise by an Employee of any right that such Employee has under law, including
rights under worker's compensation laws, the Family and Medical Leave Act, the
Americans with Disabilities Act or any other law relating to employee rights; (3) the
filing of any claim under the Federal False Claims Act or any other federal, state, local
or foreign "whistle-blower" law; or (4) Employee strikes.
68467 (8/87) COPY 4
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5 P
C
5r
"
"
Subsidiary
means:
(t)
a) any organization which, on or before the inception of the Policy Period the
Organization owns more than fifty percent (50%) of the voting interest, either
directly, or indirectly through one or more of its Subsidiaries, or has, on or before
the Inception of the Policy Period, the right to elect or appoint more than fifty
percent (50%) of the voting directors, or trustees, either directly or indirectly
through one or more of its Subsidiaries; '
b) automatically any not for profit organization which becomes a Subsidiary during
the Policy Period and where the book value of such entity's assets determined in
accordance with Generally Accepted Accounting Principles ("GAAP") totals less i
S than 30% of the similarly calculated assets of the Named Organization as of the p
inception date of the Policy Period; or i
c) any for profit organization which becomes a Subsidiary during the Policy Period
and where the book value of such entity's assets determined in accordance with
"
" o
GAAP
totals less than 20% of the similarly calculated assets of the Named
Organization as of the inception date of the Policy Period.
With regard to paragraphs b) and c) above, the Named Organization shall provide
the Insurer with full particulars of the Subsidiary before the end of the Policy
Period. Z
Any organization which becomes a Subsidiary during the Policy Period but exceeds the 1
?. asset limitations stated in b) or c) above, (hereinafter "New Subsidiary") shall be Q
provided coverage under this policy, but only upon the condition that within 90 days
after the date of Its becoming a Subsidiary, the Named Organization shall have
provided the Insurer with full particulars of the New Subsidiary and agreed to any
additional premium or amendment of the provisions of this policy required by the
Insurer relating to such New Subsidiary. Further, such coverage as shall be afforded to
the New Subsidiary is conditioned upon the Named Organization paying when due any
additional premium required by the Insurer relating to such New Subsidiary.
An organization becomes a Subsidiary when the Named Organization owns more than
fifty percent (50%) of the voting interest, either directly, or indirectly through one or
more of its Subsidiaries, or has, on or before the inception of the Policy Period, the
right to elect or appoint more than fifty percent (50%) of the voting directors, or
trustees, either directly or indirectly through one or more of its Subsidiaries.
In all events, such coverage as Is afforded under this policy with respect to a Claim
made against any Subsidiary, or any Individual Insured of a Subsidiary, shall only apply
for Wrongful Acts committed or allegedly committed after the effective time that such
Subsidiary became a Subsidiary and prior to the time that such Subsidiary ceased to
be a Subsidiary.
(u) 'Wrongful Act" means:
(1) with respect to Individual Insureds, any breach of duty, neglect, error,
misstatement, misleading statement, omission or act by such Insureds in his/her
respective capacities as such, or any matter claimed against such Individual
g insured solely by reason of his/her status as Individual Insureds of the
Organization;
(2) with respect to the Organization under Coverage C, any breach of duty, neglect,
error, misstatement, misleading statement, omission or act by or on behalf of the
Organization;
(3) with respect to service on an Outside Entity, any matter claimed against such
Individual Insureds arising out of such Insured serving as a director, trustee,
trustee emeritus or governor of an Outside Entity in such capacity, but only if
such service is at the specific written request or direction of the Organization;
68467 (8/97) CCPY 5
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C 7
(4) with respect to both the Individual Insureds and the Organization and subject to
de
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:
a
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paragraphs 1, 2 and
(a) Employment Practices Claims; o
(b) Non-Employment Discrimination;
(c) violation of the Sherman Antitrust Act or similar federal, state or local
statutes or rules;
(d) libel, slander, defamation or publication or utterance in violation of an
individual's right of privacy,
(e) wrongful entry or eviction or other invasion of the right of occupancy,
(f) false arrest or wrongful detention;
(g) plagiarism; and
(h) infringement of copyright or trademark or unauthorized use of title.
3. EXTENSIONS
Subject otherwise to the terms hereof, this policy shall cover Loss arising from any Claims
made against the estates, heirs, or legal representatives of deceased Individual Insureds,
'
s
and the legal representatives of Individual Insureds In the event of an Individual Insured
Incompetency, Insolvency or bankruptcy, who were Individual Insureds at the time the
R Wrongful Acts upon which such Claims are based were committed.
Subject otherwise to the terms hereof, this policy shall cover Loss arising from all Claims
made against the lawful spouse (whether such status is derived by reason of statutory law,
common law or otherwise of any applicable jurisdiction in the world) of an Individual
Insured for all Claims arising solely out of his or her status as the spouse of an Individual
Insured, including a Claim that seeks damages recoverable from marital community a
property, property jointly held by the Individual Insured and the spouse, or property
transferred from the Individual Insured to the spouse; provided, however, that this
extension shall not afford coverage for any Claim for any actual or alleged Wrongful Act of
the spouse, but shall apply only to Claims arising out of any actual or alleged Wrongful
Acts of an Individual Insured, subject to the policy's terms, conditions and exclusions.
4. EXCLUSIONS .
S The Insurer shall not be liable to make any payment for Loss In connection with a Claim
made against an Insured: a
g (a) arising out of, based upon or attributable to the gaining in fact of any profit or
advantage to which an Insured was not legally entitled;
(b) arising out of, based upon or attributable to the committing in fact of any criminal, or
deliberate fraudulent act;
The Wrongful Act of an Insured shall not be imputed to any other Insured for the
purpose of determining the applicability of exclusions 4(a) through 4(b).
(c) alleging, arising out of, based upon or attributable to the facts alleged, or to the
same or Related Wrongful Act alleged or contained, in any Claim which has been
reported, or in any circumstances of which notice has been given, under any policy of
which this policy is a renewal or replacement or which it may succeed in time;
(d) alleging, arising out of, based upon or attributable to as of the Continuity Date, any
pending or prior: (1) litigation; or (2) administrative or regulatory proceeding or
investigation; or the alleging of any Wrongful Act which is the same or a Related
Wrongful Act to that alleged in such pending or prior litigation or administrative or
regulatory proceeding or investigation;
68467 (8/97) COPY 6
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5
(e) alleging, arising out of, based upon or attributable to any actual or alleged act or
., omission of an Individual Insured serving in any capacitiy, other than with the
Organization or as a director, trustee, trustee emeritus, or governor of an Outside
Entity,
(f) which is brought by or on behalf of the Organization against any Individual Insured;
provided however, this exclusion shall not apply to any derivative Claim made on
behalf of the Organization by a member, an attorney general or any other such
representative party if such action Is brought and maintained independently of and
without the solicitation of or assistance of, or active participation of or intervention
of any Individual Insured or the Organization or any Affiliate thereof;
d (g) for any Wrongful Act arising out of an Individual Insured serving as a director,
trustee, trustee emeritus or governor of an Outside Entity if such Claim is brought by
the Outside Entity or by any director, trustee, trustee emeritus or governor thereof;
(h) for bodily injury, sickness, disease, death of any person, or damage to or destruction
of any tangible property, including the loss of use thereof, i
0
(I) alleging, arising out of, based upon, attributable to, or in any way involving, directly ;
S or indirectly:
(1) the actual, alleged or threatened discharge, dispersal, release or escape of
pollutants; or
(2) any direction or request to test for, monitor, clean up, remove, contain, treat,
detoxify or neutralize pollutants,
including but not limited to a Claim alleging damage to the Organization or Its
members.
Pollutants include (but are not limited to) any solid, liquid, gaseous or thermal irritant
or contaminant, Including smoke, vapor, soot, fumes, acids, alkalis, chemicals and
waste. Waste includes (but is not limited to) materials to be recycled, reconditioned
or reclaimed;
r
()) for violation(s) of any of the responsibilities, obligations or duties imposed by the
Employee Retirement Income Security Act of 1974, the Fair Labor Standards Act
(except the Equal Pay Act), the National Labor Relations Act, the Worker Adjustment
and Retraining Notification Act, the Consolidated Omnibus Budget Reconciliation Act,
the Occupational Safety and Health Act, any rules or regulations of the foregoing
promulgated thereunder, and amendments thereto or any similar provisions of any
federal, state or local statutory law or common law; provided, however, that this
exclusion shall not apply to Loss arising from a Claim for Retaliation;
(k) alleging, arising out of, based upon or attributable to any actual or alleged
contractual liability of an Insured under any express contract or agreement; provided,
however, that this exclusion shall not apply to liability which would have attached In
the absence of such express contract or agreement,
(1) for any civil or criminal fines imposed by law and any taxes (whether imposed by
federal, state, local or other governmental authority);
(m) alleging, arising out of, or in any way relating to any purchase or sale of securities by
the Named Organization, Subsidiary or Affiliate or Claims brought by securities
holders of the Organization in their capacity as such; provided, however, this
exclusion shall not apply to the issuance by the Organization of tax exempt bond
debt or Claims brought by tax exempt bond debt holders.
b-
68467 (8/97) Copy 7
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5. LIMIT OF LIABILITY - (FOR ALL LOSS - INCLUDING DEFENSE COSTS)
c
The Limit of Liability stated in Item 4 of the Declarations is the limit of the Insurer's
liability for all Loss, under Coverage A, Coverage B and Coverage C combined, arising out
of all Claims first made against the Insureds during a Policy Year or the Discovery Period
(if applicable); however, the Limit of Liability for the Discovery Period shall be part of, and
not In addition to, the Limit of Liability for the Policy Year In which the Discovery Period is
elected. Further, any Claim which is made subsequent to the Policy Year or Discovery
i
® Period (if applicable) which, pursuant to Clause 7(b) or 7(c), is considered made during the '
Policy Year or Discovery Period shall also be subject to the one applicable aggregate Limit
of Liability stated in Item 4 of the Declarations.
Defense Costs are not payable by the insurer in addition to the Limit of Liability.
Defense Costs are part of Loss and as such are subject to the Limit of Liability for
Loss.
K
This policy provides one aggregate Limit of Liability for each Policy Year. In no event
shall the Limit of Liability for any one Policy Year exceed the aggregate Limit of
Liability as stated in Item 4 of the Declarations.
6. RETENTION CLAUSE
The Insurer shall only be liable for the amount of Loss arising from a Claim which is in
excess of the Retention amount stated in Item 5(13) of the Declarations, such Retention
amount to be borne by the Organization and shall remain uninsured, with regard to all
Loss for which the Organization has indemnified or is permitted or required to indemnify
the Individual Insureds ('Indemnifiable Loss") and Loss under Coverage C. A single
Retention amount shall apply to Loss arising from all Claims alleging the same Wrongful
Act or Related Wrongful Acts.
Except as hereinafter stated, no Retention shall apply to a Claim in the event of the
Financial Insolvency of the Named Organization and all Subsidiaries or Affiliates which are
permitted or required to indemnify the Individual Insured with regard to such Claim.
Provided, however, the Organization hereby agrees to indemnify the Insureds to the fullest
extent permitted by law, taking all steps necessary in furtherance thereto, Including the
making in good faith of any required application for court approval and the passing of any
required corporate resolution or the execution of any contract. The Named Organization
and all Subsidiaries and Affiliates will be conclusively deemed to have indemnified the
Individual insureds to the extent that the Organization is permitted or required to
indemnify them pursuant to law, common or statutory, or contract, or the charter or
by-laws of the Organization.
Further, no Retention shall apply to all coverages for any Claim which is In the form of a
civil litigation for monetary relief, and the Insurer shall thereupon reimburse the Defense
Costs paid by the Insured, in the event of:
(1) a determination of No Liability of all Insureds; or
(2) a dismissal or a stipulation to dismiss the civil litigation Claim without prejudice
and without the payment of any consideration by any Insured;
provided, however, that In the case of (2) above, such reimbursement shall occur one
hundred twenty (120) days after the date of dismissal or stipulation as long as the Claim is
not re-brought (or any other Claim which is subject to the same single retention by virtue
of Clause 6 is not brought) within ninety (90) days from the time of such dismissal or
stipulation, and further subject to an undertaking by the Organization in a form acceptable
to the Insurer that such reimbursement shall be paid back by the Organization to the
Insurer in the event the Claim (or any other Claim which is subject to the same single
retention by virtue of Clause 6) is brought after such 90-day period and before the
expiration of the statute of limitations for such Claim.
45,
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7. NOTICE/CLAIM REPORTING PROVISIONS
Notice hereunder shall be given in writing to the insurer named in item 8 of the
Declarations at the address indicated in Item 8 of the Declarations. If mailed, the date
of mailing shall constitute the date that such notice was given and proof of mailing
shall be sufficient proof of notice. A Claim shall be considered to have been first D
made against an Insured when written notice of such Claim is received by any
Insured, by the Named Organization on the behalf of any Insured or by the insurer,
whichever comes first.
(a) The Insureds shall, as a condition precedent to the obligations of the Insurer under L
this policy, give written notice to the insurer of any Claim made against an Insured as
.soon as practicable and either:
(1) anytime during the Policy Year or during the Discovery Period (if applic-
able); or
(2) within 30 days after the end of the Policy Year or the Discovery Period (if
applicable), as long as such Claim Is reported no later than 30 days after the
date such Claim was first made against an Insured.
(b) If written notice of a Claim has been given to the Insurer pursuant to Clause 7(a)
above, then any Claim which Is subsequently made against the Insureds and reported
to the Insurer alleging, arising out of, based upon or attributable to the facts alleged
In the Claim for which such notice has been given, or alleging any Wrongful Act
which is the same as or related to any Wrongful Act alleged in the Claim of which
such notice has been given, shall be considered made at the time such notice was
given.
(c) If during the Policy Period or during the Discovery Period (if applicable) the Insureds
shall become aware of any circumstances which may reasonably be expected to give
rise to a Claim being made against the Insureds and shall give written notice to the
Insurer of the circumstances and the reasons for anticipating such a Claim, with full
particulars as to dates, persons, and entities involved, then any Claim which is
subsequently made against the Insureds and reported to the Insurer alleging, arising
out of, based upon or attributable to such circumstances or alleging any Wrongful
Act which is the same as or related to any Wrongful Act alleged or contained in such
circumstances, shall be considered made at the time such notice of such
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a
I
circumstances was given.
8. DEFENSE COSTS, SETTLEMENTS, JUDGMENTS (INCLUDING THE ADVANCEMENT OF
DEFENSE COSTS)
The Insurer does not assume any duty to defend. The Insureds shall defend and contest
any Claim made against them.
Notwithstanding the foregoing, the Insureds shall have the right to tender the defense of
any Claim to the Insurer, which right shall be exercised in writing by the Named
Organization on behalf of all Insureds to the Insurer pursuant to Clause 7 of this policy.
This right shall terminate if not exercised within 30 days of the date the Claim Is first
made against an Insured, pursuant to Clause 7 of the policy. Further, from the date the
Claim is first made against the Insureds to the date when the Insurer accepts the tender
of the defense of such Claim, the Insureds shall take no action, or fail to take any required
action, that prejudices the rights of the Insureds or the insurer with respect to such Claim.
Provided that the insureds have complied with the foregoing, the Insurer shall be obligated
to assume the defense of the Claim, even if such Claim is groundless, false or fraudulent.
The assumption of the defense of the Claim shall be effective upon written confirmation
thereof sent by the Insurer to the Named Organization. Once the defense has been so
tendered, the Insured shall have the right to effectively associate with the Insurer in the
defense of such Claim, including, but not limited to, negotiating a settlement, subject to
the provisions of this Clause 8. However, the Insurer shall not be obligated to defend such
68467 (8197) COPY s
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4
Claim after the Limit of Liability has been exhausted, or after an Insured's rejection of a
Settlement Opportunity as described in this Clause 8.
When the Insurer has not assumed the defense of a Claim pursuant to Clause 8, the
Insurer shall advance nevertheless, at the written request of the Insured, Defense Costs
prior to the final disposition of a Claim. Such advanced payments by the Insurer shall be
repaid to the Insurer by the Insureds, severally according to their respective Interests, in
the event and to the extent that the Insureds shall not be entitled under the terms and
conditions of this policy to payment of such Loss.
The Insureds shall not admit or assume any liability, enter into any settlement
agreement, stipulate to any judgment, or incur any Defense Costs without the prior
written consent of the Insurer. Only those settlements, stipulated judgments and
Defense Costs which have been consented to by the Insurer shall be recoverable as
Loss under the terms of this policy. The Insurer's consent shall not be unreasonably
withheld, provided that the Insurer, when it has not assumed the defense of a Claim
pursuant to this Clause 8, shall be entitled to effectively associate In the defense and
the negotiation of any settlement of any Claim, and provided further that in all events
the Insurer may withhold consent to any settlement, stipulated judgment or Defense
Costs, or any portion thereof, to the extent such Loss is not covered under the terms
of this policy.
The Insurer shall have the right to effectively associate with the Insureds in the defense of
any Claim that appears reasonably likely to involve the Insurer, including but not limited to
negotiating a settlement. The Insureds shall give the Insurer full cooperation and such
information as It may reasonably require.
If the Insurer recommends a settlement within the policy's applicable Limit of Liability
which is acceptable to the claimant (a "Settlement Opportunity"), and the Insureds consent
to such settlement, then the Organization's applicable Retention amount shall be
retroactively reduced by ten percent (10%) for such Loss. It shall be a condition to such
reduction that the Insureds must consent to such settlement within thirty (30) days of the
date the Insureds are first made aware of the Settlement Opportunity, or in the case of a
Settlement Opportunity which arises from a settlement offer by the Claimant, then within
the time permitted by the claimant to accept such settlement offer, but in all events no
later than thirty (30) days after the settlement offer was made.
However, if a Settlement Opportunity arises and the Insureds do not consent to the
settlement within the time prescribed above, the Retention amount shall remain the
applicable amount set forth in Item 5 of the Declarations even if consent is given to a
subsequent Settlement Opportunity.
Furthermore, In the event the Insureds do not consent to the first Settlement Opportunity
within the time prescribed, then the Insurer's liability for all Loss on account of such Claim
shall not exceed: (1) the amount for which the Insurer could have settled such Claim plus
Defense Costs incurred as of the date such settlement was proposed in writing by the
Insurer, ("Settlement Opportunity Amount") plus (2) 50% of covered Loss in excess of such
Settlement Opportunity Amount subject to the policy's Limit of Liability. Notwithstanding
the foregoing, this paragraph shall not apply until the Settlement Opportunity Amount
exceeds the Retention amount stated In Item 5 of the Declarations.
9. PRE-AUTHORIZED CLASS ACTION DEFENSE ATTORNEYS
This clause applies only to a Claim filed as a class action (hereinafter referred to as a
"Class Action Claim").
Affixed as Appendix A hereto and made a part of this policy is a list of Panel Counsel law
firms ("Panel Counsel Firms") from which a selection of legal counsel may be made to
conduct the defense of any Class Action Claim against an Insured pursuant to the terms
set forth below.
Is
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In the event the Insurer has assumed the defense pursuant to Clause 8 of this policy, then p
the Insurer shall be obligated to select a Panel Counsel Firm to defend the Insureds. In the
event the Insureds are already defending a Class Action Claim, then the Insureds may at
?. their option select a Panel Counsel firm to defend the Insureds. If the Insured does not
select a Panel Counsel firm, such non-Panel Counsel firm selection shall be subject to the
Insurer's consent, which consent shall not be unreasonably withheld.
The selection of the Panel Counsel Firm, when done by the Insurer, shall be from the
jurisdiction in which the Class Action Claim is brought.
The list of Panel Counsel Firms may be amended from time to time by the Insurer.
However, no change shall be made to the specific list attached to this policy during the
Policy Period without the consent of the Named Organization.
10. DISCOVERY CLAUSE
Except as indicated below, if the Named Organization shall cancel or the Insurer or the
Named Organization shall refuse to renew this policy, the Named Organization, upon
payment of the respective "Additional Premium Amount" described below, shall have the
right to a period of one, two or three years after the effective date of such cancellation or
nonrenewal (herein referred to as the "Discovery Period") in which to give to the Insurer
written notice of Claims first made against the Insureds during the selected period for any
Wrongful Act occurring prior to the end of the Policy Period and otherwise covered by this
policy. The rights contained in this paragraph shall terminate, however, unless written
notice of such election together with the additional premium due is received by the Insurer
within 30 days of the effective date of cancellation or nonrenewal. The Additional Premium
Amount for the Discovery Period shall be fully earned at the inception of the Discovery
Period. The Discovery Period Is not cancelable. This clause and the rights contained herein
shall not apply to any cancellation resulting from non-payment of premium.
r
5
The Additional Premium Amount for: (1) one year shall be 40%a of the "full annual
premium"; (2) two years shall be 75% of the "full annual premium"; (3) three years shall be
100% of the "full annual premium". As used herein, "full annual premium" means the
premium level in effect immediately prior to the end of the Policy Period.
In the event of a Transaction, as defined in Clause 12, the Named Organization shall have
the right, within 30 days before the end of the Policy Period, to request an offer from the
Insurer of a Discovery Period (with respect to Wrongful Acts occurring prior to the
effective time of the Transaction) for a period of no less than six years or for such longer
or shorter period as the Named Organization may request. The Insurer shall offer such
Discovery Period pursuant to such terms, conditions and premium as the Insurer may
reasonably decide. In the event of a Transaction, the right to a Discovery Period shall not
otherwise exist except as indicated in this paragraph.
11. CANCELLATION CLAUSE
This policy may be canceled by the Named Organization only by mailing written prior
notice to the Insurer or by surrender of this policy to the Insurer or Its authorized agent.
If this policy is canceled by the Named Organization, the Insurer shall retain the customary
short rate proportion of the premium herein. However, if the Policy Period as designated In
Item 3. of the Declarations is more than one year, this policy may not be cancelled by the
Named Organization.
This policy may be canceled by or on the behalf of the Insurer only in the event of
nonpayment of premium by the Named Organization. In the event of non-payment of
premium by the Named Organization, the Insurer may cancel this policy by delivering to
the Named Organization, or by mailing to the Named Organization, by registered, certified,
or other first class mail, at the Named Organization's address as shown in Item 1 of the
Declarations, written notice stating when, not less than 30 days thereafter, the cancellation
W, _0
68467 (8/97) COPY 11
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shall be effective, The mailing of such notice as aforesaid shall be sufficient proof of
notice. The Policy Period terminates at the date and hour specified in such notice, or at
the date and time of surrender. The Insurer shall have the right to the premium amount for g
K the portion of the Policy Year during which the policy was in effect. i
If the period of limitation relating to the giving of notice is prohibited or made void by any
law controlling the construction thereof, such period shall be deemed to be amended so
as to be equal to the minimum period of limitation permitted by such law.
12. CHANGE IN CONTROL OF NAMED ORGANIZATION
If during the Policy Period:
a. the Named Organization shall consolidate with or merge into, or sell all or
substantially all of its assets to, any other person or entity, or group of persons or
entities acting in concert;
b. any person or entity or group of persons or entities, acting in concert shall acquire an
amount of the voting interest representing more than fifty percent (50%) of the
voting power for the election or appointment of directors or trustees of the Named
Organization, or acquires the voting rights of such an amount of such interest; or
c. the Named Organization shall change from not-for-profit to for-profit status;
(any of the above events herein referred to as the "Transaction")
then, this policy shall continue in full force and effect as to Wrongful Acts occurring prior
E to the effective time of the Transaction, but there shall be no coverage afforded by any
i provision of this policy for any actual or alleged Wrongful Act occurring after the effective
time of the Transaction. This policy may not be canceled after the effective time of the
i. Transaction and the entire premium for this policy shall be deemed earned as of such
time. The Named Organization shall also have the right to an offer by the Insurer of a
Discovery Period described in Clause 10 of the policy.
The Named Organization shall give the Insurer written notice of the Transaction as soon as
practicable, but not later than thirty (30) days after the effective date of the Transaction.
13. SUBROGATION
In the event of any payment under this policy, the Insurer shall be subrogated to the
extent of such payment to all the Insureds' rights of recovery thereof, and the Insureds
shall execute all papers required and shall do everything that may be necessary to secure
such rights including the execution of such documents necessary to enable the Insurer
effectively to bring suit In the name of any Insureds. In no event, however, shall the
Insurer exercise its rights of subrogation against an Insured under this policy unless such
Insured has been convicted of a criminal act, or been determined to have committed a
dishonest or fraudulent act, or obtained any profit or advantage to which such Insured was
not legally entitled.
14. OTHER INSURANCE AND INDEMNIFICATION
Such insurance as is provided by this policy shall apply only as excess over any valid and
collectible insurance. This policy shall be specifically excess of any other policy pursuant
to which any other insurer has a duty to defend a Claim for which this policy may be
obligated to pay Loss.
In the event of a Claim against a director, trustee, trustees emeritus or governor arising
out of his or her serving as a director, trustee, trustees emeritus or governor of an
Outside Entity, coverage as is afforded by this policy shall be specifically excess of
?y 68467 (sign) COPY 12
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indemnification provided by such Outside Entity and any insurance provided to such
Outside Entity with respect to its directors, trustees, trustees emeriti or governors.
11W Further, in the event such other insurance Is provided to an Outside Entity by the Insurer
® or any member company of American International Group, Inc. (AIG) (or would be provided
but for the application of the retention amount, exhaustion of the Limit of Liability or
failure to submit a notice of a Claim) then the Insurer's maximum aggregate Limit of
Liability for all Losses combined in connection with a Claim covered, in part of In whole,
by this policy and such other insurance policy issued by AIG shall not exceed the greater
of the Limit of Liability of this policy or the limit of liability of such other AIG insurance
a_ policy.
15. NOTICE AND AUTHORITY
It is agreed that the Named Organization shall act on behalf of the Subsidiaries and all
Insureds with respect to the giving of notice of Claim or giving and receiving notice of
cancellation, the payment of premiums and the receiving of any return premiums that may
become due under this policy, the receipt and acceptance of any endorsements issued to
form a part of this policy, the exercising or declining to tender the defense of a Class
Action Claim to the Insurer and the exercising or declining of any right to a Discovery
Period.
4 16. ASSIGNMENT
This policy and any and all rights hereunder are not assignable without the written
consent of the Insurer.
17. ACTION AGAINST INSURER
No action shall lie against the Insurer unless, as a condition precedent thereto, there shall
have been full compliance with all of the terms of this policy, nor until the amount of the
Insureds' obligation to pay shall have been finally determined either by judgment against
the Insureds after actual trial or by written agreement of the Insureds, the claimant and
the Insurer.
Any person or organization or the legal representative thereof who has secured such
judgment or written agreement shall thereafter be entitled to recover under this policy to
the extent of the insurance afforded by this policy. No person or organization shall have
any right under this policy to join the Insurer as a parry to any action against the Insureds
to determine the Insureds' liability, nor shall the Insurer be impleaded by the Insureds or
their legal representatives. Bankruptcy or insolvency of the Insureds or of their estates
shall not relieve the Insurer of any of its obligations hereunder.
18. REPRESENTATIONS AND SEVERABILITY
In granting coverage. under this policy, it is agreed that the Insurer has relied upon the
statements and representations contained In the application for this policy (including
materials submitted thereto and, if this is a renewal application, all such previous policy
applications for which this policy is a renewal) as being accurate and complete. All such
statements and representations shall be deemed to be material to the risk assumed by the
Insurer, are the basis of this policy and are to be considered as incorporated Into this
policy.
With respect to such statements and representations, no knowledge or information
possessed by any Individual insured shall be imputed to any other individual Insured. If any
person who executed the application knew that such statement or representation was
inaccurate or Incomplete, such statement shall not be Imputed to any trustee, trustee
emeritus or governor other than such slgnator and any other Individual Insureds who knew
such statement or representation was inaccurate or incomplete.
9
68467 (8/97) (;QPy 13
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19. HEADINGS
The descriptions in the headings of this policy are solely for convenience, and form no
part of the terms and conditions of coverage.
20. WORLDWIDE TERRITORY
This policy shall apply to Claims made against an Insured anywhere In the world.
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APPENDIX A
NOT FOR PROFIT PANEL COUNSEL ADDENDUM
CLASS ACTIONS-NON EMPLOYMENT, 425 Market Street
ANTI-TRUST AND UNFAIR San Francisco, CA 94105-2482
COMPETITION CLAIMS Tel: (415) 268-7000
Contact: Linda E. Shostak, Esq.
ALASKA
O'MELVENY & MYERS LLP
LANE POWELL SPEARS LUBERSKY LLP 610 Newport Center Drive
420 L. Street Newport Beach, CA 92660
Suite 300 Tel: (714) 760-9600
Anchorage, AK 99501-1937 Contact: Stephen P. Pepe, Esq.
Tel: (206) 223-7019
Contact: James B. Stoetzer, Esq. Embarcadero Center West
275 Battery Street
ARIZONA San Francisco, CA 94111-3305
Tel: (415) 984-8700
GOODWIN RAUP PC Contact: Douglas Dexter, Esq.
One Columbus Plaza
Suite 1200 400 South Hope Street
Phoenix, AZ 85012-1942 15th Floor
Tel: (602) 650-2009 Los Angeles, CA 90071-2899
Contact: Martin P. Clare, Esq. Tel: (213) 430-6000
Contact: Gordon E. Krischer, Esq.
CALIFORNIA
COLORADO
IRELL & MANELLA
1800 Avenue of the Stars ARNOLD & PORTER
Suite 900 1700 Lincoln Street
Los Angeles, CA 90067-4275 Denver, Co 80203-4540
Tel: (310) 277-1010 Tel: (303) 863-1000
Contact: James F. Elliot, Esq. Contact: James E. Scarboro, Esq.
LATHAM & WATKINS DELAWARE
505 Montgomery Street
Suite 1900 WOLF BLOCK SCHORR AND SOLIS-
San Francisco, CA 94111 COHEN LLP
Tel: (415) 391-0600 One Rodney Square
Contact: Linda M. Inscoe, Esq. 10th & King Streets
Wilmington, DE 19801
633 West Fifth Street Tel: (302) 777-5860
Suite 4000 Contact: Barry M. Klayman, Esq.
Los Angeles, CA 90071-2007
Tel: (213) 485-1234
Contact: Joel E. Krischer, Esq. DISTRICT OF COLUMBIA
GREENBERG TRAURIG
MORRISON & FOERSTER LLP 1300 Connecticut Avenue, N.W.
555 West Fifth St., Suite 3500 Washington, DC 20036
Los Angeles, CA 90013-1024 Tel: (202) 331-3100
Tel: (213) 892-5200 Contacts: C. Allen Foster, Esq., Joe R.
Contact: B. Scott Silverman, Esq. Reeder, Esq., or Eric C. Rowe, Esq.
Revised (5/01)
APPENDIX A
NOT FOR PROFIT PANEL COUNSEL ADDENDUM
PATTON BOGGS, LLP
2550 M Street, N.W.
Washington, DC 20037
Tel: (202) 457-6000
Contacts: Douglas B. Mishkin, Esq. or
Sally D. Garr, Esq.
FLORIDA
GREENBERG TRAURIG
515 East Las Olas Boulevard
Ft. Lauderdale, FL 33301
Tel: (954) 765-0500
Contact: Frank Scruggs, Esq.
1221 Brickeil Avenue
Miami, FL 33131
Tel: (305) 579-0500
Contact: Ron Rosengarten, Esq.
GEORGIA
SMITH, GAMBRELL & RUSSELL LLP
3343 Peachtree Road, N.E.
Suite 3200, Promenade II
Atlanta, GA 30326-1010
ALSTON & BIRD LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, GA 30309-3424
Tel: (404) 881-7000
Contact: Peter O. Bassett, Esq. or
Robert P. Riordan, Esq.
HAWAII
LOVE YAMAMOTO & MOTOOK
1000 Bishpop Street
Honolulu, HI 9681
Tel: (808) 532-7900
Contact: Chad Love, Esq.
IDAHO
QUANE SMITH LLP
US Bank Plaza, Suite 1600
101 South Capital Blvd
Boise, ID 83702
Tel: (208) 345-0960
Contact: Jeremiah A. Quane, Esq.
ILLINOIS
JENNER & BLOCK
One IBM Plaza
Chicago, IL 60611
Tel: (312) 222-9350
Contact: David K Haase, Esq.
SIDLEY & AUSTIN
One First National Plaza
Chicago, IL 60603
Tel: (312) 853-7000
Contact: James S. Whitehead, Esq.,
Julie 0. Allen, Esq., Lawrence
Lawrence I. Kipperman, Esq.,
Thomas A. Roberts, Esq.
SONNENSCHEIN MATH & ROSENTHAL
800 Sears Towers
Chicago, IL 60601-1692
Tel: (312) 876-3112
Contact: Roger T. Brice, Esq.
INDIANA
KIGHLINGER & GRAY
151 North Delaware
Tel: (317) 638-4521
Contact: Donald L. Dawson, Esq.
IOWA
NYEMASTER GOODE VOIGTS WEST
HANSELL & O'BRIEN
700 Walnut Street
Des Moines, IA 50309
Tel: (515) 283-3100
Contact: Hayward Draper, Esq.
KENTUCKY
BOEHL STOPHER & GRAVES
400 West Market Street
Suite 2300
Louisville, KY 40222
Tel: (502) 589-5980
Contact: Ed Stopher, Esq.
Revised (5/01)
APPENDIX A
NOT FOR PROFIT PANEL COUNSEL ADDENDUM
LOUISIANA NIXON PEABODY LLP
990 Stewart Avenue
ADAMS AND REESE Garden City, NY 11530
4500 One Shell Square Tel: (516) 832-7564
New Orleans, LA 70139 Contact: Joseph J. Ortego, Esq
Tel: (504) 581-3234
Contact: Janis Van Meerveld, Esq. Omni Plaza
300 South Pearl St.
MASSACHUSETTS Albany NY 12207
Tel: (518) 427-2650
NIXON PEABODY LLP Contact: Joseph J. Ortego, Esq
101 Federal Street
Boston, Ma. 02110 437 Madison Avenue
Tel: (516) 832-7564 New York NY 10022
Contact: Joseph J. Ortego, Esq. Tel: (212) 940-3000
Contact: Joseph J. Ortego, Esq
ROPES & GRAY
One International Place Clinton Square, PO Box 31051
Boston, MA 02110-2624 Rochester, NY 14603
Tel: (617) 951-7000 Tel: (716) 263-1000
Contact: John D. Donovan, Jr., Esq. Contact: Joseph J. Ortego, Esq
NEW YORK PENNSYLVANIA
GREENBERG TRAURIG BUCHANAN INGERSOLL, PC
Met Life Building One Oxford Centre, 20th Floor
200 Park Avenue 301 Grant Street
New York, NY 10166 Pittsburgh, PA 15219-8800
Tel: (212) 801-9200 Tel: (412) 562-1880
Contact: Joe R. Reeder, Esq. Contact: John R. Leathers, Esq.
KRAMER LEVIN NAFTALIS & FRANKEL DECHERT PRICE & RHOADS
919 Third Avenue 4000 Bell Atlantic Tower
New York, NY 10022 1717 Arch Street
Tel: (212) 715-9100 Philadelphia, PA 19103-2793
Contact: Gary Naftalis, Esq. Tel: (215) 994-4000
Contact: Seymour Kurland, Esq.
SCHULTE ROTH & ZABEL LLP Jeffery G. Weil, Esq.
900 Third Avenue Frederick G. Herold, Esq.
New York, NY 10022
Tel: (212) 756-2000
Contact: Irwin J. Sugarman, Esq. or PEPPER HAMILTON LLP
Daniel J. Kramer, Esq. 3000 Two Logan Square
Eighteenth and Arch Streets
WILLKIE FARR & GALLAGHER Philadelphia, PA 19103-2799
787 Seventh Avenue Tel: (215) 981-4000
New York, NY 10019-6099 Contact: Anthony B. Haller, Esq.
Tel: (212) 728-8000
Contact: Stephen Greiner, Esq. WOLF BLOCK SCHORR & SOLIS -
COHEN LLP
1650 Arch Street
_ Philadelphia, PA 19103-2097
Tel: (215) 977-2588
Contact: Alan Kessler, Esq.
Revised (5/01) 3
APPENDIX A
NOT FOR PROFIT PANEL COUNSEL ADDENDUM
RHODE ISLAND THOMPSON & K NIGHT LLP
1700 Pacific Avenue
ROPES & GRAY Suite 3300
30 Kennedy Plaza Dallas, TX 75201-4693
Providence, RI 02903-2328 Tel: (214) 969-1700
Tel: (401) 455-4400 Contact: Timothy R. McCormick, Esq.
Contact: William S. Eggeling, Esq. Tel: (214) 969-1751
Contact: Stephen F. Fink, Esq.
NIXON PEABODY LLP
One Citizens Plaza VIRGINIA
Providence, RI 02903
Tel: (516) 832-7564 GREENBERG TRAURIG
Contact: Joseph J. Ortego, Esq 1750 Tysons Boulevard, 12th Floor
Tysons Corners, VA 22102
TEXAS Tel: (703) 749-1300
Contacts: C. Allen Foster, Esq.
BAKER & BOTTS LLP Joe R. Reeder, Esq.
2001 Ross Avenue Harry M. Glazer, Esq.
Dallas, TX 75201-2980
Tel: (214) 953-6575 MCGUIRE WOODS BATTLE
Contact: Dan Hartsfield, Esq. & BOOTHE LLP
One James Center
One Shell Plaza 901 East Cary Street
910 Louisiana Street Richmond, VA 23219-4030
Houston, TX 77002-4995 Tel: (804) 775-4364
Tel: (713) 229-1234 Contact: Warren E. Zirkle , Esq.
Contact: Richard R. Brann, Esq.
WASHINGTON
FULBRIGHT & JAWORSKI LLP
2200 Ross Avenue LANE POWELL SPEARS LUBERSKY LLP
Suite 2800 1420 Fifth Avenue Suite 4100
Dallas, TX 75201 Seattle, WA 98101-2338
Tel: (214) 855-8188 Tel: (206) 223-7019
Contact: Bob Harrell, Esq. Contact: James B. Stoetzer, Esq.
A.J. Harper, Esq.
1301 McKinney
WEST VIRGINIA
Suite 5100 STEPTOE & JOHNSON LLP
Houston, TX 77101-3095 Bank One Center
Tel: (713) 651-5442 P.O. Box 2190
Contact: Frank Jones, Esq. Clarksburg, WV 26302-2190
BO
LLP
PATTON Tel: (304) 624-8000
2626 Cole
2626
Avenue Contact: C. David Morrison, Esq.
Suite 700
Dallas, TX 75204
Tel: (214) 871-2141
Contact: D. Patrick Long, Esq.
Revised (5/01) 4
APPENDIX A
NOT FOR PROFIT PANEL COUNSEL ADDENDUM
EMPLOYMENT PRACTICES CLAIMS CALIFORNIA
ALABAMA EPSTEIN BECKER & GREEN PC
Two Embarcadero Center
LLOYD GRAY & WHITEHEAD Suite 1650
Two Perimeter Park South San Francisco, CA 94111
Suite 100 Tel: (415) 398-3500
Birmingham, AL 35423 Contact: Ron Souza, Esq
Tel: (205) 967-8822 *Class Action Approved
Contact: Steven E. Whitehead, Esq.
*Class Action Approved IRELL & MANELLA
1800 Avenue of the Stars
LUTHER OLDENBURG & RAINEY Suite 800
63 S. Royal Street Los Angeles, CA 90067-4275
Mobile, AL Tel: (310) 277-1010
Tel: (334} 433-8088 Contact: James F. Elliot, Esq.
Contact: Rudene C. Oldenburg, Esq. *Class Action Approved
ALASKA JACKSON LEWIS SCHNIIZLER &
LANE POWELL SPEARS LUBERSKY LLP KRUPMAN
420 L Street 1888 Century Park East
Suite 300 Suite 1600
Anchorage, AK 99501-1937 Los Angeles, CA 90067
Tel: (206) 223-7019 Tel: (310) 203-0200
Contact: James B. Stoetzer, Esq. Tel: (914) 328-0404
*Class Action Approved Contact: Steven D. Baderian, Esq,
*Class Action Approved All Locations
ARIZONA 1215 K Street, Suite 1800
GOODWIN RAUP PC Sacramento, CA 95814
One Columbus Plaza Tel: (916) 341-0404
Suite 1200 Tel: (914) 328-0404
Phoenix, AZ 85012-1942 Contact: Steven D. Baderian, Esq.
Tel: (602) 650-2009
Contact: Calvin Raup, Esq. 199 Freemont Street, 10th Floor
*Class Action Approved San Francisco, CA 94105
Tel: (415) 394-9400
CAMPBELL YOST Tel: (914) 328-0404
234 North Central Avenue Contact: Steven D. Baderian, Esq.
Suite 600
Phoenix, AZ 85004 KUTAK ROCK
Tel: (602) 322-1600 117 E. Colorado Avenue
Contact: Martin P. Clare, Esq. Suite 210
*Class Action Approved Pasadena, CA 91105
Tel: (626) 432-1630
ARKANSAS Contact: Gregory Hurley, Esq.
HUCKABAY MUNSON ROWLE77 LEWIS D'AMATO BRISBOIS & BISGAARD
& TILLEY LLP
1900 West Capital Avenue 221 N. Figueroa Street, Suite 1200
Suite 1900 Los Angeles, CA 90012
Little Rock, AR 72201 Tel: (213) 500-1800
Tel: (501) 374-6535 Contact: Robert F. Lewis, Esq.
Contact: Bruce Munson, Esq. Gary S. Rattet, Esq.
'Class Action Approved
Revised (5/01) 5
APPENDIX A
NOT FOR PROFIT PANEL COUNSEL ADDENDUM
One Sansome Street, Suite 1900 650 California Street
San Francisco, CA 94104 San Francisco, CA 94108
Tel: (415) 362-2580 Tel: (415) 433-0990
Contact: Duane C. Musfelt, Esq. Contact: Louis H. Castoria, Esq.
550 West C Street, Suite 800 COLORADO
San Diego, CA 92101
Tel: (619) 233-1006 KUTAK ROCK
Contact: R. Gaylord Smith, Esq. 717 Seventeenth Street
Suite 2800
650 Town Center Drive, Suite 1400 Denver, CO 80202
Costa Mesa, CA 92626 Tel: (303) 297-2400
Tel: (714) 545-9200 Tel: (626) 432-1630
Contact: Mercedes Cruz, Esq. Contact: Gregory Hurley, Esq.
Suite 600, 650 East Hospitality Lane SHERMAN & HOWARD
San Bernardino, CA 92408 633 17th Street
Tel: (909) 387-1130 Suite 3000
Contact: Joseph Arias, Esq. Denver, CO 80202
Tel: (303) 297-2900
2500 Venture Oaks Way, Suite 200 Contact: Andrew Bolin, Esq.
Sacramento, CA 95833
Tel: {916} 564-5400 PATTON BOGGS
Contact: David L. Cohen, Esq. 1660 Lincoln Street
Suite 1900
O'MELVENY & MYERS L!P Denver, CO 80264
610 Newport Center Drive Tel: (303) 830-1776
t Newport Beach, CA 92660 Contact: Timothy D. Kraus, Esq.
Tel: (714) 760-9600
Contact: Stephen P. Pepe, Esq. CONNECTICUT
"Class Action Approved All Locations
EPSTEIN BECKER & GREEN PC
Embarcadero Center West One Landmark Plaza
275 Battery Street Suite 1800
San Francisco, CA 94111-3305 Stamford, CT 06901-2601
Tel: (415) 984-8700 Tei: (212) 351-4500
Contact: Douglas Dexter, Esq, Contact: Howard Pianko, Esq
"Class Action Approved
400 South Hope Street JACKSON LEWIS SCHNITZLER &
15th Floor KRUPMAN
Los Angeles, CA 90071-2899 55 Farmington Avenue
Tel: (213) 430-6000 Suite 1200
Contact: Gordon E. Krischner, Esq. Hartford, CT 06105
WILSON ELSER MOSKOWITZ Tel: (860) 522-0404
EDELMAN & DICKER Tel: (914) 328-0404
1055 West Seventh Street Contact: Steven Baderian, Esq.
"Class Action Approved All Locations
Los Angeles, CA 90017
Tel: (213) 624-3044 177 Broad Street
Contact: James A. Stankowski, Esq. Post Office Box 251
Stamford, CT 06904-0251
Tel: (203) 961-0404
Tel: (914) 328-0404
Contact: Steven D. Baderian, Esq.
Revised (5/01) 6
APPENDIX A
NOT FOR PROFIT PANEL COUNSEL ADDENDUM
DELAWARE
WOLF BLOCK SCHOOR AND
COHEN LLP
One Rodney Square
10th & King Streets
Wilmington, DE 19801
Tel: (302) 777-5860
Contact: Barry M. Klayman,
'Class Action Approved
JORDON COYNE & SAVITS, LLP
1100 Connecticut Avenue, NW
SOLIS - Washington, DC 20036
Tel: (202) 496-2810
Contact: Deborah Murrell Whelihan, Esq.
"Class Action Approved
Esq.
GREENBERG TRAURIG LLP
The Brandywine Building
1000 West Street, Suite 1540
Wilmington, DE 19801
Tel: (302) 661-7000
'Class Action Approved
DISTRICT OF COLUMBIA
DRINKER BIDDLE PITNEY HARDEN
1500 K Street, N.W.
Suite 110
Washington, DC 20005
Tel: (202) 842-8857
Contact: Jennifer Smith, Esq.
PATTON BOGGS LLP
2550 M Street, N.W.
Washington, DC 20037
Tel: (202) 457-6000
Contact: Douglas B. Mishkin, Esq. or
Sally D. Garr, Esq.
"Class Action Approved
JACKSON LEWIS SCHNITZLER &
KRUPMAN
13501 1 Street, NW
Suite 510
Washington, DC 20005
Tel: (202) 347-5200
Tel: (914) 328-0404
Contact: Steven D. Baderian, Esq.
`Class Action Approved
WILSON ELSER MOSKOWITZ
EDELMAN & DICKER
1341 G. Street NW
Washington, DC 20005
Tel: (202) 626-7660
Contact: Paul D. Krausse, Esq.
Robert B. Wallace, Esq.
FORD & HARRISON
1300 19th Street NW
Suite 700
Washington, DC 20036
Tel: (202) 719-2012
(202) 719-2000
Contact: David Rosenberg, Esq.
FLORIDA
AKERMAN SENTERFITT
Suntrust International Center
One Southeast 3rd Ave, 28th FL
Miami, FL 33131-1714
Tel: (305) 982-5543
Contact: Michael Marsh, Esq.
*Class Action Approved
JACKSON LEWIS SCHNITZLER &
KRUPMAN
First Union Financial Center
200 South Biscayne Boulevard
Suite 2600
Miami, FL 33131
Tel: (305) 577-7600
Tel: (914) 328-0404
Contact: Steven D. Baderian, Esq.
'Class Action Approved All Locations
390 North Orange Avenue
Suite 1285
Orlando, FL 32801-1641
Tel: (407) 246-8440
Tel: (914) 328-0404
Contact: Steven D. Baderian, Esq.
VERNIS & BOWLING
517 Northlake Blvd
North Palm Beach, FL 33408
Tel: (561) 845-8781
Contact: G. Jeffrey Vernis, Esq.
Revised (5/01) 7
APPENDIX A
NOT FOR PROFIT PANEL COUNSEL ADDENDUM
CARLTON FIELDS WARD EMMANUAL
SMITH & CUTLER PA
100 S.E. 2nd Street
Suite 4000
Miami, FL 33131
Tel: (305) 539-7225
Contact: Nancy H. Henry, Esq.
KUBICKI DRAPER
25 West Flagler Street Penthouse
Miami, FL 33130
Tel: (305) 374-1212
Contact: Gene Kubicki, Esq.
'Class Action Approved
GREENBERG TRAURIG
515 East Las Olas Boulevard
Ft. Lauderdale, FL 33301
Tel: (954) 765-0500
Contact: Frank Scruggs, Esq.
'Class Action Approved-All Locations
1221 Brickell Avenue
Miami, FI 33131
Tel: (305) 579-0500
Contact: Ron Rosengarten, Esq.
JACKSON LEWIS SCHNITZLER &
KRUPMAN
1900 Marquis One Tower
245 Peachtree Center Avenue, NE
Atlanta, GA 30303-1226
Tel: (404) 525-8200
Tel: (202) 328-0404
Contact: Steven D. Baderian, Esq.
'Class Action Approved
LONG ALDRIDGE & NORMAN
One Peachtree Center
5300
Atlanta GA 30308
Tel: (404) 527-8312
Contact: Phillip A. Bradley, Esq.
HAWAII
LOVE YAMAMOTO & MOTOOKA
1000 Bishop Street
Honolulu, HI 96813
Tel: (808) 532-7900
Contact: Chad Love, Esq.
*Class Action Approved
W KATZ BARRON SQUITERO FAUST
2699 So. Bayshore Drive
7th Floor
Miami, FI 33133-5408
Tel: (305) 856-2444
Contact: Todd Boyd, Esq.
GEORGIA
ALSTON & BIRD LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, GA 30309-3424
Tel: (404) 881-7000
Contact: Peter Q. Bassett, Esq. or
Robert P. Riordan, Esq.
'Class Action Approved
FISHER & PHILLIPS LLP
1500 Resurgens Plaza
945 East Paces Ferry Road
Atlanta, GA 30326
Tel: (404) 240-4235
Contact: D. Albert Brannon, Esq. or
Ilene W. Berman, Esq.
IDAHO
QUANE SMITH LLP
US Bank Plaza, Suite 1600
101 South Capital Blvd
Boise, ID 83702
Tel: (208) 345-0960
Contact: Jeremiah A. Quane, Esq.
'Class Action Approved
ILLINOIS
CLAUSEN MILLER PC
10 South Le Salle Street
Suite 1600
Chicago, IL 60603-1098
Tel: (312) 855-1010
Contact: James S. Barber, Esq. or
James Nolan, Esq.
FREEBORN & PETERS
311 South Wacker Drive
Suite 3000
Chicago, IL 60606-6677
Tel: (312) 360-6000
Contact: David H. Klstenbroker, Esq. or
Steven M. Hartmann, Esq.
Revised (5/01) 8
APPENDIX A
NOT FOR PROFIT PANEL COUNSEL ADDENDUM
JACKSON LEWIS SCHNITZLER &
KRUPMAN
320 West Ohio Street
Suite 500
Chicago, IL 60610
Tel: (312) 787-4949
Tel: (914) 328-0404
Contact: Steven D. Baderian, Esq.
*Class Action Approved
VEDDER PRICE KAUFMAN &
KAMMHOLZ
222 N. La Salle Street
Chicago, IL 60601-1003
Tel: (312) 609-7745
Contact: Barry Hartstein, Esq.
"Class Action Approved
INDIANA
KIGHTLINGER & GRAY
Market Square Center, Suite 660
151 North Delaware
Tel: (317) 638-4521
Contact: Donald L. Dawson, Esq.
*Class Action Approved
IOWA
LOUISIANA
ADAMS AND REESE
4500 One Shelf Square
New Orleans, LA 70139
Tel: (504) 581-3234
Contact: Janis Van Meerveld, Esq.
*Class Action Approved
DEUTSCH KERRIGAN & STILES LLP
755 Magazine Street
New Orleans, LA 70130
Tel: (504) 581-5141
Contact: Ellis B. Muorv, Esq.
LOCKE LIDDLE & SAPP LLP
Pan American Life Center
601 Poydras Street, Suite 2400
New Orleans, LA 70130-6036
Tel: (504) 558-5106
Contact: Amelia W. Koch, Esq.
MCGLINCHEY STAFFORD
643 Magazine Street
New Orleans, LA 70130
Tel: (504) 586-1200
Contact: E. Frederick Preis, Jr., Esq.
NYEMASTER GOODE VOIGTS WEST
HANSELL & O'BRIEN
700 Walnut Street
Des Moines, IA 50309
Tel: (515) 283-3100
Contact: Hayward Draper, Esq.
`Class Action Approved
KENTUCKY
BOEHL STOPHER & GRAVES
400 West Market Street
Suite 2300
Louisville, KY 40222
Tel: (502) 589-5980
Contact: Ed Stopher, Esq.
'Class Action Approved
HARLIN, PACKER ALCOTT &
SHOULDOIN
519 East Tenth Street
PO Box 390
Bowling Green, KY 42102-0390
Tel: (270) 842-5611
,_. Contact: William J. Parker, Esq.
THE JUNEAU FIRM
The Harding Center
1018 Harding Strret, Suite 202
Lafayette, LA 70503-2412
Tel: (337) 269-0052
Contact: Mike Juneau
MAINE
MOON MOSS MCGILL & BACHELDER PA
10 Free Street
PO Box 7250
Portland, ME 04112-7250
Tel: (207) 228-1526
Contact: Richard 0. Moon, Esq.
MARYLAND
WHITEFORD TAYLOR & PRESTON LLP
Seven St. Paul Street
Baltimore, MD 21202
Tel: (410) 347-8700
Contact: William Ryan, Jr., Esq.
Revised (5/01) 9
APPENDIX A
NOT FOR PROFIT PANEL COUNSEL ADDENDUM
JORDAN COYNE & SAVITS LLP
33 Wood Lane
Rockville, MD 20850
Tel: (301) 424-4161
Contact: Deborah Murrell Whelihan, Esq.
MASSACHUSETTS
FOLEY HOAG & ELIOT LLP
One Post Office Square
Boston, MA 02109
Tel: (617) 832-1000
Contact: Peter M. Rosenblum
HUTCHINS WHEELER & DITTMAR PC
101 Federal Street
Boston, MA 02110
Tel: (617) 951-6624
Contact: David S. Rosenthal, Esq.
"Class Action Approved
JACKSON LEWIS SCHNITZLER &
KRUPMAN
One Beacon Street
33rd Floor
Boston, MA 02108
Tel: (617) 367-0025
Tel: (914) 328-0404
Contact: Steven D. Baderian, Esq.
`Class Action Approved
MINTZ LEVIN COHN FERRIS GLOVSKY
AND POPEO, PC
One Financial Center
Boston, MA 02110
Tel: (617) 542-6000
Contact: Patrick Sharkey, Esq. &
Robert Gault, Esq.
'Class Action Approved
GETMAN, STACEY, TAMPOSI,
SCHULTESS & STEERE, PA
163 South River Road
Bedford, NH 03110
Tel: (603) 634-4300
Contact: Laurence W. Getman,
Dona Feeney, Esq.
"Western Mass. Only
NIXON PEABODY LLP
101 Federal Street
Boston, Ma. 02110
Tel: (516) 832-7564
Contact: Joseph J. Ortego, Esq.
"Class Action Approved
Revised (5/01)
MURPHY HESSE TOOMEY & LEHANE
300 Crown Colony, Suite 410
Quincy, MA 02269
Tel: (617) 479-6467
Contact: James Toomey, Esq.
PEABODY & ARNOLD
50 Rowes Wharf
Boston, MA 02110
Tel: (617) 951-2100
Contact: William A. Cotter, Esq.
MICHIGAN
DYKEMA GOSSETT, LLP
1577 N. Woodward Avenue
Bloomfield Hills, MI 48304
Tel: (248) 203-0705
Contact: Robert L Duty, Esq.
MADDIN HOUSER WARTELL ROTH
28400 Northwestern Highway
PO Box 215
Southfield, MI 48034
Tel: (248) 354-4080
Contact: Harvey Heller, Esq.
MILLER CANFIELD PADDOCK AND
STONE PLC
1200 Campau Square Plaza
99 Monroe Avenue, N W
Grand Rapids, MI 49503
Tel: (616) 454-8656
Contact: Charles S. Mishkind, Esq.
'Class Action Approved-All Locations
150 West Jefferson,
Detroit, MI 48226
Tel: (313) 963-6420
Contact: Charles S.
Carl H. Vo
Von Ende, Esq.
Suite 2500
Mishkind, Esq. or
PLUNKETT & COONEY
505 N. Woodward Avenue
Suite 3000
Esq. or Bloomfield Hills, MI 48304
Tel: (248) 901-4005
Contact: Teresa Smith Lloyd, Esq.
BRADY HATHAWAY & BRETZ
1330 Buhl Building
Detroit, MI 48226-3602
Tel: (313) 965-3700
Contact: Dannel Bartz
10
APPENDIX A
NOT FOR PROFIT PANEL COUNSEL ADDENDUM
MINNESOTA
DORSEY & WHITNEY LLP
Philsbury Center South
220 South Sixth Street
Minneapolis, MN 55402
Tel: (612) 340-2600
Contact: Robert R. Reinhart, Esq., or
Peter S. Hendrickson, Esq.
*Class Action Approved
JACKSON LEWIS SCHNITZLER &
KRUPMAN
150 Fifth Street Towers
150 South Fifth Street, Suite 2800
Minneapolis, MN 55402
Tel: (612) 341-8131
Tel: (516) 364-0404
Contact: Steven D. Baderian, Esq.
*Class Action Approved
MEAGHER & GEER LLP
4200 Multifoods Tower
Minneapolis, MN 55402
Tel: (612) 338-0661
Contact: James F. Roegge, Esq.
MISSOURI
ARMSTRONG & TEASDALE LLP
2345 Grand Blvd
Suite 2000
Kansas City, MO 64108
Tel: (816) 221-3420
Contact: Lynn W. Hursh, Esq.
'Klass Action Approved
BROWN & JAMES, PC
705 Olive Street
Suite 1100
St. Louis, MO 63101-2270
Tel: (314) 421-3128
Contact: Charles E. Reis, IV, Esq.
GALLOP JOHNSON & NEUMAN LC
Interco Corporate Tower
101 South Hanley
St. Louis, MO 63105
Tel: (314) 862-1200
Contact: Ron Hack, Esq.
LEWIS RICE & FINGERSH, LC.
500 N. Broadway, Suite 2000
St. Louis, MO 63102-2147
Tel: (314) 444-7600
Contacts: Robert J. Golterman, Esq. &
Neal F. Perryman, Esq.
*Class Action Approved
MISSISSIPPI
BUTLER SNOW O'MARA STEVENS &
CANNADA PLLC
210 East Capitol Street
Jackson, MS 39201
Tel: (601) 948-5711
Contact: Jeffrey Walker, Esq.
'Class Action Approved
WATKINS & EAGER PLLC
400 East Capitol Street
Jackson, MS 39201
Tel: (601) 948-6470
Contact: Kenneth E. Milan, Esq.
MONTANA
MATOViCH & KELLER PC
225 First Citizens Bank
2812 First Avenue N.
Billings, MT 59101
Tel: (406) 252-5500
Contact: E. Matovich, Esq.
NEBRASKA
KUTAK ROCK
1630 Farnam Street
Omaha, NE 68102
Tel: (402) 346-6000
Contact: Gregory Hurley, Esq.
NEW HAMPSHIRE
GETMAN STACEY TAMPOSI
SCHULTESS & STEERE, PA
163 South River. Road
Bedford, NH 03110
Tel: (603) 634-4300
Contact: Laurence W. Getman, Esq, or
Dona Feeney, Esq.
Revised (5/01) 11
. -1
APPENDIX A
NOT FOR PROFIT PANEL COUNSEL ADDENDUM
?Y.
NEW JERSEY
NEVADA
EPSTEIN BECKER & GREEN PC
One Riverfront Plaza, 7th Floor
Newark, NJ 07102
Tel: (973) 639-8262
Contact: Howard Pianko, Esq.
*Class Action Approved
HARWOOD LLOYD
130 Main Street
Hackensack, NJ 07601
Tel: (201) 487-1080
Contact: Frank Lloyd, Esq.
Elizabeth Loreli, Esq.
JACKSON LEWIS SCHNITZLER
& KRUPMAN
60 Washington Street
Morristown, NJ 07960-6844
Tel: (973) 538-6890
Tel: (914) 328-0404
Contact: Steven D. Baderian, Esq.
'Class Action Approved
LINDABURY MCCORMICK &
ESTABROOK
53 Cardinal Drive
PO Box 2369
Westfield, NJ 07091
Tel: (908) 233-6800
Contact: Richard Cino, Esq.
SAIBER, SCHLESINGER, SATZ
& GOLDSTEIN
One Gateway Center, 13th Floor
Newark, NJ 07102-5311
Tel: (973) 622-3333
Contact: Jeffrey Lorell, Esq.
THOMPKINS MCGUIRE WACHENFELD
& BARRY
Four Gateway Center
100 Mulberry Street
Newark, NJ 07102-4070
Tel: (973) 622-3000
Contact: William B. McGuire, Esq.
BARKER BROWN BUSBY CHRISMAN
& THOMAS
300 South Fourth Street
Suite 800
Las Vegas, NV 89101
Tel: (702) 386-1086
Contact: James P. Chrisman, Esq.
NEW MEXICO
BUTT THORNTON & BAEHR PC
4101 Indian School Road NE
Suite 3005
Albuquerque, NM 87110
Tel: (505) 884-0777
Contact: Agnes Fuentevilla Padilla, Esq.
NEW YORK
D'AMATO & LYNCH
70 Pine Street
New York, NY 10270
Tel: (212) 269-0927
Contact: Luke Lynch Jr., Esq.
EPSTEIN BECKER & GREEN PC
250 Park Avenue
12th Floor
New York, NY 10019
Tel: (212) 351-4500
Contact: Howard Pianko, Esq,
'Class Action Approved
GARBARINI & SCHER PC
1114 Avenue of the Americas
New York, NY 10036
Tel: (212) 764-4000
Contact: James Kachadoorian, Esq.
JACKSON LEWIS SCHNITZLER &
KRUPMAN
101 Park Avenue
37th Floor
New York, NY 10178
Tel: (212) 697-8200, (212) 545-4000
Tel: (914) 328-0404
Contact: Steven D. Baderlan, Esq.
*Class Action Approved-All Locations
Revised (5/01) 12
I--,
APPENDIX A
NOT FOR PROFIT PANEL COUNSEL ADDENDUM
1000 Woodbury Road 437 Madison Avenue
Suite 402 New York NY 10022
Woodbury, NY 11797 Tel: (212) 940-3000
Tel: (516) 364-0404 Contact: Joseph J. Ortego, Esq
Tel: (914) 328-0404
Contact: Steven D. Baderian, Esq. Clinton Square, PO Box 31051
Rochester, NY 14603
One North Broadway Tel: (716) 263-1000
White Plains, NY 10601-2305 Contact: Joseph J. Ortego, Esq
Contact: Steve Baderian, Esq.
Tel: (914) 328-0404 NORTH CAROLINA
JONES HIRSCH CONNORS BULL COZEN & O'CONNOR
101 East 52nd Street 2100 One First Union Center
New York, NY 10022 301 South College St. Suite 2100
Tel: (212) 507-1000 Charlotte, NC 28202
Contact: Richard Steer Tel: (704) 376-3400
Contact: Jay Goldstein, Esq.
KAUFMAN BORGEEST & RYAN
747 Third Avenue PARKER POE ADAMS & BERNSTEIN
New York, NY 10017 401 S. Tyon Street, Suite 3000
Tel: (212) 980-9600 Charlotte, NC 28202
Contact: Julianne Ryan Tel: (704) 372-9000
Contact: Jonathan M. Crotty
KRAMER LEVIN NAFTALIS & FRANKEL
919 Third Avenue OHIO
New York, NY 10022
Tel: (212) 715-9100 DINSMORE SHOAL
Contact: Kevin LeBlang, Esq. 175 South 3rd Street
10th Floor
HODGSOM, RUSS, ANDREWS, WOODS Columbus, OH 43215
& GOODYEAR, LLP Tel: (614) 628-6220
One M&T Plaza, Suite 2000
Buffalo, NY 14203-2391 GALLAGHER SHARP FULTON &
Tel: (716) 848-1496 NORMAN
Contact: Patrick J. Tomovic, Esq. Seventh Floor Bulkley Building
1501 Euclid Avenue
NIXON PEABODY LLP Cleveland, OH 44115
990 Stewart Avenue Tel: (216) 241-5310
Garden City, NY 11530 Contact: Alton Stephens, Esq.
Tel: (516) 832-7564 'Class Action Approved
Contact: Joseph J. Ortega, Esq.
',Class Action Approved-All Locations JANIK & DORMAN
Omni Plaza Building Two
300 South Pearl St 8223 Brecksville Road
.
Albany NY 12207 Cleveland, OH 44141
Tel: (518) 427-2650 Tel: (440) 838-7600
Contact: Joseph J. Ortego, Esq Contact: Steven G. Janik, Esq.
'Class Action Approved
Revised (5/01) 13
APPENDIX A
NOT FOR PROFIT PANEL COUNSEL ADDENDUM
OKLAHOMA
RHODES HIERONYMUS JONES TUCKER &
GABLE PLLC
PO Box 21100
Tulsa, OK 74121-1100
Tel: (918) 582-1173
Contact: Chris L. Rhodes, Esq.
OREGON
BULLIVANT HOUSER BAILEY
300 Pioneer Tower
888 SW Fifth Avenue
Portland, OR 97204-2089
Tel: (503) 228-6351
Contact: Chrys A. Martin, Esq.
LANE POWELL SPEARS LUBERSKY LLP
601 SW Second Avenue
Suite 2100
Portland, OR 97204
Tel: (206) 223-7019
Contact: James B. Stoetzer, Esq.
'Class Action Approved
LINDSAY HART NEIL & WEIGLER LLP
1300 West Fifth Avenue
Suite 3400
Portland, OR 97201-5696
Tel: (503) 226-7677
Contact: Lisa F. Rackner, Esq.
Jerard S. Weigler, Esq.
PENNSYLVANIA
COZEN AND O'CONNOR
1900 Market Street
Philadelphia, PA 19103
Tel: (215) 665-2000
Contact: Jeffrey Pasek, Esq.
JACKSON LEWIS SCHNITZLER &
KRUPMAN
One PPG Place
29th Floor
Pittsburgh, PA 15222-5414
Tel: (412) 232-0404
Tel: (914) 328-0404
Contact: Steven D. Baderian, Esq.
"Class Action Approved
MARSHALL DENNEHY
1845 Walnut Street
Philadelphia, PA 19103
Tel: (215) 573-2600
Contact: Phil Torin, Esq.
Jay Rothman, Esq.
WILSON ELSER MOSKOWITZ EDELMAN &
DICKER LLP
The Curtis Center
Suite 1130 East
Philadelphia, PA 19106
Tel: (215) 627-6900
Contact: Lou Isaacsohn, Esq.
"Class Action Approved
HAMBURG & GOLDEN
1601 Market Street, Suite 565
Philadelphia, PA 19103-1443
Tel: (215) 255-8590
Contact: Neil Hamburg, Esq.
RHODE ISLAND
ROPES & GRAY
30 Kennedy Plaza
Providence, RI 02903-2328
Tel: (401) 455-4400
Contact: William S. Eggeling, Esq.
'Class Action Approved
NIXON PEABODY LLP
One Citizens Plaza
Providence, RI 02903
Tel: (516) 832-7564
Contact: Joseph J. Ortego, Esq
"Class Action Approved
SOUTH CAROLINA
JACKSON LEWIS SCHNITZLER &
KRUPMAN
2100 Daniel Building
301 S. Main Street
Greenville, SC 29601
Tel: (914) 328-0404
Contact: Steve Baderian, Esq.
"Class Action Approved
Revised (5/01) 14
APPENDIX A
NOT FOR PROFIT PANEL COUNSEL ADDENDUM
YOUNG CLEMENT RIVERS &
LLP
P.O. Box 993
28 Boad Street
Charleston, SC 29402
Tel: (864) 557-4000
Contact: Shawn D. Wallace,
SOUTH DAKOTA
TISDALE FULBRIGHT & JAWORSKI LLP
2200 Ross Avenue
Suite 2800
Dallas, TX 75201
Tel: (214) 855-8188
Contact: Bob Herrell, Esq.
Esq. A.J. Harper, Esq.
'Class Action Approved-All Locations
COSTELLO PORTER HILL HEISTERKAMP
BUSHNELL & CARPENTER LLP 200
Security Building
P.O. Box 290
Rapid City, SD 57709
Tel: (605) 343-2410
Contact: Robert L Lewis, Esq.
DAVENPORT EVANS HURWITZ
& SMITH LLP
P.O. Box 1030
513 South Main Avenue
Sioux Falls, SD 57101-1030
Tel: (605) 336-2880
Contact: Susan Brunick Simons, Esq.
Jean H. Bender, Esq.
TENNESSEE
LEITNER WILLIAMS DOOLEY
& NAPOLITAN PLLC
Pioneer Building
3rd Floor
Chattanooga, TN 37402
Tel: (423) 265-0214
Contact: Paul R. Lehner, Esq.
WEINTRAUB, STOCK BENNETT
GRISHAM & UNDERWOOD
One Commerce Square
Suite 2560
Memphis, TN 38103
Tel: (901) 526-0431
Contact: James H. Stock, Esq.
TEXAS
CLARK WEST KELLER BUTLER
& ELLIS LLP
4800 Renaissance Tower
1201 Elm Street
Dallas, TX 75270-2146
Tel: (214) 741-1001
Contact: Mark Shank, Esq.
Revised (5/01)
1301 McKinney
Suite 5100
Houston, TX 77101-3095
Tel: (713) 651-5442
Contact: Frank Jones, Esq.
JACKSON LEWIS SCHNITZLER
& KRUPMAN
3811 Turtle Creek Boulevard
Suite 500
Dallas, TX 75219
Tel: (214) 520-2400
Tel: (914) 328-0404
Contact: Steven D. Baderian, Esq.
"Class Action Approved
LOCKE LIDDELL & SAPP LLP
2200 Ross Avenue
Suite 2200
Dallas, TX 75201-6776
Tel: (214) 740-8000
Contact: John McElhaney, Esq.
MILLS SHIRLEY ECKEL & BASSETT, LLP
400 Washington Building
2228 Mechanic, P.O. Box 1943
Galveston, TX 77553
Tel: (409) 763-2341
Contact: Carla Cotropia, Esq.
UTAH
CHRISTENSON & JENSEN PC
50 South Main Street
Suite 1500
Salt Lake City, UT 84101
Tel: (801) 355-3431
Contact: Phillip S. Ferguson, Esq.
15
APPENDIX A
NOT FOR PROFIT PANEL COUNSEL ADDENDUM
VERMONT
CLEARY SHAHI ASSOCIATES
110 Merchants Row
P.O. Box 6740
Rutland, VT 05702
Tel: (802) 775-8800
Contact: David L. Cleary, Esq.
LANE POWELL SPEARS LUBERSKY LLP
1420 Fifth Avenue
Suite 4100
Seattle, WA 98101-2338
Tel: (206) 223-7019
Contact: James B. Stoetzer, Esq.
'Class Action Approved
WEST VIRGINIA
VIRGINIA
GENTRY LOCKE RAKES & MOORE
P.O. Box 40013
Roanoke, VA 24022-0013
Tel: (540) 983-9300
Contact: W. David Paxton, Esq.
JORDAN COYNE & SAVITS, LLP
33 Wood Lane
Rockville, MD 20850
Tel: (301) 424-4161
Contact: Deborah Murrell Whelihan
'Class Action Approved-All locations
305 Harrison Street, SE
LeeBurg, VA 20175
Tel: (202) 496-2810
Debra M. Whelihan, Esq
MCGUIRE WOODS BATTLE & BOOTHE
LLP
901 East Cary Street
Richmond, VA 23219
Tel: (804) 775-4378
Contact: Stephen D. Busch, Esq.
WASHINGTON
COZEN AND O'CONNOR
1201 Third Avenue
Suite 5200
Seattle, WA 98101
Tel: (206) 340-1000
Contact: Thomas M. Jones, Esq.
JACKSON LEWIS SCHNITZLER &
KRUPMAN
1420 Fifth Avenue, Suite 2000
Seattle, WA 98101
Tel: (206) 405-0404
Tel: (914) 328-0404
Contact: Steven D. Baderian, Esq.
"Class Action Approved
STEPTOE & JOHNSON LLP
Bank One Center
P.O. Box 2190
Clarksburg, WV 26302-2190
Tel: (304) 624-8000
Contact: C. David Morrison, Esq.
'Class Action Approved
WISCONSIN
MELLI WALKER PEASE & RUHLY SC
19 Martin Luther King Blvd
Madison, WI 53701
Tel: (608) 257-4812
Contact: Jack D. Walker, Esq.
WYOMING
HIRST & APPLEGATE
1720 Carey Avenue
Suite 200
Cheyenne, WY 82001
Tel: (307) 632-0541
Contact: Thomas A. Nicholas, Esq.
Revised (5/01) 16
PENNSYLVANIA
ADDENDUM TO THE DECLARATIONS - COMPANY ADDRESSES
Unless otherwise noted in the Policy, all correspondence should be sent to the companies'
administrative offices at 70 Pine Street, New York New York 10270.
AIU INSURANCE COMPANY
70 Pine Street
New York, NY 10270
AMERICAN HOME ASSURANCE COMPANY
70 Pine Street
New York, NY 10270
AMERICAN INTERNATIONAL SOUTH INSURANCE COMPANY
2704 Commerce Drive, Suite B
Harrisburg, PA, 17110
BIRMINGHAM FIRE INSURANCE COMPANY OF PENNSYLVANIA
2704 Commerce Drive, Suite B
Harrisburg, PA, 17110
COMMERCE AND INDUSTRY INSURANCE COMPANY
70 Pine Street
New York, NY 10270
GRANITE STATE INSURANCE COMPANY
2704 Commerce Drive, Suite B
Harrisburg, PA, 17110
ILLINOIS NATIONAL INSURANCE CO.
500 West Madison Street
Chicago, Illinois 60661
THE INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA
2704 Commerce Drive, Suite B
Harrisburg, PA, 17110
NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA.
2704 Commerce Drive, Suite B
Harrisburg, PA, 17110
NEW HAMPSHIRE INSURANCE COMPANY
2704 Commerce Drive, Suite B
Harrisburg, PA, 17110
The policy will be issued by one of the companies listed on the Declarations page.
72630 (10/01)
VERIFiC'ATION
1 hereby verify that the fact,, set forth in the foregoing COMPLAINT are true and
coi-rect to the best of my knowledge,, information and belief, and that as Cha.innan of Board
of Directors of Southcentral Employment Corporation, I am authorized to make this
verification on its behalf. I understand that false statements herein are made subject to the
penalties of 18 Pa. C.S. § 4904, relati :zg to unsworn falsification to authorities.
Date: /?- *7 - 0004
By: -Z I--
?hhaa sler
of Board of Directors of
tral Employment Corporation
90/96 39bd 63MOId ddOHS SICIVS 6TSKVb LTL 6E:9T b00Z/90/ZT
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. 71
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i
9
(3) discrimination, (including but not limited to discrimination based upon age, a 00
gender, race, color, national origin, religion, sexual orientation or preference, i
pregnancy, or disability); -01
(4) Retaliation (including lockouts); i
;
(5) employment-related misrepresentation(s) to an Employee or applicant for
employment with the Organization; d
(6) employment-related libel, slander, humiliation, defamation or Invasion of i
;
privacy;
(7) wrongful failure to employ or promote;
(8) wrongful deprivation of career opportunity, wrongful demotion or negligent
Employee evaluation, including the giving of negative or defamatory
statements in connection with an employee reference; w
i
(9) wrongful discipline; i
(10) failure to grant tenure or practice privileges;
(11) failure to provide or enforce adequate or consistent organization policies or
procedures relating to any other Employment Practices Violation,
(12) violation of any individual's civil rights relating to any of the above, o
but only if the Employment Practices Violation relates to an Individual Insured, or 3
S applicant for employment, with the Organization or an Outside Entity, whether direct, e
indirect, intentional or unintentional.
(h) "Financial Insolvency" means: (1) entering Into proceedings in bankruptcy or (2)
becoming a debtor In possession; or (3) the taking of control, the supervision of, or
?- the managing or liquidating the financial affairs of such entities by a receiver,
conservator, liquidator, trustee, rehabilitator, or similar official.
c ?
(1) "Individual Insured(s)" means a past, present or future duly elected or appointed
director, officer, trustee, trustee emeritus, executive director, department head,
committee member (of a duly constituted committee of the Organization), staff or
faculty member (salaried or non-salaried), Employee or volunteer of the Organization.
Coverage will automatically apply to all new persons who become Individual Insureds
after the inception date of this policy.
(j) "Insured(s)" means the Organization and all Individual Insureds.
(k) "Loss" means damages, (including back pay and front pay), judgments, settlements,
pre- and post-judgment interest, the multiple or liquidated damages awards under the
Age Discrimination in Employment Act and the Equal Pay Act and Defense Costs;
however, Loss shall not include: (1) any amount for which the Insureds are not
financially liable or which are without legal recourse to the Insureds; (2) employment-
related benefits, stock options, perquisites, deferred compensation or any other type of
compensation other than salary, wages or bonus compensation; (3) any liability or
costs incurred by any Insured to modify any building or property in order to make said
building or property more accessible or accommodating to any disabled person, or any
liability or costs incurred in connection with any educational, sensitivity or other
corporate program, policy or seiner relating to an Employment Practices Claim; or (4)
matters which may be deemed uninsurable under the law pursuant to which this policy
shall be construed.
68467 (8/97) Copy 3
5
'a
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MAR 0 7 2005
SOUTHCENTRAL EMPLOYMENT
CORPORATION,
PLAINTIFF
VS.
BIRMINGHAM FIRE INSURANCE
COMPANY OF PENNSYLVANIA,
To: Southcentral Employment Corporation
You are hereby notified to file a written
response to the enclosed New Matter within
twenty (20) days from service hereof or a
judgment may be entered against you.
Attorneys for Defendant
Birmingham Fire Insurance Company of
Pennsylvania
IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY
PENNSYLVANIA
ACTION FOR
DECLARATORY JUDGMENT
NO. 2004 - 6162 CIVIL TERM
DEFENDANT.
BIRMINGHAM FIRE INSURANCE COMPANY OF PENNSYLVANIA'S ANSWER
AND NEW MATTER TO COMPLAINT
Birmingham Fire Insurance Company of Pennsylvania (`Birmingham'), by and through
its undersigned counsel. White and Williams LLP, responds to the Complaint of Plaintiff
Southcentral Employment Corporation ("Southcentral"), as follows:
BIRMINGHAM'S ANSWER TO COMPLAINT
Denied. After reasonable investigation, Birmingham is without knowledge or
information sufficient to form a belief as to the truth thereof.
2. Denied as stated. It is admitted only that Birmingham is a corporation.
3. Denied as stated. It is admitted only that Birmingham issues policies to insureds
doing business in Pennsylvania, including a corporation purportedly doing business in
Cumberland County.
Does PH 1706964v1
4. Denied. After reasonable investigation, Birmingham is without knowledge or
information sufficient to form a belief as to the truth thereof.
5. Denied. After reasonable investigation, Birmingham is without knowledge or
information sufficient to form a belief as to the truth thereof.
Denied as stated. Birmingham admits only that it issued policy no. 263-37-50 to
Susquehanna Employment & Training Corp., effective March 17, 2003 to March 17, 2004 (`the
Birmingham policy"), By way of further response, the Birmingham policy is a writing that
speaks for itself and any allegations or characterizations inconsistent with its terms are denied.
All other allegations are denied.
7 - 9 Denied as stated. The Birmingham policy is a writing that speaks for itself and
any allegations or characterizations inconsistent with its terms are denied.
10. Denied as stated. The allegations of this paragraph purport to characterize a
document, memorandum, filing or decision which is a document writing that speaks for itself and
any allegations or characterizations inconsistent with that document is denied.
H. Denied as stated. The allegations of this paragraph purport to characterize a
document, memorandum, filing or decision which is a document writing that speaks for itself and
any allegations or characterizations inconsistent with that document is denied.
12. Denied as stated. The allegations of this paragraph purport to characterize a
document, memorandum, filing or decision which is a document writing that speaks for itself and
any allegations or characterizations inconsistent with that document is denied.
DOCS_PH 1706964v)
13 Denied. The allegations of this paragraph purport to characterize a document,
memorandum, filing or decision which is a document writing that speaks for itself and any
allegations or characterizations inconsistent with that document is denied. Birmingham denies
that the document referred to alleges "Wrongful Acts" as that term is used in the Birmingham
policy. Strict proof thereof is demanded at trial. Further, to the extent that the allegations in this
paragraph are conclusions of law or legal characterizations, no response is required.
14. Denied in part, Admitted in part. Birmingham admits only that Southcentral
advised Birmingham of the Final Determination of the Bureau of Workforce Investment through
correspondence dated March 12, 2004. Birmingham denies that any such notice was timely
given and/or provided pursuant to the terms of the Birmingham policy.
15. Admitted in part. Birmingham admits that it denied coverage of SEC's claim.
Further.. to the extent the allegations of this paragraph are based upon a letter dated May 10,
2004, a document in writing which speaks for itself, any allegations or characterizations
inconsistent with that document are denied.
16. Denied. Further, to the extent the allegations of this paragraph are conclusions of
law or legal characterizations, no response is required.
WHEREFORE, Defendant Birmingham Fire Insurance Company of Pennsylvania
requests that this Court enter judgment in its favor and dismiss Plaintiffs Complaint with
prejudice.
New Matter
17. The Complaint fails to state a claim against Birmingham upon which relief may
be granted.
DOCS PH 1706964x1
18 Southcentral's claims are barred to the extent precluded by the applicable statute
of limitations and/or by waiver, estoppel, lathes and/or unclean hands.
19. Coverage does not exist under the Birmingham policy to the extent that
Southcentral does not qualify as an insured under the Birmingham policy, and to the extent that
the entity liable for the purported loss does not constitute an insured under the Birmingham
policy.
20. Coverage does not exist under the Birmingham policy to the extent the Complaint
does not seek covered damages and defense costs in excess of the applicable retention and within
the applicable Policy Limit.
21- Coverage does not exist under the Birmingham policy to the extent that the
Complaint does not allege a Loss as that term is defined in the Birmingham policy. Loss does
not include the return funds which were received by an entity from any federal, state or local
government agency.
22. Coverage does not exist under the Birmingham policy to the extent that the
purported Loss does not arise from a Claim first made against the insured organization during the
Policy Period and reported to Birmingham pursuant to the terms of the policy for any actual or
alleged Wrongful Act of the Organization.
23. Coverage does not exist under the Birmingham policy for claims that do not seek
loss arising from a "Wrongful Act" as that phrase is defined in the Birmingham policy.
24. Coverage does not exist under the Birmingham policy to the extent barred by one
or more of the Birmingham policy exclusions.
ROCS PH 1706964N I
25 Coverage does not exist under the Birmingham policy to the extent any claim is
excluded because it arises out of, is based upon or attributable to the gaining in fact of any profit
or advantage to which an entity was not legally entitled,
26. Coverage does not exist under the Birmingham policy for claims arising out of,
based upon or attributable to the committing in fact of any criminal, or deliberate fraudulent act.
27. Coverage does not exist under the Birmingham policy for claims alleging, arising
out of, based upon or attributable to the facts alleged, or to the same or Related Wrongful Act
alleged or contained, in any Claim which has been reported, or in any circumstances of which
notice has been given, under any policy of which the Birmingham policy is a renewal or
replacement or which it may succeed in time.
28. Coverage does not exist under the Birmingham policy for claims alleging, arising
out of, based upon or attributable to as of the policy Continuity Date, any pending or prior: (1)
litigation; or (2) administrative or regulatory proceeding or investigation, or the alleging of any
Wrongful Act which is the same or a Related Wrongful Act to that alleged in such pending or
prior litigation or administrative or regulatory proceeding or investigation.
29. Coverage does not exist under the Birmingham policy for claims alleging, arising
out of, based upon or attributable to any actual or alleged contractual liability of an insured under
any express contract or agreement
30. Coverage does not exist under the Birmingham policy for any civil or criminal
fines imposed by law and any taxes (whether imposed by federal, state, local or other
governmental authority).
DOC$ PH L706964v1
31 Coverage does not exist under the Birmingham policy for claims alleging any
Wrongful Act(s) which occurred prior to September 3, 1999. The Birmingham policy only
provides coverage for Loss arising from Claims, which allege Wrongful Act(s) occurring on or
after September 3, 1999 and prior to the end of the Policy Period and otherwise covered by the
Birmingham policy. Loss(es) arising out of the same or Related Wrongful Act(s) steal I be
deemed to arise from the first such same or Related Wrongful Act(s).
32. Coverage does not exist under the Birmingham policy for violation(s) of any of
the responsibilities, obligations or duties imposed by the Employee Retirement Income Securities
Act of 1974, the Fair Labor Standards Act (except the Equal Pay Act), the National Labor
Relations Act, the Worker Adjustment and Retraining Notification Act, the Consolidated
Omnibus Budget Reconciliation Act, the Occupational Safety and Health Act, any rules of
regulations of the foregoing promulgated thereunder, and amendments thereto provided.
33. Coverage under the Birmingham policy is precluded to the extent barred by the
insured's failure to comply with any condition precedent to coverage under the Birmingham
policy. This requires, among other things, that the insured give timely notice of claims and suits.
34. To the extent that an insured has failed to mitigate and/or avoid any of the alleged
damages or costs at issue, Birmingham is not obligated to reimburse or indemnify its insured for
such damages or costs.
35. Coverage for the underlying claims is barred to the extent that the insured failed
to disclose or misrepresented or concealed facts that were material to the risks undertaken by
-
Birmingham for purposes of inducing the issuance and/or renewal of the Birmingham policy
DOC$ PH 1706964v1
36. To the extent that any other valid or collectable insurance is available to an
insured for the underlying claims, the Birmingham policy shall apply (if at all) only to the extent
provided by the "other insurance" or similar provisions contained or incorporated within such
policy.
37. Coverage is precluded to the extent barred by the known loss or loss-in-progress
doctrines, or account of the lack of fortuity associated with the underlying actions or claims.
38. Coverage is precluded to the extent barred by applicable public policy.
39. Birmingham has no liability for bad faith and/or associated with costs
Southcentral incurs in pursuit of this action or claim as Birmingham has acted reasonably and in
good faith at all times.
40- To the extent that Southcentral did not describe the underlying claims with
sufficient particularity to enable Birmingham to determine all of its legal, contractual and
equitable defenses, Birmingham reserves the right to amend and/or supplement its answer and/or
new matter to assert any and all pertinent defenses ascertained through discovery in this action.
41. Coverage does not exist to the extent that the underlying claims do not fall within,
or to the extent that coverage is precluded by, any of the terms, conditions, limitations or
provisions of the Birmingham policy.
42. Coverage under the Birmingham policy may be barred, in whole or in part, to the
extent that Southcentral or any insured may have failed to satisfy or comply with any terms or
conditions of the Birmingham policy at issue. Birmingham reserves the right to seek dismissal
of this action on the ground that the Birmingham policy states that no action shall lie against
DOCS_PH 170664,1
Birmingham unless there has been such compliance by the insured and until the amount of the
insured's obligation to pay shall have been finally determined either by judgment against the
insured after actual trial or by written agreement of the insured, the claimant and Birmingham.
43. Coverage under the Birmingham policy may be barred, in whole or in part, to the
extent that Southcentral's or any insured's inactions or failure to take action in the underlying
actions prejudiced Birmingham.
44. Coverage under the Birmingham policy may be barred, in whole or in part, to the
extent that the relief sought represents fines, sanctions, or penalties.
WHEREFORE, Birmingham respectfully requests judgment in its favor and against
Southcentral, dismissing Southcentral's claims and the Complaint against Birmingham, and
awarding to Birmingham its costs, including reasonable attorneys' fees, and such other and
further relief as the Court in its discretion deems appropriate.
Dated: March 7, 2005
WHITE AND WILLIAMS LLP
By:
Lawrence J. Bistany
Attorney I.D. 61825
Celestine M. Montague
Attorney I.D. 73243
Attorneys For Defendant,
Birmingham Fire Insurance Company of
Pennsylvania
8
DOCS PH 1706964v1
VERIFICATION
I, Tiffany Ngeo, verify that I am authorized to make this verification on behalf of
Birmingham Fire Insurance Company of Pennsylvania and the facts contained in the foregoing
Answer to the Complaint with New Matter are true and correct to the best of my knowledge,
information and belief. I understand that this verification is made subject to the penalties set
forth in 18 Pa. C.S.A. §4904, relating to unsworn falsifications.
?s
Dated:
iffany g o U)
oocs rH 17069640
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing Defendant, Birmingham Fire
Insurance Company of Pennsylvania's Answer And New Matter To Plaintiff's Complaint was
served via first class mail, postage prepaid on this 7th day of March 2005 upon the following:
Brian C. Caffrey, Esquire
Saidis, Shuff, Flower & Lindsay
A Professional Corporation
26 West High Street
Carlisle, Pennsylvania 17013
Attorney for Plaintiff
Dated: Q 61 '
(17 7
By: Ct ??Lrn C?
Celestine M. Montague r
DOCS PH 1706964,1
..>
?,?
4
fY _ F
J
'.
.. ?
.
' 'i
?
n
??.
G
SOUTHCENTRAL EMPLOYMENT IN THE COURT OF
CORPORATION, CUMBERLAND CC
PLAINTIFF PENNSYLVANIA
V. ACTION FOR
DECLARATORY JUDGI
BIRMINGHAM FIRE INSURANCE NO. 2004-6162CIVIL COMPANY OF PENNSYLVANIA,
DEFENDANT
REPLY TO NEW MATTER
SAIDIS
SHUFF, FLOWER
& LINDSAY
26 W. High Street
Carlisle, PA
17. Paragraph 17 sets forth a legal conclusion to which no
the extent any reply is required, it is denied that the Complaint fails to
Birmingham upon which relief may be granted.
18. Paragraph 18 sets forth a legal conclusion to which no
the extent any reply is required, it is denied that Plaintiff's claims are
of limitation or by waiver, estoppel, laches and/or unclean hands.
19. It is denied that coverage does not exist under the
further denied that Plaintiff does not qualify as an insured under the
Southcentral Employment Corporation, is the named insured under the
denied that "the entity liable for the purported loss does not constitute an
the policy.
PLEAS
is required. To
a claim against
is required. To
l by any statute
.in policy. It is
The Plaintiff,
;;y. It is further
sured" under
20. It is denied that Plaintiff is seeking damages in excess of the policy limit. It
is admitted that there is a retention amount provided in Clause 6 of the policy; however,
such retention amount does not bar Plaintiff's claims.
21. It is denied that the Complaint does not allege a loss as thit term is defined
in the policy. On the contrary, the Complaint alleges a loss as defined in the policy.
Furthermore, it is denied that any provision of the policy relating to
precludes coverage or bars Plaintiff s recovery.
SAIDIS
SHUFF, FLOWER
& LINDSAY
ATr0RNEYS•AT•LAW
26 W. High Street
Carlisle, PA
22. It is denied that Plaintiffs loss does not arise from a claim
against the insured organization during the policy period and reported to
pursuant to the terms of the policy for any actual or alleged wrongful act
organization.
23. Paragraph 23 sets forth a legal conclusion to which no
Clause 2 (u) of the policy defines "wrongful act." Plaintiffs claim is
act' as defined in the policy.
24. Paragraph 24 sets forth a legal conclusion to which no
Plaintiffs claim is not barred by any exclusion set forth in the policy.
25. Paragraph 25 sets forth a legal conclusion to which no
The claim to which the loss relates does not arise out of, is not based
attributable to the gaining in fact of any profit or advantage to which an
legally entitled.
26. Paragraph 26 sets forth a legal conclusion to which no
The claim to which the loss relates does not arise out of, is not based
attributable to the committing in fact of any criminal or deliberate
27. Paragraph 27 sets forth a legal conclusion to which no
The claim to which the loss relates does not allege or arise out of, is not
not attributable to the facts alleged, or to the same or related wrongful act
contained, in any claim which has been reported, or in any circumstances
funds"
rst made
rmingham
the Plaintiff
is required.
on a "wrongful
is required.
is required.
and is not
ured was not
is required.
and is not
it act.
is required.
ed upon, and is
leged or
which notice
has been given, under any policy of which the policy is a renewal or replacement or which
it succeeded in time.
28. Paragraph 28 sets forth a legal conclusion to which no repl? is required.
The claim to which the loss relates does not allege or arise out of, is not by sed upon, and is
not attributable to as of the continuity date, any pending or prior litigation?or administrative
or regulatory proceeding of investigation, or the alleging of any wrongful Oct which is the
same or a related wrongful act to that alleged in any such pending or priorl litigation or
administrative or regulatory proceeding or investigation.
29. Paragraph 29 sets forth a legal conclusion to which no repl? is required.
The claim to which the loss relates does not allege or arise out of, is not b4sed upon, and is
not attributable to any actual or alleged contractual liability of the Plaintifl under any
express contract or agreement. Clause 4 (k) of the policy does not apply t Plaintiff's
claim.
30. Paragraph 30 sets forth a legal conclusion to which no repl is required.
Plaintiff s claim does not involve any civil or criminal fines or any taxes.
31. Denied as stated. The prior acts exclusion appears as Endorsement # 5 to
SAIDIS
SHUFF, FLOWER
& LINDSAY
ATTORNEYS•AT•LAW
26 W. High Street
Carlisle, PA
the policy. It is denied that Endorsement # 5 bars Plaintiff s claims.
32. Denied as stated. The exclusion referred to appears in its entirety as
Endorsement # 13 to the policy. The claim to which the loss relates does rot relate to any
violation of any of the responsibilities, obligations or duties imposed by th? Employee
Retirement Income Security Act of 1974, the Fair Labor Standards Act, th? National Labor
Relations Act, the Worker Adjustment and Retraining Notification Act, thq Consolidated
3
SAIDIS
SHUFF, FLOWER
& LINDSAY
ATTORNEYS•AT•LAW
26 W. High Street
Carlisle, PA
Omnibus Budget Reconciliation Act, the Occupational Safety and
or regulations of the foregoing promulgated thereunder, or any
33. It is denied that Plaintiff failed to comply with any
coverage under the policy, including the giving of timely notice of
Plaintiff gave Defendant timely notice of its claim as required by the
34. Paragraph 34 sets forth a legal conclusion to which no
35. It is denied that Plaintiff failed to disclose or
facts that were material to the risks undertaken by Defendant for
issuance and/or renewal of the policy.
36. Paragraph 36 sets forth a legal conclusion to which no
such other valid or collectable insurance is available to Plaintiff for the
37. Paragraph 37 sets forth a legal conclusion to which no
is denied that Plaintiff's claims are barred by the known loss or
or by any lack of fortuity associated with the underlying actions or claims.
38. Paragraph 38 sets forth a legal conclusion to which no
is denied that either coverage or Plaintiff's claims are barred by applicab
39. Paragraph 39 sets forth a legal conclusion to which no
is denied that Birmingham has acted reasonably and in good faith at all ti
40. It is denied that Plaintiff did not describe the underlying
sufficient particularity to enable Birmingham to determine all of its legal,
equitable defenses.
41. Paragraph 41 sets forth a legal conclusion to which no
pct, or any rules
s thereto.
n precedent to
and suits.
Y.
+ is required.
i or concealed
of inducing the
is required. No
lerlying claims.
is required. It
gress doctrines,
is required. It
public policy.
is required. It
s.
ms with
mractual and
Yis required.
4
42. Paragraph 42 sets forth a legal conclusion to which no reply is required. It
is denied that Plaintiff failed to satisfy or comply with any terms or conditions of the
policy. The amount of Plaintiff's obligation to pay has been established, tls set forth in the
Complaint, paragraphs 10 and 12.
43. Paragraph 43 sets forth a legal conclusion to which no repl? is required. It
is denied that any inaction by Plaintiff or any other insured in the
prejudiced Defendant.
44. Paragraph 44 sets forth a legal conclusion to which no
Paragraph 30 set forth above is incorporated herein by reference.
WHEREFORE, Plaintiff demands judgment in its favor and
accordance with Plaintiffs Complaint.
?
Date: /,"kGcr... Z?( Zcs6), By.
Respectfully submitted,
SAIDIS, SHUFF, FLOWER &
rAn'C. Caffrey, Esquire
Attorney I.D. #42667
26 West High Street
Carlisle, Pennsylvania 17013
Phone: 717.243.6222
Attorneys for Plaintiff
SAIDIS
SHUFF, FLOWER
& LINDSAY
26 W. High Street
Carlisle, PA
5
actions
is required.
Defendant in
Y,
VERIFICATION
SAIDIS
SHUFF, FLOWER
& LINDSAY
26 W. High Street
Carlisle, PA
I hereby verify that the facts set forth in the foregoing
MATTER are true and correct to the best of my knowledge,
that as Chairman of the Board of Directors of Southcentral Employment
Y TO NEW
and belief, and
Iam
authorized to make this verification on its behalf. I understand that false statements herein
are made subject to the penalties of 18 Pa. C.S. § 4904, relating to
authorities.
Date: I -- J Se- , 2005
By:
l '
A-f ;i
hn J. A Sler •-
Chairman of Board
Southcentral Emph
falsification to
actors of
Corporation
6
SOUTHCENTRAL EMPLOYMENT
CORPORATION,
PLAINTIFF
V.
BIRMINGHAM FIRE INSURANCE
COMPANY OF PENNSYLVANIA,
DEFENDANT
IN THE COURT OF
CUMBERLAND CC
PENNSYLVANIA
ACTION FOR
DECLARATORYJUDG]
NO. 2004 - 6162 CIVIL'
y CERTIFICATE OF SERVICE
On this / day of ?L 12005, I, Adele
that I served a true and correct copy of the foregoing REPLY To NEW MA
States Mail, first-class, postage prepaid addressed as follows:
Lawrence J. Bistany, Esquire
WHITE AND WILLIAms LLP
1800 One Liberty Place
Philadelphia, Pennsylvania 19103-7395
SAIDIS
SHUFF, FLOWER
& LINDSAY
26 W. High Street
Carlisle, PA
Saidis, Shuff, Flower & Lin
Adele Group
PLEAS
hereby certify
via United
?,
c. ?',
_?
N ;?,?::
'`?;
.. ?>;-
- ;„
cS t;
ra
tic3
WHITE AND WILLIAMS LLP
Lawrence J. Bistany
David E. Edwards
Celestine Montague
Attorney I.D. Nos. 61825, 67961 and 73243
1800 One Liberty Place
1650 Market Street Attorneys for Defendant
Philadelphia, PA 19103 Birmingham Fire Insurance Company
215/864-7000 of Pennsylvania
SOUTHCENTRAL EMPLOYMENT
CORPORATION,
PLAINTIFF,
IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY
PENNSYLVANIA
VS.
BIRMINGHAM FIRE INSURANCE ACTION FOR
COMPANY OF PENNSYLVANIA, DECLARATORY JUDGMENT
NO. 2004 -- 6162 CIVIL TERM
DEFENDANT.
MOTION OF DEFENDANT BIRMINGHAM FIRE
INSURANCE COMPANY OF PENNSYLVANIA FOR JUDGMENT
ON THE PLEADINGS PURSUANT TO PA R. CIV. P. 1034
Defendant Birmingham Fire Insurance Company of Pennsylvania (`Birmingham") by
and through its undersigned counsel, White and Williams LLP, respectfully moves for the entry
of judgment in its favor and against the Plaintiff, Southcentral Employment Corporation
("Plaintiff'), pursuant to Pa. R. Civ P. 1034, and in support thereof avers as follows:
On or about December 8, 2004, Plaintiff filed its complaint in this action seeking
insurance coverage for the requested return of $597,273.00 in government money. For the
convenience of the Court, a copy of Plaintiff's Complaint with Exhibits is attached at Tab 1.
2. On March 7, 2005, Birmingham Answered the Complaint and asserted New
Matter.
On or about March 29, 2005, Plaintiff responded to Birmingham's New Matter.
DOCS_PH 1766720v.1
4. The pleadings are now closed. See Pa. R. Civ. P. 1017(a) ("the pleadings in an
action are limited to a complaint, an answer thereto, [and] a reply if the answer contains new
matter....")
5. This action has not been listed for trial. See Cumberland County Local Rule 214-
No prior motions have been heard by the Court.
The pleadings on file and the documents attached thereto demonstrate that
Plaintiff has no claim for defense or indemnification under the Birmingham Policy for the claim
asserted for return of government funds to the Commonwealth of Pennsylvania..
A copy of the Birmingham Policy is attached at Exhibit A to Plaintiff's
Complaint.
9. Plaintiff states in its Complaint that on March 8, 2004, it received a demand from
the Pennsylvania Department of Labor & Industry, Bureau of Workforce Investment for the
return of $597,273.00 in monies charged by Plaintiff. Plaintiffs Complaint ¶¶10 - 12.
10. The amount to be returned to the Commonwealth by Plaintiff represented "excess
revenue drawn down on various unidentifiable contracts, uncategorized expenses and
unsupported debits and credits and accruals and payable, inability to account for classroom
training funds, and inability to justify cost allocation basis adjustment...." Plaintiff s Complaint
¶13.
11. The Policy provides in the Insuring Agreement that Birmingham will
"pay on behalf of the Organization Loss arising from a Claim first
made against the Organization during the Policy Period or the
Discovery Period (if applicable) and reported to the insurer
pursuant to the terms of this policy for any actual or alleged
Wrongful Act of the Organization."
2
DOCS_PH 1766720v.1
Policy §1, Coverage C.
12. A "Wrongful Act" is defined "with respect to the organization under Coverage C,
any breach of duty, neglect, error, misstatement, misleading statement, omission or act by or on
behalf of the Organization...." Policy §2, ¶(u)(2).
13. The term "Loss" is defined in the Birmingham Policy to mean "damages,
(including back pay and front pay), judgments, settlements, pre- and post judgment interest, the
multiple or liquidated damages awards under the Age Discrimination in Equipment Act and the
Equal Pay Act and Defense Costs...." Policy §2, ¶(k).
14. Endorsement #11, "Governmental Funding Defense Cost Coverage," to the
Birmingham Policy applies to the Commonwealth's demand for return of money from Plaintiff.
This Endorsement modifies the definition of a "Loss," and establishes a self-insured requirement
for defense costs associated with government funding claims:
"In consideration of the premium charged, it is understood and
agreed that the Loss shall not include the return funds which
were received by the Organization or any other entity from
any federal, state, or local governmental agency; provided,
however, that with regard to Claims arising out of the return, or
request to return, such funds, subject to a retention amount of
$1,000,000, this policy shall pay Defense Costs up to $1,000,000
on a 50% coinsurance basis with 50% of such Defense Costs to be
borne by the Insured and to remain uninsured; and the remaining
50% of such Defense Costs to be covered by the insurer subject to
all other terms, conditions and exclusions of the policy."
Emphasis added.
15. Assuming, for purposes of this motion only, that the Plaintiff s activities in
mischarging $597,273.00 against government funding constitute "Wrongful Acts" under the
Birmingham Policy, pursuant to Endorsement 11 to the Policy, the $597.273.00 in return funds
demand by the Commonwealth is not a "Loss," and, thus, not recoverable under the Birmingham
DOCS_PH 1766720v.1
Policy. Birmingham is not responsible to indemnify Plaintiff for the $597,273.00 to be repaid to
the Commonwealth.
16. Under the express terms of Endorsement 11, Birmingham has no obligation to
Plaintiff for government funding claims except a limited duty to defend. This limited duty is
comprised of an obligation to split defense costs with Plaintiff, but only after Plaintiff has paid
as a self-insured retention, the first $1 million in defense costs for such a claim.
17. Plaintiff has not alleged that it has incurred over $1'. million in defense costs for
the Commonwealth's demand fro return of government funds.
18. There is no allegation in the Complaint of a coverable event under the
Birmingham Policy.
19. Based upon the pleadings and the documents attached thereto, judgment should be
entered in favor of Birmingham and against Plaintiff finding that Birmingham has no duty to
defend and no duty to indemnify Plaintiff on the claims by the Commonwealth for return of
government funds.
4
DOCS PH 1766720v.1
WHEREFORE, Defendant Birmingham Fire Insurance Company of Pennsylvania
respectfully requests that its Motion be granted and that judgment be entered in its favor and
against Plaintiff Southcentral Employment Corporation dismissing its claims.
Respectfully Submitted,
WHITE AND WILLIAMS LLP
r ?r
By:
Lawrence J. Bistany
David E. Edwards
Celestine Montague
Attorneys For Defendant,
Birmingham Fire Insurance Company of
Pennsylvania
Dated: September 7, 2005
DOCS_PH 1766720v.1
CERTIFICATE OF SERVICE:
I hereby certify that a true and correct copy of the foregoing Defendant, Birmingham Fire
Insurance Company of Pennsylvania's Motion for Judgment on the Pleadings Pursuant to Pa. R.
Civ. P. 1034, and accompanying Praecipe for Argument Listing and Proposed Order was served
via first class mail, postage prepaid on this 7a' day of September; 2005 upon the following:
Brian C. Caffrey, Esquire
Saidis, Shuff, Flower & Lindsay
A Professional Corporation
26 West High Street
Carlisle, Pennsylvania 17013
Attorney for Plaintiff
Dated: September 7. 2005 By:
David E. Edwards
DOCS_PH 1766720v.1
SOUTHCENTRAL EMPLOYMENT
CORPORATION,
PLAINTIFF
IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY,
PENNSYLVANIA
V. ACTION FOR
DECLAR ATORY JUDGMENT
BIRMINGHAM FIRE INSURANCE NO. 2004 - CIVIL TERM
COMPANY OF PENNSYLVANIA,
DEFENDANT
COMPLAINT
NOW COMES the Plaintiff, Southcentral Employment Corporation, through its
attorneys, Saidis, Shuff, Flower & Lindsay and states the following cause of action.
Plaintiff, Southcentral Employment Corporation ("SEC") is a non-profit
corporation organized and existing under the laws of the Commonwealth of Pennsylvania
having an office at 1 Alexandra Court, Carlisle, Cumberland County, Pennsylvania 17013.
Defendant, Birmingham Fire Insurance Company of Pennsylvania
("Birmingham") is a corporation with an administrative office at 70 Pine Street, New
York, NY 10270.
3. Birmingham does business in Pennsylvania, and particularly in
Cumberland County, Pennsylvania.
4. On September 3, 1999 the Susquehanna Employment and Training
SAIDIS
HE FLOWER
LINDSAY
rORNEYS•AT•LAW
W. High Street
Carlisle, PA
Corporation ("SETCO") filed articles of amendment with the Pennsylvania Department of
State, which changed SETCO's name to SEC.
The business of SEC is to provide and coordinate workforce investment in
Central Pennsylvania, including the expenditure of funds made available to it by the
United States Department of Labor, acting through the Commonwealth of Pennsylvania,
Department of Labor and Industry, as well as, the Commonwealth of Pennsylvania
Department of Welfare.
6. Effective March 17, 2003 until March 17, 2004, in consideration of SEC's
payment of the appropriate premium, Birmingham issued to SEC a Not-for-Profit
Protector policy, policy no. 263-37-50 (ihe "Policy"), a copy of which is attached hereto
and incorporated herein as Exhibit "A."
The Policy provides in part as follows:
COVERAGE C: ORGANIZATION ENTITY COVERAGE
This policy shall pay on behalf of the Organization Loss arising from a Claim first
made against the Organization during the Policy Period or the Discovery Period (if
applicable) and reported to the Insurer pursuant to the terms of this policy for any
actual or alleged Wrongful Act of the Organization. The Insurer shall, in
accordance with and subject to Clause 8, advance Defense Costs of such Claim
prior to its final disposition.
Policy, Exhibit "A," p. 1.
The policy further provides:
"Wrongful Act" means: ...
(2) With respect to the Organization under Coverage C, any breach of duty,
neglect, error, misstatement, misleading statement, omission or act by or on behalf
of the Organization;
SAIDIS
TF, FLOWER
LINDSAY
ORNEYS-AT-LAW
W. High Street
Carlisle, PA
Policy, Exhibit "A," Clause 2 (u) (2), p. 5.
9. The Policy also provides:
When the Insurer has not assumed the defense of a Claim pursuant to Clause 8, the
Insurer shall advance nevertheless, at the written request of the Insured, Defense
Costs prior to the final disposition of a Claim.
Policy, Exhibit "A," Clause 8, p. 10.
10. On or about March 8, 2004 the Pennsylvania Depart of Labor & Industry,
Bureau of Workforce Investment issued a Final Determination for resolution of the single
audits that were conducted on SETCO for the years ending June 30, 1997, 1998 and 1999,
and the single audit of SEC for the year ended June 30, 2000.
11. The Final Determination resulted from expenditures by SETCO and/or
SEC which were questioned by the audit firm.
12. In its March 8, 2004 letter enclosing the Final Determination Summary, the
Bureau of Workforce Investment ("BWI") states:
BWI issued a Initial Determination on April 29, 2003, which identified each
finding and the expenditures which were questioned by the audit firm of KPMG.
The total amount of questioned costs was $600,368.00. Of this amount, BWI was
able to approve $3,095.00 of questioned costs, which left a remainder of
$597,273.00 to be paid. The attached Final Determination lists each finding and
the amount due from each finding. SEC is required to pay the remaining
$597,273.00, from non-Federal funds, within 30 days of issuance of the Final
Determination.
13. The basis alleged by BWI for its order to SEC to pay $597,273.00, namely
SAIDIS
JFF, FLOWER
LINDSAY
tnRNM@er•tnW
W. High Street
Carlisle, PA
excess revenue drawn down on various unidentifiable contracts, uncategorized expenses
and unsupported debits and credits and accruals and payables, inability to account for
classroom training funds, and inability to justify cost allocation basis adjustment, constitute
"Wrongful Acts" under the Policy.
14. On March 12, 2004, pursuant to the terms of the Policy, SEC provided
written notice to Birmingham of the Final Determination of the Bureau of Workforce
Investment.
15. On May 10, 2004 AIG Technical Services, Inc., on behalf of Birmingham,
denied coverage of SEC's claim.
16. Under the terms of the policy, Birmingham is required to indemnify SEC
for the amount assessed in the Final Determination by the Bureau of Workforce
Investment, $597,273.00, and to provide a legal defense for SEC in connection with
SEC's opposition to and appeal of the Bureau's determination.
WHEREFORE, SEC requests the Court to enter judgment:
(a) Declaring that Birmingham has a duty to defend SEC in the administrative
proceedings which have been and are being prosecuted against SEC by the Department of
Labor & Industry, to pay the costs of such defense, and to reimburse SEC for its costs and
legal fees incurred in such proceedings and in pursuing the instant declaratory judgment
action;
(b) Declaring that Birmingham shall be required to indemnify SEC from and
SAIDIS
UFF, FLOWER
a LINDSAY
-MRNE45•AT•LAW
i W. High Street
Carlisle, PA
against any and all liability arising out of such proceedings, to the extent of the Policy
limits; and
(c) Granting such farther relief as the Court may deem appropriate.
Respectfully submitted,
cL SAIDIS, SHUFF, FLOWER & LINDSAY`, - 9, ?
Date: 4z (? -0 By: (17 1
.9rian C. Cafj rey, Esquire
Attorney I.D. #42667
26 West High Street
Carlisle, Pennsylvania 17013
Phone: 717.243.6222
Attorneys for Plaintiff
PC Y NUMBER:
263'-di-50
REPLACEMENT OF POLICY NUMBER:
214'-16-11
01M American International Companies
NOT-FOR-PROFIT INDIVIDUAL AND ORGANIZATION INSURANCE POLICY
INCLUDING EMPLOYMENT PRACTICES LIABILITY INSURANCE
NOT-FOR-PROFIT PROTECTOR"'
AIU Insurance Company ? Granite State Insurance Company
American Home Assurance Company []Illinois National Insurance Company
American International Pacific Insurance Company ? National Union Fire Insurance Company of Pitts., Pa
American International South Insurance Company ? National Union Fire Insurance Company of Louisiana
Birmingham Fire Insurance Company of Penns. ? New Hampshire Insurance Company
(each of the above being a capital stock company)
NOTICE: EXCEPT TO SUCH EXTENT AS MAY OTHERWISE BE PROVIDED HEREIN, THE
COVERAGE OF THIS POLICY IS GENERALLY LIMITED TO LIABILITY FOR ONLY THOSE CLAIMS
THAT ARE FIRST MADE AGAINST THE INSURED DURING THE POLICY PERIOD AND REPORTED
IN WRITING TO THE INSURER PURSUANT TO THE TERMS HEREIN. PLEASE READ THE POLICY
CAREFULLY AND DISCUSS THE COVERAGE THEREUNDER WITH YOUR INSURANCE AGENT OR
BROKER.
NOTICE: THE LIMIT OF LIABILITY AVAILABLE TO PAY JUDGMENTS OR SETTLEMENTS SHALL
BE REDUCED BY AMOUNTS INCURRED FOR LEGAL DEFENSE. AMOUNTS INCURRED FOR LEGAL
DEFENSE SHALL BE APPLIED AGAINST THE RETENTION AMOUNT.
NOTICE: THE INSURER DOES NOT ASSUME ANY DUTY TO DEFEND. HOWEVER. THE INSUREDS
MAY UNDER CERTAIN CONDITIONS TENDER THE DEFENSE OF A CLAIM. IN ALL EVENTS, THE
INSURER MUST ADVANCE DEFENSE COSTS PAYMENTS PURSUANT TO THE TERMS HEREIN
PRIOR TO. THE FINAL DISPOSITION OF A CLAIM.
DECLARATIONS /
ITEM 1. NAMED ORGANIZATION: SUSQUEHANNA f YNENT & TRAINING CORP
MAILING ADDRESS: 100 NORTH CAMERON STREET
FIRST FLOOR
HARRIS8URG, PA 17101-2424
STATE OF INCORPORATION OF THE NAMED ORGANIZATION:
Pennsylvania
ITEM 2. SUBSIDIARY COVERAGE: any past, present or future Subsidiary of the Named
Organization
ITEM 3. POLICY PERIOD: From: March 17, 2003 To: March 17, 2004
(12:01 A.M. standard time at the address stated in item 1.)
ITEM 4. LIMIT OF LIABILITY: $2,000,000
aggregate for each Policy YSrCovarages A B and C combined (including Defense
_ 7075549 Costs) 'U
68466 (sign) COPY y f
MAY 01 2003 09:41 FR AIG 5L 908 879 9275 TO E .78494949 P.01
Birmingham Fire Insurance Company
of Pennsylvania
_ Executive Offices
175 Water Strut
New York, NY 10038
?rr.,u rwx,xr? G+x??x
May 1, 2003
Direct Dist:
MARY HOMER
THE GLATFELTER AGENCY
221 WEST PHILADELPHIA ST
4TH FLOOR
YORK PA 17405
RE: EOUTHCENTRAL EMPLOYMENT CORPORATION
Policy Number. 2W27-50
Dear MARY
Enclosed pieate find the original and copy(les) of the policy and/or endorsement(s) for the
captioned account
if you have any questions, please feel free to contact me at the above listed number.
Vary truly yours,
MARK COMING
Underwriter
Enc.
7075549 Draft Copy - 05/01/2003
DRAFT COPY
MAY 01 2BO3 09:41 FR RIG SBUC 908 679 9275 TO 91r,r8454949
ENDORSEMENT# 17
This endorsement effective 12:01 A.M. Merck 17, 2003 forma a part of
policy number 263-3760
Issued to SOOTWATRAL EMPLOYMENT CORPORATION
by NiPRiRo6a111 fire 19311PORCE COMPaey Of PeRS3ylvaRfe
NAMED INSURED AMENDED
In consideration of the premium charged, it is hereby agreed and understood that the
Named Insured Is amended to reflect the following:
NAMED INSURED: SOUTHCENTRAL EMPLOYMENT CORPORATION
ALL OTHER TERMS, CONDITIONS AND EXCLUSION REMAIN UNCHANGED,
P.02
EM UAW Copy - 05/01/2003 AUTHORIZED REPRESENTATIVE
DRAFT COPY
** TOTAL PAGE.02 **
ITEM 5. RETENTION:
A Judgments, Settlements and Defense Costs None
(Non-Indemnifiabla Loss or Indemnifiable Loss
Incurred solely by Organizations in Financial
Insolvency)
B. Judgments, Settlements and Defense Costs
(Coverage C and all other Indemnifiable Loss)
ITEM 6. CONTINUITY DATES:
A Coverages A and B:
B. Coverage C:
ITEM 7. A PREMIUM: 1 Year Premium
3 Year Premium Prepaid
$10,000
for Loss arising from
Claims, alleging the same
Wrongful Act or related
Wrongful Acts (weivable
under Clause 6 in certain
circumstances)
Narch 17, 2003
Narch 17, 2003
$7,200
n/a..
3 Year Premium Installments payable each anniversary
1st n/a. inception
2nd nla.
3rd n/a.
Premium for Certified Acts of Terrorism Coverage under Terrorism Risk Incuran,e Act
2002: $ 1 included in policy premium.
Any coverage provided for losses caused by an act of terrorism as defined by TRIA (TRIA
Losses) may be partially reimbursed by the United States under a formula established by
TRIA as follows: 90% of TRIA Losses in excess of the insurer deductible mandated by TRIA,
the deductible to be based on a percentage of the insurer's direct earned premiums for the
year preceding the act of terrorism.
A copy of the TRIA disclosure sent with the original quote is attached hereto
B. ADDITIONAL PREMIUM FOR PUNITIVE, EXEMPLARY AND MULTIPLIED DAMAGES
(included in above) (No punitive damages coverage provided X)
7075549
69466
ITEM 8. NAME AND ADDRESS OF INSURER (hereinafter "Insurer"):
(This policy is issued only by the insurance company Indicated below.)
Birmingham Fire Insurance Company of Pennsylvania
175 Water Street
New York, NY 10038
7075549
68466 (8/97)
IN WITNESS WHEREOF, the Insurer has caused this policy to be signed on the Declarations
page by its President, a Secretary and a duly authorized representative of the Insurer.
KI.IC.
SECRETARY
,;;r r
PRESIDENT
AUTHORIZED REPRESENTATIVE
COUNTERSIGNATURE DATE
THE GLATFELTER AGENCY
221 WEST PNILAOELPHIA ST
4TH FLOOR
YORK, PA 17405
7075549
COUNTERSIGNED AT
68466 (ei97) COPY
ENDORSEMENT# 1
This endorsement, effective 11:01 a.m. March 17, 2003 forms a part of
policy number 263-37-50
issued to SUSQUEHANNA EMPLOYMENT & TRAINING CORP
by Birmingham fire Insurance Company of Pennsylvania
PENNSYLVANIA CANCELLATION/NONRENEWAL
AMENDATORY ENDORSEMENT
Wherever used in this endorsement: 1) "we", "us", "our", and "Insurer" mean the insurance
company which issued this policy; and 2) "you", "your", "named insured', "First Named
Insured", and "Insured" mean the Named Corporation, Named Organization, Named
Sponsor, Named Insured, or Insured stated in the Declarations page; and 3) "Other
Insured(s)" means all other persons or entities afforded coverage under the policy.
Cancellation/Non renewal
The cancellation provision of this policy is amended as follows:
Cancelling a policy midterm is prohibited except if:
1) A condition material to insurability has changed substantially;
2) Loss of reinsurance or a substantial decrease in reinsurance has occurred;
3) Material misrepresentation by the Insured;
4) Policy was obtained through fraud;
5) The Insured has failed to pay a premium when due;
6) The Insured has requested cancellation;
7) Material failure to comply with terms;
8) Other reasons that the commissioner may approve.
Notice Requirements for Midterm Cancellation and Nonrenewal
Notice shall be mailed by registered or first class mail by the Insurer directly to the
named Insured. Written notice will be forwarded directly to the named Insured at least
sixty (60) days In advance of the termination date unless one or more of the following
exists:
1) The insured has made a material misrepresentation which affects the insur-
ability of the risk, in which case the prescribed written notice of cancellation
shall be forwarded directly to the named Insured at least fifteen (15) days in
advance of the effective date of termination.
2) The Insured has failed to pay a premium when due, whether the premium is
payable directly to the Insurer or its agents or indirectly under a premium
finance plan or extension of credit, in which case the prescribed written notice
of cancellation shall be forwarded directly to the Named Insured at least
fifteen (15) days in advance of the effective date of termination.
3) The policy was cancelled by the named Insured, in which case written notice
of cancellation shall not be required and coverage shall be terminated on the
date requested by the Insured. Nothing in these three sections shall restrict
the Insurer's right to rescind an insurance policy ab initio upon discovery that
the policy was obtained through fraudulent statements, omissions or
END 001
ENDORSENIENT# 1 (continued)
concealment of fact material to the acceptance of the risk or to the hazard
assumed by the Insurer.
The notice shall be clearly labeled -Notice of Cancellation" or "Notice of Nonrenewal". A
midterm cancellation or nonrenewal notice shall state the specific reasons for the
cancellation or nonrenewal. The reasons shall identify the condition or loss experience
which caused the midterm cancellation or nonrenewal. The notice shall provide sufficient
information or data for the Insured to correct the deficiency.
A midterm cancellation or nonrenewal notice shall state that, at the Insured's request, the
Insurer shall provide loss information to the Insured for at least three years or the period
of time during which the Insurer has provided coverage to the Insured, whichever is less.
Loss Information on the Insured shall consist of the following:
1) Information on closed claims, Including date and description or occurrence,
and any amount of payments, if any;
2) Information on open claims, including date and description or occurrence,
amount of payment, If any, and amount or reserves, If any,
3) Information on notices of occurrence, including date and description of
occurrence and amount of reserves, if any.
The Insured's written request for loss Information must be made within ten (10) days of
the Insured's receipt of the midterm cancellation or nonrenewal notice. The Insurer shall
have thirty (30) days from the date of receipt of the Insured's written request to provide
the requested information.
Notice of Increase in Premium
The Insurer shall provide not less than sixty (60) days notice of intent to increase the
Insured's renewal premium with thirty (30) days notice of an estimate of the renewal
premium. The notice of renewal premium increase will be mail or delivered to the
Insured's last known address. If notice is mailed, it will be by registered or first class mail.
Return of Unearned Premium
Cancellation Initiated by Insurer -- Unearned premium must be returned to the Insured
not later than ten (10) business days after the effective date of termination.
Cancellation Initiated by Insured -- Unearned premium must be returned to the Insured
not later than thirty (30) days after the effective date of termination.
ALL OTHER TERMS, CONDITIONS AND EXCLUSIONS SHALL REMAIN UNCHANGED.
AUTHORIZED REPRESENTATIVE
END 001
52165 (11/96) COPY - 2 -
ENDORSEMENT# 1
This endorsement, effective 12:01 a.m. March 17, 2003 forms a part of
policy number 253-37-50
issued to SUSQUEHANNA EMPLOYMENT & TRAINING CORP
by Birmingham fire Insurance Company of Pennsylvania
CAPTIVE INSURANCE COMPANY EXCLUSION
In consideration of the premium charged, it is hereby understood and agreed that the
Insurer shall not be liable to make any payments for Loss In connection with any Claim(s)
made against any Insured alleging, arising out of, based upon, or attributable to the
ownership, management, maintenance and/or control by the Organization of any captive
insurance company or entity, including but not limited to any Claim(s) alleging the
Insolvency or bankruptcy of the Organization as a result of such ownership, operation,
management and control.
ALL OTHER TERMS, CONDITIONS AND EXCLUSIONS REMAIN UNCHANGED.
AUTHORIZED REPRESENTATIVE
END 002
,. l %I
ENDORSEMENT# 3
This endorsement, effective 11:01
policy number 263-37-50
issued to SUSQUEHANNA EMPLOYMENT
a.m. March 17, 2003 forms a part of
& TRAINING CORP
by Birmingham Fire Insurance Company of Pennsylvania
COMMISSIONS EXCLUSION
In consideration of the premium charged, it is hereby understood and agreed that the
Insurer shall not be liable to make any payment for Loss in connection with any Claim(s)
made against any Insured alleging, arising out of, based upon, or attributable to:
(1) payments, commissions, gratuities, benefits or any other favors to or for the
benefit of any full or pert-time domestic or foreign governmental or armed
services officials, agents, representatives, employees or any members of their
family or any entity with which they are affiliated; or
(if) payments, commissions, gratuities, benefits or any other favors to or for the
benefit of any full or part-time officials, directors, agents, partners, represent-
atives, members, principal shareholders, owners or employees, or affiliates (as
that term is defined in the Securities Exchange Act of 1934, including any of
their officers, directors, agents, owners, partners, representatives, principal
shareholders or employees) or any customers of the Organization or any
members of their family or any entity with which they are affiliated; or
political contributions, whether domestic or foreign
ALL OTHER TERMS, CONDITIONS AND EXCLUSIONS REMAIN UNCHANGED.
AUTHORIZED REPRESENTATIVE
END 003
ENDORSEMENT# 4
This endorsement, effective 11:01
policy number 163-37-50
issued to SUSQUEHANNA EMPLOYMENT
a.m. March 17, 2003
& TRAINING CORP
forms a part of
by Birmingham fire Insurance Company of Pennsylvania
NUCLEAR ENERGY LIABILITY EXCLUSION ENDORSEMENT
(BROAD FORM)
In consideration of the premium charged, It Is hereby understood and agreed that this
policy does not apply to any Claim(s):
A. alleging, arising out of, based upon, attributable to, or in any way involving, directly
or indirectly the hazardous properties of nuclear material, including but not limited
to:
(1) nuclear material located at any nuclear facility owned by, or operated by or on
behalf of, the Organization, or discharged or dispersed therefrom; or
(2) nuclear fuel contained in spent fuel or waste which was or is at any time
possessed, handled, used, processed, stored, transported or disposed of by or
on behalf of the Organization; or
(3) the furnishing by an Insured or the Organization of services, materials, parts
or equipment in connection with the planning, construction, maintenance,
operation or use of any nuclear facility, or
(4) claims for damages to the Organization or its members which alleges, arises
from, is based upon, is attributed to or in any way involves, directly or
indirectly, the hazardous properties of nuclear material.
B. (1) which is insured under a nuclear energy liability policy issued by Nuclear
Energy Liability Insurance Association, Mutual Atomic Energy Liability
underwriters, or Nuclear Insurance Association of Canada, or would be insured
under any such policy but for Its termination upon exhaustion of its Limit of
Liability; or,
(2) with respect to which (a) any person or organization is required to maintain
financial protection pursuant to the Atomic Energy Act of 1954, or any law
amendatory thereof, or (b) the Organization Dr any Insured is, or had this
policy not been issued would be, entitled to indemnity from the United States
of America, or any agency thereof, under any agreement entered into the
United States of America, or any agency thereof, with any person or
organization.
As used in this endorsement:
"hazardous properties" include radioactive, toxic or explosive properties;
"nuclear material' means source material, special nuclear material or byproduct
material;
"source material", "special nuclear material", and "'byproduct material" have the
meanings given them in the Atomic Energy Act of 1954 or in law amendatory
thereof;
END 004
51681 (4/91) COPY - 1 -
ENDORSEMENT# 4 (continued)
"spent fuel" means any fuel element or fuel component, solid or liquid, which has
been used or exposed to radiation in a nuclear reactor;
"waste" means any waste material (1) containing byproduct material and (2) resulting
from the operation by any person or organization of any nuclear facility included
within the definition of nuclear facility under paragraph (a) or (b) thereof;
"nuclear facility" means -
(a) any nuclear reactor,
(b) any equipment or device designed or used for (1) separating the isotopes of
uranium or plutonium, (2) processing or utilizing spent fuel, or (3) handling,
processing or packaging waste,
(c) any equipment or device used for the processing, fabricating or alloying of
special nuclear material If at any time the total amount of such material in the
custody of the Insured at the premises where such equipment or device is
located consists of or contains more than 25 grams of plutonium or uranium
233 or any combination thereof, or more than 2150 grams of uranium 235,
(d) any structure, basin, excavation, premises or place prepared or used for the
storage or disposal of waste, and includes the site on which any of the
foregoing is located, all operations conducted on such site and ail-premises
used for such operations;
"nuclear reactor" means any apparatus designed or used to sustain nuclear fission in a
self- supporting chain reaction or to contain a critical mass: of fissionable material.
ALL OTHER TERMS, CONDITIONS AND EXCLUSIONS REMAIN UNCHANGED.
AUTHORIZED REPRESENTATIVE
END 004
51581 (4/91) COPY - 2 -
ENDORSEMENT# 5
This endorsement, effective 12:01 a.m. March 17, 2003 forms a part of
policy number 263-37-50
issued to SUSQUENANNA EMPLOYMENT & TRAINING CORP
by Birmingham fire Insurance Company of Pennsylvania
PRIOR ACTS EXCLUSION
(BACKDATED)
In consideration of the premium charged, It is hereby understood and agreed that the
Insurer shall not be liable to make any payment for Loss in connection with any Claim(s)
alleging any Wrongful Act(s) which occurred prior to September 3, 1999 . This policy
only provides coverage for Loss arising from Claims, which allege Wrongful Act(s)
occurring on or after September 3, 1999 and prior to the end of the Policy Period and
otherwise covered by this policy. Loss(es) arising out of the some or Related Wrongful
Act(s) shall be deemed to arise from the first such same or Related Wrongful Act(s).
ALL OTHER TERMS, CONDITIONS AND EXCLUSIONS REMAIN UNCHANGED.
AUTHORIZED REPRESENTATIVE
END 005
COPY
ENDORSEMENT# 6
This endorsement, effective 11:01 a.m. March 17, 2003
policy number 263-37-50
Issued to SUSNUENANNA EMPLOYMENT & TRAINING COPP
by Birmingham Fire Insurance Company of Pennsylvania
OUTSIDE ENTITY ENDORSEMENT
forms a part of
in consideration of the premium charged. It is hereby understood and agreed that the
following entities shell be deemed an "Outside Entity" with respect to its corresponding
Continuity Date below:
OUTSIDE ENTITY CONTINUITY DATE
1) a not-for-profit organization March 77, 2000
ALL OTHER TERMS, CONDITIONS AND EXCLUSIONS REMAIN UNCHANGED.
AUTHORIZED REPRESENTATIVE
END 006
62790 (6/95) COPY
ENDORSEMENT# 7
This endorsement, effective 12:01 a.m. March 17, 2003 forms a part of
\ policy number 263-37-50
issued to SUSQUEHANNA EMPLOYMENT & TRAINING CORP
by Birmingham Fire Insurance Company of Pennsylvania
"NO LIABILITY" PROVISION DELETED
In consideration of the premium charged, It Is hereby understood and agreed that the
policy is hereby amended as follows:
(1) The Definition of "No Liability" is hereby deleted in its entirety; and
(2) The last paragraph of Clause 6. RETENTION CLAUSE is hereby deleted in Its
entirety.
ALL OTHER TERMS, CONDITIONS AND EXCLUSIONS REMAIN UNCHANGED.
AUTHORIZED REPRESENTATIVE
END 007
COPY
ENDORSEMENT# 8
This endorsement, effective 12:01 a.m. March 17, 2003 forms a part of
policy number 263-37-50
issued to SUSQUEHANNA EMPLOYMENT & TRAINING CORP
by Birmingham fire insurance Company of Pennsylvania
RELIANCE ENDORSEMENT-NOT-FOR-PROFIT ORGANIZATIONS
(STANDARD FORM)
In consideration of the premium charged, it is hereby understood and agreed that this
policy is issued in reliance upon the accuracy of the statements made and materials
furnished to the Insurer by the Named Organization in connection with all Not-For-Profit
Organization and/or Directors and Officers and/or Trustees Insurance applications or
requests furnished to the Insurer including all prior insurance applications or requests,
and all statements made and materials incorporated In the following specific documents
issued or filed by the Named Organization whether furnished directly to the Insurer or
indirectly to the Insurer from public resources available to the Insurer at the time of such
request(s):
1. The Organization's audited annual report(s) or audited financial statements;
2. The Organization's interim financial statements;
3. The Organization's Indemnification provisions (and contracts, If any).
ALL OTHER TERMS, CONDITIONS AND EXCLUSIONS REMAIN UNCHANGED.
AUTHORIZED REPRESENTATIVE
END 008
COPY
ENDORSEMENT# 9
This endorsement, effective 11:01
policy number 163-37-50
issued to SUSQUEHANNA EMPLOYMENT
a. m. March 17, 1003 forms a part of
& TRAINING CORP
by Birmingham Fire Insurance Company of Pennsylvania
PENNSYLVANIA AMENDATORY ENDORSEMENT
Not-For-Profit Individual and Organization Insurance Policy
The policy is hereby amended as follows:
Section (a) of Clause 7., NOTICE/CLAIM REPORTING PROVISIONS, is deleted in entirety and
replaced with the following:
(a) The Insureds shall, as a condition precedent to the obligations of the Insurer
under this policy, give written notice to the Insurer of any Claim made against
an Insured as soon as practicable and either:
(1) anytime during the Policy Year or during the Discovery Period (if
applicable); or
(2) within 60 days after the end of the Policy Year or the Discovery Period
(if applicable), as long as such Claim is reported no later than 60 days
after the date such Claim was first made against an Insured.
The first paragraph of Clause 10., DISCOVERY CLAUSE, is deleted in entirety and replaced
with the following:
(a) Automatic Discovery Period
If the Company or the Named Organization shall cancel or refuse to renew this
policy and the Named Organization does not obtain replacement coverage as
of the effective date of such cancellation or nonrenewal, the Named
Organization shall have the right to a period of sixty (60) days following the
effective date of such cancellation or nonrenewal in which to give written
notice to the Company of any Claim made against the Insured during said
sixty (60) day period for any Wrongful Act before the end of the Policy Period.
(b) Optional Discovery Period
Except as indicated below, if the Named Organization shall cancel or the
Insurer or the Named Organization shall refuse to renew this policy, the
Named Organization, upon payment of the respective "Additional Premium
Amount" described below, shall have the right to a period of one, two or three
years after the expiration of the Automatic Discovery Period (herein referred to
as the "Optional Discovery Period") in which to give the Insurer written notice
of Claims first made against the Insureds during the selected period for any
Wrongful Act occurring prior to the end of the Automatic Discovery Period and
otherwise covered by this policy. The rights contained in this paragraph shall
terminate, however, unless written notice of such election together with the
additional premium due is received by the Insurer within sixty (60) days of the
effective date of cancellation or nonrenewal. The Additional Premium Amount
for the Discovery Period shall be fully earned at the inception of the Discovery
Period, The Discovery Period is not cancelable.
END 009
69584 (1/98) COPY
1
6NDORSEMENT# 9 (continued)
In the event of cancellation or nonrenewal by the Company for the nonpayment of
'j premium or other monies due to the Company, the right to either Discovery Period
Option under this Clause 10. is available to any Insured upon payment of an amount
equal to (a) the premium for the Discovery Period plus (b) any earned premium for
the policy period which has not yet been paid.
ALL OTHER TERMS, CONDITIONS AND EXCLUSIONS REMAIN THE SAME
AUTHORIZED REPRESENTATIVE
END 009
69594 (1/98) COPY
z
ENDORSEMENT# 10
This endorsement, effective 12:01 a.m. March 17, 2003 forms a part of
_ policy number 263-37-50
issued to SUSQUEHANNA EMPLOYMENT & TRAINING CORP
by Birmingham fire Insurance Company of Pennsylvania
CLAUSE 9 - AMENDED TO REQUIRE PANEL COUNSEL FOR ALL CLAIMS
In consideration of the premium charged, it is hereby understood and agreed that Clause
9. PRE-AUTHORIZED CLASS ACTION DEFENSE ATTORNEYS is deleted in its entirety and
replaced with the following:
9. PRE-AUTHORIZED DEFENSE ATTORNEYS FOR ALL CLAIMS
This Clause applies to all Claims made under the policy.
Affixed as Appendix A hereto and made part of this policy is a list of Panel Counsel
law firms ("Panel Counsel Firms') from which a selection of legal counsel shall be
made to conduct the defense of any Claim made against an Insured pursuant to the
terms set forth below.
In the event the Insurer has assumed the defense pursuant to Clause 8 of this
policy, then the Insurer shall be obligated to select a Panel Counsel Firm to defend
the Insureds. In the event the Insureds are defending a Claim, then the Insureds
shall select a Panel Counsel Firm to defend the Insureds.
The selection of the Panel Counsel Firm, whether done by the Insurer or the
Insureds, shall be from the jurisdiction in which the Claim is brought. In the event a
Claim is brought in a jurisdiction not Included on the list, the selection shall be
made from a listed jurisdiction which is the nearest geographic jurisdiction to either
where the Claim is maintained or where the corporate headquarters or state of
formation of the Named Organization is located.
With the express prior written consent of the Insurer, an Insured may select (in the
case of the insured defending the Claim), or cause the Insurer to select (in the case
of the Insurer defending the Claim), a Panel Counsel Firm different from that
selected by other Insured defendants if such selection is required due to an actual
conflict of interest.
The list of Panel Counsel Firms may be amended from time to time by the Insurer.
However, no change shall be made to the specific list attached to this policy during
the Policy Period without the consent of the Named Organization.
ALL OTHER TERMS, CONDITIONS AND EXCLUSIONS REMAIN UNCHANGED.
AUTHORIZED REPRESENTATIVE
END 010
COPY
ENDORSEMENT# 11
This endorsement, effective 12:01 R.M. March 17, 2003 forms a part of
policy number 163-37-50
Issued to SUSQUENANNA EMPLOYMENT & TRAINING CORP
by Birmingham fire Insurance Company of Pennsylvania
GOVERNMENTAL FUNDING DEFENSE COST COVERAGE
In consideration of the premium charged, it is understood and agreed that the Lass shall
not include the return funds which were received by the Organization or any other entity
from any federal, state, or local governmental agency; provided, however, that with regard
to Claims arising out of the return, or request to return, such funds, subject to a retention
amount of $1,000,000, this policy shall pay Defense Costs up to $1,000,000 on a 50%
coinsurance basis with 50% of such Defense Costs to be borne by the Insured and to
remain uninsured; and the remaining 50% of such Defense Costs to be covered by the
Insurer subject to all other terms, conditions and exclusions of the policy.
it Is further understood and agreed that the Clause 6 provisions for a retention waiver
upon finding of No Liability shall not apply to the above separate retention.
ALL OTHER TERMS, CONDITIONS, AND EXCLUSIONS REMAIN UNCHANGED
AUTHORIZED REPRESENTATIVE
END 011
COPY
ENDORSEMENT# 11
This endorsement, effective 11:01
policy number 263-37-50
issued to SUSQUEHANNA EMPLOYMENT
a. M. March 17, 2003
& TRAINING CORP
forms a part of
by Birmingham fire Insurance Company of Pennsylvania
THIS ENDORSEMENT CHANGES THE POLICY, PLEASE READ CAREFULLY.
THIS IS ACCIDENT ONLY COVERAGE. IT DOES NOT COVER SICKNESS OR DISEASE
TRAVEL ACCIDENT INSURANCE ENDORSEMENT
Not-for-Profit Protectoro
The Policy is amended as follows:
1. ADDITIONAL DECLARATIONS - For the purpose of the coverage provided by this
Endorsement, the following is added to the Declarations page:
1. Travel Accident Insurance Effective Date: March 17, 2003
2. Classification of Eligible Persons:
All current, duly elected and appointed Directors, Corporate Officers, Trustees
and Trustee Emeritus of the Named Organization.
3. Principal Sum Amount (per Covered Person): $100,000
4. Covered Hazard(s):
Coverage is provided for Injury sustained by a Covered Person While on the
Business of the Named Organization including traveling to, during the course
of, and while returning from:
(a) meetings of the Named Organization's or any Subsidiary's Board of
Directors or any of its' committees; and
(b) any Trip taken at the direction of the Named Organization or any
Subsidiary for which the Named Organization or Subsidiary reimburses
expenses incurred by the Covered Person for that Trip.
With respect to any period of time such Covered Person is traveling on a
conveyance during the course of any such Trip, coverage applies only with
respect to Injury sustained by the person:
1. While operating or riding in or on (includiing getting in or out of, or on or
off of), or by being struck or run down by any conveyance being used as
a means of land or water transportation, except:
a. Any such conveyance the Covered Person has been hired to
operate or for which the Covered Person has been hired as a crew
member;
END 012
79199 (9/02) COPY 1
ENDORSEMENT* 12 (continued)
b. Any such conveyance the Covered Person is operating, or for
which the Covered Person is performing as a crew member,
(including getting in or out of, or on or off of) for the
transportation of passengers or property for hire, profit or gain; or
2. While riding as a Passenger in or on (including getting In or out of, or
on or off of):
a. Any Named Organization or any Subsidiary Aircraft
b. Any Civilian Aircraft; or
c. Any Military Air Transport Aircraft; or
3. By being struck or run down by any aircraft.
5. Accident Aggregate Limit: 10 times Principal Sum per accident.
IL INSURING AGREEMENT - TRAVEL ACCIDENT INSURANCE - For the purpose of the
coverage provided by this Endorsement, the following Is added to the end of Clause
1., INSURING AGREEMENTS:
• TRAVEL ACCIDENT INSURANCE
This Policy insures Covered Persons against a covered Accidental Death or
Dismemberment or Paralysis loss arising from an Injury that results from an
accident that occurs on or after the Travel Accident Insurance Effective Date and
during a Covered Hazard as set out below. The Principal Sum Amount and the
Covered Hazard(s) applicable to each Covered Person are set out In the Schedule.
A. Accidental Death Benefit. If Injury to the Covered Person results in death
within 365 days of the date of the accident that caused the Injury, the Insurer
will pay 100% of the Principal Sum.
B. Accidental Dismemberment and Paralysis Benefit. If Injury to the Covered
Person results, within 365 days of the date of the accident that caused the
Injury, in any one of the Injury Losses specified below, the Insurer will pay
the percentage of the Principal Sum shown below for that Injury Loss:
For Inlury Loss of
Both Hands or Both Feet -----------
Sight of Both Eyes ----------------
One Hand and One Foot ------------
One Hand and the Sight of One Eye
One Foot and the Sight of One Eye
Speech and Hearing in Both Ears
One Hand or One Foot--------------
Sight of One Eye-------------------
Speech or Hearing in Both Ears ------
Hearing in One Ear -----------------
Thumb and Index Finger of Same Hand
Quadriplegia ----------------------
Paraplegia ------------------------
Hemiplegia -----------------------
Uniplegia -------------------------
END 012
79199 (9/02) COPY
2
Percentage of Principal Sum
--------------------100%
-------------------100%
--------------------100%
100%
-------------------100%
-------------------100%
-------------------- 50%
•------------------ 50%
-------------------- 50%
------------------- 25%
-------------------- 25%
--------------------100%
-------------------- 50%
------------------- 50%
------------------- 25%
ENDORSEMENT# 12 (continued)
"Injury Loss" of a hand or foot means complete severance through or above the
wrist or ankle joint. "Injury Loss" of sight of an eye means total and irrecoverable
loss of the entire sight in that eye. "Injury Loss' of hearing in an ear means total
and irrecoverable loss of the entire ability to hear in that ear. 'Injury Loss" of
speech means total and irrecoverable loss of the entire ability to speak "Injury
Loss" of thumb and index finger means complete :severance through or above the
metacarpopholangeal joint of both digits.
"Quadriplegia" means the complete and irreversible paralysis of both upper and
both lower limbs. "Paraplegia" means the complete and irreversible paralysis of both
lower limbs. "Hemipiegia" means the complete and irreversible paralysis of the
upper and lower limbs of the same side of the body. 'Uniplegia" means the
complete and irreversible paralysis of one limb. "Limb" means entire arm or entire
leg.
If more than one Injury Loss is sustained by a Covered Person as a result of the
some accident, only one amount, the largest, will be paid.
III. DEFINITIONS - For the purpose of the coverage provided by this Endorsement, the
following is added to the end of Clause 2., DEFINITIONS:
• Airworthiness Certificate means the "Standard" Airworthiness Certificate issued by
the Federal Aviation Agency of the United States of America or its equivalent issued
by the governmental authority having jurisdiction over civil aviation in the country
of registry
.
Civilian Aircraft means a civil or public aircraft having a current and valid
Airworthiness Certificate and piloted by a person who has a current and valid
medical certificate and pilot certificate with appropriate ratings for the aircraft. A
Civilian Aircraft does not include a Named Organization Aircraft.
Immediate Family Member means a person who is related to the Covered Person
in any of the following ways: spouse, brother-in-law, sister-in-law, son-in-law,
daughter-in-law, mother-in-law, father-in-law, parent (includes stepparent), brother
or sister (includes stepbrother or stepsister), or child (includes legally adopted or
stepchild).
Injury - means bodily injury: (1) which is sustained as a direct result of an
unintended, unanticipated accident that is external to the body and that occurs while
the injured person's Travel Accident coverage is in force; (2) which occurs under the
circumstances described in a Covered Hazard applicable to that person; and (3)
which directly (independent of sickness, disease or any other cause) causes a
covered loss under a Benefit applicable to such Covered Hazard.
• Covered Person means a person: (1) who is a member of an eligible class of
persons as described in the Classification of Eligible Persons section of the
Schedule; (2) for whom premium has been paid; and (3) while such person's Travel
Accident coverage is in force.
Military Air Transport Aircraft means an aircraft having a current and valid
Airworthiness Certificate; piloted by a person who has a current and valid medical
certificate and pilot certificate with appropriate ratings for the aircraft; and operated
by the United States of America, or by the similar air transport service of any duly
constituted governmentai authority of any other recognized country.
END 012
79199 (9/02) COPY 3
ENDORSEMENT# 11 (continued)
• Passenger means a person not performing as a pilot, operator or crew member of a
conveyance.
• Physician means a licensed practitioner of the healing arts acting within the scope
of his or her license who is not: (1) the Covered Person; (2) an Immediate Family
Member; or (3) retained by any Named Organization or any Subsidiary.
• Schedule - means the Additional Declarations section of this Travel Accident
Insurance Endorsement.
• Named Organization Aircraft - means any aircraft with a current and valid
Airworthiness Certificate and owned, leased or operated by the Named
Organization or any Subsidiary.
Trip - means a trip taken by a Covered Person which begins when the Covered
Person leaves his or her residence or place of regular employment for the purpose
of going on the trip (whichever occurs last), and is deemed to end when the
Covered Person returns from the trip to his or her residence or place of regular
employment (whichever occurs first). However, the trip is deemed to exclude any
period of time during which the Covered Person is on an authorized leave of
absence or vacation or travel to and from the Covered Person's place of regular
employment.
• While on the Business of the Named Organization - means while on assignment
by or at the direction of the Named Organization or any Subsidiary for the purpose
of furthering the business of the Named Organization or any Subsidiary, but does
not include any period of time: (1) while the Covered Person is working at his or
her regular place of employment; (2) during the course of everyday travel to and
from work; or (3) during an authorized leave of absence or vacation.
IV. EXCLUSIONS - For the purpose of the coverage provided by this Endorsement,
Clause 4., EXCLUSIONS, is deleted in its entirety and replaced with the following
Exclusions:
• EXCLUSIONS No coverage shall be provided for Travel Accident insurance and no
payment shall be made for any Travel Accident loss resulting in whole or in part
from, or contributed to by, or as a natural and probable consequence of any of the
following excluded risks:
1. suicide or any attempt at suicide or intentionally self-inflicted injury or any
attempt at Intentionally self-inflicted Injury or auto-eroticism.
2. war, whether declared or not, or any act or condition incident to war, civil war,
insurrection, act of foreign enemy, civil commotion, factional civil commotion,
military or usurped power, rebellion or revolution.
3. full-time active duty in the armed forces, National Guard or organized reserve
corps of any country or international authority (unearned premium will be
returned if the Covered Person enters military service); (National Guard or
reserve active duty for regularly scheduled training purposes is not excluded.)
4. the Covered Person being under the influence of intoxicants while operating
any vehicle or means of transportation or conveyance.
END 012
79199 (9/02) COPY
4
ENDORSEMENT# 12 (continued)
5. the Covered Person being under the influence of drugs unless taken under the
advice of and as specified by a Physician.
6. the Covered Person's commission of or attempt to commit a crime.
7, travel or flight in or on (including getting in or out of, or on or off of) any
vehicle used for aerial navigation, whether as a pilot, operator or crew
member.
8. sickness, or disease, mental incapacity or bodily infirmity whether the loss
results directly or Indirectly from any of these.
9. infections of any kind regardless of how contracted, except bacterial infections
that are directly caused by botulism, ptomaine poisoning or an accidental cut
or wound independent and In the absence of any underlying sickness, disease
or condition including but not limited to diabetes.
10. the medical or surgical treatment of sickness, disease, mental incapacity or
bodily infirmity whether the loss results directly or indirectly from the
treatment.
11. stroke or cerebrovascular accident or event; cardiovascular accident or event;
myocardial infarction or heart attack; coronary thrombosis; aneurysm.
V. LIMITS OF INSURANCE - For the purpose of the coverage provided by this
Endorsement, the following is added to the end of Clause 5., LIMIT OF LIABILITY
(FOR ALL LOSS - INCLUDING DEFENSE COSTS):
• Travel Accident Aggregate Limit. The maximum amount payable under the Travel
Accident Benefit may be reduced if more than one Covered Person suffers a loss as
a result of the same accident. The maximum amount payable for all such losses for
all Covered Persons will not exceed the amount shown as the Accident Aggregate
Limit in the Schedule. If the combined maximum amount otherwise payable for all
Covered Persons must be reduced to comply with this provision, the reduction will
be taken by applying the same percentage of reduction to the individual maximum
amount otherwise payable for each Covered Person for all such losses. The Travel
Accident Aggregate Limit is in addition to the Policy's Limit of Liability.
VI. CLAIMS PROVISIONS - For the purpose of coverage provided by this Endorsement,
Clause 7., NOTICE OF CLAIM/REPORTING PROVISIONS, is deleted in its entirety and
replaced with the following:
Notice of Claim. Written notice of a claim for benefits must be given to the Insurer
within 20 days after a Covered Person's loss, or as soon thereafter as reasonably
possible. Notice given by or on behalf of the claimant to the Insurer at American
International Companieso, Accident and Health Claims Division, P.O. Box 15701,
Wilmington, DE 19850-5701, with information sufficient to identify the Covered
Person, is deemed notice to the Insurer.
• Claim Forms. The Insurer will send claim forms to the claimant upon receipt of a
written notice of claim. If such forms are not sent within 15 days after the giving of
notice of a claim, the claimant will be deemed to have met the proof of loss
requirements upon submitting, within the time fixed herein for filing proof of loss,
written proof covering the occurrence, the character and the extent of the loss for
which claim is made. The notice should include the Covered Person's name, the
Named Organization name and the Policy number.
END 012
79199 (9/02) COPY
5
ENDORSEMENT# 12 (continued)
Proof of Loss. Written proof of loss must be furnished to the Insurer within 90
days after the date of the loss. If the loss is nine for which this Endorsement
requires continuing eligibility for periodic benefit payments, subsequent written
proofs of eligibility must be furnished at such intervals as the Insurer may
reasonably require. Failure to furnish proof within the time required neither
invalidates nor reduces any claim if it was not reasonably possible to give proof
within such time, provided such proof is furnished as soon as reasonably possible
and in no event, except in the absence of legal capacity of the claimant, later than
one year from the time proof is otherwise required.
Payment of Claims. Upon receipt of due written proof of death, payment for loss
of life of a Covered Person will be made, In equal shares, to the survivors in the
first surviving class of those that follow: the Covered Person's (1) spouse; (2)
children; (3) parents; or (4) brothers and sisters. If no class has a survivor, the
beneficiary is the Covered Person's estate.
Upon receipt of due written proof of loss, payments for all losses, except loss of
life, will be made to (or on behalf of, if applicable) the Covered Person suffering
the loss. If a Covered Person dies before all payments due have been made, the
amount still payable will be paid as described above for loss of life.
If any payee is a minor or is not competent to give a valid release for the payment,
the payment will be made to the legal guardian of the payee's property. If the
payee has no legal guardian for his or her property, a payment not exceeding $1,000
may be made, at the Insurer's option, to any relative by blood or connection by
marriage of the payee, who, In the Insurer's opinion, has assumed the custody and
support of the minor or responsibility for the incompetent person's affairs.
Any payment the Insurer makes in good faith fully discharges the Insurer's liability
to the extent of the payment made.
Time of Payment of Claims. Benefits payable for any loss other than loss for which
this Endorsement provides any periodic payment will be paid immediately upon the
Insurer's receipt of due written proof of the loss. Subject to the Insurer's receipt
of due written proof of loss, all accrued benefits for loss for which this Endorsement
provides periodic payment will be paid at the expiration of each month during the
continuance of the period for which the insurer Is liable and any balance remaining
unpaid upon termination of liability will be paid immediately upon receipt of such
proof.
Physical Examination and Autopsy. The Insurer at its own expense has the right
and opportunity to examine the person of any individual whose loss is the basis of
claim hereunder when and as often as it may reasonably require during the
pendency of the claim and to make an autopsy in case of death where it is not
forbidden by law.
VII. ADDITIONAL PROVISIONS - For the purpose of the coverage provided by this
Endorsement, the following is added to the Policy:
Covered Person's Effective Date. A Covered Person's Travel Accident Insurance
• coverage begins on the latest of: (1) the Travel Accident Insurance Effective Date;
(2) the date the person becomes a member of an eligible class of persons as
described in the Classification of Eligible Personas section of the Schedule; or (3)
the date the appropriate premium is paid for the Covered Person.
END 012
79199 (9/02) COPY 6
ENDORSEMENT# 12 (continued)
Covered Person Termination Date. A Covered Person's Travel Accident Insurance
coverage ends on the earliest of: (1) the date the Policy is terminated; (2) the date
this Endorsement is terminated; (3) the premium due date If premiums for this
coverage are not paid when due; or (4) the date the Covered Person ceases to be a
member of any eligible class of persons as described in the Classification of
Eligible Persons section of the Schedule.
Termination of coverage will not affect a claim for a covered loss that occurred
while the Covered Person's Travel Accident Insurance coverage was In force.
All other terms, conditions, and exclusions of the Policy shall remain unchanged. However,
Clauses 6, 8, 9, 10, 12, 13, 14, 17 and 19 of the Policy do not apply to the coverage
provided by this Endorsement.
AUTHORIZED REPRESENTATIVE
END 012
79199 (9/02) COPY
7
ENDORSEMENT# 13
This endorsement, effective 12:01
policy number 163-37-50
issued to SUSOUENANNA EMPLOYMENT
M. March 17, 2003
& TRAINING CORP
forms a part of
by Birmingham fire Insurance Company of Pennsylvania
EXCLUSION 0) AMENDED
(PAIR LABOR STANDARDS ACT)
in consideration of the premium charged, It is hereby understood and agreed that
notwithstanding any other provision of this policy (including any endorsement attached
hereto whether such endorsement precedes or follows this endorsement In time or
sequence), Clause 4. EXCLUSIONS, Is hereby amended by deleting Exclusion 6) In its
entirety and replacing It with the following:
(j) for violation(s) of any of the responsibilities, obligations or duties imposed by
the Employee Retirement Income Security Act of 1974, the Pair Labor
Standards Act (except the Equal Pay Act), the National Labor Relations Act, the
Worker Adjustment and Retraining Notification Act, the Consolidated Omnibus
Budget Reconciliation Act, the Occupational Safety and Health Act, any rules or
regulations of the foregoing promulgated thereunder, and amendments thereto
or any similar federal, state, local or foreign statutory law or common law;
provided, however, this exclusion shall not apply to a Claim for Retaliation;
provided, further, however, there is no coverage provided under this policy for
any Claim related to, arising out of, based upon, or attributable to the refusal,
failure or inability of any Insured(s) to pay wages or overtime pay for services
rendered (hereinafter, "earned Wages") (as opposed to tort-based back pay or
front pay damages) or for Improper payroll deductions taken by any Insured(s)
from any Employee(s) or purported employee(s), including, but not limited to,
(1) any unfair business practice claim alleged because of the failure to pay
Earned Wages, or (ii) any Claim seeking earned Wages because any
Employee(s) or purported employee(s) was Improperly classified or mislabeled
as "exempt;"
ALL OTHER TERMS, CONDITIONS AND EXCLUSIONS REMAIN UNCHANGED.
AUTHORIZED REPRESENTATIVE
END 013
(10/02) COPY 1 of 1
ENDORSEMENT# 14
This endorsement, effective 12:01 a.m. March 17, 2003 forms a part of
policy number 263-37-50
Issued to SUSQUEHANNA EMPLOYMENT & TRAINING CORP
by Birmingham fire insurance Company of Pennsylvania
EMPLOYMENT PRACTICES CLAIMS SEPARATE RETENTION
In consideration of the premium charged, it is hereby understood and agreed that Item 5.
of the Declarations page is deleted in its entirety and replaced with the following:
ITEM 5. RETENTION:
A. Judgments, Settlements and None
Defense Costs (Non-Indemnifiable Loss or
Indemnifiable Loss incurred solely by Organizations
In Financial Insolvency)
B. EMPLOYMENT PRACTICES CLAIMS
Judgments, Settlements and Defense Costs i25 0
(Coverage C and all Indemnifiable Loss) f L s 25, g2from Claims
C. ALL CLAIMS (OTHER THAN
EMPLOYMENT PRACTICES CLAIMS):
Judgments, Settlements and Defense
(Coverage C and Indemnifiable Loss)
or o
alleging the same Wrongful
Act or Related Wrongful
Acts (waivable under Clause
6 in certain circumstances)
Costs
$10,000
for Loss arising from Claims
allegingi the same Wrongful
Act or Related Wrongful
Acts (waivable under Clause
6 in certain circumstances)
It is further understood and agreed that Clause 6. RETENTION CLAUSE is amended by
deleting the first paragraph in its entirety and replacing it with the following:
The Insurer shall only be liable for the amount of Loss arising from a Claim which is
in excess of the Retention amounts stated in Item 5.B. and 5.C. of the
Declarations, such Retention amounts to be borne by the Organization and shall
remain uninsured, with regard to all Loss for which the Organization has
indemnified or is permitted or required to indemnify the Individual Insureds
("Indemnifiable Loss") and Loss under Coverage C. A single Retention shall apply to
Loss arising from all Claims alleging the same Wrongful Act or Related Wrongful
Acts. In the event a Claim triggers more than one 11) amount stated in Item 5. Of
END 14
COPY
ENDORSEMENT# 14 (Contk 9d)
This endorsement, effective 12:01 a.m. March 17, 2003 forms a part of
policy number 263-37-50
issued to SUSQUERANNA EMPLOYMENT & TRAINING CORP
by. Birmingham fire Insurance Company of Pennsylvania
the Declarations page, only the highest such amount shall apply, which amount
shall apply to all Loss under such Claim.
ALL OTHER TERMS, CONDITIONS AND EXCLUSIONS REMAIN UNCHANGED.
END 14
AUTHORIZED REPRESENTATIVE
ENDORSEMENT# 15
This endorsement, effective 12:01 a.m. March 17, 2003
policy number 263-37-50
issued to SUSQUEHANNA EMPLOYMENT & TRAINING CORP
by Birmingham Fire Insurance Company of Pennsylvania
AFFILIATE ENDORSEMENT
forms a part of
In consideration of the premium charged, it is hereby understood and agreed that
Definition 21n), "Organization" shall include following entity(ies), which are "Affiliates" as
defined in Definition 2(a):
AFFILIATE CONTINUITY DATE
Workforce Investment Board 03-17-2000
Youth Council 03-17-2000
It is further understood and agreed that only as respects any additional coverage granted
by this endorsement, the Insurer shall not be liable for any Loss in connection with any
Claim(s) made against any entity listed above or any Claim(s) made against any Individual
Insured of such entity alleging, arising out of, based upon or attributable to as of each
~} entity's respective Continuity Date listed above, any pending or prior: (1) litigation; or (2)
administrative or regulatory proceeding or investigation of which an Insured had notice, or
alleging any Wrongful Act which is the same or Related Wrongful Act to that alleged in
such pending or prior litigation or administrative or regulatory proceeding or investigation.
All other terms, conditions and exclusions remain the same.
END 15
AUTHORIZED REPRESENTATIVE
COPY
ENDORSEMENT# 16
This endorsement, effective 12:01 a.m. March 17, 2003 forms a part of
policy number 163-37-50
issued to SUSQUEHANNA EMPLOYMENT & TRAINING CORP
by Birmingham fire Insurance Company of Pennsylvania
Discovery Amended - Premium to be Determined
In consideration of the premium charged, it is hereby understood and agreed that the
policy (and any endorsement amending Clause 10. DISCOVERY CLAUSE) is hereby
amended to the extent necessary for the policy to provide the following:
1. Clause 10. DISCOVERY CLAUSE, is deleted in its entirety and replaced with the
following:
10. DISCOVERY CLAUSE
Except as indicated below, if the Named Entity shall cancel or the Named Entity or the
Insurer shall refuse to renew this policy, the Named Entity shall have the right to a
period of either one, two or three years following the effective date of such
cancellation or nonrenewal (herein referred to as the "Discovery Period") upon
payment of an additional premium amount as shall be determined by the Insurer in its
sole and absolute discretion (the "Additional Premium Amount") in which to give to
the Insurer written notice of Claims first made against the Insureds during said
Discovery Period for any Wrongful Act occurring prior to the end of the Policy Period
and otherwise covered by this policy. The rights contained in this paragraph shall
terminate, however, unless written notice of such election together with the additional
premium due is received by the Insurer within 30 days of the effective date of
cancellation or nonrenewal. The Additional Premium Amount for the Discovery Period
shall be fully earned at the inception of the Discovery Period. The Discovery Period is
not cancelable. This clause and the rights contained herein shall not apply to any
cancellation resulting from non-payment of premium.
In the event of a Transaction, as defined in Clause 12, the Named Entity shall have
the right, within 30 days before the end of the Policy Period, to request an offer from
the Insurer of a Discovery Period (with respect to Wrongful Acts occurring prior to the
effective time of the Transaction) for a period of no less than three years or for such
longer or shorter period as the Named Entity may request. The Insurer shall offer such
Discovery Period pursuant to such terms, conditions and premium as the Insurer may
reasonably decide. In the event of a Transaction, the right to a Discovery Period shall
not otherwise exist except as indicated in this paragraph.
ALL OTHER TERMS, CONDITIONS AND EXCLUSIONS REMAIN UNCHANGED.
END 16
AUTHORIZED REPRESENTATIVE
COPY
POLICYHOLDER DISCLOSURE STATEMENT
UNDER
TERRORISM RISK INSURANCE ACT OF 2002
You are hereby notified that under the federal Terrorism Risk Insurance Act of 2002
(the "Act") effective November 26, 2002, you now have a right to purchase insurance
coverage for losses arising out of an Act of Terrorism, which is defined in the Act as an act
certified by the Secretary of the Treasury (i) to be an act of terrorism, (ii) to be a violent act
or an act that is dangerous to (A) human life; (B) property or (C) infrastructure, (iii) to have
resulted in damage within the United States, or outside of the United States in case of an air
carrier or vessel or the premises of a U.S. mission and (iv) to have been committed by an
individual or individuals acting on behalf of any foreign person or foreign interest, as part of
an effort to coerce the civilian population of the United States or to influence the policy or
affect the conduct of the United States Government by coercion. You should read the Act for
a complete description of its coverage. The Secretary's decision to certify or not to certify
an event as an Act of Terrorism and thus covered by this law is final and not subject to
review. There is a $100 billion dollar annual cap on all Losses resulting from Acts of Terrorism
above which no coverage will be provided under this policy and under the Act unless Congress
makes some other determination.
For your information, coverage provided by this policy for losses caused by an Act of
Terrorism may be partially reimbursed by the United States under a formula established by
the Act. Under this formula the United States pays 90% of terrorism losses covered by this
law exceeding a statutorily established deductible that must be met by the insurer, and which
deductible is based on a percentage of the insurer's direct earned premiums for the year
preceding the Act of Terrorism.
Unless you sign this form and return it to us rejecting Terrorism Coverage under the
Federal Act, you will be covered for Terrorism as defined in the Act and your premium for
that coverage is $
I hereby reject coverage in accordance with the Act.
Signature of Insured
Print Name/Title
Date
COPY OF DISCLOSURE SENT WITH ORIGINAL QUOTE
81285 (1/03)
14M AMERICAN INTERNATIONAL COMPANIES
NOT-FOR-PROFIT INDIVIDUAL AND ORGANIZATION INSURANCE POLICY
INCLUDING EMPLOYMENT PRACTICES LIABILITY INSURANCE
NOT-FOR-PROFIT PROTECTORsm
In consideration of the payment of the premium, and In reliance upon the statements made to
the Insurer by application forming a part hereof and Its attachments and the material
incorporated therein, the insurance company designated in Item B of the Declarations, herein
called the "Insurer", agrees as follows:
t. INSURING AGREEMENTS
COVERAGE A: INDIVIDUAL INSURED INSURANCE
This policy shall pay on behalf of each and every Individual insured Loss arising from a
Claim first made against such Individual Insured during the Policy Period or the Discovery
Period (if applicable) and reported to the Insurer pursuant to the terms of this policy for
any actual or alleged Wrongful Act in his/her respective capacities as an Individual
Insured of the Organization, except when and to the extent that the Organization has
indemnified the Individual Insured. The Insurer shall, in accordance with and subject to
Clause 8, advance Defense Costs of such Claim prior to its final disposition.
COVERAGE B: ORGANIZATION INDEMNIFICATION REIMBURSEMENT INSURANCE
This policy shall pay on the behalf of the Organization Loss arising from a Claim first
made against an Individual Insured during the Policy Period or the Discovery Period (if
applicable) and reported to the Insurer pursuant to the terms of this policy for any actual
or alleged Wrongful Act in his/her respective capacities as an Individual Insured of the
Organization, but only when and to the extent that the Organization has indemnified such
Individual Insured for such Loss pursuant to law, common or statutory, or contract, or the
Charter or By-laws of the Organization duly effective under such law which determines
and defines such rights of indemnity. The Insurer shall, In accordance with and subject to
Clause 8, advance Defense Costs of such Claim prior to Its final disposition.
COVERAGE C: ORGANIZATION ENTITY COVERAGE
This policy shall pay on behalf of the Organization Loss arising from a Claim first made
against the Organization during the Policy Period or the Discovery Period (if applicable)
and reported to the Insurer pursuant to the terms of this policy for any actual or alleged
Wrongful Act of the Organization. The Insurer shall, In accordance with and subject to
Clause 8, advance Defense Costs of such Claim prior to its fined disposition.
DEFENSE PROVISIONS
The Insurer does not assume any duty to defend; provided, however, the Named Organiza-
tion may at its sole option, and in accordance with Clause 8, tender to the Insurer the
defense of a Claim for which coverage is provided by this policy. Regardless of whether
the defense is so tendered, the Insurer shall advance Defense Costs (excess of the
Retention amount) of such Claim prior to its final disposition. Selection of counsel to
defend a "Class Action Claim as defined In Clause 9, shall be made in accordance with
Clause 9 of the policy.
68467 (8/97) COPY
2. DEFINITIONS
(a) "Affiliate" shall mean any not for profit organization other than a Subsidiary which:
(1) the Named Organization or any Subsidiary controls or otherwise has the
ability to direct the financial or managerial decisions of such entity, whether
through the operation of law, contract or agreement, stock ownership or
membership, charter, articles of incorporation, or by-law provisions; or
(2) is granted by contract the right to control the financial or managerial
decisions of the Organization or any Subsidiary.
Provided, however that such coverage as is provided by sections (1) and (2) above
shall be limited solely to Wrongful Acts occurring in the course of the exercise of
such control of financial or managerial decisions.
(b) "Claim" means:
(1) a written demand for monetary relief; or
(2) a civil, criminal, regulatory or administrative proceeding for monetary or
non-monetary relief which is commenced by:
(1) service of a complaint or similar pleading; or
(ii) return of an indictment (in the case of a criminal proceeding); or
(iii) receipt or filing of a notice of charges; or
(3) any request to toll or waive any statute of limitations.
The term 'Claim' shall include an Employment Practices Claim, provided however,
that in no event shall the term "Claim" include any labor or grievance proceeding
which is subject to a collective bargaining agreement.
(c) "Continuity Date" means the date set forth in:
(1) Item 6A of the Declarations with respect to all coverages other than Coverage
C; or
(2) Item 6B of the Declarations with respect to Coverage C only.
(d) 'Defense Costs' means reasonable and necessary fees, costs and expenses consented
to by the Insurer (including premiums for any appeal bond, attachment bond or similar
bond, but without any obligation to apply for or furnish any such bond) resulting solely
from the investigation, adjustment, defense and appeal of a Claim against the Insureds,
but excluding salaries of Individual Insureds.
(e) 'Employee(s)' means any past, present or future employee of the Organization,
whether such employee is in a supervisory, co-worker or subordinate position or
otherwise, including any full-time, part-time, seasonal and temporary Employee of the
Organization In his or her capacity as such.
(f) "Employment Practices Claim" means a Claim alleging an Employment Practices
Violation.
(g) 'Employment Practices Violation(s)" means any actual or alleged:
(1) wrongful dismissal, discharge or termination (either actual or constructive) of
employment, including breach of an implied contract;
(2) harassment (including sexual harassment whether "quid pro quo", hostile work
environment or otherwise);
68467 (8/97) 2
(3) discrimination, (including but not limited to discrimination based upon age,
gender, race, color, national origin, religion, sexual orientation or preference,
pregnancy, or disability);
(4) Retaliation (including lockouts);
(5) employment-related misrepresentation(s) to an Employee or applicant for
employment with the Organization;
(6) employment-related libel, slander, humiliation, defamation or invasion of
privacy;
(7) wrongful failure to employ or promote;
(8) wrongful deprivation of career opportunity, wrongful demotion or negligent
Employee evaluation, including the giving of negative or defamatory
statements in connection with an employee reference;
(9) wrongful discipline;
(10) failure to grant tenure or practice privileges;
(11) failure to provide or enforce adequate or consistent organization policies or
procedures relating to any other Employment Practices Violation;
(12) violation of any Individual's civil rights relating to any of the above,
but only if the Employment Practices Violation relates to an Individual Insured, or
applicant for employment, with the Organization or an Outside Entity, whether direct,
indirect, intentional or unintentional.
(h) "Financial Insolvency" means: (1) entering into proceedings in bankruptcy or (2)
becoming a debtor In possession; or (3) the taking of control, the supervision of, or
the managing or liquidating the financial affairs of such entities by a receiver,
conservator, liquidator, trustee, rehabilitator, or similar official.
(i) "Individual Insured(s)" means a past, present or future duly elected or appointed
director, officer, trustee, trustee emeritus, executive director, department head,
committee member (of a duly constituted committee of the Organization), staff or
faculty member (salaried or non-salaried), Employee or volunteer of the Organization.
Coverage will automatically apply to all new persons who become Individual Insureds
after the inception date of this policy.
0) "Insured(s)" means the Organization and all Individual Insureds
(k) "Loss" means damages, (including back pay and front pay), judgments, settlements,
pre- and post-Judgment interest, the multiple or liquidated damages awards under the
Age Discrimination in Employment Act and the Equal Pay Act and Defense Costs;
however, Loss shall not include: (1) any amount for which the Insureds are not
financially liable or which are without legal recourse to the Insureds; (2) employment-
related benefits, stock options, perquisites, deferred compensation or any other type of
compensation other than salary, wages or bonus compensation; (3) any liability or
costs incurred by any Insured to modify any building or property in order to make said
building or property more accessible or accommodating to any disabled person, or any
liability or costs incurred in connection with any educational, sensitivity or other
corporate program, policy or seiner relating to an Employment Practices Claim; or (4)
matters which may be deemed uninsurable under the law pursuant to which this policy
shall be construed.
63467 (8/97) COPY 3
If an additional premium is stated in Item 7B of the Declarations page, then Loss shall
specifically include, (subject to the policy's other terms, conditions and exclusions)
punitive, exemplary and multiple damages. It is further understood and agreed that the
enforceability of the foregoing coverage shall be governed by such applicable law
which most favors coverage for punitive, exemplary and multiple damages. If an
additional premium is not stated in Item 7B of the Declarations, then Loss shall not
include punitive, exemplary damages or the multiplied portion of multiple damages. In
all events, coverage shall not be provided to any particular Insured who has been
adjudicated to have obtained a profit or advantage or committed a fraudulent or
dishonest act or a willful violation of any statute, rule or law.
(1) "No Liability" means: (1) a final judgment of no liability obtained prior to trial, in favor
of all Insureds, by reason of a motion to dismiss or a motion for summary judgment,
after the exhaustion of all appeals; or (2) a final judgment of no liability obtained after
trial, In favor of all Insureds, after the exhaustion of all appeals. In no event shall the
term 'No Liability' apply to a Claim made against an Insured for which a settlement
has occurred.
(m) "Non-Employment Discrimination" means any actual or alleged sexual harassment or
unlawful discrimination, as described in paragraphs (2) and (3) of the definition of
Employment Practices Violation, or the violation of the civil rights of a person relating
to such sexual harassment or discrimination, when such acts are alleged to be
committed against anyone other than an Individual insured, or applicant for
employment with the Organization or an Outside Entity, including, but not limited to:
students, patients, members, customers and suppliers.
(n) The 'Organization" means: (1) the Named Organization designated In Item 1 of the
Declarations; (2) any Subsidiary thereof; and (3) and Affiliate thereof listed by
endorsement to this policy.
(o) "Outside Entity" means a not-for-profit organization, other, than a Subsidiary or listed
Affiliate, on which an Individual Insured serves, at the specific written request of the
Organization, as a director, trustee, trustee emeritus or governor. Such coverage as is
provided by this policy shall be specifically excess of any insurance in force as
respects such Outside Entity and any Indemnification provided by such Outside Entity.
(p) "Policy Period" means the period of time from the inception date shown In Item 3 of
the Declarations to the earlier of the expiration date shown in Item 3 of the
Declarations or the effective data of cancellation of this policy.
(q) "Policy Year" means a period of one year, within the Policy Period, commencing each
year on the day and hour first named in Item 3. of the Declarations, or if the time
between the effective date or anniversary and termination of the Policy is less than
one year, then such lesser period.
(r) "Related Wrongful Acts" shall mean Wrongful Acts which are the same, related or
continuous, or Wrongful Acts which arise from a common nucleus of facts. Claims can
allege Related Wrongful Acts regardless of whether such Claims involve the same or
different claimants, Insureds or legal causes of action.
(s) "Retaliation" means a Wrongful Act of an Insured relating to or alleged to be in
response to any of the following activities: (1) the disclosure or threat of disclosure by
an Employee to a superior or to any governmental agency of any act by an Insured
which Is alleged to be a violation of any federal, state, local or foreign law, common or
statutory, or any rule or regulation promulgated thereunder; (2) the actual or attempted
exercise by an Employee of any right that such Employee has under law, including
rights under worker's compensation laws, the Family and Medical Leave Act, the
Americans with Disabilities Act or any other law relating to employee rights; (3) the
filing of any claim under the Federal False Claims Act or any other federal, state, local
or foreign "whistle-blower" law; or (4) Employee strikes.
68467 (8/97) COPY 4
(t) "Subsidiary" means:
a) any organization which, on or before the inception of the Policy Period the
Organization owns more than fifty percent (50%) of the voting interest, either
directly, or indirectly through one or more of its Subsidiaries, or has, on or before
the inception of the Policy Period, the right to elect or appoint more than fifty
percent (50%) of the voting directors, or trustees, either directly or indirectly
through one or more of its Subsidiaries;
b) automatically any not for profit organization which becomes a Subsidiary during
the Policy Period and where the book value of such entity's assets determined in
accordance with Generally Accepted Accounting Principles ("GAAP") totals less
than 30% of the similarly calculated assets of the Named Organization as of the
inception date of the Policy Period; or
c) any for profit organization which becomes a Subsidiary during the Policy Period
and where the book value of such entity s assets determined in accordance with
"GAAP" totals less then 20% of the similarly calculated assets of the Named
Organization as of the Inception date of the Policy Period.
With regard to paragraphs b) and c) above, the Named Organization shall provide
the Insurer with full particulars of the Subsidiary before the end of the Policy
Period.
Any organization which becomes a Subsidiary during the Policy Period but exceeds the
asset limitations stated in b) or c) above, (hereinafter "New Subsidiary'l shall be
provided coverage under this policy, but only upon the condition that within 90 days
after the date of Its becoming a Subsidiary, the Named Organization shall have
provided the Insurer with full particulars of the New Subsidiary and agreed to any
additional premium or amendment of the provisions of this policy required by the
Insurer relating to such New Subsidiary. Further, such coverage as shall be afforded to
the New Subsidiary is conditioned upon the Named Organization paying when due any
additional premium required by the Insurer relating to such New Subsidiary.
An organization becomes a Subsidiary when the Named Organization owns more then
fifty percent (50%) of the voting interest, either directly, or indirectly through one or
more of Its Subsidiaries, or has, on or before the inception of the Policy Period, the
right to elect or appoint more than fifty percent (50%) of the voting directors, or
trustees, either directly or indirectly through one or more Of its Subsidiaries.
In all events, such coverage as is afforded under this policy with respect to a Claim
made against any Subsidiary, or any Individual Insured of a Subsidiary, shall only apply
for Wrongful Acts committed or allegedly committed after the effective time that such
Subsidiary become a Subsidiary and prior to the time that such Subsidiary ceased to
be a Subsidiary.
(u) "Wrongful Act" means:
(t) with respect to Individual Insureds, any breach of duty, neglect, error,
misstatement, misleading statement, omission or act by such Insureds in his/her
respective capacities as such, or any matter claimed against such Individual
Insured solely by reason of his/her status as Individual Insureds of the
Organization;
(2) with respect to the Organization under Coverage C, any breach of duty, neglect,
error, misstatement, misleading statement, omission or act by or on behalf of the
Organization;
(3) with respect to service on an Outside Entity, any matter claimed against such
individual Insureds arising out of such Insured serving as a director, trustee,
trustee emeritus or governor of an Outside Entity in such capacity, but only if
such service is at the specific written request or direction of the Organization;
68467 (8/97) COPY 5
(4) with respect to both the Individual Insureds and the Organization and subject to
paragraphs 1, 2 and 3 above, "Wrongful Act" shall specifically include:
(a) Employment Practices Claims;
(b) Non-Employment Discrimination;
(c) violation of the Sherman Antitrust Act or similar federal, state or local
statutes or rules;
(d) libel, slander, defamation or publication or utterance in violation of an
individual's right of privacy;
(e) wrongful entry or eviction or other invasion of the right of occupancy,,
(f) false arrest or wrongful detention;
(g) plagiarism; and
(h) infringement of copyright or trademark or unauthorized use of title.
3. EXTENSIONS
Subject otherwise to the terms hereof, this policy shall cover Loss arising from any Claims
made against the estates, heirs, or legal representatives of deceased Individual Insureds,
and the legal representatives of Individual Insureds In the event of an Individual Insured's
Incompetency, insolvency or bankruptcy, who were Individual Insureds at the time the
Wrongful Acts upon which such Claims are based were committed.
Subject otherwise to the terms hereof, this policy shall cover Loss arising from all Claims
made against the lawful spouse (whether such status is derived by reason of statutory law,
common law or otherwise of any applicable jurisdiction in the world) of an Individual
Insured for all Claims arising solely out of his or her status as the spouse of an Individual
Insured, including a Claim that seeks damages recoverable from marital community
property, property jointly held by the Individual Insured and the spouse, or property
transferred from the Individual Insured to the spouse; provided, however, that this
extension shall not afford coverage for any Claim for any actual or alleged Wrongful Act of
the spouse, but shall apply only to Claims arising out of any actual or alleged Wrongful
Acts of an Individual Insured, subject to the policy's terms, conditions and exclusions.
4. EXCLUSIONS
The Insurer shall not be liable to make any payment for Loss in connection with a Claim
made against an Insured:
(a) arising out of, based upon or attributable to the gaining in fact of any profit or
advantage to which an Insured was not legally entitled;
(b) arising out of, based upon or attributable to the committing in fact of any criminal, or
deliberate fraudulent act;
The Wrongful Act of an Insured shall not be imputed zo any other Insured for the
purpose of determining the applicability of exclusions 4(a) through 4(b).
(c) alleging, arising out of, based upon or attributable to the facts alleged, or to the
same or Related Wrongful Act alleged or contained, in any Claim which has been
reported, or in any circumstances of which notice has been given, under any policy of
which this policy is a renewal or replacement or which it may succeed in time;
(d) alleging, arising out of, based upon or attributable to as of the Continuity Date, any
pending or prior: (1) litigation; or (2) administrative Or regulatory proceeding or
investigation; or the alleging of any Wrongful Act which is the same or a Related
Wrongful Act to that alleged In such pending or prior litigation or administrative or
regulatory proceeding or investigation;
68467 (8197) COPY 6
(e) alleging, arising out of, based upon or attributable to any actual or alleged act or
omission of an Individual Insured serving in any capacitiy, other than with the
Organization or as a director, trustee, trustee emeritus, or governor of an Outside
Entity;
(f) which is brought by or on behalf of the Organization against any individual Insured;
provided however, this exclusion shall not apply to any derivative Claim made on
behalf of the Organization by a member, an attorney general or any other such
representative party if such action Is brought and maintained independently of and
without the solicitation of or assistance of, or active participation of or intervention
of any Individual Insured or the Organization or any Affiliate thereof;
(g) for any Wrongful Act arising out of an Individual Insured serving as a director,
brought by
emeritus trustee, trustee governor the Outside Entity orby any diirecor, tru tee, trustee Entity em itus orlgoClaim is ve nor thereof;
(h) for bodily Injury, sickness, disease, death of any person, or damage to or destruction
of any tangible property, including the loss of use thereof;
(i) alleging, arising out of, based upon, attributable to, or in any way Involving, directly
or indirectly:
(1) the actual, alleged or threatened discharge, dispersal, release or escape of
pollutants; or
(2) any direction or request to test for, monitor, clean up, remove, contain, treat,
detoxify or neutralize pollutants,
including but not limited to a Claim alleging damage to the Organization or its
members.
Pollutants include (but are not limited to) any solid, liquid, gaseous or thermal irritant
or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and
waste. Waste includes (but is not limited to) materials to be recycled, reconditioned
or reclaimed;
Cl) for violation(s) of any of the responsibilities, obligations or duties imposed by the
Employee Retirement Income Security Act of 1974, the Fair Labor Standards Act
(except the Equal Pay Act), the National Labor Relations, Act, the Worker Adjustment
and Retraining Notification Act, the Consolidated Omnibus Budget Reconciliation Act,
the Occupational Safety and Health Act, any rules or regulations of the foregoing
promulgated thereunder, and amendments thereto or any similar provisions of any
federal, state or local statutory law or common law; provided, however, that this
exclusion shall not apply to Loss arising from a Claim for Retaliation;
(k) alleging, arising out of, based upon or attributable to any actual or alleged
contractual liability of an Insured under any express contract or agreement; provided,
however, that this exclusion shall not apply to liability which would have attached in
the absence of such express contract or agreement;
(1) for any civil or criminal fines imposed by law and any taxes (whether imposed by
federal, state, local or other governmental authority);
(m) alleging, arising out of, or in any way relating to any purchase or sale of securities by
the Named Organization, Subsidiary or Affiliate or Claims brought by securities
holders of the Organization In their capacity as such; provided, however, this
exclusion shall not apply to the issuance by the Organization of tax exempt bond
debt or Claims brought by tax exempt bond debt holders,
68467 (8/97) COPY 7
5. LIMIT OF LIABILITY - (FOR ALL LOSS - INCLUDING DEFENSE COSTS)
The Limit of Liability stated in Item 4 of the Declarations is the limit of the Insurer's
liability for all Loss, under Coverage A, Coverage B and Coverage C combined, arising out
of all Claims first made against the Insureds during a Policy Year or the Discovery Period
(if applicable); however, the Limit of Liability for the Discovery Period shall be part of, and
not in addition to, the Limit of Liability for the Policy Year In which the Discovery Period is
elected. Further, any Claim which is made subsequent to the Policy Year or Discovery
Period (if applicable) which, pursuant to Clause 7(b) or 7(c), is considered made during the
Policy Year or Discovery Period shall also be subject to the one applicable aggregate Limit
of Liability stated in Item 4 of the Declarations.
® Defense Costs are not payable by the Insurer in addition to the Limit of Liability.
Defense Costs are part of Loss and as such are subject to the Limit of Liability for
Loss.
This policy provides one aggregate Limit of Liability for each Policy Year. In no event
® shall the Limit of Liability for any one Policy Year exceed the aggregate Limit of
® Liability as stated in Item 4 of the Declarations.
6. RETENTION CLAUSE
The Insurer shall only be liable for the amount of Loss arising from a Claim which is in
excess of the Retention amount stated In Item 5(B) of the Declarations, such Retention
amount to be borne by the Organization and shall remain uninsured, with regard to all
Loss for which the Organization has indemnified or is permitted or required to indemnify
the Individual Insureds ('Indemnifiabie Loss") and Loss under Coverage C. A single
Retention amount shall apply to Loss arising from all Claims alleging the same Wrongful
Act or Related Wrongful Acts.
Except as hereinafter stated, no Retention shall apply to a Claim in the event of the
Financial Insolvency of the Named Organization and all Subsidiaries or Affiliates which are
permitted or required to indemnity the Individual Insured with regard to such Claim.
Provided, however, the Organization hereby agrees to indemnify the Insureds to the fullest
extent permitted by law, taking all steps necessary in furtherance thereto, Including the
making in good faith of any required application for court approval and the passing of any
required corporate resolution or the execution of any contract. The Named Organization
and all Subsidiaries and Affiliates will be conclusively deemed to have indemnified the
Individual Insureds to the extent that the Organization is permitted or required to
indemnity them pursuant to law, common or statutory, or contract, or the charter or
by-laws of the Organization.
Further, no Retention shall apply to all coverages for any Claim which is In the form of a
civil litigation for monetary relief, and the Insurer shall thereupon reimburse the Defense
Costs paid by the Insured, in the event of:
(1) a determination of No Liability of all Insureds; or
(2) a dismissal or a stipulation to dismiss the civil litigation Claim without prejudice
and without the payment of any consideration by any Insured;
provided, however, that in the case of (2) above, such reimbursement shall occur one
hundred twenty (120) days after the date of dismissal or stipulation as long as the Claim is
not re-brought (or any other Claim which is subject to the same single retention by virtue
of Clause 6 is not brought) within ninety (90) days from the time of such dismissal or
stipulation, and further subject to an undertaking by the Organization in a form acceptable
to the Insurer that such reimbursement shall be paid back by the Organization to the
Insurer in the event the Claim (or any other Claim which is subject to the same single
retention by virtue of Clause 6) is brought after such 90-day period and before the
expiration of the statute of limitations for such Claim.
68467 (8/97) COPY 8
7. NOTICE/CLAIM REPORTING PROVISIONS
Notice hereunder shall be given in writing to the Insurer named in Item 8 of the
Declarations at the address indicated in Item 8 of the Declarations. If mailed, the date
of mailing shall constitute the date that such notice was given and proof of mailing
shall be sufficient proof of notice. A Claim shall be considered to have been first
made against an Insured when written notice of such Claim is received by any
Insured, by the Named Organization on the behalf of any Insured or by the Insurer,
whichever comes first.
(a) The insureds shall, as a condition precedent to the obligations of the Insurer under
this policy, give written notice to the Insurer of any Claim made against an Insured as
soon as practicable and either:
(t) anytime during the Policy Year or during the Discovery Period (if applic-
able); or
(2) within 30 days after the end of the Policy Year or the Discovery Period (if
applicable), as long as such Claim is reported no later than 30 days after the
date such Claim was first made against an Insured.
(b) If written notice of a Claim has been given to the Insurer pursuant to Clause 7(a)
above, then any Claim which is subsequently made against the Insureds and reported
to the Insurer alleging, arising out of, based upon or attributable to the facts alleged
in the Claim for which such notice has been given, or alleging any Wrongful Act
which is the same as or related to any Wrongful Act alleged in the Claim of which
such notice has been given, shall be considered made at the time such notice was
given.
(c) if during the Policy Period or during the Discovery Period (if applicable) the Insureds
shall become aware of any circumstances which may reasonably be expected to give
rise to a Claim being made against the Insureds and shall give written notice to the
Insurer of the circumstances and the reasons for anticipating such a Claim, with full
particulars as to dates, persons, and entities involved, then any Claim which is
subsequently made against the Insureds and reported to the Insurer alleging, arising
out of, based upon or attributable to such circumstances or alleging any Wrongful
Act which Is the same as or related to any Wrongful Act alleged or contained in such
circumstances, shall be considered made at the time such notice of such
circumstances was given.
8. DEFENSE COSTS, SETTLEMENTS, JUDGMENTS (INCLUDING THE ADVANCEMENT OF
DEFENSE COSTS)
The Insurer does not assume any duty to defend. The Insureds shall defend and contest
any Claim made against them.
Notwithstanding the foregoing, the Insureds shall have the right to tender the defense of
any Claim to the Insurer, which right shall be exercised in writing by the Named
Organization on behalf of all Insureds to the Insurer pursuant to Clause 7 of this policy.
This right shall terminate if not exercised within 30 days of the date the Claim is first
made against an Insured, pursuant to Clause 7 of the policy. Further, from the date the
Claim is first made against the Insureds to the date when the Insurer accepts the tender
of the defense of such Claim, the Insureds shall take no action, or fail to take any required
action, that prejudices the rights of the Insureds or the Insurer with respect to such Claim.
Provided that the Insureds have compiled with the foregoing, the Insurer shall be obligated
to assume the defense of the Claim, even if such Claim Is groundless, false or fraudulent.
The assumption of the defense of the Claim shall be effective upon written confirmation
thereof sent by the Insurer to the Named Organization. Once the defense has been so
tendered, the Insured shall have the right to effectively associate with the Insurer in the
defense of such Claim, including, but not limited to, negotiating a settlement, subject to
the provisions of this Clause B. However, the Insurer shall not be obligated to defend such
68467 (8/97) COPY 9
Claim after the Limit of Liability has been exhausted, or attar an Insured's rejection of a
Settlement opportunity as described in this Clause 8. pursuant to Clause 8, the
When the Insurer has not assumed the defense of a Claim p the insurer shall be
Insurer shall advance nevertheless, at the written request of the Insured, Defense Costs
a me:
of a Claim. Such advance p V
prior to the final disposition nts by
the insureds, severally according to their respective interests, in
repaid to the Insurer by
the event and to the extent that the Insureds shell not be entitled under the terms an
conditions of this policy to payment of such Loss,
shall not liability, enter into any settlement
or incur any Defense Costs without the prior
The Insureds admit or assume any udgments and
8 agreement, stipulate to any judgment, those settlements, stipulated j
g written consent of the Insurer. Only the Insurer shall be recoverable as
Defense Costs which have been consented to by
Loss under the terms of this policy. The Insurer's consent shall not a unreasonably
the nse of a defense Clam
withheld, provided that the Insurer, when it has not assumed the associate in defense
all events
pursuant to this Clause 8, shall be entitled to effectively
or even
the negotiation of any settlement of any Claim, and provided
Insurer may withhold consent to any settlement, stip jthat
Costs, or any portion thereof, to the extent such Loss is not covered under the terms
of this Policy.
the right to reasonably likely ltol involve C1the nsurer,eininsureds in the cluding but not lim ted to
The Insurer shall have
any Claim that appears ive the Insurer full cooperation and such
negotiating a settlement. The Insureds shall g
information as it may reasonably require. olicYs applicable Limit of Liability
'
If the Insurer recommends a settlement within the portunity"), and the Insureds consent
which is acceptable to the claimant (a "Settlement pp
to such settlement, then the Organization's applicable Retention amount shall be
of the
retroactively reduced by tan percent (10%) for such Loss. H: shall be condition to such
reduction that the Insureds must consent to such settlement within thirty 30 days
ortunity, or in the case of a
data the insureds are finc?hdarisesafrom ahsettletmentnoffer by the Claimant, than within
Settlement opportunity
the time permitted by the claimant to accept such settlement offer, but In all events no
later than thirty (30) days after the settlement offer was made.
Retenliond amount not consent remain the
However, if a Settlement opportunity arises and the
settlement within the time prescribed above, the
applicable amount set fort in Item 5 of the Declarations even if consent is given to a
subsequent settlement Opp ortunity the Furthermore, in the event the insureds nolia consent
for all Lossron acclount nof Osuch Claim
within the time prescribed, by the
proposeddin writing iPhe
Defense Costs xceed: (1) the as of the odate'su hesettlement washave
amount shall not Insurer, ("Settlement Opportunity Amount") Pius (2) 50% of covered Loss in excess of such
Settlement Opportunity Amount subject to the policy's Limit of Liability. Notwithstanding
I the foregoing, this paragraph shall not apply until the :settlement opportunity Amount
exceeds the Retention amount stated In Item 5 of the Declarations.
9. PRE-AUTHORIZED CLASS ACTION DEFENSE ATTORNEYS
(hereinafter
clause applies only to a Claim filed as a class action referred to as a
"Class Action Claim").
Affixed as Appendix A hereto and made a part of this policy is a list of Panel Counsel law
an Insured counsel may be made to
A selection of
ured pursuant to the terms
I from
conduct the "Panel defense
set forth below.
68467 (8/97)
10
In the event the Insurer has assumed the defense pursuant to CIausO 8 of this policy, then
the Insurer shall be obligated to select a PenClass Action l claim, dthen dtheaInsureds smay at
event the Insureds are already defending
select option n select a Pf rm, suchsnonlrPane11 C un eltfirmnsele tionfshall be subjecttto the
insurer's consent, which Consent shall not be unreasonably withheld.
The selection of the Panel Counsel Firm, when done by the Insurer, shall be from the
jurisdiction in which the Class Action Claim is brought.
The list of panel Counsel Firms may be amended from time to time by the insurer.
However, no change shall be made to the specific list attached to this policy during the
Policy Period without the consent of the Named Organization.
10. DISCOVERY CLAUSE
Othe Insurer rganization, or
refuse Named o renew r9h siz policyshathe cancel or
Except amed as indicated below,
the
N
payment of the respective "Additional Premium Amount" do:scdate of below, such shall have cancellation or
Insurer
right to a period of one, two or three years after the effective date
nonrenewal (herein referred to as the "Discovery Period") which el give p the or any
eriod for any
written notice of Claims first made against the Insureds during the selected p d by end of cy and
Wrongful Act occurring prior to the this Para traPp h oshallP to min a e,ohowever, cunless written
policy. The rights contained in this p 9 due is w
notice of such election togeth with additional ithin 30 days of the effectiverdate ofhc ncellation or non enewalSThe received Additional Premium
Amount for the Discovery Period shall be fully earned at the inception of the Discovery
contained herein
Period. The Discovery Period is not cancelable. This clause
meat of premium.
shall not apply to any cancellation resulting from non-pay
The Additional Premium Amount for: (1) one year shall be 40% of the "full annual
premium"; (2) two years shall be 759/6 of the "full annual premium"; (3) three years shall be
100% of the "full annual premium". As used herein, "full annual premium" means the
premium level in effect immediately prior to the end of the Policy Period.
In the event of a Transaction, as defined in Clause 12, the Named Organization shall have
the right, within 30 days before the and of the Policy Period, to request an offer r from the
Insurer of a Discovery Period (with respect to Wrongful Acts occurring prior to the Transaction
for such nger
six years
no less
effective time of period. the Named) Organization may reque tan The Insurerrshall offerosuch
Discovery Period pursuant to such terms, conditions and premium as the Insurer may
Discovery r p p
reasonably decide. In the event of a Transaction, the right to a Discovery Period shall not
otherwise exist except as indicated in this paragraph.
11. CANCELLATION CLAUSE written prior
the In only b mailing
Its g r writte agent.
This policy may be canceled by the Named Organizati
notice to the Insurer or by surrender of this policy shall
e customary If this policy is canceled by th pre miumrherein. However,hf theuPolicy Pe iodlastdesigna ed In
short rate proportion the he not be cancelled by the
item 3. of the Declarations is more than one year, this policy may
Named Organization.
This policy may be canceled by or on the behalf of the Insurer only in the event of
nonpayment of premium by the Named Organization. In the event of non-pet
premium by the Named Organization, the Insurer may cancel this policy by delivering to
Organzaton'sOaddress tlas shown In Item 1 certified,
tNamed he first class p mail, at the Named to the Named
or other the
Declarations, written notice stating when, not less than 30 days thereafter, the cancellation
68457
11
shall be effective. The mailing of such notice as aforesaid shall be sufficient proof of
d
notice. The Policy Period terminates at the ate and hour specified the in psuchremium notice, amount t at
pol icy was i neifectth for
the date and time of surrender. The Insurer Which the shall
the portion Of the Policy Year during
if the period of limitation relating to the giving of notice is prohibited or made void by any
period uch shall law controlling the construction thereof, s
of llm'ttationperrritted by sucheaw.o be amended so
as to be equal to the minimum period
12. 2. CHANGE IN CONTROL OF NAMED ORGANIZATION
If during the Policy Period:
a. the Named Organization shall consolidate with or merge into, or sell a or
substantially all of its assets to, any other person or entity, or group of persons or
entitles acting In concert;
b. any person or entity or group of persons or entities, acting in concerttshall acquire the
amount of the voting interest re mof directors) or trustees of the Named
voting power for the election or appointment
Organization, or acquires the voting rights of such an amount of such interest; or
c, the Named Organization shall change from not-for-profit to for-profit status;
(any of the above events herein referred to as the "Transaction") prior
then, this policy shall continue in full force and effect as to Wrongful Acts occurring p
occurring afterothed by any
pr effective
the effective time of the Transaction, be
provision of this policy for any actual or alleged Wrongful
time of the . ransaction and theL1entirehlpremlium for this policy canceled shall be deemedffearned tas of such
the the right to an offer by the Insurer of a
T
i se. The Period Named described in Clausal a10 lso
policy. notice
Dcovery
ransa
tion The Named Organization shall give t3e0I days after the effective date Tof thecT an action. as
practicable, but not later than thirty (30)
13. SUBROGATION
the dinsto the
In the event of any payment under this policy, the Insurer very shthe eofs and gated
ureds secure
hat may extent of such papapers reqred and shell yment to all the Insureds' rights of reco shall execute all the execution of sucho doc everything s in cessary tonecessa
enablenthe In surer
such rights including ding the
such
subrogation against an insured under this policy unless shall
ensureireexerciser'its rights) of the name of any
committed etermined to have dishonestaor frraudulentlact, or obtainedcriminal
anyaprofit oreadvantage to which such Insured was
not legally entitled.
tq. OTHER INSURANCE AND INDEMNIFICATION only excess over any valid and
Such insurance as is provided by this policy shall apply Y as of any collectible insurance.
insurer has ahduity to defendlia Claimsfor ppolicyolicy
to which any other
obligated to pay Loss.
In the event of a Claim against a director, trustee, trustees emeritus or governor arising
out of his or her serving as a director, trustee, pruste jsh emeritus
specifigov r or of of
Outside Entity, coverage as is afforded by this 68467 (8/97) COPY 12
??am
indemnification provided by such outside Entity and any insurance provided to such
to its directors, trustees, trustees emeriti or governors.
Outside Entity with respect
Further, in the event such other insurance is provided to In outside Entity by the Insure
of American International Group, Inc. (AIG) (or would be provided
fat Limit of
or any member company exhaustion of the Limte9
but for the application of the retention amount, f to whole,
failure to submit a notice of a Claim) then the insurer's maximum in p rart o
Liability for all Losses combined in connection with a Claimcovered<.;hall , not m p exceed the greater
by this policy and such other insurance policy Issued by AIG
of
of the Limit of Liability of this policy or the limit of liability such other AIG insurance
policy.
15. NOTICE AND AUTHORITY
if of the Subsidiaries and al
It is agreed that the Named Organization shall act on behe notice of
s the may
Insureds with respect to the giving of notice of Claim or giving and receiving endorsements issued to
cancellation, the paymentoi Pr[heu eceiptand acceptancefofnany return premium
the exercising or declining to tender the defense of a Class
become due under this Policy,
form a part of this Policy, or declining of any right to a Discovery
Action Claim to the insurer and the exercising
period.
16. ASSIGNMENT
hereunder are not assignable without the written
This policy and any and all rights
consent of the Insurer.
17. ACTION AGAINST INSURER
less as a
No action shall lie against the Insurer un, condition precedent th udtment against
have been full compliance shall Ihavetbean rfinaly determined ethertbythe amount of the with al of Insureds' obligation top pay
the Insureds after actual trial or by written agreement of the Insureds, the claimant and
the Insurer.
Any person or organization or the legal representative thereof who has secured such
judgment or written agreement shall thereafter be entitled to recover under this Policy to
No person or organization shall have
surer as a Policy . party to any action against the Insureds
the extent of the insuranc to for ed bn this
Insureds
any right under this Policy join the
to determine the Insureds' liability, nor shall the Insurer bet Insureds impleaded or by of the their estates
their legal representatives. Bankruptcy or insolvency of of the
hereunder.
shall not relieve the Insurer of any of Its 15. REPRESENTATIONS AND SEVERABILITY
esentations Policy, it is agreed that the Insurer has relied upon the
, ined in the application for this policy (including
in granting coverage, under this
statements materials and submitted repr thereto and, if this is a renewal application all such previous policy
applications for which this policy is a renewal) as being accurate and complete. All such risk the
considered ashInco poratede n oy his
statements and representations shall b ndee ee to be material to
s of this policy
insurer, are the basi
policy.
possessed and representations Ito any other individual o insured.If any
With respect to such statements
or representation was
by any Individual insured shall be imp imputed to any trustee, trustee ation know
tha person who executed the S?pp?lcstatement sh Iltnotcbestatement
inaccurate or Incomplete,
such'statement or reorpresentatiooth was inaccurate or income et Individual Insureds who new
68467 (8/97)
13
19. HEADINGS
The descriptions in the headings of this policy are solely for convenience, and form n
part of the terms and conditions of coverage.
20. WORLDWIDE TERRITORY here in the world.
This policy shall apply to Claims made against an Insured anywhere
68467 (8/97)
14
?n
CJ
PRAECIPE FOR LISTING CASE FOR ARGUMENT
(Must be typewritten and submitted induplicate)
TO THE PROTHONOTARY OF CUMBERLAND COUNTY:
Please list the within matter for the next Argument Court.
CAPTION OF CASE
(entire caption must be stated in full)
Southcentral Employment
Corporation
(Plaintiff)
VS.
Birmingham Fire Insurance Company
of Pennsylvania
(Defendant)
No. 2004 . 6162 Term
State matter to be argued (i.e., plaintiff s motion for new trial, defendant's demurrer to
complaint, etc.):
Defendant Birmingham Fire Ins. Co.'s Motion for Judgment on the Pleadings
2. Identify counsel who will argue cases:
(a) for plaintiff:
Brian C. Caffrey, Esq.,
(Name and Address
Saidis, Shuff, Flower & Lindsay
26 West High Street, Carlisle, PA 17013
(b) for defendant:
Lawrence J. Bistany, Esq.
(Name and Address
White and Williams LLP
1800 One Liberty Place, Philadelphia, PA 19103
3. 1 will notify all parties in writing within two days that this case has been listed for argument
4.
Yes
Date: September 12, 2005 Attorney for Defendant
David E. Edwards
Print your Name
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing court ordered form for
Praecipe for Listing Case for Argument in reference to Defendant, Birmingham Fire Insurance
Company of Pennsylvania's Brief in Support of its Motion for Judgment on the Pleadings
Pursuant to Pa. R. Civ. P. 1034, served via first class mail, postage prepaid on this 12th day of ,
September, 2005 upon the following:
Brian C. Caffrey, Esquire
Saidis, Shuff, Flower & Lindsay
A Professional Corporation
26 West High Street
Carlisle, Pennsylvania 17013
Attorney for Plaintiff
By:
David E. Edwards
DOCS_PH 1766720v.1
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.,1
SOUTHCENTRAL EMPLOYMENT
CORPORATION
Plaintiff,
V.
BIRMINGHAM FIRE INSURANCE
COMPANY OF PENNSYLVANIA
Defendant
IN THE COURT OF COMMON PLEAS
OF CUMBERLAND COUNTY,
PENNSYLVANIA
CIVIL ACTION-LAW
NO. 2004-6162 CIVIL TERM
IN RE: DEFENDANT'S MOTION FOR JUDGMENT ON THE PLEADINGS
BEFORE HESS and OLER, JJ.
ORDER OF COURT
AND NOW, this P day of February, 2006, upon consideration of Defendant's
motion for judgment on the pleadings, and for the reasons stated in the accompanying
opinion, the motion is granted and it is declared as follows:
1. The insurance policy at issue in this case excludes
coverage of Plaintiff's return-of-funds loss; and
2. The said policy also does not obligate Defendant to provide
or contribute to a defense of Plaintiff with respect to the
claim against Plaintiff for the said return funds.
Brian C. Caffrey, Esq.
Saidis, Shuff, Flower & Lindsay
26 W. High Street
Carlisle, PA 17013
Attorney for Plaintiff
BY THE COURT.
Wesley OW. Jr., J
2?f2ct ,? ?d (??.v3-06
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Lawrence J. Bistany, Esq.
David E. Edwards, Esq.
Celestine Montague. Esq.
White and Williams, LLP
1800 One Liberty Place
1650 Market Street
Philadelphia, PA 19103
Attorneys for Defendant
. U of
i
SOUTHCENTRAL EMPLOYMENT
CORPORATION
Plaintiff,
IN THE COURT OF COMMON PLEAS
OF CUMBERLAND COUNTY,
PENNSYLVANIA
V.
BIRMINGHAM FIRE INSURANCE
COMPANY OF PENNSYLVANIA
Defendant
CIVIL ACTION-LAW
NO. 2004-6162 CIVIL TERM
IN RE: DEFENDANT'S MOTION FOR JUDGMENT ON THE PLEADINGS
BEFORE HESS and OLER, JJ.
OPINION and ORDER OF COURT
OLER, J., February 3, 2006.
In this insurance case, Plaintiff allegedly incurred a loss under an insurance policy
issued by Defendant. Plaintiff filed a claim with Defendant for the recovery of
approximately $597,273.00, which Plaintiff owed to a state agency as a result of
Plaintiff's inability to account for the use of the funds in an audit. Defendant denied
Plaintiff's insurance claim, as a result of which the present action for a declaratory
judgment was commenced. With the filing of the Complaint,' Answer and New Matter,2
and Reply to New Matter,3 the pleadings are closed and Defendant has moved for
judgment on the pleadings.4
For the reasons stated herein, Defendant's motion for judgment on the pleadings
will be granted.
Complaint, 15, filed December S, 2004 (hereinafter "Complaint").
Birmingham Fire Insurance Company of Pennsylvania's Answer and New Matter to Complaint, filed
March 7, 2005 (hereinafter "Answer").
J Reply to New Matter, filed March 28, 2005.
Motion of Defendant Birmingham Fire Insurance Company of Pennsylvania for Judgment on the
Pleadings Pursuant to Pa. R. Civ. P. 1034, filled September 7, 2005 (hereinafter "Motion").
STATEMENT OF FACTS
For purposes of Defendant's motion, the facts may be summarized as follows:
Plaintiff is Southcentral Employment Corporation, a non-profit employment services
corporation which expends "funds made available to it by the United States Department
of Labor, acting through the Commonwealth of Pennsylvania Department of Labor and
Industry," 5 Defendant is Birmingham Fire Insurance Company of Pennsylvania, with
which Plaintiff had a Not-for-Profit Protector Policy.`'
On April 29, 2003, the Pennsylvania Department of Labor & Industry, Bureau of
Workforce Investment (hereinafter the "Department of Labor") issued a final
determination from 1997, 1998, 1999, and 2000 audits of Plaintiff? The determination
identified and disapproved of several expenditures made by Plaintiff during the course of
its contracts with the Department of Labor in connection with "excess revenue drawn
down on various unidentifiable contracts, uncategorized expenses and unsupported debits
and credits and accruals and payabtes, inability to account for classroom training funds,
and inability to justify cost allocation basis adjustment." 8 The Department of Labor
determined that Plaintiff was "required to pay ... $597,273.00 from non-Federal funds"
to the Department.9
On March 12, 2004, Plaintiff provided Defendant with written notice of the final
determination and claimed that such determination was covered under the "wrongful
acts" portion of the policy."' Defendant denied coverage of Plaintiff's claim." In
Complaint, ¶ 5.
Complaint, ¶ 6, Exhibit A; Answer ¶ 6.
Complaint, ¶J 10-12.
Complaint, ?I 13.
Complaint, jj l 10-13.
0 Complaint, 1114; Answer ¶ 14.
1)
response, Plaintiff has filed the instant declaratory judgment action seeking a
determination that Defendant is obligated to indemnify Plaintiff in the amount
$547,273.00, and to provide a legal defense for Plaintiffs opposition to and appeal from
the charges assessed by the Department of Labor. 12
According to the terms of the policy Defendant is required to:
pay on behalf of the Organization Loss arising from a Claim
first made against the Organization during the Policy Period
or the Discovery Period (if applicable) and reported to the
insurer pursuant to the terms of this policy for any actual or
alleged Wrongful Act of the Organization. 13
The policy defines a "Wrongful Act" by an organization as:
any breach of duty, neglect, error, misstatement, misleading
statement, omission or act by or on behalf of the
Organization.... "Wrongful Act' shall specifically include:
(a) Employment Practice Claims; (b) Non-Employment
Discrimination; (c) violation of the Sherman Antitrust Act or
similar federal, state or local statutes or rules.... 14
The policy defines "Loss" as:
Damages, (including back pay and front pay), judgments,
settlements, pre- and post-judgment interest, the multiple or
liquidated damages awards under the Age Discrimination in
Employment Act and the Equal Pay Act and Defense Costs;
however, Loss shall not include: (1) any amount for which the
Insureds are not financially liable or which are without legal
recourse to the Insureds; . . . (4) matters which may be
deemed uninsurable under the law pursuant to which this
policy shall be construed. 15
11 Complaint, ¶ 15; Answer ¶ 15.
12 Complaint, ¶ 16.
13 Policy §1, Coverage C.
14 Policy §2, ¶ (u)(2)-(4).
is Policy §2, ¶ (k)
3
According to Endorsement 11 of the Policy, regarding "Governmental Funding
Defense Cost Coverage:"
In consideration of the premium charged, it is understood and
agreed that the Loss shall not include the return funds which
were received by the Organization or any other entity from
any federal, state, or local governmental agency; provided,
however, that with regard to Claims arising out of the return,
or request to return, such funds, subject to a retention amount
of $1,000,000, this policy shall pay Defense Costs up to
$1,000,000 on a 50% coinsurance basis with 50% of such
Defense Costs to be borne by the Insured and to remain
uninsured; and the remaining 50% of such Defense Costs to
be covered by the Insurer subject to all other terms,
conditions and exclusions of the policy.16
Following the filing of an answer with new matter, to which Plaintiff replied,
Defendant moved for judgment on the pleadings. 17 In the motion, Defendant asserts that
even if Plaintiff's activities constitute "wrongful acts" under the policy they are still not
considered a "loss" according to Endorsement 11 of the policy. ?g Finally, under
Endorsement 11, Defendant asserts that any obligation on its part to pay defense costs is
limited to cases involving return funds in excess of $1,000,000."'
DISCUSSION
Pennsylvania Rule of Civil Procedure 1034(a) provides that, "after the relevant
pleadings are closed, but within such time as not to unreasonably delay the trial, any
party may move for judgment on the pleadings." According to Cumberland County
Local Rule 1034(a), "Motions for judgment on the pleadings shall be filed with the
Cumberland County Prothonotary's Office and disposed of in the same manner as
preliminary objections in accordance with Rule 1028(c)."
16 Policy, Endorsement 11.
" Motion of Defendant Birmingham Fire Insurance Company of Pennsylvania for Judgment on the
Pleadings Pursuant to Pa. R. Civ. P. 1034, filed September 7, 2005 (hereinafter "Motion").
iX Motion, ¶ 15.
Motion, ¶ 16-17
4
When ruling on a motion for judgment on the pleadings, the court
must view all of the opposing party's allegations as true, and
only those facts that the opposing party has specifically
admitted may be considered against the opposing party. We
may consider only the pleadings themselves and any
documents property attached thereto. We may grant a motion
for judgment of the pleadings only when there is no genuine
issue of fact and the moving party is entitled to judgment as a
matter of law.
Parish v. Horn, 768 A.2d 1214, 1215 n.l (Pa. Commw. 2001), affd, 569 Pa. 45, 800
A.2d 294 (2002) (citations omitted).
The question presented by a defendant's demurrer, or motion for judgment on the
pleadings, is whether the law states with certainty that no recovery is possible based on
the facts by which Plaintiff is bound. Werner v. Plater-Zyberk, 2002 PA Super. 42 ¶7,
799 A.2d 776, 783 (2002) (citation omitted). All material facts set forth in the complaint,
as well as all reasonable inferences therefrom, are deemed true for purposes of review.
Id.
To prevail based on an exclusionary insurance provision, such as the "return
funds" exclusion at issue herein, the insurer must prove that the language is clear and
unambiguous; otherwise, the provision will be construed in favor of the insured. Fayette
Co. Housing Authority v. Housing and Redevelopment Ins. Exchange., 2001 PA Super 83
??7, 771 A.2d 11, 13 (2001). Contractual terms are considered ambiguous if they are
"subject to more than one reasonable interpretation when applied to a given set of facts.
However, in interpreting the terms of the contract, [the court] will not distort or strain the
meaning of the language in order to find an ambiguity." Id. at ¶8 (citing Madison
Construction Co. v. Harleysville Mutual Ins. Co., 557 Pa. 595, 605, 735 A.2d 100, 106
(1999)). Finally, words not defined in the policy are to be "read in their natural,
plain, and ordinary sense, and [the court] may consider their
dictionary definition in determining our understanding of these terms."
Id. at ¶9.
5
The insurance policy in dispute excludes from the definition of "loss" the "return
funds which were received by the Organization or any entity from any federal, state, or
local government agency." Therefore, the issue for resolution in the present context is
whether the $597,293.00 that Plaintiff owes the Department of Labor constitutes "return
funds" excluded from coverage under the policy.
Although the phrase "return funds" is not defined in the policy, it appears clear
from the context of Endorsement 11 that "return funds" means funds to be returned to
government agencies. Plaintiff contends that this provision refers to funds that
constituted "return funds" when they were received by the organization; however, such a
reading of Endorsement 11 is inconsistent with the context of the policy and with the
natural meaning of the word return. In the present case, the Department of Labor
requested Plaintiff to return funds previously distributed to Plaintiff and such return of
funds is not covered by the insurance policy.
Furthermore, with respect to Defendant's obligation to pay defense costs, the
language of Endorsement 11 clearly provides that such an obligation arises only when the
funds to be returned exceed $1,000,000. In the present case, Plaintiff has alleged only
$597,273.00 in funds to be returned to the Department of Labor.
Therefore, the following order will be entered:
ORDER OF COURT
AND NOW, this 3`a day of February, 2006, upon consideration of Defendant's
motion for judgment on the pleadings, and for the reasons stated in the accompanying
opinion, the motion is granted and it is declared as follows:
1. The insurance policy at issue in this case excludes
coverage of Plaintiff's return-of-funds loss; and
2. The said policy also does not obligate Defendant to provide
or contribute to a defense of Plaintiff with respect to the
claim against Plaintiff for the said return funds.
6
BY THE COURT,
sl J. Wesley Oler, Jr.
J. Wesley Oler, Jr., J.
Brian C. Caffrey, Esq.
Saidis, Shuff, Flower & Lindsay
26 W. High Street
Carlisle, PA 17013
Attorney for Plaintiff
Lawrence J. Bistany, Esq.
David E. Edwards, Esq.
Celestine Montague, Esq.
White and Williams, LLP
1800 One Liberty Place
1650 Market Street
Philadelphia, PA 19103
Attorneys for Defendant
SOUTHCENTRAL
IN THE COURT OF COMMON PLEAS
EMPLOYMENT CORPORATION, CUMBERLAND COUNTY,
Plaintiff PENNSYLVANIA
V. ACTION FOR
DECLARATORY JUDGMENT
BIRMINGHAM FIRE NO. 2004 - 6162 CIVIL TERM
INSURANCE COMPANY OF
PENNSYLVANIA,
Defendant
NOTICE OF APPEAL
Notice is hereby given that Southcentral Employment Corporation, Plaintiff
above named, hereby appeals to the Superior Court of Pennsylvania from the order
entered in this matter on the 3rd day of February, 2006. This order has been entered in
the docket as evidenced by the attached copy of the docket entry.
Respectfully submitted,
Saidis, Flower & Lindsay
.
rian C. Caffrey
SAIDIS
SHUFF, FLOWER
& LINDSAY
ATMRNEYS-AT•LAW
26 W. High Street
Carlisle, PA
PA ID # 42667
Attorney for Plaintiff
26 W. High Street
Carlisle, PA 17013
717-243-6222
March 3, 2006
PYS511 Cumberland County Prothonotary's Office
Civil Case Print
Page 1
2004-06162 SOUTHCENTRAL EMPLOYMENT CORP (vs) BIRMINGHAM FIRE INSURANCE CO
Reference No..: Filed........: 12/08/2004
Case Type ..... : COMPLAINT Time...... .. .: 3:24
Judgment.. .00 Execution Date 0/00/0000
Judge Assigned: Jury Trial....
Disposed Desc.: Disposed Date. 0/00/0000
------------ Case Comments ------------- Higher Crt 1.:
Higher Crt 2.:
General Index Attorney Into
SOUTHCENTRAL EMPLOYMENT CORP PLAINTIFF CAFFREY BRIAN C
ALEXANDRA COURT
CARLISLE PA 17013
BIRMINGHAM FIRE INSURANCE DEFENDANT
COMPANY OF PENNSYLVANIA
70 PINE STREET
NEW YORK NY 10270
* Date Entries
********************************************************************************
- - - - - - - - - - - - - FIRST ENTRY - - - - - - - - - - - - - -
12/08/2004 COMPLAINT
-------------------------------------------------------------------
3/07/2005 BIRMINGHAM FIRE INSURANCE COMPANY OF PENNSYLVANIA'S ANSWER AND NEW
MATTER TO COMPLAINT -BY LAWRENCE J BISTANY ESQ FOR DEFT
-------------------------------------------------------------------
3/29/2005 REPLY TO NEW MATTER - BY BRIAN C CAFFREY ESQ FOR PLFF
-------------------------------------------------------------------
9/08/2005 MOTION OF DEFENDANT BIRMINGHAM FIRE INSURANCE COMPANY OF
PENNSYLVANIA FOR JUDGMENT OF THE PLEADINGS PURSUANT TO PA R CIV P
1024 BY DAVID E EDWARDS ESQ
-------------------------------------------------------------------
9/13/2005 PRAECIPE FOR LISTING CASE FOR ARGUMENT - DEFT BIRMINGHAM FIRE
INSURANCE CO'S MOTION FOR JUDGMENT ON THE PLEADINGS - BY DAVID E
EDWARDS ESQ
-------------------------------------------------------------------
2/03/2006 OPINION AND ORDER OF COURT - DATED 2/3/06 - IN RE DEFT'S MOTION
FOR JUDGMENT ON THE PLEADINGS - IN RE DEFT'S MOTION FOR JUDGMENT
ON THE PLEADINGS AND FOR THE REASONS STATED IN THE ACCOMPANYING
OPINION THE MOTION IS GRANTED - BY THE COURT J WESLEY OLER JR J
COPIES MAILED
- - - - - - - - - - - - - - LAST ENTRY - - - - - - - - - - - - - -
********************************************************************************
* Escrow Information
* Fees & Debits BP*Bal*** mts/Adj End Bai
***********************************P ****** *******************************
COMPLAINT 35.00 35.00 .00
TAX ON CMPLT .50 .50 .00
SETTLEMENT 5.00 5.00 .00
AUTOMATION 5.00 5.00 .00
JCP FEE 10.00 10.00
-
- .00
--
--
--
---------------
55.50 ------
-- --
55.50 -
-
-
.00
********************************************************************************
* End of Case Information
I
PROOF OF SERVICE
I hereby certify that I am this day serving the foregoing document upon the persons and
SAIDIS
SHUFF, FLOWER
& LINDSAY
ATTORNEYS-AT-LAW
26 W. High Sheet
Carlisle, PA
in the manner indicated below which service satisfies the requirements of Pa.R.A.P. 121:
Service by first-class mail addressed as follows:
White and Williams, LLP
1800 One Liberty Place
Philadelphia, PA 19103-7395
Birmingham Fire Insurance Company of Pennsylvania
c/o Lawrence J. Bistany, Esquire (215) 864-7000
Honorable J. Wesley Oler, Jr. (717) 240-6200
Court of Common Pleas
Cumberland County Courthouse
One Courthouse Square
Carlisle, PA 17013
Official Court Reporter (717) 240-6200
One Courthouse Square
Carlisle, PA 17013
Taryn N. Dixon (717) 240-6200
District Court Administrator
Cumberland County Courthouse
One Courthouse Square
Carlisle, PA 17013
Dated: March 3, 2006
P.an Caffrey
PA ID # 42667
Attorney for Plaintiff
26 W. High Street
Carlisle, PA 17013
717-243-6222
b
a
r
w
CX?
?a
C,
i -,
qqk,
SOUTHCENTRAL : IN THE COURT OF COMMON PLEAS
EMPLOYMENT CORPORATION, CUMBERLAND COUNTY,
Plaintiff PENNSYLVANIA
V.
BIRMINGHAM FIRE
INSURANCE COMPANY OF
PENNSYLVANIA,
Defendant
ACTION FOR
DECLARATORY JUDGMENT
NO. 2004 - 6162 CIVIL TERM
STATEMENT OF COUNSEL UNDER Pa.R.A.P. 904 (c)
Undersigned counsel hereby states, in accordance with Pa.R.A.P. 904 (c), that,
inasmuch as the proceedings in the Court of Common Pleas involved only the pleadings and a
motion for judgment on the pleadings, there is no verbatim record of the proceedings.
Respectfully submitted,
Saidis, Flower & Lindsay
SAIDIS
SHUFF, FLOWER
& LINDSAY
y6 VC. Caffrey
PA ID # 42667
Attorney for Plaintiff
26 W. High Street
Carlisle, PA 17013
717-243-6222
March 3. 2006
26 W. High Street
Carlisle, PA
PROOF OF SERVICE
I hereby certify that I am this day serving the foregoing document upon the persons and
SAIDIS
SHOFF, FLOWER
& LINDSAY
26 W. High Street
Carlisle, PA
in the manner indicated below which service satisfies the requirements of Pa.R.A.P. 121:
Service by first-class mail addressed as follows:
Birmingham Fire Insurance Company of Pennsylvania
c/o Lawrence J. Bistany, Esquire (215) 864-7000
White and Williams, LLP
1800 One Liberty Place
Philadelphia, PA 19103-7395
Honorable J. Wesley Oler, Jr. (717) 240-6200
Court of Common Pleas
Cumberland County Courthouse
One Courthouse Square
Carlisle, PA 17013
Official Court Reporter (717) 240-6200
One Courthouse Square
Carlisle, PA 17013
Taryn N. Dixon (717) 240-6200
District Court Administrator
Cumberland County Courthouse
One Courthouse Square
Carlisle, PA 17013
Dated: March 3, 2006
B C. Caffrey
A ID # 42667
Attorney for Plaintiff
26 W. High Street
Carlisle, PA 17013
717-243-6222
}
C. ?
3:01 rrM.
Appeal Docket Sheet
Docket Number:
Page 1 of 2
March 6, 2006
408 MDA 2006
Southcentral Employment Corporation, Appellant
V.
Birmingham Fire Insurance Company of Pennsylvania
Initiating Document: Notice of Appeal
Case Status: Active
Case Processing Status: March 6, 2006
Journal Number:
Case Category: Civil
Consolidated Docket Nos.:
Next Event Type: Receive Docketing Statement
Next Event Type: Original Record Received
Next Event Due Date: March 20, 2006
Next Event Due Date: April 17, 2006
COUNSEL INFORMATION
Appellant Southcentral Employment Corporation
Pro Se: Appoint Counsel Status:
IFP Status: No
Appellant Attorney Information:
Attorney: Caffrey, Brian C.
Bar No.: 42667
Address: 26 W High Street
Carlisle, PA 17013
Phone No.: (717)243-6222
Receive Mail: Yes
E-Mail Address:
Receive E-Mail: No
Awaiting Original Record
CaseType: Civil Action Law
Related Docket Nos.:
SCHEDULED EVENT
Law Firm: Saidis, Shuff, Flower & Lindsay
Fax No.: (717)243-6486
Appellee Birmingham Fire Insurance Company of Pennsylvania
Pro Se: Appoint Counsel Status:
IFP Status:
Appellee Attorney Information:
Attorney: Bistany, Lawrence Joseph
Bar No.: 61825 Law Firm: White and Williams, LLP
Address: 1800 One Liberty Place
Philadelphia, PA 19103-1395
Phone No.: (215)864-6306 Fax No.: (215)789-7506
Receive Mail: Yes
E-Mail Address: bistanyl@whiteandwilliams.com
Receive E-Mail: No
OY - ? « -?_ iL,, L ? L?
Superior Court of Pennsylvania
3/6/2006 3023
3:01 P.M.
Appeal Docket Sheet
Docket Number: 408 MDA 2006
Page 2 of 2
March 6, 2006
Superior Court of Pennsylvania
FEE INFORMATION
Paid
Fee Date Fee Name Fee Amt Amount Receipt Number
3/6/06 Notice of Appeal 60.00 60.00 2006SPRMD000223
TRIAL COURTIAGENCY INFORMATION
Court Below: Cumberland County Court of Common Pleas
County: Cumberland Division: Civil
Date of Order Appealed From: February 3, 2006 Judicial District: 9
Date Documents Received: March 6, 2006 Date Notice of Appeal Filed: March 3, 2006
Order Type: Order Entered OTN:
Judge: Oler, Jr., J. Wesley Lower Court Docket No.: 2004-6162
Judge
ORIGINAL RECORD CONTENTS
Original Record Item Filed Date Content/Description
Date of Remand of Record:
BRIEFS
DOCKET ENTRIES
Filed Date Docket Entry/Document Name Party Type Filed
March 6, 2006 Notice of Appeal Filed
Appellant Southcentral Employment Corporation
March 6, 2006
Docketing Statement Exited (Civil)
Middle District Filing Office
3/6/2006
3023
SOUTHCENTRAL
EMPLOYMENT
CORPORATION,
Plaintiff
V.
BIRMINGHAM FIRE
INSURANCE COMPANY:
OF PENNSYLVANIA,
Defendant
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL ACTION - LAW
NO. 04-6162 CIVIL TERM
ORDER OF COURT
AND NOW, this 6°i day of March, 2006, upon consideration of the Notice of
Appeal filed in the above-captioned matter, Appellant is DIRECTED, pursuant to Pa.
R.A.P. 1925(b), to file of record in this Court and to serve upon the undersigned judge a
concise Statement of Matters Complained of on Appeal no later than 14 days after entry
of this Order.
Brian C. Caffrey, Esq.
26 West High Street
Carlisle, PA 17013
Attorney for Plaintiff
Lawrence J. Bistany, Esq.
White and Williams, LLP
1800 One Liberty Place
Philadelphia, PA 19103-7395
Attorney for Defendant
BY THE COURT,
:rc
SOUTHCENTRAL
EMPLOYMENT CORPORATION,
Plaintiff
V.
BIRMINGHAM FIRE
INSURANCE COMPANY OF
PENNSYLVANIA,
Defendant
IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY,
PENNSYLVANIA
ACTION FOR
DECLARATORY JUDGMENT
NO. 2004 - 6162 CIVIL TERM
STATEMENT OF MATTERS COMPLAINED OF ON APPEAL
PURSUANT TO Pa.RA.P. 1925 (b)
Plaintiff/Appellant submits the following concise Statement of Matters
Complained of on Appeal, pursuant to Pa.R.A.P. 1925 (b) and the Court's order of
March 6, 2006:
Whether the court erred as a matter of law in construing an ambiguous
exclusionary provision in an insurance policy in favor of the insurance
company.
Suggested answer: Yes.
2. Whether the court erred as a matter of law in ruling, in effect, that the
insured could not possibly recover against the insurance company on a
policy containing an ambiguous exclusionary provision.
Suggested answer: Yes.
SAIDIS,
FLOWER &
LINDSAY
ATR1KIM- T.
26 Wu[ High Sam[
CAA,, PA
3. Whether the court erred as a matter of law by improperly considering
facts outside the complaint in adopting the insurance company's
interpretation of an ambiguous exclusionary provision.
Suggested answer: Yes.
4. Whether the court erred as a matter of law in failing to hold that the
exclusionary provision at issue is inconspicuous, and, consequently,
unenforceable.
Suggested answer: Yes.
Whether the court erred as a matter of law in ruling that the insured is
not entitled to a legal defense under an ambiguous exclusionary
provision of an insurance policy.
Suggested answer: Yes.
Respectfully submitted,
Saidis, Flower & Lindsay
41rian C. Caffrey
PA ID # 42667
Attorney for Plaintiff
26 W. High Street
Carlisle, PA 17013
717-243-6222
March 16, 2006
SAIDIS,
FLOWER &
LINDSAY
.rrowwaanraww
26 West High Street
Carlisle, PA
PROOF OF SERVICE
I hereby certify that I am this day serving the foregoing document upon the persons and
SAIDIS,
FLOWER &
LINDSAY
A RN NA•uw
26 West High Street
Cadislc, PA
in the manner indicated below which service satisfies the requirements of Pa.R.A.P. 121:
Service by first-class mail addressed as follows:
Birmingham Fire Insurance Company of Pennsylvania
c/o Lawrence J. Bistany, Esquire (215) 864-7000
White and Williams, LLP
1800 One Liberty Place
Philadelphia, PA 19103-7395
Honorable J. Wesley Oler, Jr. (717) 240-6200
Court of Common Pleas
Cumberland County Courthouse
One Courthouse Square
Carlisle, PA 17013
Dated: March 16, 2006
I3Man C. Caffrey
PA ID # 42667
Attorney for Plaintiff
26 W. High Street
Carlisle, PA 17013
717-243-6222
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SOUTHCENTRAL EMPLOYMENT
CORPORATION
Plaintiff,
IN THE COURT OF COMMON PLEAS
OF CUMBERLAND COUNTY,
PENNSYLVANIA
v.
BIRMINGHAM FIRE INSURANCE CIVIL ACTION-LAW
COMPANY OF PENNSYLVANIA
Defendant NO. 2004-6162 CIVIL TERM
IN RE: OPINION PURSUANT TO PA. R.A.P. 1925
OLER, J„ April 3, 2006.
In this declaratory judgment action, Plaintiff sued its insurance carrier on a "Not-
for-Profit Protector" policy as a result of the insurer's denial of coverage with respect to
certain federal funds which Plaintiff allegedly did not properly account for.' Defendant
insurer's motion for judgment on the pleadings was granted by an en bane panel of this
court on the basis of this court's interpretation of the contract in question. The order was
accompanied by an opinion.3
From the order granting the insurer's motion for judgment on the pleadings
Plaintiff has filed a notice of appeal to the Pennsylvania Superior Court.4 The bases of
the appeal have been expressed in Plaintiffs Statement of Matters Complained of on
Appeal as follows:
1. Whether the court erred as a matter of law in construing an ambiguous
exclusionary provision in an insurance policy in favor of the insurance
company....
2. Whether the court erred as a matter of law in ruling, in effect, that the
insured could not possibly recover against the insurance company on a policy
containing an ambiguous exclusionary provision....
3. Whether the court erred as a matter of law by improperly considering facts
outside the complaint in adopting the insurance company's interpretation of an
ambiguous exclusionary provision....
Plaintiff's Complaint, filed December 8, 2004.
2 Order of Court, February 3, 2006.
3 Opinion of Court, February 3, 2006.
Plaintiff's Notice of Appeal, filed March 3, 2006
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4. Whether the court erred as a matter of law in failing to hold that the
exclusionary provision at issue is inconspicuous, and, consequently,
unenforceable....
5. Whether the court erred as a matter of law in ruling that the insured is not
entitled to a legal defense under an ambiguous exclusionary provision of an
insurance policy .... 5
The rationale for the court's view that the terms of the policy excluded coverage
for the type of loss claimed by Plaintiff in this case is contained in the court's opinion
accompanying the order appealed from and will not be reiterated here. With respect to
Plaintiff's contention that the court, in reaching this conclusion, considered "facts outside
the complaint," it may be noted that the court's opinion supported its statement of facts
by citations to the pleadings and attachments thereto. The court is unaware of its
consideration of any facts not alleged or conceded by Plaintiff in the pleadings.
BY THE COURT,
Wesley Oler Jr/, J.
Brian C. Caffrey, Esq.
Saidis, Shuff, Flower & Lindsay
26 W. High Street
Carlisle, PA 17013
Attorney for Plaintiff
Lawrence J. Bistany, Esq.
David E. Edwards, Esq."
Celestine Montague, Esq.
White and Williams, LLP
1800 One Liberty Place
1650 Market Street
Philadelphia, PA 19103
Attorneys for Defendant
L)- .
s Plaintiff's Statement of Matters Complained of on Appeal Pursuant to Pa.R.A.P. 1925(b).
2
Karen Reid Bramblett, Esq.
Prothonotary
James D. McCullough, Esq.
Deputy Prothonotary
TO: Mr. Curtis R. Long
Prothonotary
e
Superior Court of Pennsylvania
Middle District
May 31, 2007
Certificate of Remittal/Remand of Record
RE: South Central Emp Corp v. Birmingham Fire Ins Co
No.408 MDA 2006
Trial Court/Agency Dkt. Number: 2004-6162
Trial Court/Agency Name: Cumberland County Court of Common
Pleas
Intermediate Appellate Court Number:
100 Pine Street. Suite 400
Harrisburg, PA 17101
717-772-1294
www.superior.court.state.pa.us
Annexed hereto pursuant to Pennsylvania Rules of Appellate Procedure 2571 and 2572
is the entire record for the above matter.
Contents of Original Record:
Original Record Item
Part
Date of Remand of Record:
Filed Date Description
May 9, 2006 1
JUL 10 2007
ORIGINAL RECIPIENT ONLY - Please acknowledge receipt by signing, dating, and
returning the enclosed copy of this certificate to our office. Copy recipients (noted below) need
not acknowledge receipt.
Signature
Printed Name
Date
/alv
., r 2
1. A39006/06
2007 PA Super 156
SOUTHCENTRAL EMPLOYMENT IN THE SUPERIOR COURT OF
CORPORATION, PENNSYLVANIA
Appellant
V.
No. 408 Middle District Appeal 2006
BIRMINGHAM FIRE INSURANCE
COMPANY OF PENNSYLVANIA
Appeal from the Order Entered February 3, 2006,
in the Court of Common Pleas of Cumberland County
Civil Division at No. 2004-6162
BEFORE: FORD ELLIOTT, P.J., LALLY-GREEN AND JOHNSON, JJ.
OPINION BY FORD ELLIOTT, P.J.: FILED: May 31, 2007
¶ 1 Southcentral Employment Corporation ("SouthcentraI") appeals the
order of February 3, 2006, granting Birmingham Fire Insurance Company of
Pennsylvania's ("Birmingham") motion for judgment on the pleadings. We
affirm.
12 The Honorable J. Wesley Oler, Jr., in his February 3, 2006 opinion and
order granting defendant/appellee Birmingham's motion for judgment on the
pleadings, sets forth the facts of this matter as follows:
For purposes of [Birmingham's] motion, the
facts may be summarized as follows: Plaintiff is
Southcentral Employment Corporation, a non-profit
employment services corporation which expends
'funds made available to it by the United States
Department of Labor, acting through the
Commonwealth of Pennsylvania Department of Labor
and Industry.' Defendant is Birmingham Fire
J . A39006/06
Insurance Company of Pennsylvania, with which
[Southcentral] had a Not-for-Profit Protector Policy.
On April 29, 2003, the Pennsylvania
Department of Labor & Industry, Bureau of
Workforce Investment (hereinafter the 'Department
of Labor') issued a final determination from 1997,
1998, 1999, and 2000 audits of [Southcentral]. The
determination identified and disapproved of several
expenditures made by [Southcentral] during the
course of its contracts with the Department of Labor
in connection with `excess revenue drawn down on
various unidentifiable contracts, uncategorized
expenses and unsupported debits and credits and
accruals and payables, inability to account for
classroom training funds, and inability to justify cost
allocation basis adjustment.' The Department of
Labor determined that [Southcentral] was 'required
to pay ... $597,273.00 from non-Federal funds' to
the Department.
On March 12, 2004, [Southcentral] provided
[Birmingham] with written notice of the final
determination and claimed that such determination
was covered under the 'wrongful acts' portion of the
policy. [Birmingham] denied coverage of
[South central's] claim. In response, [Southcentral]
has filed the instant declaratory judgment action
seeking a determination that [Birmingham] is
obligated to indemnify [Southcentral] in the amount
[of] $597,273.00, and to provide a legal defense for
[Southcentral's] opposition to and appeal from the
charges assessed by the Department of Labor.
According to the terms of the policy
[Birmingham] is required to:
pay on behalf of the Organization Loss
arising from a Claim first made against
the Organization during the Policy Period
or the Discovery Period (if applicable)
and reported to the insurer pursuant to
the terms of this policy for any actual or
alleged Wrongful Act of the Organization.
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J. A39006/06
The policy defines a 'Wrongful Act' by an
organization as:
any breach of duty, neglect, error,
misstatement, misleading statement,
omission or act by or on behalf of the
Organization.... Wrongful Act' shall
specifically include: (a) Employment
Practice Claims; (b) Non-Employment
Discrimination; (c) violation of the
Sherman Antitrust Act or similar federal,
state or local statutes or rules....
The policy defines 'Loss' as:
Damages, (including back pay and front
pay), judgments, settlements, pre- and
post-judgment interest, the multiple or
liquidated damages awards under the
Age Discrimination in Employment Act
and the Equal Pay Act and Defense
Costs; however, Loss shall not include:
(1) any amount for which the Insureds
are not financially liable or which are
without legal recourse to the Insureds;
... (4) matters which may be deemed
uninsurable under the law pursuant to
which this policy shall be construed.
According to Endorsement 11 of the Policy,
regarding 'Governmental Funding Defense Cost
Coverage: '
In consideration of the premium charged,
it is understood and agreed that the Loss
shall not include the return funds which
were received by the Organization or any
other entity from any federal, state, or
local governmental agency; provided,
however, that with regard to Claims
arising out of the return, or request to
return, such funds, subject to a retention
amount of $1,000,000, this policy shall
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1. A39006/06
pay Defense Costs up to $1,000,000 on a
50% coinsurance basis with 50% of such
Defense Costs to be borne by the
Insured and to remain uninsured; and
the remaining 50% of such Defense
Costs to be covered by the Insurer
subject to all other terms, conditions and
exclusions of the policy.
Following the filing of an answer with new
matter, to which [Southcentral] replied,
[Birmingham] moved for judgment on the pleadings.
In the motion, [Birmingham] asserts that even if
[South central's] activities constitute `wrongful acts'
under the policy they are still not considered a loss'
according to Endorsement 11 of the policy. Finally,
under Endorsement 11, [Birmingham] asserts that
any obligation on its part to pay defense costs is
limited to cases involving return funds in excess of
$1,000,000.
Opinion and order, 2/3/06 at 2-4 (footnote citations to the record omitted).
¶ 3 On March 3, 2006, Southcentral filed a notice of appeal. Southcentral
has complied with the trial court's order to file a concise statement of
matters complained of on appeal pursuant to Pa.R.A.P. 1925(b), and the
trial court has filed a Rule 1925(a) opinion.
$ 4 Southcentral presents the following issues for this court's review:
A. WHETHER THE COURT ERRED AS A MATTER OF
LAW IN CONSTRUING AN AMBIGUOUS
EXCLUSIONARY PROVISION IN AN INSURANCE
POLICY IN FAVOR OF THE INSURANCE
COMPANY.
B. WHETHER THE COURT ERRED AS A MATTER OF
LAW IN RULING, IN EFFECT, THAT THE
INSURED COULD NOT POSSIBLY RECOVER
AGAINST THE INSURANCE COMPANY ON A
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3. A39006/06
POLICY CONTAINING AN AMBIGUOUS
EXCLUSIONARY PROVISION.
C. WHETHER THE COURT ERRED AS A MATTER OF
LAW IN RULING THAT THE INSURED IS NOT
ENTITLED TO A LEGAL DEFENSE UNDER AN
AMBIGUOUS EXCLUSIONARY PROVISION OF
AN INSURANCE POLICY.
Southcentral's brief at 4.
$ 5 Initially, we set forth our standard of review:
As this Court has summarized:
A motion for judgment on the
pleadings should be granted only where
the pleadings demonstrate that no
genuine issue of fact exists, and the
moving party is entitled to judgment as a
matter of law. Pa.R.C.P. 1034[.] Thus,
in reviewing a trial court's decision to
grant judgment on the pleadings, the
scope of review of the appellate court is
plenary; the reviewing court must
determine if the action of the trial court
is based on a clear error of law or
whether there were facts disclosed by
the pleadings which should properly go
to the jury. An appellate court must
accept as true all well-pleaded facts of
the party against whom the motion is
made, while considering against him only
those facts which he specifically admits.
Neither party can be deemed to have
admitted either conclusions of law or
unjustified inferences. Moreover, in
conducting its inquiry, the court should
confine itself to the pleadings themselves
and any documents or exhibits properly
attached to them. It may not consider
inadmissible evidence in determining a
motion for judgment on the pleadings.
Only where the moving party's case is
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3. A39006/06
clear and free from doubt such that a
trial would prove fruitless will an
appellate court affirm a motion for
judgment on the pleadings.
Consulting Engineers, Znc. v. Insurance
Company of North America, 710 A.2d 82, 83-84
(Pa.Super.1998) (citations and quotation marks
omitted).
Wilcha v. Nationwide Mutual Fire Znsurance Co., 887 A.2d 1254, 1258
(Pa.Super. 2005). "An insurer's duty to defend and indemnify the insured
may be resolved via declaratory judgment actions." Zd., quoting Erie
insurance Exchange v. Claypoole, 673 A.2d 348, 355 (Pa.Super. 1996)
(en banc) .
¶ 6 We address Southcentral's first two arguments, that the exclusionary
provision in the policy is ambiguous and therefore must be construed in
favor of the insured, and that the trial court erred in determining that
Southcentral could not recover on the policy as a matter of law, together, as
they raise essentially the same issues. Southcentral argues that the phrase
"return funds" is ambiguous and should be construed against the drafter of
the policy, Birmingham. The trial court disagreed, finding the exclusionary
clause is not ambiguous and the policy clearly precludes coverage of the
$597,273 demanded to be returned by the Department of Labor. We agree
with the trial court, and also agree with Birmingham that in any event, both
public policy and case law interpreting the meaning of the word "loss" in
insurance contracts would serve to deny coverage for Southcentral's claim.
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1. A39006/06
As our Supreme Court has summarized:
Where an insurer relies on a policy
exclusion as the basis for its denial of
coverage and refusal to defend, the
insurer has asserted an affirmative
defense and, accordingly, bears the
burden of proving such a defense. To
determine whether [the insurer] has met
its burden of proof we rely on
well-settled principles of contract
interpretation.
The task of interpreting [an
insurance] contract is generally
performed by a court rather than by a
jury. The goal of that task is, of course,
to ascertain the intent of the parties as
manifested by the language of the
written instrument. Where a provision of
a policy is ambiguous, the policy
provision is construed in favor of the
insured and against the insurer, the
drafter of the agreement. Where,
however, the language of the contract is
clear and unambiguous, a court is
required to give effect to that language.
Contractual language is ambiguous
if it is reasonably susceptible of different
constructions and capable of being
understood in more than one sense.
This is not a question to be resolved in a
vacuum. Rather, contractual terms are
ambiguous if they are subject to more
than one reasonable interpretation when
applied to a particular set of facts. We
will not, however, distort the meaning of
the language or resort to a strained
contrivance in order to find an ambiguity.
Madison Construction Company v. Harleysville
Mutual Insurance Company, 557 Pa. 595, 605-06,
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J. A39006/06
735 A.2d 100, 106 (1999) (citations and quotation
marks omitted).
Wilcha, supra at 1258-1259. See also Mitsock v. Erie Insurance
Exchange, 909 A.2d 828, 831 (Pa.Super. 2006).
¶ 7 Here, endorsement eleven of the policy provides, "it is understood and
agreed that the Loss shall not include the return funds which were received
by the Organization or any other entity from any federal, state, or local
governmental agency ...." We agree with the trial court that in context, it
is clear that the term "return funds" means funds to be returned to
government agencies. (Opinion and order, 2/3/06 at 6.) Southcentral
presents a convoluted argument that the provision refers only to funds that
constituted "return funds" at the time they were initially received by the
organization; as the trial court states, "such a reading of Endorsement 11 is
inconsistent with the context of the policy and with the natural meaning of
the word return." (Id.) Obviously, if such funds were returnable at the very
instant in which they were received, they would never have been distributed
in the first place.
? 8 Southcentral cites Local 705 International Brotherhood of
Teamsters Health & Welfare Fund v. Five Star Managers, LLC, 735
N.E.2d 679 (III.App. 2000), which, if anything, is contrary to its argument.
In that case, the Health & Welfare Fund ("H & W") agreed to repay over
$16.5 million, plus interest, in funds it had received from a sister pension
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J. A39006/06
fund in violation of ERISA.1 H & W sought coverage which was denied.
H & W argued on appeal that the trial court erred when it ruled H & W did
not sustain a loss for coverage purposes when it returned the $16.5 million
originally transferred from the pension fund. The Illinois appellate court
disagreed, stating,
Here, there is no question that the sole basis upon
which H & W paid out the settlement amount was
the Pension Fund's claim that H & W was required to
return those monies which it had no right to possess
in the first place. Such a payment can hardly be
termed a loss. Nor can such payment create a
deprivation any more so than any borrower can be
said to suffer a deprivation from being required to
repay an indebtedness.
Id. at 683. 'The plain and ordinary meaning of `loss' cannot be ignored.
H & W simply cannot lose that to which it was not legally entitled." Id, at
684 (quotation marks and citation omitted).
$ 9 Similarly, here, Southcentral was required to return to the Department
of Labor funds constituting, inter alia, "excess revenue drawn down on
various unidentifiable contracts, uncategorized expenses and unsupported
debits and credits." As it appears, at least in the government's opinion
following four audits from the years 1997-2000, that Southcentral was not
legally entitled to keep these funds, their return can hardly be deemed a
"loss" for insurance purposes. See also Republic Western Insurance Co.
v. Spierer, Woodward, Willens, Denis & Furstman, 68 F.3d 347 (9th Cir.
1 Employee Retirement Income Security Act, 29 U.S.C.A. § 1001 et seq.
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1. A39006/06
1995) (where a conflict of interest prevented attorney from earning his
retainer and such was disgorged into court, the money was not "damages"
for which the policy provided coverage; restitutionary payments are not
limited to money wrongfully acquired and are not "damages," specifically
rejecting attorney's argument that the money was earned when it was
received, because his client had at that time achieved its objective of limiting
its potential expenditure on litigation Costs).2
$ 10 Local 705, supra, relied partly on our supreme court's decision in
Central Dauphin School District v. American Casualty Co., 493 Pa.
2541 426 A.2d 94 (1981), wherein a school district tax was struck down by
the lower court as illegal and the court directed the payment of refunds. The
school district sought indemnification from its insurer in an amount equal to
the tax revenue it had illegally collected and was required by the court to
return to its taxpayers. Our supreme court held the tax refunds were
uninsurable on public policy grounds, stating "it must be concluded that a
political subdivision's return of tax monies to its taxpayers collected by an
2 Birmingham cites Conseco, Inc. v. National Union Fire Insurance Co. of
Pittsburgh, 2002 WL 31961447 (Ind.Cir. 2002), for the principle that even where
the allegedly wrongful conduct is unintentional or the result of mere negligence, an
ill-gotten gain innocently obtained and then returned is not a covered loss. Id.
at *11; Birmingham's brief at 13-14. We note that Conseco is an unpublished
opinion and therefore is improperly cited and non-binding on this panel; however,
we agree with the general proposition as stated above, that even where
inadvertently acquired, money or property that has to be returned does not belong
to the insured and therefore the insured has not suffered a loss. Otherwise, the
insured would be unjustly enriched with a windfall from its own wrongful, albeit
innocent, conduct. Certainly this principle applies here.
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1. A39006/06
unlawful tax is uninsurable. Hence there has been no 'loss' within the
meaning of the insurance policy and no claim lies against appellant
(American Casualty)." id. at 260, 426 A.2d at 97. See also Larsen, J.,
concurring (`"The school district simply cannot 'lose' that to which it was not
legally entitled.'"). Id, at 261-262, 426 A.2d at 98. Accord Level 3
Communications.. Inc. v. Federal Insurance Co., 272 F.3d 908, 910-911
(7t" Cir. 2001) ("a 'loss' within the meaning of an insurance contract does
not include the restoration of an ill-gotten gain"), citing, inter alia, Central
Dauphin School District, supra.
$ 11 The $597,273 which Southcentral is required to repay to the
Department of Labor, whether wrongfully acquired willfully or by mistake or
accident, is nonetheless not an insurable loss. These are restitutionary
funds and are not recoverable, even if there were not an unambiguous
exclusionary clause in the policy for "return funds.i3
$ 12 Finally, we turn to Southcentral's argument that it was entitled to a
legal defense on the underlying claim. We determine that it was not.
As this Court has summarized:
The duty to defend is a distinct
obligation, separate and apart from the
3 Southcentral also argues that the trial court, in deciding Birmingham's motion for
judgment on the pleadings, considered facts not of record and did not construe all
reasonable inferences in favor of Southcentral. As the trial court states in its
Rule 1925(a) opinion, it supported its findings with extensive citations to the
pleadings and attachments thereto. (Trial court opinion, 4/3/06 at 2.) In addition,
it is clear from reviewing the record that all pertinent facts as described above are
not in dispute. This is a matter involving the interpretation of an insurance contract
which is a matter of law, not fact.
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J. A39006/06
insurer's duty to provide coverage.
Moreover, the insurer agrees to defend
the insured against any suit arising under
the policy even if such suit is groundless,
false, or fraudulent. Since the insurer
agrees to relieve the insured of the
burden of defending even those suits
which have no basis in fact, the
obligation to defend arises whenever the
complaint filed by the injured party may
potentially come within the coverage of
the policy. In order to determine
whether a claim may potentially come
within the coverage of the policy, we
must first ascertain the scope of the
insurance coverage and then analyze the
allegations in the complaint.
Britamco Underwriters, Inc. v. Grzeskiewicz,
433 Pa.Super. 55, 639 A.2d 1208, 1210 (1994)
(citations and quotation marks omitted).
Wilcha, supra at 1258.
1 13 We have already determined for the reasons discussed supra that the
underlying claim, i.e., the Department of Labor's demand that Southcentral
return funds of $597,273, is not covered by the policy, both because of the
policy's express exclusion of "return funds" and because of prevailing case
law interpreting the term "loss" as applied in insurance contracts. Therefore,
Birmingham had no duty to defend the action.
$ 14 Furthermore, any duty to defend on the part of Birmingham is limited
by the policy's own terms. Endorsement 11 provides, in relevant part, "with
regard to Claims arising out of the return, or request to return, such funds,
subject to a retention amount of $1,000,000, this policy shall pay
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1. A39006/06
Defense Costs up to $1,000,000 on a 50% coinsurance basis with 50% of
such Defense Costs to be borne by the Insured ...." (emphasis added).
Therefore, as the trial court correctly observes, Birmingham's duty to pay
defense costs with regard to any claim arising out of a request to return
funds only "kicks in" under the policy when the retention amount is
$1,000,000 or more. (Opinion and Order, 2/3/06 at 4.)4 As this claim
involves return funds in the amount of $597,273, Birmingham has no duty
to pay any of Southcentral's defense costs.5
¶ 15 Order affirmed.
4 Birmingham, on appeal, interprets the clause as applying only when Southcentral
has first paid $1 million or more defending a claim for return funds. (Birmingham's
brief at 15.) However, we believe, consistent with the trial court, that its plain
language indicates Birmingham only has a duty to defend the claim when the
amount retained is in excess of $1 million, regardless of what Southcentral has
expended defending the claim. Of course, under either scenario, the provision is
inapplicable in this case.
5 We also note that Southcentral argues that Endorsement 11, excluding coverage
of return funds, is inconspicuously displayed and did not alert the insured that the
provision excludes coverage. (Southcentral's brief at 17-18.) First, we note that
this issue was not explicitly raised in Southcentral's statement of the questions
involved and is accordingly waived. Pa.R.A.P. 2116(a). At any rate, as Birmingham
points out, Endorsement 11 appears on a separate page and is titled, in bold capital
letters, "GOVERNMENTAL FUNDING DEFENSE COST COVERAGE." In addition,
to the extent Southcentral argues the exclusion's conspicuousness is somehow
reduced by its ambiguity (Southcentral's brief at 18), this issue has already been
resolved in Birmingham's favor.
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I A39006/06
Judgment Entered:
Anal, c
rl?ty Prothonotary
May 31, 2007
Date:
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