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HomeMy WebLinkAbout02-2701IN THE COURT OF COMMON PLEAS CCI(v4?D COUNTY, PENNSYLVANIA No. Oa-"2701 1K_1 Civil Action - ( ) L av (x) Equity CARET`PI, INC., PENNSYLVANIA MANLJFACrURERS' ASSOCIATION 4590 Industrial Park Road : INSURANCE CCMPANY, MANUFACTURERS ALLIANCE P.O. Box 331 : INSURANCE CWANY, PENNSYLVANIA MANU Camp Hill, PA 17011-0331. _ FACTURERS INDEMNITY COMPANY, and MID- ATMTrIC STATES CASUALTY CCVIPANY 500 North 12th Street Lanoyne, PA 17043 versus Plaintiff(s) 8 Defendant(s) 8 Address(es) Address(es) PRAECIPE FOR WRIT OF SUMMONS TO THE PROTHONOTARY OF SAID COURT: Please issue writ of summons in the above-captioned action. Writ of Summons shall be issued and forwarded to (x)ATtorney ( )Sheriff Thomas S. Beckley, Esquire Beckley & FEaFe-n- 212 N. r ., x Harrisburg, PA 7 0 - (717) 233-769 Names/Address/ Telephon No. of Attorney Signature of Attorney Supreme Court ID No. 77040 Date: 5,.,.e 14, 4,0 09 WRIT OF SUMMONS TO THE ABOVE NAMED DEFENDANT(S): YOU ARE NOTIFIED THAT THE ABOVE-NAMED PLAINTIFF(S) HAS/HAVE COMMENCED AN ACTION AGAINST YOU. /6- xaz6t?az Prothonotary Date: ?.? o aDD? by i?i ' DiSpLef y ( ) Check here if reverse is issued for additional information PROTHON. - 55 N w c? f l _. Z c _a v! d= "S7 N C? r? r? t" ?i CARETTI, INC., : IN THE COURT OF COMMON PLEAS Plaintiff : OF CUMBERLAND COUNTY, : PENNSYLVANIA V. ACTION INEQUITY PENNSYLVANIA MANUFACTURERS' ASSOCIATION INSURANCE NO. 02-2701 COMPANY, MANUFACTURERS ALLIANCE INSURANCE COMPANY, PENNSYLVANIA MANUFACTURERS INDEMNITY COMPANY, and MID- ATLANTIC STATES CASUALTY COMPANY, Defendants 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 any other claim for relief requested by the Plaintiff. You may lose money or property or other right important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHl?RE YOU CAN GET LEGAL HELP. Cumberland County Bar Association 2 Liberty Avenue Carlisle, Pennsylvania 17013 (717) 249-3166 CARETTI, INC., : IN THE COURT OF COMMON PLEAS Plaintiff : OF CUMBERLAND COUNTY, : PENNSYLVANIA V. : ACTION INEQUITY PENNSYLVANIA MANUFACTURERS' ASSOCIATION INSURANCE NO. 02-2701 COMPANY, MANUFACTURERS ALLIANCE INSURANCE COMPANY, PENNSYLVANIA MANUFACTURERS INDEMNITY COMPANY, and MID- ATLANTIC STATES CASUALTY COMPANY, Defendants COMPLAINT AND NOW comes the Plaintiff, Caretti, Inc., who, by and through its attorneys, Thomas A. Beckley, Esquire, Thomas S. Beckley, Esquire, and Beckley & Madden, of Counsel, files this Complaint, and in support thereof, avers as follows: The Parties 1. Plaintiff is Caretti, Inc. ("Caretti"), a corporation organized and existing under the laws of the Commonwealth of Pennsylvania, with a business address of 4590 Industrial Park Road, Camp Hill, Pennsylvania 17011. 2. Defendants are as follows: (a) Pennsylvania Manufacturers' Association Insurance Company, a corporation organized and existing under the laws of the Commonwealth of Pennsylvania, with a business address of 380 Sentry Parkway, Post Office Box 3031, Blue Bell, Pennsylvania 19422-0754; (b) Manufacturers Alliance Insurance Company, a corporation organized and existing under the laws of the Commonwealth of Pennsylvania, with a business address of 380 Sentry Parkway, Post Office Box 3031, Blue Bell, Pennsylvania 19422-0754; (c) Pennsylvania Manufacturers Indemnity Company a corporation organized and existing under the laws of the Commonwealth of Pennsylvania, with a business address of 380 Sentry Parkway, Post Office Box 3031, Blue Bell, Pennsylvania 19422-0754; and (d) Mid-Atlantic States Casualty Company, upon information and belief, a corporation with a business address of 380 Sentry Parkway, Post Office Box 3031, Blue Bell, Pennsylvania 19422-0754. Defendants collectively are referred to herein as "PMA." 3. Caretti is a masonry subcontractor with employees located in Pennsylvania and Maryland. 4. PMA is an insurance company licensed to issue workers compensation insurance policies in the Commonwealth of Pennsylvania and the State of Maryland. The Insurance Policy 5. On or about January 14, 1998, PMA issued a. Workers Compensation and Employers Liability Insurance Policy ("Policy") to Caretti. A true and correct copy of the Policy is incorporated herein, made a part hereof, and attached hereto as Exhibit A. 2 6. Caretti is one of the insureds on the Policy. (Policy, Information Page, Item 1.) 7. The Policy was in effect from January 1, 1998, through January 1, 1999, at 12:01 a.m. Standard Time. (Policy, Information Page, Item 2.) 8. Pursuant to Part One of the Policy, PMA agreed to pay on behalf of Caretti any "benefits" which Caretti may have been required to pay under the workers compensation law due to "bodily injury by accident or bodily injury by disease." (Policy, Part One, ¶ A-B.) 9. The Policy required PMA to investigate and defend claims on behalf of Caretti. Specifically, the Policy provides as follows: "[PMA has] the right and duty to defend at our [PMA's] expense any claim, proceeding or suit against [Caretti] for the benefits payable by this insurance. We [PMA] have the right to investigate and settle these claims, proceedings or suits." (Policy, Part One, Paragraph C.) 10. Caretti has complied with all the terms of the Policy and has paid all the premiums as determined by PMA. The Worker's Compensation Claim 11. In June, 1998, Theodore Parker ("Parker"), a Caretti employee, was working as a mason tender at one of Caretti's masonry projects ("Project") located in Maryland. 3 12. On June 5, 1998, Parker claims to have suffered an injury to his back while working on the Project. On June 11, 1998, he filed a claim ("Claim") against Caretti with the Maryland Workers' Compensation Commission for workers' compensation benefits. 13. Parker's claim consisted of the following allegations: (a) Parker was working as a mason tender for Caretti on the Project on June 5, 1998; (b) Parker's duties included mixing cement for the masons, and carrying 100 pound bags of cement to the cement mixer; (c) While Parker was carrying a 100 pound bag of cement, he slipped on some sand, fell on one knee, and injured his back. 14. On or about June 22, 1998, Caretti contacted IPMA and indicated that it had discussed Parker's alleged injury with other workers on the Project, and learned the following: (a) On the day of the alleged injury, Parker was working as a mason tender which involved supplying mortar and bricks to the masons working on a wall; (b) Parker was not working at the cement mixer nor was he required (nor did he) carry any bags of cement; (c) John Papetti ("Papetti"), another Caretti employee, was working at the cement mixer and Papetti was responsible for carrying the bags of cement to the mixer; (d) Charles "Chuck" Kline ("Kline"), Caretti's foreman on the Project, confirmed that Papetti carried the bags of cement to the cement mixer, and Kline never directed Parker nor saw Parker carry any bags of cement; 4 (e) Caretti had several other employees on the Project who did not see Parker carry any bags of cement to the cement mixer; (f) Parker offered no witnesses of his alleged accident; (g) The Project was "open" in the sense that the Caretti employees on the Project could see each other working. 15. Throughout June and July, 1998, PMA continued to deny Parker's claim. 16. On July 24, 1998, PMA forwarded its file regarding Parker's claim to John Rafe ("Rafe"), an attorney with the law firm of Ticer & Associates located in Hunt Valley, Maryland. Along with the file, PMA forwarded a notice regarding the hearing date which had been scheduled for September 24, 1998. 17. Rafe made his initial contact with Caretti on September 8, 1998, approximately six weeks after he had received the file from PMA. A true and correct copy of Rafe's "contact" letter is attached hereto as Exhibit: B. 18. On or about September 16, 1998, Rafe subpoenaed documents from Nationwide Insurance Company regarding a pre-existing injury to Parker's back. 19. On September 21, 1998, Rafe attempted to serve a subpoena upon Papetti for the hearing on September 24, 1998; however, the process server returned the subpoena indicating that Papetti did not reside at the address. 20. Mr. Rufe returned the subpoena to Caretti indicating the process server could not find Papetti at the address; however, Rafe made no further efforts to locate Papetti 5 such as hiring a private investigator or conducting a search through the United States Postal Service, or even looking in the telephone directory. 21. At the first hearing on September 24, 1998, Caretti sent two eye witnesses, Chuck Kline and Brad Weaver, to testify on behalf of Caretti. Rufe did not discuss the case with either witness either prior to or at the hearing. 22. At the time of the first scheduled hearing, Rufe, without informing the aforementioned witnesses or Caretti, requested a continuance because he had not received the documents from Nationwide Insurance regarding the prior injury to Parker's back. 23. The Commissioner presiding over the matter granted the continuance, and Rufe left the hearing without discussing the case with either Kline or Weaver, nor did he inform them that the case had been continued. 24. On or about October 21, 1998, Parker's counsel requested the Commission to schedule a new hearing date. 25. The Commission scheduled a second hearing in the matter for October 28, 1998. 26. On the morning of October 28, 1998, the scheduled second hearing date, Rufe contacted Kline for the first time since the case was turned over to PMA and requested him to attend the hearing later that day. 6 27. Kline, at the time, was supervising several employees on a Caretti project and was unable, with effectively no prior notice, to leave the project in order to attend the hearing. 28. Rufe proceeded to the hearing without any witnesses on behalf of Caretti. 29. Rufe did not request a continuance at or during the hearing on October 28, 1998. 30. Shortly after the conclusion of the hearing, the Commissioner ruled in favor of Parker and granted workers' compensation benefits to him. Calculation of Premiums and the Experience Modification Factor 31. PMA agreed to provide to Caretti workmen's compensation insurance. In return, Caretti agreed to pay to PMA insurance premiums. 32. PMA calculates the "base" amount of the insurance premium, then multiplies the base amount by the experience modification factor ("'MOD") to arrive at the final amount of the premium. The MOD is calculated using a number of factors including, an employer's history of claims. 33. The MOD will increase or decrease a company's insurance premiums depending upon how high or low it is. A MOD of 1.00 will not change the premium, whereas a MOD of .90 will provide an employer with a ten percent (10%) discount on the amount of the premium, and a MOD of 1.10 will increase an employer's premium by ten percent (10%). 7 34. Although a few states use their own system of calculating the MOD, Maryland and the vast majority of states rely upon the National Council on Compensation Insurance, Ina ("NCCP') located in Boca Raton, Florida, to calculate an employer's MOD. 35. NCCI arrives at a company's MOD in the following manner (which it did for Caretti): (a) On or before June 30 of each year, Caretti (the insured company in this case) provides PMA, its insurance carrier, with a list of all employees injured while working for Caretti during the previous three (3) calendar years. (b) Parker's injury in June, 1998, was reported (for purposes of calculating Caretti's MOD) on or before June 30, 1999, along with any injuries to other Caretti employees which may have occurred during calendar year 1998. (c) For the purposes of calculating Caretti's MOD in Maryland, PMA then reported Caretti's injuries in Maryland to NCCI. 36. NCCI, upon receipt of PMA's report and on behalf of the insurance industry, calculated Caretti's MOD and provided this information to Caretti and PMA. 37. PMA then calculated Caretti's final insurance premium for the upcoming year by multiplying the "base" premium set by PMA by the MOD provided by NCCI. 8 38. Because Parker's alleged injury was reported in June, 1999, it was not "factored" into Caretti's MOD (and, therefore, insurance premiums) until calendar year 2000. 39. In calculating an employer's MOD, NCCI relies upon injuries from the three (3) previous reporting periods. Consequently, an employee's injury or "alleged injury" will affect an employer's MOD for three years. 40. In the event PMA either attributes or fails to attribute a particular injury to Caretti, it can submit a "correction" to NCCI which may affect the MOD by either lowering or increasing it. A change in the MOD will, in turn, raise or lower the premium charged to Caretti for its insurance coverage. 41. In the event a correction lowers a premium, PMA then refunds the excess portion of the premium to the employer (in this case, Caretti). 42. In this case, Parker's alleged injury has resulted in an increase in Caretti's MOD for 2000, 2001 and 2002. 43. As a result of Caretti's increased MOD, Caretti has paid significantly higher workmen's compensation insurance premiums to PMA in years 2000, 2001, 2002, and will pay higher premiums in 2003.1 1For purposes of reporting periods, Caretti switched from a calendar year to a fiscal year reporting period in 2002, therefore, the final year in which Caretti will pay increased premiums on account of Parker's injury is 2003. 9 COUNTI BREACH OF CONTRACT 44. Caretti hereby incorporates paragraphs 1 through 43 of this Compliant as though set forth here at length. 45. PMA failed to adequately defend Caretti as required by the Policy in the following respects: (a) PMA's counsel failed to contact Caretti to begin preparation of the case until approximately three weeks prior to the hearing; (b) PMA's counsel failed to request the documents regarding Parker's prior injury in order to have them in hand during the first hearing on September 24, 1998; (c) PMA's counsel failed to inform Caretti of the reasons causing the first hearing to be continued; (d) PMA's counsel failed to contact any Caretti witness until the morning of the second scheduled hearing; (e) PMA failed to offer any defenses on the part of Caretti; (f) PMA failed to keep Caretti informed as to the status of the case; (g) PMA failed to satisfy the fiduciary obligations which it assumed and owed to Caretti. 46. PMA failed to conduct any investigation as contemplated by the Policy in the following respects: (a) PMA failed to conduct any search to locate John Papetti; (b) PMA's counsel failed to interview any Caretti witnesses in person, and failed to interview any witnesses prior to the day of the hearing; 10 (c) PMA failed to investigate the possibility of settlement. 47. Had PMA properly investigated Parker's clairn, PMA would have discovered sufficient information to successfully defeat Parker's claim against Caretti. 48. As a result of PMA's breach of the Policy in the handling of Parker's claim, Caretti's insurance premiums for workers' compensation insurance have increased significantly on account of an increase in Caretti's MOD. WHEREFORE, Plaintiff, Caretti, Inc., respectfully requests this Court to enter an Order against the Defendants, Pennsylvania Manufacturers' Association Insurance Company, Manufacturers Alliance Insurance Company, Pennsylvania Manufacturers Indemnity Company, and the Mid-Atlantic States Casualty Company, directing PMA to do the following: (a) Assume all liability for Parker's damages, including, without limitation, refunding all funds paid to PMA from Caretti, Inc., in the form of increased premiums on account of Parker's claim; (b) Submit a correction to the National Council on Compensation Insurance, Inc., which correction effectively deletes Parker's injury from the calculation of Caretti's experience modification factor. (c) Recalculate Caretti's insurance premiums for years 2000, 2001, 2002, and any subsequent years, and direct PMA to refund to Caretti any and all increases in premiums it was required to pay to PMA due to the increase in Caretti's premiums on account of Parker's claim since 2000, together with interest, costs and attorneys fees incurred by Caretti in this matter. 11 (d) Any and all such further relief as this Court deems appropriate. COUNT H BREACH OF FIDUCIARY DUTY 49. Caretti hereby incorporates paragraphs 1 through 48 of this Complaint as though set forth here at length. 50. As a fact, an insurer has a fiduciary responsibility to an insured. 51. As a fact, an insurer owes an affirmative duty to act in good faith and with due care in representing the interests of its insureds on all claims brought against its insureds by third parties. 52. As a fact, an insurer owes a duty to investigate all claims filed against its insured by third parties. 53. PMA failed to adequately investigate Parker's claim against Caretti in at least the following respects: (a) PMA failed to conduct any search to locate John Papetti; (b) PMA's counsel failed to interview any Caretti witnesses in person, and failed to interview any witnesses prior to the day of the hearing; (c) PMA failed to investigate the possibility of settlement. 54. PMA failed to adequately defend Caretti in the following respects: 12 (a) PMA's counsel failed even to contact Caretti to begin preparation of the case until approximately three weeks prior to the hearing; (b) PMA's counsel failed to request the documents regarding Parker's prior injury in order to have them in hand during the first hearing on September 24, 1998; (c) PMA's counsel failed to inform Caretti why the first hearing was continued; (d) PMA's counsel failed to contact any of Caretti's witnesses until the actual morning of the continued hearing; (e) PMA failed and refused to offer any defenses on the part of Caretti; (f) PMA failed and refused to keep Caretti informed as to the status of the case so that Caretti could participate in the preparation of Caretti's defense. 55. PMA's failure to properly investigate and defend Caretti constituted breaches of its fiduciary duty owed to Caretti. 56. PMA failed to act in good faith and with due care in representing the interests of its insured, Caretti. WHEREFORE, Plaintiff, Caretti, Inc., respectfully requests this Court to enter an Order against the Defendants, Pennsylvania Manufacturers' Association Insurance Company, Manufacturers Alliance Insurance Company., Pennsylvania Manufacturers Indemnity Company, and the Mid-Atlantic States Casualty Company, directing PMA to do the following: (a) Assume all liability for Parker's awards and damages, including, without limitation, refunding all funds paid to PMA from Caretti, Inc., in the form of increased premiums on account of Parker's claim; 13 (b) Submit a correction request to the National Council on Compensation Insurance, Inc., which correction effectively deletes Parker's injury from the calculation of Caretti's experience modification factor, and ensure that such correction is made effective. (c) Recalculate Caretti's insurance premiums for years 2000, 2001, 2002, and any subsequent years, and direct PMA to refund to Caretti any and all increases in premiums it was required to pay to PMA due to the increase in Caretti's premiums on account of Parker's claim since 2000; and (d) Any and all such further relief as this Court deems appropriate. DATED: December 4, 2002 Of Counsel BECKLEY & MADDEN 212 North Third Street Post Office Box 11998 Harrisburg, Pennsylvania 17108-1998 (717) 233-7691 Respectfully submitted Thomas A. eckle, squire Thomas S. Beckley, Esquire Attorneys for Plaintiff, Caretti, Inc. 14 °rom: Gregory R. Hess To: Thomas S. Beddey Date: 1213/2002 Time: 5:21:28 PM Pape 2 of 2 DEC- 3-02 TUE 12 :SS BQak I ow & MCL66e , P. 03 vERU`XA I-ON I, Gregory R. Hess, hereby verify that 1 am an adult individual; that I am the president of Caretti, Inc.; that l am authorized to make this statement on behalf of Caretti, Inc.; that T have read the foregoing docu,ncnt; and that the facts set forth in the foregoing document are true to the best of my knowledge, information and belief. I understand that false statements herein are made subject to the penalties of] 8 Pa.C.S. § 4904 relating to unsworn falsification to authorities. Caretti, IInc. [3 Gregi S, en EXHIBIT A . S s !HE PMA3, GROUP stcause the cost ® of protzcilon must be coratroilea? WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY f . THE MA. GROUP Pennsylvania Manufacturers' Association Insurance Company l Manufacturers Alliance Insurance Company Pennsylvania Manufacturers Indemnity Company Mid-Atlantic States Casualty Company 380 Sentry Parkway, P.O. Box 3031, Blue Bell, Pik 19422-0754 In return for the payment of the premium and subject to all terms of this policy, we agree with you as follows: GENERAL SECTION A. The Policy This policy includes at its effective date the Information Page and all endorsements and schedules listed there. It is a contract of insurance between you (the employer named in Item 1 of the Information Page) and us (the insurer named on the Information Page) r?+ly agree ments retailing to this insurance are stated in this polio. terms of this policy may not be changed or waived except by endorsement issued by us to be pan of this policy. B. Who Is Insured You are insured if you are an employer named in Item 1 of the Informa- tion Page. If that employer is a partnership, and if you are one of its partners, you are insured, but only in your capacity as an employer of the partnership's employees. C. Workers Compensation Law Workers Compensation Law means the workers or workmen's com- pensation law and occupational disease law of each state or terri. tory named in Item 3.A. of the Information Page. It includes any amendments to that law which are in effect during the policy period. It does not include any federal workers or workmen's compensation law, any federall occupational disease law or the provisions of any law that provide nonoccupational disability benefits. D. State State means any state of the United States of America, and the District of Columbia. E. Locations This policy covers all of your workplaces listed in Items 1 or 4 of the Information Page; and it covers all other workplaces in Item 3.A. states unless you have other insurance or are self-insured for such workplaces. PART ONE - WORKERS COMPENSATION INSURANCE A. How This Insurance Applies This workers compensation insurance applies to bodily injury by acci- dent or bodily injury by disease. Bodily injury includes resulting death. 1. Bodily injury by accident must occur during the policy period. 2. Bodily injury by disease must be caused or aggravated by the condi- tions of your employment. The employee's last day of last exposure to the conditions causing or aggravating such bodily injury by dis- ease must occur during the policy period. B. We Will Pay We will pay promptly when due the benefits required of you by the workers compensation law. C. We Will Defend We have the right and duty to defend at our expense any claim, proceeding or suit against you for benefits payable by this insurance. We have the right to investigate and settle these claims, proceedings or suits. We have no duty to defend a claim, proceeding or suit that is not covered by this insurance. D. We Will Also Pay We will also pay these costs, in addition to other amounts payable under this insurance, as part of any claim, proceeding or suit we defend: 1, reasonable expenses incurred at our request, but not loss of earnings: 2. premiums for bonds to release attachments and for appeal bonds in bond amounts up to the amount payable under this insurance; 3. litigation costs taxed against you; 4. interest on a judgment as required by law until we offer the amount due under this insurance; and 5. expenses we incur. E. Otherlnsurance We will not pay more than our share of benefits and costs covered by this insurance and other insurance or self-insurance. Subject to any limits of liability that may apply, all shares will be equal until the loss is paid. If any insurance or self-insurance is exhausted, the shares of all remaining insurance will be equal until the loss is paid. F. Payments You Must Make You are responsible for any payments in excess of the benefits regu- larly provided by the workers compensation law including those required because: 1. of your serious and willful misconduct; 2. you knowingly employ an employee in violation of law: 3. you fail to comply with a health or safety law or regulation; or 4. you discharge, coerce or otherwise discriminate against any employee in violation of the workers compensation law. If we make any payments in excess of the benefits regularly provided by the workers compensation law on your behalf, you will reimburse us promptly. G. Recovery From Others We have your rights, and the rights of persons entitled to the benefits of this insurance. to recover our payments from anyone liable for the injury. You will do everything necessary to protect those rights for us and to help us enforce them. H. Statutory Proviisions These statements apply where they are required by law. 1. As between an injured worker and us, we have notice of the injury when you have notice. 2. Your default or the bankruptcy or insolvency of you or your estate will not relieve us of our duties under this insurance after an injury occurs. 3. We are directly and primarily liable to any person entitled to the benefits payable by this insurance. Those persons may enforce our duties: so may an agency authorized by law. Enforcement may be against us or against you and us. 4. Jurisdiction over you is jurisdiction over us for purposes of the workers compensation law. We are bound by decisions against you under that law, subject to the provisions of this policy that are not in conflict with that law. 5. This insurance conforms to the parts of the workers compensa- tion law that apply to: a. benefits payable by this insurance: or b. special taxes, payments into security or other special funds, and assessments payable by us under that law. 6. Terms of this insurance that conflict with the workers compensa- tion law are changed by this statement to conform to that law. Nothing in these paragraphs relieves you of yourduties under this policy. PART TWO - EMPLOYERS LIABILITY INSURANCE A. How This Insurance Applies 1. The bodily injury must arise out of and in the course of the This employers liability insurance applies to bodily injury by accident injured employee's employment by you. or bodily injury by disease. Bodily injury includes resulting death. 2. The employment must be necessary or incidental to your work in ? I This space is for the attachment of the Information Page as in the policy provided, and when so attached, forms a part of the policy. a state or territory listed in Item 3.A. of the Information Page. 3. Bodily injury by accident must occur during the policy period. 4. Bodily injury by disease must be caused or aggravated by the conditions of your employment. The employee's last day of last exposure to the conditions causing or aggravating such bodily injury by disease must occur during the policy period. 5. If you are sued, the original suit and any related legal actions for damages for bodily injury by accident or by disease must be brought in the United States of America, its territories or possessions, or Canada. We Will Pay We will pay all sums you legally must pay as damages because of bodily injury to your employees, provided the bodily injury is covered by this Employers Liability Insurance. The damages we will pay, where recovery is permitted by law, includes I1. for damages: you are liable to a third party by reason of a claim or suit against you by that third party to recover the damages claimed against such third party as a result of injury to your employee; 2. for care and loss of services; and 3. for consequential bodily injury to a spouse, child, parent, brother or sister of the injured employee; provided that these damages are the direct consequence of bodily injury that arises out of and in the course of the injured employee's employment by you; and 4. because of bodily injury to your employee that arises out of and in the course of employment, claimed against you in a capacity other than as employer. Exclusions This insurance does not cover: 1. liability assumed under a contract. This exclusion does not apply to a warranty that your work will be done in a workmanlike manner; 2. punitive or exemplary damages because of bodily injury to an employee employed in violation of law; 3. bodily injury to an employee while employed in violation of law with your actual knowledge or the actual knowledge of any of your executive officers; 4, any obligation imposed by a workers compensation, occupational disease, unemployment compensation, or disability benefits law, or any similar law; 5. bodily injury intentionally caused or aggravated by you; 6. bodily injury occurring outside the United States of America, its territories or possessions, and Canada. This exclusion does not apply to bodily injury to a citizen or resident of the United States of America or Canada who is temporarily outside these countries; 7. damages arising out of coercion, criticism, demotion, evalua- tion, reassignment, discipline, defamation, harassment, humiliation, discrimination against or termination of any employee, or any personnel practices, policies, acts or omissions; 8. bodily injury to any person in work subject to the Longshore and Harbor Workers'Compensation Act (33 USC Sections 901-950), the Nonappropriated Fund Instrumentalities Act (5 USC Sections 8171-8173), the Outer Continental Shelf Lands Act (43 USC Sections 1331-1356), the Defense Base Act (42 USC Sections 1651-1654), the Federal Coal Mine Health and Safety Act of 1969 (30 USC Sections 901-942), any other federal workers or workmen's compensation law or other federal occupa - tional disease law, or any amendments to these laws; 9. bodily injury to any person in work subject to the Federal Employ- ers' Liability Act (45 USC Sections 51-60), any other federal laws obligating an employer to pay damages to an employee due to bodily injury arising out of or in the course of employment, or any amendments to those laws; 10. bodily injury to a master or member of the crew of any vessel; B. C. 11, fines or penalties imposed for violation of federal or state law; and 12. damages payable under the Migrant and Seasonal Agricultural Worker Protection Act (29 USC Sections 1801.1872) and under any other federal law awarding damages for violation of those laws or regulations issued thereunder, and any amendments to those laws. 0. We Will Defend We have the right and duty to defend, at our expense, any claim, proceeding or suit against you for damages payable by this insurance. We have the right to investigate and settle these claims, proceedings and suits. We have no duty to defend a claim, proceeding or suit that is not cover- ed by this insurance. We have no duty to defend or continue defending after we have paid our applicable limit of liability under this insurance. E. We Will Also Pay We will also pay these costs, in addition to other amounts payable under this insurance, as pan of any claim, proceeding, or suit we defend: 1. reasonable expenses incurred at our request, but not loss of earnings; 2. premiums for bonds to release attachments and for appeal bonds in bond amounts up to the limit of our liability under this insurance; 3. litigation costs taxed against you; 4. interest on a judgment as required by law until we offer the amount due under this insurance; and 5. expenses we incur. F. Other Insurance We will not pay more than our share of damages and costs covered by this insurance and other insurance or self-insurance. Subject to any limits of liability that apply, all shares will be equal until the loss is paid. If any insurance or self-insurance is exhausted, the shares of all remaining insurance and self-insurance will be equal until the loss is paid. G. Limits of Liability Our liability to pay for damages is limited. Our limits of liability are shown in Item 3.B. of the Information Page. They apply as explained below. 1. Bodily Injury by Accident. The limit shown for 'bodily injury by accident-each accident' is the most we will pay for all damages covered by this insurance because of bodily injury to one or more employees in any one accident. A disease is not bodily injury by accident unless it results directly from bodily injury by accident. 2. Bodily Injury by Disease. The limit shown for 'bodily injury by disease-policy limit' is the most we will pay for all damages cover- ed by this insurance and arising out of bodily injury by disease, regardless of the number of employees who sustain bodily injury by disease. The limit shown for 'bodily injury by disease-each employee' is the most we will pay for all damages because of bodily injury by disease to any one employee. Bodily injury by disease does not include disease that results directly from a bodily injury by accident. 3. We will not pay any claims for damages after we have paid the applicable limit of our liability under this insurance. H. Recovery From Others We have your rights to recover our payment from anyone liable for an injury covered by this insurance. You will do everything neces- sary to protect those rights for us and to help us enforce them. 1. Actions Against Us There will be no right of action against us under this insurance unless: 1. You have complied with all the terms of this policy; and 2. The amount you owe has been determined with our consent or by actual trial and final judgment. This insurance does not give anyone the right to add us as a defendant in an action against you to determine your liability. The bankruptcy or insolvency of you or your estate will not relieve us of our obligations under this Part. PART THREE - OTHE A. How This Insurance Applies 1. This other states insurance applies only it one or more states are shown in Item 3.C. of the Information Page. 2. If you begin work in any one of those states after the effective date of this policy and are not insured or are not self-insured for such work, all provisions of the policy will apply as though that state were B. listed in Item 3.A. of the Information Page. 3. We will reimburse you for the benefits required by the workers R STATES INSURANCE compensation law of that state if we are not permitted to pay the benefits directly to persons entitled to them. 4. If you have work on the effective date of this policy in any state not listed in Item 3.A. of the Information Page, coverage will not be afforded for that state unless we are notified within thirty days. Notice Tell us at once if you begin work in any state listed in Item 3.C. of the Information Page. PART FOUR - YOUR DUTIES IF INJURY OCCURS Tell us at once if injury occurs that may be covered by this policy. Your othe rduties are listed here. 1. Provide for immediate medical and other services required by the workers compensation law. 2. Give us or our agent the names and addresses of the injured persons and of witnesses and other information we may need. 3. Promptly give us all notices, demands and legal papers related to the injury, claim, proceeding or suit. 4. Cooperate with us and assist us, as we may request, in the invest- igation, settlement or defense of any claim. proceeding or suit. 5. Do nothing after an injury occurs that would interfere with our right to recover from others. 6. Do not voluntarily make payments, assume obligations or incur expenses, except at your own cost. Ir V V PART FIVE - PREMIUM A. Our Manuals All premium for this policy will be determined by our manuals of rules, rates, rating plans and classifications. We may change our manuals and apply the changes to this policy it authorized by law or a govem- mental agency regulating this insurance. 0. classifications Item 4 of the Information Page shows the rate and premium basis for certain business or work classifications. These classifications were assigned based on an estimate of the exposures you would have during the policy period. If your actual exposures are not properly described by those classifications, we will assign proper classifica- tions, rates and premium basis by endorsement to this policy. C. Remuneration Premium for each work classification is determined by multiplying a rate times a premium basis. Remuneration is the most common premium basis. This premium basis includes payroll and all other remunera- tion paid or payable during the policy period for the services of: 1. all your officers and employees engaged in work covered by this policy; and 2. all other persons engaged in work that could make us liable under Part One (Workers Compensation Insurance) of this policy. If you do not have payroll records for these persons, the contract price for their services and materials may be used as the premium basis. This paragraph 2 will not apply if you give us proof that the employers of these persons lawfully secured their workers compensation obligations. D. Premium Payments You will pay all premium when due. You will pay the premium even if part or all of a workers compensation law is not valid. E. Final Premium The premium shown on the Information Page, schedules, and endorse- ments is an estimate. The final premium will be determined after this' policy ends by using the actual, not the estimated, premium basis and the proper classifications and rates that lawfully apply to the business and work covered by this policy. If the final premium is more than the premium you paid us, you must pay us the balance. If it is less, we will refund the balance to you. The final premium will not be less than the highest minimum premium for the classifications covered by this policy. If this policy is canceled, final premium will be determined in the fol- lowing way unless our manuals provide otherwise: 1. If we cancel, final premium will be calculated pro rata based on the time this policy was in force. Final premium will not be less than the pro rata share of the minimum premium. 2. If you cancel, final premium will be more than pro rata; it will be based on the time this policy was in force, and increased by our short- rate cancelation table and procedure. Final premium will not be less than the minimum premium. F. Records You will keep records of information needed to compute premium. You will provide us with copies of those records when we ask for them. G. Audit You will let us examine and audit all your records that relate to this policy. These records include ledgers, journals, registers, vouchers, contracts, tax reports, payroll and disbursement records, and pro- grams for storing and retrieving data. We may conduct the audits dur- ing regular business hours during the policy period and within three years after the policy period ends. Information developed by audit will be used to determine final premium. Insurance rate service organizations have the same rights we have under this provision. PART SIX - CONDITIONS; A. Inspection We have the right, but are not obliged to inspect your workplaces at any time. Our inspections are not safety inspections. They relate only to the insurability of the workplaces and the premiums to be charged. We may give you reports on the conditions we find. We may also recommend changes. While they may help reduce losses, we do not undertake to perform the duty of any person to provide for the health or safety of your employees or the public. We do not warrant that your workplaces are safe or healthful or that they comply with laws, regulations, codes or standards. Insurance rate service organizations have the same rights we have under this provision. B. Long Term Policy If the policy period is longer than one year and sixteen days, all provisions of this policy will apply as though a new policy were issued on each annual anniversary that this policy is in force. C. Transfer of Your Rights and Duties Your rights or duties under this policy may not be transferred without our written consent. If you die and we receive notice within thirty days after your death, we will cover your legal representative as insured. D. Cancellation 1. You may cancel this policy. You must mail or deliver advance written notice to us stating when the cancelation is to take effect. 2. We may cancel this policy. We must mail or deliver to you not less than ten days advance written -notice stating when the cancel- ation is to take effect. Mailing that notice to you at your mail- ing address shown in Item 1 of the Information Page will be sufficient to prove notice. 3. The policy period will end on the day and hour stated in the cancelation notice. 4. Any of these provisions that conflict with a law that controls the cancelation of the insurance in this policy is changed by this statement to comply with the law. E. Sole Representative The insured first named in Item 1 of the Information Page will act on behalf of all insureds to change this policy, receive return premium, and give or receive notice of cancelation. F. Disposition of IProfifs Article A Section 1 of our By-Laws provides for the distribution of profits as follows: 'The Board of Directors, after setting aside such sums as may be necessary under the law or in the judgment of the Board of Directors for contingency funds, may apportion among the policy- holders such sums as the Board of Directors shall deem to be in the best interest of the Company. Such apportionment among the policyholders shall be made in such manner as the Board of Directors shall from time to time direct. In connection with such apportionment, the Board of Directors may make reasonable class- ification of policies or lines of insurance and may determine what policies or liners of insurance and the extent to which policyholders may participate in the profits of the Comparry.' In 39thlts8 311114trtDf, the COMPANY has caused this policy to be signed by its President and a duty authorized signatory agent of the Company, at Blue Bell, PA. Senior Vice President and President and Chief Underwriting Officer Chief Operating Officer PC-196 (3/96) Includes copyright material of the National Council on Compensation Insurance used with its permission WC 00 00 00 (Ed 4/92) !`n... •.:•.M 1001 NMinnnl !`nnnnil nn rmm?pncarinn Inm vArlr:R I PENNSYLVANIA MANUFACTURERS INDEMNITY COMPANY FED. ID NO. 23-1552288 INFORMATION Do - 50/95 HARRISBURG Item 1. Name and Address of Insured CARETTI INC S/OR CARETTI REAL ESTATE &/OR COMMONWEALTH MASONRY PO BOX 331 CAMP HILL PA 17011 THE PMA GROUP PAGE NCC1 NO. 21288 Policy No. 209801 12-24-28-6 Prior Policy No. 209701 12-24-28-6 PRODUCER BLACK, DAVIS G SHUE AGENCY, INC. 2019 MARKET STREET HARRISBURG PA 17103 Named Insured Is: ? Individual ? Partnership ® Corporation ? Other Item 2. The policy period is from 01/01/98 to O 1 /01 /99 ('12:01 A.M. Standard Time at the insured's mailing address. Item 3. A. Workers Compensation Insurance: Pan One of the policy applies to the Workers Compensation Law of the states listed here: MD 19 NY 31 PA 37 B. Employers Liability Insurance: Part Two of the policy applies to work in each state listed in item 3.A. The limits of our liability under Part Two are: Bodily Injury by Accident $ 100,000 each accident Bodily Injury by Disease $ 500,000 policy limit Bodily Injury by Disease $ 100,000 each employee C. Other States Insurance: Part Three of the policy applies to the states, if any, listed here: all states except Nevada, North Dakota, Ohio, Washington. West Virginia and Wyoming. D. This policy includes these endorsements and schedules: SEE EXTENSION OF INFORMATION PAGE Item 4. The premium for this policy will determined by our Manuals of Rules, Classifications, Rules and Rating Plans. All information required below is subject to verification and change by audit. Premium Basis Rate Per Code Total Estimated $100 of Estimated Annual Classifications Number Annual Remuneration Remuneration Premium STATE OF MARYLAND RISK ID No. 190362639 STATE OF NEW YORK RISK ID No. 190362639 STATE OF PENNSYLVANIA RISK ID NO. 1000000000 SEE EXTENSION OF INFORMATION PAGE - 19 - 31 - 37 Expense Constant $ 160 Total Estimated Annual Premium $ Minimum Premium $ 959.00 COLLECTED IN 37 Deposit Premium $ 92,555.00 141,171.00 233,726.oo TOTAL SURCHARGE $ TOTAL ESTIMATED COST $ 233,726.00 If indicated herein, interim adjustments of premium shall be made ANNUALLY Date of issue O 1 / 14/98 Countersigned (Authorized Agent) SEE THE EXTENSION OF INFORMATION PAGE(S) FOR THE DEVIATION APPLIED P0195-FMT7 (REV. 11/88) COPYRIGHT 1987 NATIONAL COUNCIL ON COMPENSATION INSURANCE WC 00 00 OIA I 04 Jp4WIF THE RNtA GROUP PENNSYLVANIA MANUFACTURERS INDE14NITY COMPANY EXTENSION OF INFORMATION PAGE POLICY NO. 209801 12-24-28-6 NAME OF INSURED CARETTI INC a/OR CARETTI REAL ESTATE &/OR COMM014WEALTH MASONRY ) )S ) C 00 Deposit Premium $ If indicated herein, interim adjustments of premium shall be made ANNUALLY SEE OTHER EXTENSION OF INFORMATION PAGE(S) P0205-FMT7 (REV 11/88) COPYRIGHT 1987 NATIONAL COUNCIL ON COMPENSATION INSURANCE WC 00 00 OIA Item 4. The premium for this Policy will be determined by our Manuals of Rules, Classifications, Rates and Rating Plans. All information required below is subject to verification and changed by audit. Premium Basis Rate Per Cafe Total Estimated $100 of Estimated Annual Classifications Number Annual Remuneration Remuneration Premium 04 THE MA.G OvP PENNSYLVANIA MANUFACTURERS INDEMNITY COMPANY EXTENSION OF INFORMATION PAGE POLICY NO. 209801 12-24-28-6 NAME OF INSURED CARETTI INC E/OR CARETTI REAL ESTATE L/OR COMMONWEALTH MASONRY Item 4. The premium for this policy will be determined by our Manuals of Rules. Classifications, Rates and Rating Plans. All information required below is subject to Verification and changed by audit. Premium Basis Rate Per Code Total Estimated $100 of Estimated Annual Classifications Number Annual Remuneration Remuneration Premium S If indicated herein, interim adjustments of premium shall be made ANNUALLY SEE OTHER EXTENSION OF INFORMATION PAGE(S) P0205-FM77 (REV 11/88) COPYRIGHT 1987 NATIONAL COUNCrL ON COMPENSATION INSURANCE WC 00 00 OIA ]Deposit Premium $ NEW YORK STATE ASSESSMENT 1 t THE PMAG OUP PENNSYLVANIA MANUFACTURERS INDEMNITY COMPANY EXTENSION OF INFORMATION PAGE POLICY NO. 209801 12-24-28-6 NAME OF INSURED CARETTI INC s/OR CARETTI REAL ESTATE s/OR COMMONWEALTH MASONRY Item 4. The premium for this policy will be determined by our Manuals of Rulcs, Classifications. Rates and Rating Plans. All information required below is subject to verification and changed by audit. Premium Basis Rate Per Code Total Estimated $100 of Estimated Annual Number Annual Remuneration Remuneration Premium STATE OF PENNSYLVANIA - 37 QUARRIES 051 30,000 4.66 1,398.00 CARPENTRY-DETACHED DWELLING 652 IF ANY 6.53 MASONRY 653 3,000,000 7.99 239,700.00 SALESMEN 951 150,000 .49 735.00 OFFICE 953 250,000 .23 575.00 EXPERIENCE MODIFICATION 9898 •935 226,651.00 S SCHEDULE MODIFICATION 9887 .750 56,663.00 C CONSTRUCTION CLASSIFICATION CREDIT - 6.0% 9046 10,199.00 C. PREMIUM DISCOUNT 18,778.00 Cf EXPENSE CONSTANT 0900 160.00 Premium $ 959.00 COLLECTED IN 37 Total Estimated Annual Premium $ Deposit Premium $ If indicated herein, interim adjustments of premium shall be made ANNUALLY SEE OTHER EXTENSION OF INFORMATION PAGE(S) P0205-FMT7 (REV 11188) COPYRIGHT 1997 NATIONAL COUNCIL ON COMPENSATION INSURANCE ,171.00 WC 000001A 04. JpSIF THE MA-GROUP PENNSYLVANIA MANUFACTURERS INDEMNITY COMPANY PREMIUM PAYMENT SCHEDULE Premium payments are payable and due to the Company on the dates indicated. Payment Method: MONTHLY 12 EQUAL INSTALLMENTS Date Due 01/01/98 02/01/98 03/01/98 04/01/98 05/01/98 06/01/98 07/01/98 08/01/98 09/01/98 10/01/98 11/01/98 12/01/98 PAYMENT PLAN CODE E I Type 19,479.00 RENEWAL INSTALLMENT 19,477.00 RENEWAL INSTALLMENT 19,477.00 RENEWAL INSTALLMENT 19,477.00 RENEWAL INSTALLMENT 19,477.00 RENEWAL INSTALLMENT 19,477.00 RENEWAL INSTALLMENT 19,477.00 RENEWAL INSTALLMENT 19,477.00 RENEWAL INSTALLMENT 19,477.00 RENEWAL INSTALLMENT 19,477.00 RENEWAL INSTALLMENT 19,477.00 RENEWAL INSTALLMENT 19,477.00 RENEWAL INSTALLMENT GROSS PREMIUM 233,726 POLICY NO. 209801 12-24-28-6 ISSUED TO CARETTI INC &/OR CAR17TTI REAL ESTATE s/OR COMMONWEALTH MASONRY ISSUED BY PENNSYLVANIA MANUFACTURERS INDEMNITY COMPANY Date issued 01/14/98 SEE THE EXTENSION OF INFORMATION__PAGE(S) FOR THE DEVIATION APPLIED P0010-FM7'7 (NEW 7163) C-165 THE PMA GROUP PENNSYLVANIA MANUFACTURERS INDEMNITY COMPANY EXTENSION OF INFORMATION PAGE ENDORSEMENT SCHEDULE POLICY NO. 209801 12-24-28-6 ISSUED TO CARETTI INC &/OR CARETTI REAL ESTATE &/OR COMMONWEALTH MASONRY Effective on and after O1 /01 /98 Item 3.1). This policy includes these endorsements and schedules: Endorsement Number Description WC 00 04 03 EXPERIENCE RATING MODIFICATION FACTOR ENDORSEMENT WC 00 04 06 PREMIUM DISCOUNT ENDORSEMENT WC 00 04 14 NOTIFICATION OF CHANGE IN OWNERSHIP ENDORSEMENT WC 19 04 01 MARYLAND CONSTRUCTION CLASSIFICATION PREMIUM REDUCTION PROGRAM ENDORSEMENT WC 19 06 01 MARYLAND CANCELLATION ENDORSEMENT WC 31 03 08 NEW YORK WORKERS' COMPENSATION WC 31 06 14 NEW YORK CONSTRUCTION CLASSIFICATION PREMIUM ADJUSTMENT WC 37 06 01 SPECIAL PA. ENDORSEMENT - INSPECTION OF MANUALS WC 37 06 03 PENNSYLV ANIA ACT 86-1986 ENDORSEMENT WC 99 06 11 RESIDENT AGENT COUNTERSIGNATURE ENDORSEMENT WC 99 06 19 RETENTIO N PLAN DIVIDEND PLAN ENDORSEMENT WC 99 06 27 MARYLAND RETENTION PREMIUM SUPPLEMENTAL ENDORSEMENT DATE OF ISSUE 01/14/98 POO70-FMT7 (REV 11188) COPYRIGHT 1997 NATIONAL COUNCIL ON COMPENSATION INSURANCE WC 00 00 OIA 04 THE PJMA GROUP WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY EXPERIENCE RATING MODIFICATION FACTOR ENDORSEMENT The premium for the policy will be adjusted by an experience rating modification factor. The factor was not available when the policy was issued. The factor, if any, shown on the Infor- mation Page is an estimate. We will issue an endorsement to show the proper factor, if different from the factor shown, when it is calculated. THIS ENDORSEMENT APPLIES TO THE FOLLOWING STATE(S): PENNSYLVANIA This endorsement changes the policy to which it is attached and is effective on the date issued unless otherwise stated. Effective date of this endorsement 01101198 This endorsement forms a part of POLICY NO. 209801 12-24-28-6 ISSUED TO CARETTI INC s/OR CARETTI REAL ESTATE E/OR COMMONWEALTH MASONRY ISSUED BY PENNSYLVANIA MANUFACTURERS INDEMNITY COMPANY POLICY DATED 01/01/98 01/01/99 Date issued 01/14/98 COPYRIGHT 1933 NATIONAL COUNCIL ON COMPENSATION INSURANCE P0174-FMT7 (REV. 05192) WC 00 04 03 04 WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY PREMIUM DISCOUNT ENDORSEMENT The premium for this policy and the policies if any, lasted in item 3 of the Schedule may be eligible for a discount. This endorsement shows your estimated discount in item 1 or 2 of the Schedule. The final calculation of premium discount will be determined by our manuals and your premium basis as determined by audit. Premium subject to retrospective rating is not subject to premium discount. Schedule 1. State MARYLAND Estimated Eligible Premium First Next $5,000 $95,000 2. Average percentage discount: 10.9 3. Other policies: Next $400,000 Balance 12.6 14.4 4. If there are no entries in items 1, 2 and 3, of the Schedule see the Premium Discount Endorsement attached to your policy number: This endorsement changes the policy to which it is attached and is effective on the date issued unless otherwise stated. Effective date of this endorsement 01/01/98 This endorsement forms a part of POLICY NO. 209801 12-24-28-6 ISSUED TO CARETTI INC b/OR CARETTI REAL ESTATE &/OR COMMONWEALTH MASONRY ISSUED BY PENNSYLVANIA MANUFACTURERS INDEMNITY COMPANY POLICY DATED 01/01/98 01/01/99 Date issued 01/14/98 COPYRIGHT 1933 NATIONAL COUNCIL ON COMPENSATION INSURANCE P0176-PM77 (REV. 05192) WC 00 04 06 1 04 WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY PREMIUM DISCOUNT ENDORSEMENT The premium for this policy and the policies if any, listed in item 3 of the Schedule may be eligible for a discount. This endorsement shows your estimated discount in item 1 or 2 of the Schedule. The final calculation of premium discount will be determined by our manuals and your premium basis as determined by audit. Premium subject to retrospective rating is not subject to premium discount. Schedule 1. State Estimated Eligible Premium NEW YORK First Next Next $5.000 $95,000 $400,000 Balance 2. Average percentage discount: 10.9 12.6 14.4 3. Other policies: 4. If there are no entries in items 1, 2 and 3, of the Schedule see the Premium Discount Endorsement attached to your policy number: This endorsement changes the policy to which it is attached and is effective on the date issued unless otherwise stated. Effective date of this endorsement 01/01/98 This endorsement forms a part of POLICY NO. 209801 12-24-28-6 ISSUED TO CARE:TTI INC VOR CARE:TTI REAL ESTATE L/OR COMMONWEALTH MASONRY ISSUED BY PENNSYLVANIA MANUFACTURERS INOEMNITY COMPANY POLICY DATED 01/01/98 01/01/99 Date issued 01/14/98 COPYRIGHT 1983 NATIONAL COUNCIL ON COMPENSATION INSURANCE P0176-FMT7 (REV. 05/92) WC 000406 . , 1 THE P- MA I' WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY PREMIUM DISCOUNT ENDORSEMENT The premium for this policy and the policies if any, listed in item 3 of the Schedule may be eligible for a discount. This endorsement shows your estimated discount in item 1 or 2 of the Schedule. The final calculation of premium discount will be determined by our manuals and your premium basis as determined by audit. Premium subject to :retrospective rating is not subject to premium discount. Schedule 1. State Estimated Eligible Premium PENNSYLVANIA First Next Next $5,000 $95,000 $400,000 Balance 2. Average percentage discount: 10.9 12.6 14.4 3. Other policies: 4. If there are no entries in items 1, 2 and 3, of the Schedule see the Premium Discount Endorsement attached to your policy number: This endorsement changes the policy to which it is attached and is effective on the date issued unless otherwise stated. Effective date of this endorsement 01/01/98 This endorsement forms a part of POLICY NO. 209801 12-24-28-6 ISSUED TO CARE:TTI INC &/OR CARE:TTI REAL ESTATE &/OR COMMONWEALTH MASONRY ISSUED BY PENNSYLVANIA MANUFACTURERS INDEMNITY COMPANY POLICY DATED 01/01/98 01/01/99 Date issued 01/14/98 COPYRIGHT 1983 NATIONAL COUNCIL ON COMPENSATION INSURANCE P0176-FMT7 (REV. 05/92) WC 00 04 06 04 **IF THE PIMAGROUP THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. NOTIFICATION OF CHANGE OF OWNERSHIP ENDORSEMENT Experience rating is mandatory for all eligible insureds. The experience rating modification factor, if any, applicable to this policy, may change if there is a change in your ownership or in that of one or more of the entities eligible to be combined with you for experience rating purposes. Change in ownership includes sales, purchases, other transfers, mergers, consolidations, dissolutions, formations of a new entity and other changes provided for in the applicable experience rating plan manual. You must report any change in ownership to us in writing within 90 days of such change. Failure to report such changes within this period may result in revision of the experience rating modification factor used to determine your premium. This endorsement changes the policy to which it is attached and is effective on the date issued unless otherwise stated. Effective date of this endorsement 01/01/98 This endorsement forms a part of POLICY NO 209801 12-24-28-6 ISSUED TO CARETTI INC &/OR CARETTI REAL ESTATE &/OR COMMONWEALTH MASONRY ISSUED BY PENNSYLVANIA MANUFACTURERS INDEMNITY COMPANY POLICY DATED 01/01/98 O1/ 99 DATE ISSUED 01/14/98 Via P0443-FMT7 (New 08/90) WC 00 04 14 (Ed. 07/90) THE PE AGROUP 04 IVO WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY MARYLAND CONSTRUCTION CLASSIFICATION PREMIUM REDUCTION PROGRAM ENDORSEMENT The premium for the policy may be reduced by the Maryland Construction Classification Premium credit factor. The factor was not available when the policy was issued. If you qualify, or if an estimated factor has been applied, we will issue an endorsement to show the proper premium reduction factor after it is calculated. This endorsement changes the policy to which it is attached and is effective on the date issued unless otherwise stated. Effective date of this endorsement 01/01/98 This endorsement forms a part of POLICY NO. 209801 12-24-28-6 ISSUED TO CARETTI INC VOR CARETTI REAL ESTATE s/OR COMMONWEALTH MASONRY ISSUED BY PENNSYLVANIA MANUFACTURERS INDEMNITY COMPANY POLICY DATED 01/01/98 01/01/99 Date issued 01/14/98 1992 National Council on Compensation ]nsumucc P2609-FMn (NEW 07193) WC 19 04 01 04 Jp*IF THE RMA GROUP WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY MARYLAND CANCELATION ENDORSEMENT This endorsement applies only to the insurance provided by the policy because Maryland is shown in item 3.A of the Information Page. The Cancelation Condition of the policy is replaced by this Condition: D. Cancelation 1. You may cancel this policy. You will mail or deliver advance written notice to us stating when the cancelation is to take effect. 2. We may cancel this policy. We will file with the Office of the Maryland Workmen's Compensation Commission, and mail by registered mail or deliver to you, not less that 30 days advance written notice stating when the cancelation is to take effect. Mailing this notice to you at your mailing address last known to us will be sufficient to prove notice. 3. The policy period will end on the day and hour stated in the cancelation notice. This endorsement changes the policy to which it is attached and is effective on the date issued unless otherwise stated. Effective Date of this Endorsement 01/01/98 This endorsement forms a part of POLICY NO. 209801 12-24-28-6 ISSUED TO CARE:TTI INC b/OR CARE:TTI REAL ESTATE VOR COMMONWEALTH MASONRY ISSUED BY PENNSYLVANIA MANUFACTURERS INDEMNITY COMPANY POLICY DATED 01/01/98 01/01/99 Date issued 01/14/98 COPYRIGHT 1983 NATIONAL COUNCIL ON COMPENSATION INSURANCE P0180-FMT7 (REV. 05192) WC 19 06 01 04 Jp*IF THE PM GROUP WORKERS COMPENSATION AND EMPLOUERS LIABILITY INSURANCE POLICY NEW YORK LIMIT OF LIABILITY ENDORSEMENT This endorsement applies only to the insurance provided by Part Two (Employers Liability Insurance) because New York is shown in item 3.A of the Information Page. We may not limit our liability to pay damages for which we become legally liable to pay because of bodily injury to your employees if the bodily injury arises out of and in the course of employment that is subject to and is compensable under the Workers Compensation Law of New York. This endorsement changes the policy to which it is attached and is effective on the date issued unless otherwise stated. Effective date of this endorsement 01/01/98 This endorsement forms a part of POLICY NO. 209801 12-24-28-6 ISSUED TO CARE:TT I I NC VOR CARE:TTI REAL ESTATE VOR COMMONWEALTH MASONRY ISSUED BY PENNSYLVANIA MANUFACTURERS INDEMNITY COMPANY POLICY DATED 01/01/98 01/01/99 Date issued 01/14/98 COPYRIGHT 1983 NATIONAL COUNCIL ON COMPENSATION INSURANCE P0395-FMT7 (REV. 07/92) ` WC 31 03 08 04 lp 4alF THE PM GSOUP WORKERS COMPENSATION AND EMPLOYERS LIA13ILITY INSURANCE POLICY NEW YORK CONSTRUCTION CLASSIFICATION PREMIUM ADJUSTMENT ENDORSEMENT The premium for this policy may be adjusted by a New York Construction Classification Premium Adjustment factor. The factor was not available when the policy was issued. If you qualify, we will issue an endorsement to show the premium adjustment factor after it is calculated. This endorsement changes the policy to which it is attached and is effective on the date issued unless otherwise stated. Effective date of this endorsement 01/01/98 This endorsement forms a part of POLICY NO. 209801 12-24-28-6 ISSUED TO CARETTI INC b/OR CARETTI REAL ESTATE VOR COM14ONWEALTH MASONRY ISSUED BY PENNSYLVANIA MANUFACTURERS INIIEMNITY COMPANY POLICY DATED Date issued 01/01/98 01/01/99 01/14/98 P2604-FMT7 (NEW 04193) WC 31 06 14 THE PMA GRCS UP WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY SPECIAL PENNSYLVANIA ENDORSEMENT INSPECTION OF MANUALS The manuals of rules, rating plans, and classifications are approved pursuant to the provisions of Section 654 of the Insurance Company Law of May 17, 1921, P.L. 652, as amended, and are on file with the Insurance Commissioner of the Commonwealth of Pennsylvania. This endorsement changes the policy to which it is attached and is effective on the date issued unless otherwise stated. Effective date of this endorsement 01/01/98 This endorsement forms a part of POLICY NO. 209801 12-24-28-6 ISSUED TO CARETTI INC s/OR CARETTI REAL ESTATE VOR COMMONWEALTH MASONRY ISSUED BY PENNSYLVANIA MANUFACTURERS INDEMNITY COMPANY POLICY DATED 01/01/98 01/01/99 Date issued 01/14/98 COPYRIGHT 1984 PENNSYLVANIA COMPENSATION RATING BUREAU P0237-FMT7 (REV. 08!92) WC 37 06 01 04 Iwo THE P.M.Q. GRO U P WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY PENNSYLVANIA ACT 86-1986 ENDORSEMENT NONRENEWAL, NOTICE OF INCREASE OF PREMIUM, and RETURN OF UNEARNED PREMIUM This endorsement applies only to the insurance provided by the policy because Pennsylvania is shown in Item 3.A. of the Information Page. The policy conditions are amended by adding the following regarding nonrenew•al, notice of increase in premium, and return of unearned premium. Nonrenewal 1. We may elect not to renew the policy. We will mail to each named insured, by first class mail, not less than 60 days advance notice stating when the nonrenewal will 1:ake effect. Mailing that notice to you at your mailing address last known to us will be sufficient to prove notice. 2. Our notice of nonrenewal will state our specific reasons for not renewing. 3. If we have indicated our willingness to renew, we will not send you a notice of nonrenewal. However, the policy will still terminate on its expiration date if: a. you notify us or the agent or broker who procured this policy that you do not want the policy renewed: or b. you fail to pay all premiums when due; or c. you obtain other insurance as a replacement of the policy. Notice of Increase in Premium 1. We will provide you with not less than 30 days advance notice of an increase in renewal premium of this policy, if it is our intent to offer such renewal. 2. The above notification requirement will be satisfied if we have issued a renewal policy more than 30 days prior to its effective date. 3. If a policy has been written or is to be written on a retrospective grating plan basis, the notice of increase in premium provision of this endorsement does not apply. P2651A FM77 (NEW 09/93) 1 OF 2 (see Next Pate) WC 37 06 03A Return of Unearned Premium 046 1. If this policy is canceled and there is unearned premium due you: a. If the Company cancels, the unearned premium will be returned to you within 10 business days after the effective date of cancellation. b. If you cancel, the unearned premium will be returned within 30 days after the effective date of cancellation. 2. Because this policy was written on the basis of an estimated premium and is subject to a premium audit, the unearned premium specified in la. and lb. above, if any, shall be returned on an estimated basis. Upon our completion of computation of the exact premium, an additional return premium or charge will be made to you within 15 days of the final computation. 3. These return or unearned premium provisions shall not apply if this policy is written on a retrospec- tive rating plan basis. This endorsement changes the policy to which it is attached and is effective on the date issued unless otherwise stated. Effective date of this endorsement 01/01/98 This endorsement forms a part of POLICY NO. 209801 12-24-28-6 ISSUED TO CARETTI INC E/OR CARETTI REAL ESTATE VOR COMMONWEALTH MASONRY ISSUED BY PENNSYLVANIA MANUFACTURERS INDEMNITY COMPANY POLICY DATED 01/01/98 01/01/99 Date issued 01/14/98 P265]B-FMT7 (NEW 09!95) 2 of 2 WC 37 06 03A . 04 WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY RESIDENT AGENT COUNTERSIGNATURE ENDORSEMENT This endorsement is issued for the State of MARYLAND State Premium 92 , 555 This is to certify that the resident agent's signature fixed hereto is the valid countersignature for the policy identified below as respects that portion of the Risk located in the State named herein. This endorsement changes the policy to which it is attached and is effective on the date issued unless otherwise stated. Effective date of this endorsement This endorsement forms a part of POLICY NO. ISSUED BY POLICY DATED Date issued Countersigned at 01/01/98 the ciffV of ^ 19 Resident Apni Address 209801 12-24-28-6 ISSUED TO CARETT I I NC s/OR CARETTI REAL ESTATE s/OR COMMONWEALTH MASONRY PENNSYLVANIA MANUFACTURERS INIDEMNITY COMPANY ot/ol/98 01/01/99 01/14/98 P0334-FMT7 (REV. 08/92) - WC 99 06 11 THE PM GROUP WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY RETENTION DIVIDEND PLAN E]vDORSEMENT It is agreed that the earned premium developed on this policy is subject to any dividend declared by the Board of Directors of the Company in accordance with the Rules of the Retention Dividend Plan afforded participating members. Dividends, by law, cannot be guaranteed and are subject to the judgment of the Board of Directors of the Company. A. Retention Premium Formula Other insurance policies may be combined with this policy to calculate the retention premium. If the policies provide insurance for more than one insured, the retention premium will be determined for all insureds combined, not separately for each insured. Any additional policies will be shown by endorsement to this policy. 1. Retention premium is determined as follows: (Retention Factor x Discounted Standard Premium) + (Incurred Losses x Loss Conversion Factor) x Tax Multiplier. 2. The retention factor varies depending on total discounted standard premium and the state generating the premium. This factor was computed initially upon an estimate of discounted standard premium and finally upon the actual discounted standard premium for such insurance. 3. The maximum retention premium is final discounted standard premium plus expense constant and is the most you will pay. 4. Incurred losses consist of losses and allocated loss adjustment expenses actually paid as well as a reserve for payment of future losses and allocated loss adjustment expenses. 5. Tax Multiplier varies by state and by Federal and non-Federal classifications. B. Premium Calculations and Payments 1. We will calculate the retention premium using all loss information we have as of a date 18 months after the inception date of the policy and annually thereafter. 2. After a calculation of retention premium, you and we may agree that it is the final calculation. No other calculation will be made unless there is clerical error in the final calculation. 3. After each calculation of retention premium, you will pay promptly the amount due us, or we will refund the amount due you. Each insured is responsible for the payment of all discounted standard premium and retention premium calculated under this endorsement. C. Work in Other States If any of the policies provide insurance in a state not listed at inception and if you begin work in that state during the rating plan period, this endorsement will apply to that insurance. P2585A-FMT7 (REV. 07!97) 1 OF 2 See Next Page WC 99 06 19 04 **IF THE PM GROUP SCHEDULE Discounted Standard Premium Minimum Retention Premium Factor Loss Conversion Factor Excess Loss Premium Factor (Loss Limitation is $ ) Retention Factor (Including ELPF) 50% $ 145,115$ or less RXTM 1.100 .000 •559 100% 150% 290,229$ 435,344 or more RXTM RXTM 1.100 1.100 000 .000 500 .441 This endorsement changes the policy to which it is attached and is effective on the date issued unless otherwise stated. Effective date of this endorsement 01/01/98 This endorsement forms a part of POLICY NO. 209801 12-24-28-6 ISSUED TO CARETTI INC L/OR CARETTI REAL ESTATE &/OR COMMONWEALTH MASONRY ISSUED BY PENNSYLVANIA MANUFACTURERS INDEMNITY COMPANY POLICY DATED 01/01/98 01/01/99 Date issued 01/14/98 P2596B-FMT7 (NEW 11/92) (2 OF 2) WC 99 06 19 I V This endorsement changes the Retention Premium Endorsement identified in the Schedule. The change applies only to the premium charged because Maryland is shown in item 3.A of the Information Page. WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY MARYLAND RETENTION PREMIUM SUPPLEMENTAL ENDORSEMENT Maryland standard premium will be reduced by a sum equal to the percentage shown in the Schedule for each $100 of remuneration and other premium basis. This amount is payable in addition to the retention premium. Schedule Retention Premium Endorsement: Percentage: 04 THE PMA GROUP 4 WC990619 This endorsement changes the policy to which it is attached and is effective on the date issued unless otherwise stated. Effective date of this endorsement O 1 /01 /98 This endorsement forms a part of POLICY NO. 209801 12-24-28-6 ISSUED TO CARETTI INC b/OR CARETTI REAL ESTATE b/OR COMMONWEALTH MASONRY ISSUED BY PENNSYLVANIA MANUFACTURERS INDEMNITY COMPANY POLICY DATED 01/01/98 01/01/99 Date issued 01/14/98 COPYRIGHT 1993 NATIONAL COUNCIL ON COMPENSATION INSURANCE P2589-FMT7 (NEW 11192) WC 99 06 27 04 THE PMA GROUP WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY RESIDENT AGENT COUNTERSIGNATURE ENDORSEMENT This endorsement is issued for the State of MARYLAND State Premium 92555.00 This is to certify that the resident agent's signature fixed hereto is the valid countersignature for the policy identified below as respects that portion of the Risk located in the State named herein. This endorsement changes the policy to which it is attached and is effective on the date issued unless otherwise stated. Effective date of this endorsement 01/01/98 This endorsement forms a part of POLICY NO. ISSUED BY 209801 12-24-28-6 POLICY DATED 01/01/98 01/01/99 Date issued 01/14/98 Countersigned at CARETTI INC VOR ISSUED TO CAR.ETTI REAL ESTATE VOR COMMONWEALTH MASONRY the day 1of? 19 Resident Agent Address P0334-FMT7 (REV. 08/92) - WC 99 06 11 BROKER ADDRESS BLACK, DAVIS & SHUE AGENCY, INC. 2019 MARKET STREET HARRISBURG PA 17103 INSURED "S ADDRESS CARETTI INC &/OR CARETTI REAL ESTATE &/OR COMMONWEALTH MASONRY PO BOX 331 CAMP HILL PA 17011 T1029 - FMT10 - (NEW 09193) ' COPY T1028 THE C A GROUP PENNSYLVANIA ACCIDENT AND ILLNESS PREVENTION SERVICES This notice is provided in compliance with Article X of the Pennsylvania Workers' Compensation Act. Please be advised that, at least, the following accident and illness preven- tion services are available from the PMA Group's Risk Control Services Department: * Surveys, * Recommendations, * Training Programs, * Consultations, * Analyses of Accident Causes, * Industrial Hygiene Services, and * Industrial Health Services To take advantages of these services, please contact your broker or local PMA account representative. P2619 - FMT NEW (09/93) P2619 • f a a PENNSYLVANIA NOTICE; An Insurance Company, its agents, employees, or service contractors acting on its behalf, may provide services to reduce the likelihood of injury, death or loss. These services may include any of the following or related services incident to the application for, issuance, renewal or continuation of, a policy of insurance: 1. surveys; 2. consultation or advice; or 3. inspections. The "Insurance Consultation Services Exemption Act" of Pennsylvania provides that the Insurance Company, its agents, employees or service contractors acting on its behalf, is not liable for damages from injury, death or loss occurring as a result of any act or omission by any person in the furnishing of or the failure to furnish these services. The Act does not apply: 1. if the injury, death or loss occurred during the actual performance of the services and was caused by the negligence of the Insurance Company, its agents, employees or service contractors; 2. to consultation services required to be performed under a written service contract not related to a policy of insurance; or 3. if any acts or omissions of the Insurance Company, its agents, employees or service contractors are judicially determined to constitute a crime, actual malice., or gross negligence. COPYRIGHT 1984 PENNSYLVANIA COMPENSATION RATING BUREAU P0234-FMT7 (NEW 4184) WC 37 06 02 04 UT NOTICE TO SUBCONTRACTORS If you employ subcontractors, the Workmen's Compensation Act holds you responsible for injuries to their employees, unless they provide separate insurance. Make certain each of your subcontractors furnishes you with a certificate of his compen- sation insurance. These certificates are provided without cost by all insurance companies upon request. These certificates must be available for examination by our auditors, in order to avoid payment of additional premium on subcontractors employees. P0330-FM77 (NEW 4/94) WC 99 06 07 1 04 THE PISA GROUP RE: NEW YORK STATE ASSESSMENT Dear Policyholder: As part of the December 1993 legislation in New York, loss based assessments in New York were removed from the rate making process and replaced by a separate, identifiable policy charge which is known as the New York State Assessment This change is applicable effective April 1, 1994 for all new and renewal policies. Monies collected from the policy charges are not considered premium; however, the State of New York will consider these amounts as premium for premium tax purposes. Because of this. a tax rate will be applied to the assessment The Assessment is determined as follows: Other than Retrospectively Rated Policies with Deductibles Premium determined on the basis of Board or authorized rates (deviated, if applicable), including any ex- perience modification, minimum premium and any applicable Construction Classification Premium Adjust- ment Program policy credit factor. The expense constant is excluded from the determination of the assess- ment charge. The assessment charge is subject to change at the time of audit Retrospectively Rated Policies At inception, the Assessment will be determined as shown in item 1 above. At adjustment, the Assess- ment will be based on Retrospective premium determined by the applicable parameters of the Retrospective Rating Plan plus the implied premium discount determined on the basis of standard premium. (The latter step is necessary since the assessment percentage has been calculated on a standard, i.e., non-discounted, premium basis.) The assessment charge is subject to change at audit and at all subsequent retrospective adjustments. Deductible Policies Premium otherwise determined in accordance with either of the aforementioned categories, but prior to the application of any small deductible credit Large Deductible Policies Large deductible premium plus the implied premium discount determined on the basis of standard premium will determine the Assessment at policy inception. This assessment is subject to change at audit In addi- tion to this premium Assessment, all New York deductible loss reimbursements plus associated loss handling fees will also be subject to the Assessment P2644-FM77 (NEW 01M) P2644 EXHIBIT 113 Ticer & Associates Suite 101 3091nternational Circle Hunt Valley, Maryland 21031 fleen M. Ticer Robert S. Sinton John P. Rufe (410) 527-9026 FAX. (410) 527-9199 September 8, 1998 Ms. Brenda Schubauer Caretti, Inc. 9633 Liberty Road Randallstown, Maryland 21133 RE: Claimant: Theodore Parker Employer: Caretti, Inc. WCC No.: B439928 PMA No.: W5098-07500 Tic 2rFt h Dear Ms. Schubauer: This is to advise ghat I will be representing your interest in the above matter at the hearing scheduled for September 24, 1998. As the issue involved one of whether an accidental injury occurred as alleged by Claimant, it will be necessary to have those employees (including "John") present at the hearing to testify as to the inaccuracy of Claimant's description of the happening of the alleged accident. Please contact me to advise as to the identities of those witnesses who will be attending the hearing, as well as to discuss any 5uestions you may have regarding this matter. Very truly yours, ,. 6 ohn P. Rufe - 4 JPR/jna CERTIFICATE OF RVIIM I, Thomas S. Beckley, Esquire, hereby certify that on this day a true and correct copy of the foregoing document was served upon the persons and in the manner indicated below: SERVICE BY FIRST CLASS 11mm Pennsylvania Manufacturers' Association Insurance Company 380 Sentry Parkway Post Office Box 3031 Blue Bell, Pennsylvania 19422-0754 Manufacturers Alliance Insurance Company 380 Sentry Parkway Post Office Box 3031 Blue Bell, Pennsylvania 19422-0754 Pennsylvania Manufacturers Indemnity Company 380 Sentry Parkway Post Office Box 3031 Blue Bell, Pennsylvania 19422-0754 Mid-Atlantic States Casualty Company 380 Sentry Parkway Post Office Box 3031 Blue Bell, Pennsylvania 19422-0754 DATED: December 4, 2002 Thomas S. Beckley c- C? l;fJ 1J; Lt} ? 1..._fJ 4?]Tt I CARETTI, INC., V. Plaintiff, IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA PENNSYLVANIA MAUNFACTURERS' ASSOCIATION INSURANCE COMPANY, MANUFACTURERS ALLIANCE INSURANCE COMPANY, PENNSYLVANIA MANUFACTURERS INDEMNITY COMPANY, and MID- ATLANTIC STATES CASUALTY COMPANY, Defendants. ACTION IN EQUITY NO. 02-2701 DEFENDANTS' PRELIMINARY OBJECTIONS TO PLAINTIFF'S COMPLAINT AND NOW, come Defendants, Pennsylvania Manufacturers' Association Insurance Company, Manufacturers' Alliance Insurance Company, Pennsylvania Manufacturers Indemnity Company, and Mid-Atlantic States Casualty Company, by and through their attorneys, Pietragallo, Bosick & Gordon, and file the following Preliminary Objections to Plaintiffs' Complaint. 1. Plaintiff, Caretti, Inc. ("Caretti") commenced this action upon claims arising out of the defendants' alleged breach of a Workers Compensation and Employers Liability Insurance Policy ("Policy") and alleged breach of fiduciary duty based upon the same facts alleged to give rise to the breach of contract claim; that is, the alleged failure of the Defendants to properly investigate and defend a workers compensation claim filed by a Caretti employee. Attached as Exhibit "A " to Caretti's Complaint is a copy of the Policy upon which Caretti bases its claims. 2. As alleged in the Complaint, Caretti contends that legal counsel retained by the Defendants' failed to properly defend Caretti against a workers compensation claim brought by a Caretti employee and that, as a result of counsel's acts or omissions, the employee's injury was found to be compensable by the applicable workers compensation authorities thus resulting in certain costs and expenses being incurred by Caretti. 3. Although not styled as such, this action is, in effect, a legal malpractice action brought by Caretti against counsel selected by Pennsylvania Manufacturers' Association Insurance Company to defend the workers compensation claim of an employee of Caretti, Inc. 4. Also not stated in the Complaint is the fact that Caretti is a member of a group of insureds that had formed a captive insurer vehicle referred to as ACRC. 5. ACRC on its own, and on behalf of its members, including Caretti, Inc., entered into a contract with Pennsylvania Manufacturers' Indemnity Company. The contractual agreement between ACRC and Pennsylvania Manufacturers' Indemnity Company required that any disputes arising out of the rights and obligations of the parties be commenced in arbitration proceedings. 6. ACRC, on behalf of its members, including Caretti, Inc., has commenced arbitration proceedings seeking the same or substantially similar relief to that which is sought in this action. Attached hereto as Exhibit "I" is a copy of the agreement containing the relevant arbitration clause. Attached hereto as Exhibit "2" is the demand for arbitration that has been filed by the ACRC. 2 PRELIMINARY OBJECTIONS PRELIMINARY OBJECTION PURSUANT TO PA.R.C.P. 1509(c) - MOTION TO DISMISS BASED UPON THE EXISTENCE OF A FULL, COMPLETE AND ADEQUATE NON-STATUTORY REMEDY AT LAW 7. Caretti alleges that it has in the past and will in the future suffer monetary damages, costs and expenses, primarily in the form of workers' compensation benefits payable to the injured Caretti employee and increased insurance premiums payable by Caretti, as a result of the alleged acts or omissions of the Pennsylvania Manufacturers Indemnity Company to properly investigate and defend the workers compensation claim filed by the Caretti employee. See Complaint. S. The claims asserted and the relief sought by Caretti are cognizable in an action at law seeking money damages based upon the same breach of contract and breach of fiduciary duty theories of liability asserted in this action. 9. To the extent Caretti is seeking relief from the National Council on Compensation Insurance, Inc. ("NCCI"), Caretti has not named NCCI as a party to this action, and none of the remaining parties have the power or authority to cause NCCI to take any action requested by Caretti. Further, the relief Caretti seeks from NCCI, deletion of the Caretti employee's compensation injury from the calculation of Caretti's experience modification factor, would have the effect of setting aside the finding of the applicable workers compensation authorities to the effect that the employee suffered a compensable injury while in the course and scope of his employment with Caretti. 10. Any remedy potentially available to Caretti is available in an action at law and in any such action Caretti would posses a full, complete and adequate non-statutory remedy. 3 PRELIMINARY OBJECTION PURSUANT TO PA.R.C.P. 1028(a)(4) - MOTION TO STRIKE FOR FAILURE TO STATE A CLAIM FOR WHICH RELIEF MAY BE GRANTED (DEMURRER) 11. As stated above, Caretti has not named NCCI as a party to this action and none of the named defendants have the power or authority to cause NCCI to delete the Caretti employee's compensation injury from the calculation of Caretti's experience modification factor. 12. Nowhere in its Complaint does Caretti allege that any of the named Defendants posses the right, power or authority to cause NCCI to take any action to effectuate the relief sought by Caretti. at the employee suffered a compensable injury while in the course and scope of his employment with Caretti. 13. The NCCI regulations state, in pertinent part: "Revision of losses: It shall not be permissible to revise values because of department or judicial decision or because of developments in the nature of injury between two valuation dates, provided however, that: (a) In cases where loss values are included or excluded through mistake other than error of judgment; (b) Where a claim is declared non-compensable; (c) Where the claimant or carrier has recovered in an action against a third party ... 14. Because none of the named Defendants have any authority to cause NCCI to take any action requested by Caretti, the Complaint fails to state a claim for which relief may be granted to the extent that none of the Defendants may effectuate the relief sought as to NCCI and so the request for relief contained in paragraph (b) of the Wherefore Clauses at the end of both Count I and Count II of the Complaint should be stricken. PRELIMINARY OBJECTION PURSUANT TO PA.R.C.P. 1028(a)(5) - MOTION TO STRIKE DUE TO NONJOINDER OF A NECESSARY PARTY 15. Caretti has not named NCCI as a party to this action. 4 16. None of the named defendants have the power or authority to cause NNCI to delete the Caretti employee's compensation injury from the calculation of Caretti's experience modification factor. 17. Because Caretti has not joined NCCI as a defendant in this action, the request for relief contained in paragraph (b) of the Wherefore Clauses at the end of both Count I and Count II of the Complaint cannot be granted and so the claim for such relief should be stricken. PRELIMINARY OBJECTION PURSUANT TO PA.R.C.P. 1028(a)(4) - MOTION TO STRIKE FOR FAILURE TO STATE A CLAIM FOR WHICH RELIEF MAY BE GRANTED (DEMURRER) 18. The contract of insurance issued by Pennsylvania Manufacturers' Indemnity contains language that is tantamount to a "deems expedient" clause as the contract confers upon Pennsylvania Manufacturers' Indemnity Company the unfettered right to investigate and settle [workers compensation] claims. 19. There is no cause of action recognized in Pennsylvania under the circumstances, that would allow one who has negotiated terms of an agreement that would allow a carrier to investigate and settle a claim a cause of action for current and/or prospective increase of insurance premiums allegedly due to the carriers' conduct or omissions with respect to investigation and/or settlement, provided that this settlement falls within policy limits. PRELIMINARY OBJECTION PURSUANT TO PA.R.C.P. 1028(a)(4) - MOTION TO STRIKE FOR FAILURE TO STATE A CLAIM FOR WHICH RELIEF MAY BE GRANTED (DEMURRER) 20. As clearly and expressly set forth in the Information Page, Premium Payment Schedule, Endorsement Schedule and Endorsements, the Policy was issued by Pennsylvania Manufacturers Indemnity Company. See Exhibit "A " of the Complaint. 5 21. Plaintiff has improperly named Pennsylvania Manufacturers' Association Insurance Company, Manufacturers' Alliance Insurance Company and Mid-Atlantic States Casualty Company and defendants in this action. 22. Pennsylvania Manufacturers' Association Insurance Company, Manufacturers' Alliance Insurance Company and Mid-Atlantic States Casualty Company have no relationship with Caretti, whether contractual or otherwise based upon the terms of the Policy. 23. Because Pennsylvania Manufacturers' Association Insurance Company, Manufacturers' Alliance Insurance Company and Mid-Atlantic States Casualty Company have no relationship with Caretti they are not proper parties to this action and Caretti's Complaint, including the Policy attached thereto, confirms that the Caretti has not and cannot state a claim against them. Consequently, all claims asserted against Pennsylvania Manufacturers' Association Insurance Company, Manufacturers' Alliance Insurance Company and Mid-Atlantic States Casualty Company should be dismissed with prejudice. PRELIMINARY OBJECTION PURSUANT TO PA.R.C.P. 1028(a)(6) - MOTION TO DISMISS DUE TO PENDENCY OF A PRIOR ACTION AND AGREEMENT FOR ALTERNATIVE DISPUTE RESOLUTION 24. Caretti is a member of a group of insureds that operate the captive insurer responsible for handling the Caretti employee's workers compensation claim. 25. As a member of the captive's group of insureds, Caretti is bound by an arbitration agreement and has previously commenced arbitration proceedings seeking the same or substantially similar relief to that sought in this action. See Exhibit "2" attached hereto. 26. Because Caretti is bound by an arbitration agreement and is the subject of a previously commenced an arbitration proceeding based upon the same or substantially the same claims as are asserted in this action, the present action should be dismissed with prejudice. 6 III. CONCLUSION For all of the reasons stated herein, each and every Count of the Complaint should be dismissed and this action should be dismissed, with prejudice, as to all Defendants. Respectfully submitted, t DATE: December ?, 2002 PIETRAGALLO, BOSICK & GORDON By: pEsq.11po M Gordon, Pa. .D. #25561 Bryan K. Shreckengost, Esq. Pa. I.D. #619098 Pietragallo, Bosick & Gordon Firm #834 One Oxford Centre - 38th Floor Pittsburgh, Pennsylvania 15219 (412) 263-2000 Attorneys for Defendants, Pennsylvania Manufacturers' Association Insurance Company, Pennsylvania Manufacturers Indemnity Company, Manufacturers' Alliance Insurance Company and Mid-Atlantic States Casualty Company 7 Ry, RSURANCL AGREEMENT In consideration of the premium hereinafter provided. AimuCAN CON-I- ACTORS REINSURANCis CObeANV. LTD.. P.O. Box 2196, Georgetown, Gntnd Cayman, British West Indies, (hereinafter exiled the "REMLJRER"), hereby reinsures PENNSYLVANIA bWXWACrURER5' ASSOCIATION INSURANCE COMPANY, MANUFACTURERS ALLIMC E INSURANCE COMPANY, PENNSYLVANIA A'IANUFACI'URERS INDEMN= COITANYand MID-ATLANTIC STATES CASUALTY COMPANY, 380 Sentry Parkway, Blue Bell, PA 19422 (hminafter called the "COMPANY" ) as provided herein and specified as a result of any occu renm and /or casualties which nray occur during the term of this Agreement, subject to the following terms and conditions: AR7TCLE I (a) _ The terra "Pollcy>', "POUdes" or "Underlying Policies" as used in this Agreement shall mesa Company's bindcrs and policies Providing fnsn mwe on the policies rcinsmed under this Agr=mnt. (b) The term "Property" lines of insurance as used in this Agreement shat! min Fee and Allied Liaes, Inland Masine. Automobile Physical DamaM and Burglary and Theta (including Employee D"rshon=W and Depositors Forgery), _ .. ; . v i'X 0 Tbc term "Casualty" fines of inmrance as used in this Agreeatent'shdll mean Automohile Liability. %Amtrn:rGM Uneral Ltabiuty and Workers' Compensatefoik- , (d) The lam "Oocurnetree" shalt mesa an ac mdad. including condmums or rcpatted exposnra to substantially the scare general ham M conditions. (e) The term "Gross Written Premium" shall mean the actual premium charged on the Underlying Policies, ifxludiag all audit and Other adktslmcnts, other d= policyholder dividends which shall trot be deemed to reduce the amount of Gross Written Premium (t) "'Loss" or "Losses" shall mean any amount or amounts incurred by Cornnpauy in respect of Say seulemeftM awards or judgments (including imereat where classilled as loss), including any compeusmoty or punitive damages or fines incurred or arising out of claims under the Underlying Policies, after deduction for all recoveries, sahrMge and subrogation actually recovered , prvvfded, however. that thtre shall be no deduct"a for any rainsuran placed by Company for its own account. (fa "Allocated Lou A4punacru ExpertW or "Al" shalt truso all costs and expeam allocable to a specific claim that are incurred by Company in the invesuptiea, nppraissl> adjustmem, settlement, iitlptim dcfena or appeal *fa spe dflc claim including town crests and Oocrs of wupawdeas and appal bonds, and including (i) Orr: judgment interest, unless included as part of the award or judgrncnt; (i) POntiudVmmmt laft zsr. (iii) legal expenses and costs Incurred in connection with coverage que:Wom and legal actions: connected thereto; and (iv) a pro rata share of salaries of Company's in-house legal staff ackhdy involved in the defense or settlement of claims end Losses covered by this Agreement. (A) Ibis Avusava and the reinsurance Pravided hereunder dMU Apply to We Policies is8ned by CompmW (hereinafter the "Underlying i'oliciees") which as idcada d as being subpet to this A amlm is women notloa (b Ca?Y? 1 ? Davis and Shut Agony, Inc., 2304 Wen Marlo t ShwL York peansyh-AWa 17404 "Agenn. (b) The insu w= provided on risks mbj= M this AVftmeM shall be M forms provided by Company and Company is its sole diserttion shall determine all MWIM tpialing to tbearodeeevr#errg Ofsue6 rising. including best not limited to, the avcCptatico, rejmpon or mum latioa oP. risks aw yor part cWar coverages ssjtid limits of liability. ARTICLE M (a) 'n an"" Min of the premiums and Charges set forth in Article VIQ C=WWW s5alt OOda and ltoinmrer shall accept kvm COmpatty liability oa all risks insured ender the Underlying Policies as respects Losses on Underlying Policies boned or renewed daring the t= of this AptcW eat 0m,"ing PrapaW and Casudty businca as identitied in Article II(a) and eachding the business discobed in Article V. The (bAllocglcd eLLabbjhW of Rt zwmr deal] attach dnndu eo Wy with and follow ilea[ of foIISaiy bell : .s and t j. ifaW, dOr shall be payable by Rdtr at the same tnoe he sametserp p y ?y el th aged is t aitm s cr MW be Mplired to pay regacdfen of whether this AVremeM has kited or is in full foroe and effed on the date CompaWs lisbWW is deterasined,'ad the premimn on aoooetat of svels liability shall be credited to the Reinstttarfrom the orighW day of Compsgys liability. (c) A11 rzinsmnoe Far which Reinsurer sfsp?I be I WO by virtue of this Agrxmeut shall be sobjaM in r?is. to the same limitations, terms, condit[oM in all and a]tetatioos as rte Urtdet LOur and ?". a?od to tbo same modr$Cadeatts lying Policies to which the reinsirssnce relates, the true: intent of this Agreeatent being That Reinsurer shall, in every case to which this Agrxment applim follow the fortunes Of Company. ARTICLE iv A A (a ) The initial terra of this AP'nent is hose 1, 19% to May 31.1997. TWs Agreement shat be OulUmadmW pasty gives rsori nnew'ed for successive am year periods; bcounin htae 1 of each calendar year vnkae either Agrecra t. tetrsuzraetoa nMOY (90) days prior to the expiration of the: tlsea Qum" tam Orthis (b} 'ibis A is nonranoclabk Mcept as provided in Article IV(a). Ac) Notwithstanding the termination of tW$ Agreement as hceeiaabove ptvvidcd. tot: ptovidow of this Sr'xraesst shall cantimse to apply to 4 per. Losses and Alloated Loss Adjustmeat F-Vense incurred under the Underlying Policies issue prior to such termination. ARTICLE V EXCLUSIONS This Agrecmcttt sbaII not apply to any binder or policy of Company providing aAstion insnrawr, am= xdw itxuraece, uaibtelta liability insurance. boll" and atacbinmy ice, any bald. and airy other i written or bound by Company which is ceded by Compmy, in whole of in part, to say volunh" or imolasdW dncumnce pool, amodsition or syndimte, ARTICLE VI IMBR RY As mVeces all litres of fnsumce covered hereunder the territorial lizruits shall be those ofthe Underlying Policicz. ARTICLE VII c irf.r w .v _.,. . _ !: e:aI`::JIJ Wit. .: .._ ?:'s. ..... _ _ ._ - - r CCI wrii a (a) Pte OaxuisnM Pet Polley Ulniuli= Xciawutcr shall be liable for 50% of the aggregate of joint Losses tied Allocated I4M Adjtr m Expanse from or under the Un exceed S pol;q? ear are Oc J= to this Agmentem lieinsttser's >liol? hereunder fog currence shall not exceed SIMt of the t'*%Ming pv O=m mm Pa Polies' limits: SS 'Um per Ourmm per Polity sioo,ooo pcr Oomm., tx per Policy I'M-000 per Oocurrenm per Poli-• M An=d Aggregate Limitad m WtutsW Compensation All Casualty Hues of inso=nM elmiuding Work=- itmuiu. as defined in Mile I (c) Of thz Ag oemotst All Property ) lin= Of wee as deft ppd in AMCk ro of this Agmenom Raiasvttr shall be liable for the aggregate of total Luca and Allocated Lou de;cdbed in subpamgmph (a) of Article Vll ftm or under the Underling to an annual aggregam atnoyot equal to 42.5% of the G 3Policies sub)octAm up row Written Premh m or the Underlying policies. (C) EA6 PUW to other than this A s Agreement shall hm the ri& to obtain a"dornl sr:fosutanee coverage (? additional tetttstt thi lament) for that party s respective exposes glider etas ADZ aM air such ge shall inure only to the benefit of the pattitarlm pwly &Mhft said adds MM teirtsurancc wv"mge• Rcmw ana mcove= from said additional teinst mvm Coverage firm = == otter Ihm Us Agreement shall not be coraidered in determining the rapm*e Los= of each parry under this Asteemem (d) Tie per Ooc:urcnce per policy Llnti scpatately to the Workers' ComPen"tiOn tation described in subp=paph (a) of this Ankle apply exec line Of Insurance and all Property ky RA?sltoafll nta and pt these lines of insurance ?iftcally Casuxl x?uded ir, Article V .?i zhigteeA m=t Amimlz vM a) Premiums and Charges- 7be Premium due Reinsurer shah be eqmd Underlying Policies less 137,29% ceding conquission. to 48 ?496 "the earned ?? an the utili7 - to catatla? eap? ?uMng ?mWa set forth in subpmpaph (e) of this Artkle YIIl[ shall be Ilar+'s to be Paid monthly under this AVreenjent ro) . nOtic; I' Company $hall advise and of all lq.5a subject to this Asrearnen; the ? as w 8fler Cry and ..... _. , -- -_ •an ... the payments made on such !,oases. Ile fo initial MM=? tbw? =WKMM *MDPmeat ormawm effect the liability of Reinsuter One, M hereunder, C:,°'p°e13' i° Ki?'+a$ s??tn uoure v bet?roea is no wry 2- Rti=,ter agrees that COMPMY P ty as to the cstablis "I. on all Lasses subject to this A oom kte autltori htneat and ad" 4 have sole and Payments to be made tltewg utcludln8 all settletne andoall o tim dispanrouatos f tic = ark die amounts of i dauands, M Of all claims, salts and 3- Subject to the term and cooditiwa of the Underlying jjoi t^atn investigate and defend all Losses aa'?jng this reiasuranoe and to pmmepsoaQ? io has the obligation to dekmo nation. the reports otCom Pa"y as P ovided in s,bpara phgre th rR to [.asses affeettu8 this ttittauoutce bad S' Cft"y shall advise Co rtpstty's MmaL- %r cutstandiog Loss p=rves New 30 and May 31 of each calendar year of Previsions for ' but not Reia3tuer 1.ata of Credit, vvhicb Shall be Providcd p?y in 8ccordarm with A d n rt#c f la ? g? Qf pi's this Agtecumt 'N I wr= OF IMMDIT, of (a) Paymoat of Losses: To the cxteat of its liability under and subject to the kjn" surd C0=5110" oftbe Usderlying and Allocated Loss Adjustment E. MW shall PIIy, when due and gRmpriatm diwnfion. determirtt ivh ?nss under said Underlying Policies aM C ' an MM erred Sbr its S Lasses tch Losses and Allocated Lou Adjwtnltm t Pmts trail., in ole Payrntctu and u1 other nutters Pertaining b Loss and Lacs adjttstmeapatse saould be pate!. at soount of each 2. on a monthly basis, Reinsurer agrees to reimbtuse Company subject to the providons of Article VII, for Reinsumr's share of all suns which shall have been paid as Losses and Altopnod Loss Adjtmtn;ent Ex-cm br Corupany during each monthly period, in accordance with the formula set faith in ,?h??psh (_) of this Article VIII. nwnthlyr aocortnnng (d) Monthly Accounting: I . At the close of each calendar month, Company shalt prepare an aaountintg of acttml due Rcins wer, Lou and claim payments dye Company, and the reserves established by Company and Rcift urer. This accounting shalt be determined by using the formula in subparagraph (e) of Ibis Article VIII. Payntew by Reinsures of the amounts calculated pursuant to such ac coundug shall be due wlrbin tea (10) business days of Reinsurer's receipt thereof. 2- The parties each agree to pbM at the disposal of the other, with right to inspect, auvugb their authorized r'epr?esentstives, at all reasonable times during the cunvIuq of his Agrumeat and U%ereaftw. the books, retards. and papers pertaining to the ranswance Provided hereunder, the Uttderlyina policies, Losses and Allocated Lou Adjustment Expense thereunder, and trserves and provisions its respect tlto wE 3 - The parties agree to exchange copies of their rcspecew f asocial stardatcuts. Company shall furnish to Roinsurer a copy of its statutory shat AMn on or before May 13 of esch calendar year. ReinsUM shall furnish a COPS of its flAIr cisl statement and any other annual statement rcqWred regulatory authority of the Cayman Islands within save me rrfsrtraooe are corn feted tttrd/or my-five (75) days dam the data such report or zzport? P required to be filed with any regulatory authority. .. (:.i ; ::u?iie;y ds?eounung rortmriz; 1. Gross Written Pmmium mcaved for the month ended 2. Lcss. (1) Expenses (39.5% ofprendum received) for the month ended (Z) Premiums returned to policyholders as dividends for the month ended (3) Paid Lasses and Allocated Loss Adjustment Expenses 1= subrogation and salvage tocaverables for the month ended 3. Total; 4. Premium due Reinstuer; S. Amount due Company; _X.50 5 ARTICLE IX )E-LnXR?F CREDIT (a) In order to secure the due and punctual payment and performance of its obl,&K M , Rdasv provide to Company a dean irrevocable and unconditional Letter(s) of Credit Ile initia LeuWz) of slsdl shall be in the aggregate amount of $1,000,000, shall be provided in the amounts and by the daft to forth below and shall contain such other terms and conditions as shall be acceptable to Company. The amount ofmach Letter(s) of Credit is intended to cover (1) Reinsur 's outiYani ag HaMties under tthi Agreement, (ii) rCwFm as described in subparagraph (b) of Article VIII and On) irtcutted but not tepoeted Losses. Due D Amount of fn 5r AM=jgLdidttw of Credit Juste 1. 1996 September 1, 1996 $230.000 $250,000 $500 000 Deoetttber 1, 1996 March 1 1-397 $250,400 , $750.000 , WORM 51,000,000 (b) Such Letter{s} of Credit shall be issued by such bank as may be approved by Company with szld Letter(s) of Credit to be drawn upon that bank's United States of Ametha Iona lon or subsidiary and sha11 Provide for automatic renecral for successive o"ear periods, aUregate amount of such letter(s) of Credit shalt be reviewed as of November 30 d (c) The anMay 31 of sba11 be accalendar year during which alts Agreement is in effect and. if Company deems necessary or appropriate. c uated as deterndned by Company. (d) Company shall not draw against the Letter(s) of Credit except Default as defined below. upon the occurrence of an Event Of 1. Any one or morn of the fotbwing shat constitute an Event ofDefauh: i. Reinsurer's failure 90 tim this Aareernent; uY firitill atry or all of its obligations to Company Hader ii_ The commencement of any insolvency, liquidation. arrangCMcM tehabRitation or similar proceedings against or will[ r-V= to RcMnart" by any govetament o@ici supervising the Operation of insurance or reinsurance Companies in any state territory or jurisdiction within the United States or territory or country. any fotdg?t iii• Reinswer's failure to c dcnd or renew the Letter(s) of Credit ten (10) days prior tO the expiration therm[; 2. Upon the occurrence of as Event of Default set forth in subparagraph (4)(1m) above, Company may draw against the Letter(s) of Credo only to from Reirtsurer. the extent of any unpaid amounts due to Company Upon the =urrencc ofaa Event of Default described in above. Company rnay draw against the full atpoum of the Letter(s) of CredliiL mbpamgraphs and (del) (LI) (iu7 (e) It is undc=tootl that any amounts drmm oil the Later($) of Credit COMPany be he semptod from t?M?y's assets to be applied by Company in PaYment reduction ofsReinauer's is trust Obligations Agrmment and, subject thereto, 10 be repaid to lieiasu:et when Company, in its sole John Burke To: John Sellinger/PMA/PMAGroup*PMAGroup ` 12109/02 04:44 PM cc: Barbara Sutherland/PMA/PMAGroup(MPMAGroup, Eric . ?. Reiner/PMA/PMAGroup@PMAGrou Ileen ..?; ;.-_::'• Greene/PMA/PMAGroup@PMAGroup, Rick Ramell/PMA/PMAGrouptPPMAGroup, David Emerick/PMA/PMAGroupQPMAGroup, Scott Ha,rar/PMA/PMAGroup@PMAGroup Subject Re: Caretti, Inc. v. PMAIC, MAICO PMIC & MASCO Thanks John. Eric Reiner is handling the claim and is familiar with the issues. Please send the Complaints to his attention. John ` John Sellinger John Sellinger To: Barbara Sutherland/PMA/PMAGnwp@PMAGroup, John 12109102 12:34 PM Burke/PMA/PMAGroup@PMAGroup cc: Subject: Caretti, Inc. v. PMAIC, MAICO PMIC & MASCO We received today, in the mail, copies of the complaint Caretti, Inc. has filed against PMAIC, MAICO, PMIC and MASCO in the Court of Common Pleas of Cumberland County, Pennsylvania. Please let me know to whom I should direct these copies. Barbara had briefly mentioned this matter to me a few months ago,. It sounded interesting then, so I took a look at Caretti's complaint this morning. The complaint is for breach of contract and breach of fiduciary duty relating to PMA's handling of the Theodore Parker claim (W5098-07500). This Maryland claim was submitted under PMI's Policy No. 209801-12-24-28-6, which was on a retention dividend premium plan. Essentially, Caretti is alleging that Parker's back injury, even if true, was not work related, and because PMA's staff counsel didn't appropriately defend Caretti, Parker's claim was determined to be compensable. Caretti is seeking as damages the premium Caretti has paid to PMA and PMI under PMI's 2000 and 2001 policies, and PMA's 2002 policy attributable to the change in Caretti's experience modification factor from the Parker claim . (As far as I can see, neither MAICO nor MASCO issued any w/c policy to Caretti after the Parker claim, so they should not be defendants.) Caretti is also seeking an order requiring PMA submit a correction report to NCCI and ensure that such correction is made effective, and to assume all liability for the Parker claim. Caretti is a Pennsylvania corporation, and the '98 policy included coverage for Caretti's operations in PA, MD, and NY, with the lion's share of exposure in PA. In the past, we have used a trilogy of cases in PA to try and derail allegations similar to Caretti's. The three cases are: Caplan v. Fellheimer Eichen Braverman & Kaskey, 68 F.3d 828 (3d Cir. 1995); L. C. Renninger Co., Inc, v. VIK Brother's Insurance, Inc., 180 F.R.D. 272 (W. D. Pa. 1997): and, Bleday v. OUM Group, 435 Pa-Super. 395, 645 A.2d 1358 (1994), allot. denied, 540 Pa. 591, 655 A.2d 981 (1995). 1 was able to successfully get similar claims dismissed at the preliminary objection stage in a case here in Montgomery County, and I am attaching a copy of my analysis for your possible review. There also appears to be a statute of limitations defense available since the initial determination of compensability occurred around 10128/98, more than 4 years before Caretti filed its complaint. If there is anything I can do to help, please let me know. Thanks. - John J. Sellinger, Esquire PMA Insurance Group 380 Sentry Parkway. Blue Bell, PA 19422 (610) 397-5266 (610) 397-5299 (telempier) AMMCAN CO ! ACTORS REINSURANCE COMPANY LM. • V Floor Barclays Il use, P-0-Box 1051Gr. Grand Cayman, Cayman Islands, B.W.I_ Telephone: 345-94q-7989 I Fax 345-949-7849 I October 28, 2002 Pennsylvania Manufschuers' ,Association Insurance Compmy Maoufacturms Alliance Insurance Corry pex?aayivania Man" "em Indemnity Company Mid-Atlantic; Stages Caspatts, Company Dear. r pursuant to the ?iein?suramce Agreement by and bmvC= ltcinsurvve Company, `X.t& ("ACRC"X and P? 'f?can Con=Um l''?X Manufacturers ?tlliaace Iasurance Maaufacwreas' Association Marrufac4l era Indemnity Company and Mid-Atlantic States company, p vania (colketivejy refereed tows "PMA"), a cc IN of which is atmelted her ??` Company invokes the arbitration, Provisions conUinM in A;Tkle XV ?' ACRC hereby of the R,e3nginatke ,Agrtenmt_ ACRC is seel6n; to have PMA in+leumify and compensate ACRC fox all damages ARC has incurred aid will incur dam, to P)4A's handling of a claim for workers pensation beoefets Eped by Tbcodow Parker. Pursuant to Article XV of the agtaexAm, ACRC hereby requests PMA to choose an arbitrator within four weeks Of the We of this letter, or alternativedy, specifically waive Pennsylvania statues governing thy: timeliness of actiow of arbitration. ours, f jomr?yfjm- Res Assistant S=L.Wzy i 1 I I CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing Preliminary Objections to ct, Plaintiffs' Complaint was served by Federal Express 2nd :Day Delivery this day of December, 2002, upon: Thomas A. Beckley, Esquire Thomas S. Beckley, Esquire BECKLEY & MADDEN 212 North Third Street P.O. Box 11998 Harrisburg, PA 17108-1998 (Attorneys for Plaintifj) ar Gor on, Esq. PA-YD. #25561 Bryan K. Shreckengost, Esq. Pa. I.D. #69098 Pietragallo, Bosick: & Gordon Firm #834 One Oxford Centre - 38th Floor Pittsburgh, Pennsylvania 15219 (412) 263-2000 Attorneys for Defendants, Pennsylvania Manufacturers' Association Insurance Company, Pennsylvania Manufacturers Indemnity Company, Manufacturers'Alliance Insurance Company and Mid-Atlantic States Casualty Company CARETTI, INC., V. IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, Plaintiff, PENNSYLVANIA PENNSYLVANIA MAUNFACTURERS' ASSOCIATION INSURANCE COMPANY, MANUFACTURERS ALLIANCE INSURANCE COMPANY, PENNSYLVANIA MANUFACTURERS INDEMNITY COMPANY, and MID- ATLANTIC STATES CASUALTY COMPANY, Defendants. ACTION IN EQUITY NO. 02-2701 DECREE AND ORDER OF COURT AND NOW, this day of 200, upon consideration of Defendants' Preliminary Objections and the parties' arguments with respect thereto, it is hereby ORDERED, ADJUDGED AND DECREED that said Preliminary Objections are SUSTAINED as to all counts of the Complaint, and this action is dismissed with prejudice. BY THE COURT: J. -0 4r: r _ r n I7; C-y N PRAECIPE FOR LISTING CASE FOR ARGUMENT (Must be typewritten and submitted in duplicate) 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) CAREITI, INC., (Plaintiff) VS. PENNSYI,VANIA MA2WACTURERS 1= ASSOCIATION INSURANCE COMPANY, MANUFACTURERS ALLIANCE INSURANCE CCH PANY, PENNSYLVANII, MANUFACTURERS INDa VITY COMPANY, and 14ID-ATLANTIC STAZFS CASUALTY COMPANY, (Defendant) Action in Equity No. 02-2701 Civil 19 1. State matter to be argued (i.e., plaintiff's motion for new trial, defendant's demurrer to complaint, etc.): Defendants' Preliminary Objections to Plaintiff's Complaint 2. Identify counsel who will argue case: (a) for plaintiff: Charles O. Beckley, II:, Esquire Address: Beckley & Madden, 212 N. 3rd St., P.O. Box 11998, Harrisburg, PA 17108-1998 (717) 233-7691 (b) for defendant: Mark Gordon, Esquire Address: Pietragallo, Bosik & Gordon, One Oxford Center, 38th Floor, Pittsburgh, PA.15219 (412) 263-2000 3. I w3-U notify all parties i-n writing w been listed for arg mmt 'thin two days that this case has . 4- Ar9mlent Court Date: Marcfi 26 20Q3 Dated: Attorney for Carettl, Inc, ?' !?? ' ' /" ` i ? ?} 'n' ..LZ L-;'?? ' ? t i e ? ? ,?. t` ? . ? ti /. _ r c_ . __ -- __ ?_ s, __ ,? y> ,-- . . _ `^S -_.? CARETTI, INC., IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA Vs. CIVIL ACTION - EQUITY PENNSYLVANIA MANUFACTURERS' ASSOC. INSURANCE COMPANY, 02-2701 EQUITY MANUFACTURERS ALLIANCE INSURANCE COMPANY, PENNSYLVANIA MANUFACTURERS INDEMNITY: COMPANY and MID-ATLANTIC : STATES CASUALTY COMPANY, : Defendants IN RE: PRELIMINARY OBJECTIONS OF DEFENDANTS BEFORE HOFFER P.J., HESS AND OLER, JJ. ORDER AND NOW, this 3 day of June, 2003, the court being satisfied that: 1. It is unclear, at this stage, whether the plaintiff's remedies at law are full, complete and adequate; and 2. No order is sought against NCCI and, therefore, NCCI is not an indispensable parry; and 3. It has not been established that dismissal for failure 110 state a cause of action is "clearly warranted and free from any doubt," Stine v. F'ichardson, 448 A.2d 558 (Pa. Super. 1982); the preliminary objections of the defendants are DENIED. BY THE COURT, .?* vNHA14NN?- Ilf 9c. Charles O. Beckley, II, Esquire Thomas S. Beckley, Esquire For the Plaintiff o y 03 Bryan K. Shreckengost, Esquire 1 For the Defendants Am CARETTI, INC., V. Plaintiff, IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA PENNSYLVANIA MANUFACTURERS' ASSOCIATION INSURANCE COMPANY, MANUFACTURERS ALLIANCE INSURANCE COMPANY, PENNSYLVANIA MANUFACTURERS INDEMNITY COMPANY, and MID- ATLANTIC STATES CASUALTY COMPANY, Defendants. ACTION IN EQUITY NO. 02-2701 DEFENDANTS' ANSWER AND NEW MATTER DEFENDANTS' ANSWER AND NEW' MATTER AND NOW, come the Defendants, Pennsylvania Manufacturers' Association Insurance Company, Manufacturers Alliance Insurance Company, Pennsylvania Manufacturers Indemnity Company, and Mid-Atlantic States Casualty Company, by and through their attorneys, Pietragallo, Bosick & Gordon, and file this Answer and New Matter to Plaintiffs' Complaint, averring as follows: 1. Upon information and belief, the allegations contained in paragraph 1 of the Complaint are admitted. 2. The allegations contained in paragraph 2, and all subparagraphs thereof, of the Complaint are admitted. 3. Upon information and belief, the allegations contained in paragraph 3 of the Complaint are admitted. 4. The allegations contained in paragraph 4 of the Complaint are denied as stated. Upon information and belief, not all of the companies collectively referred to by Plaintiff as "PMA" are licensed to issue workers' compensation insurance policies in both the Commonwealth of Pennsylvania and the State of Maryland. 5. The allegations contained in paragraph 5 of the Complaint are denied as stated. Defendants deny that each of them issued a Workers' Compensation and Employers Liability Policy to Caretti. To the contrary, on or about January 14, 1998, Pennsylvania Manufacturers Indemnity Company issued a Workers' Compensation and Employer's Liability Insurance Policy ("Policy") to Caretti. Upon information and belief, a copy of the Policy is attached as Exhibit A to the Complaint. The remaining Defendants did not issue the Policy to Caretti. In further response, the Policy, being a written document, speaks for itself and is its own best evidence of its contents. 6. The allegations contained in paragraph 6 of the Complaint are admitted with the qualification that the Policy, being a written document, speaks for itself and is its own best evidence of its contents. 7. The allegations contained in paragraph 7 of the Complaint are admitted with the qualification that the Policy, being a written document, speaks for itself and is its own best evidence of its contents. 8. The allegations contained in paragraph 8 of the Complaint are denied as stated insofar as the allegations contained therein refer to, rely upon and purport to characterize selected provisions of the Policy. To the extent that the allegations contained in paragraph 8 refer to, rely upon and purport to characterize any provisions of the Policy, that written document speaks for itself and is its own best evidence of its contents. 2 9. The allegations contained in paragraph 9 of the Complaint are denied as stated insofar as the allegations contained therein refer to, rely upon and purport to characterize selected provisions of the Policy. To the extent that the allegations contained in paragraph 9 refer to, rely upon and purport to characterize the provisions of the Policy, that written document speaks for itself and is its own best evidence of its contents. 10. The allegations contained in paragraph 10 of the Complaint are denied as stated. Defendants deny that premiums under the Policy were paid to or determined by "PMA". To the contrary, the Policy was issued by Pennsylvania Manufacturers Indemnity Company, to which company premiums were paid and which company calculated premium. The remaining Defendants did not receive or calculate premiums as to Caretti. Further, the allegation that Caretti has complied with all of the terms of the Policy constitutes a legal conclusion to which no response is required. To the extent that a response might be deemed to be required by the Court, it is denied that Caretti has complied with all of the terms of the Policy. To the contrary, Caretti has not complied with all of the terms of the Policy. 11. Upon information and belief, the allegations contained in paragraph 11 of the Complaint are admitted. 12. The allegations contained in paragraph 12 of the Complaint are denied as stated insofar as the allegations contained therein refer to, rely upon and purport to characterize or summarize the contents of a Workers' Compensation claim petition filed by Parker against Caretti with the Maryland Workers' Compensation Commission. To the extent that the allegations contained in paragraph 12 of the Complaint refer to, rely upon and purport to characterize the terms of Parker's claim for workers' compensation benefits, that written document speaks for itself and is its own best evidence of its contents. In further response, upon 3 information and belief, and subject to the above qualification, the allegations contained in paragraph 12 of the Complaint are admitted. 13. The allegations contained in paragraph 13 of the Complaint are denied as stated insofar as the allegations contained therein refer to, rely upon and purport to characterize or summarize the contents of a Workers' Compensation claim filed by Parker against Caretti with the Maryland Workers' Compensation Commission. To the extent that the allegations contained in paragraph 13 of the Complaint refer to, rely upon and purport to characterize the terms of Parker's claim for workers' compensation benefits, that written document speaks for itself and is its own best evidence of its contents. With regard to the allegations contained in the subparagraphs of paragraph 13 of the Complaint: (a) Upon information and belief, it is admitted that Parker contended that he was working as a mason tender for Carer:i on the Project on June 5, 1998; (b) Upon information and belief, it is admitted that Parker contended that his duties as a mason tender for Caretti on the Project on June 5, 1998 included mixing cement for the masons, and carrying 100-pound bags of cement to the cement mixer; and (c) Upon information and belief, it is admitted that Parker contended that while he was carrying a 100-pound bag of cement while working as a mason tender for Caretti on the Project on June 5, 1998, he slipped on some sand, fell on one knee, and injured his back. In further response, a more full, accurate and complete; description of Parker's workers compensation claim is contained in the papers, pleadings, testimony, documents, exhibits and 4 other evidence made a part of the record of the Maryland Workers' Compensation Commission, all of which documents, evidence and testimony speak for themselves. 14. The allegations contained in paragraph 14 of the Complaint, and all subparagraphs thereof, are admitted in part and denied in part. It is denied that on or about June 22, 1998, Caretti contacted PMA and indicated that Caretti had discussed Parker's alleged injury with other workers on the Project and learned certain information. To the contrary, on or about June 22, 1998, Caretti contacted a representative of Pennsylvania Manufacturers Indemnity Company, which was the company that issued the Policy. At no time has Caretti contacted any of the other companies identified collectively as "PMA" in the Complaint with regard to Parker's claim. It is further denied that Caretti learned, as fact, information regarding Parker's claim from his co-workers. To the contrary, upon information and belief, Caretti learned of certain opinions, conclusions and observations of some, but not all, of Parker's co-workers. In further response, as to each of the subparagraphs of paragraph 14: (a) Upon information and belief, it is admitted that on or about June 22, 1998, a representative of Caretti contacted Pennsylvania Manufacturers Indemnity Company and advised that, on the day of the alleged injury, Parker was working as a mason tender which involved supplying mortar and bricks to the masons working on a wall. After reasonable investigation, Defendants are without knowledge or information sufficient to form a belief as to the truth of the averment that on the day of the alleged injury, Parker was, in fact, working as a mason tender which involved supplying mortar and bricks to the masons working on a wall and, therefore, the allegation is deemed to be denied in accordance with 5 Pa. R.C.P. 1029(c), and strict proof thereof is demanded at the time of trial. (b) Upon information and belief, it is admitted that on or about June 22, 1998, a representative of Caretti contacted Pennsylvania Manufacturers Indemnity Company and advised that Parker was not working as a cement mixer nor was he required (nor did he) carry any bags of cement. After reasonable investigation, Defendants are without knowledge or information sufficient to form a belief as to the truth of the averment that Parker was not, in fact, working at the cement mixer nor was he required (nor did he) carry any bags of cement and, therefore, the allegation is deemed to be denied in accordance with Pa. R.C.P. 1029(c), and strict proof thereof is demanded at the time of trial. (c) Upon information and belief, it is admitted that on or about June 22, 1998, a representative of Caretti contacted Pennsylvania Manufacturers Indemnity Company and advised that John Papetti, another Caretti employee, was working at the cement mixer and Papetti was responsible for carrying the bags of cement to the mixer. After reasonable investigation, Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegation that, in fact, John Papetti, another Caretti employee, was working at the cement mixer, and Papetti was responsible for carrying the bags of cement to the mixer and, therefore, the allegation is deemed to be denied pursuant to Pa. R.C.P. 1029(c), and strict proof thereof is demanded at the time of trial. 6 (d) Upon information and belief, it is admitted that on or about June 22, 1998, a representative of Caretti contacted Pennsylvania Manufacturers Indemnity Company and advised that Charles "Chuck" Klein, Caretti's foreman on the Project, confirmed that Papetti carried the bags of cement to the cement mixer, and Klein never directed Parker nor saw Parker carry any bags of cement. After reasonable investigation, Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegation that, in fact, Charles "Chuck" Klein, Caretti's foreman on the Project, confirmed that Papetti carried the bags of cement to the cement mixer, and Klein never directed Parker nor saw Parker carry any bags of cement and, therefore, the allegation is deemed to be denied in accordance with Pa. R.C.P. 1029(c), and strict proof thereof is demanded at the time of trial. (e) Upon information and belief, it is admitted that on or about June 22, 1998, a representative of Caretti contacted Pennsylvania Manufacturers Indemnity Company and advised that Caretti had several other employees on the Project who did not see Parker carry any bags of cement to the cement mixer. After reasonable investigation, Defendants are without knowledge or information sufficient to form a belief as to the truth of the averment that, in fact, Caretti had several other employees on the Project who did not see Parker carry any bags o f cement to the cement mixer and, therefore, the allegation is deemed to be denied in accordance with Pa. R.C.P. 1029(c), and strict proof thereof is demanded at the time of trial. 7 (f) Upon information and belief, it is admitted that on or about June 22, 1998, a representative of Caretti contacted Pennsylvania Manufacturers Indemnity Company and advised that Parker offered no witnesses of his alleged accident. After reasonable investigation, Defendants are without knowledge or information sufficient to fbnn a belief as to the truth of the allegation that, in fact, Parker offered no witnesses of his alleged accident to Caretti and, therefore, the allegation shall be deemed to be denied in accordance with Pa. R.C.P. 1029(c), and strict proof thereof is demanded at the time of trial. (g) Upon information and belief, it is admitted that on or about June 22, 1998, a representative of Caretti contacted Pennsylvania Manufacturers Indemnity Company and advised that the Project was "open" in the sense that the Caretti employees on the Project could see each other working. After reasonable investigation, Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegation that the Project was, in fact, "open" in the sense that the Caretti employees on the Project could see each other working and, therefore, the allegation shall be deemed to be denied in accordance with Pa. R.C.P. 1029(c), and strict proof thereof is demanded at the time of trial. 15. The allegations contained in paragraph 15 of the Complaint are denied. To the contrary, throughout June and July, 1998, Pennsylvania Manufacturers Indemnity Company, the company which issued the Policy, continued to deny Parker's claim. The remaining companies 8 collectively identified by Plaintiff as "PMA" did not issue the Policy and had no obligation with regard to Parker's claim. 16. The allegations contained in paragraph 16 of the Complaint are denied. To the contrary, on or about June 24, 1998, Pennsylvania Manufacturers Indemnity Company, the company that issued the Policy, forwarded its file regarding Parker's claim to John Rufe ("Rufe"), an attorney with the law firm of Ticer & Associates located in Hunt Valley, Maryland and, along with the file forwarded a notice regarding the hearing date which had been scheduled for September 24, 1998. The remaining Defendants collectively identified by Plaintiff as "PMA" did not issue the Policy, did not handle the Parker claim and did not forward any file or file documents to Rufe. 17. The allegations contained in paragraph 17 of the Complaint are admitted in part and denied in part. It is admitted that Attorney Rufe contacted Caretti on or around September 8, 1998 and that a copy of a document purporting to be a letter from Rufe to Caretti is attached as Exhibit B to the Complaint. In further response, the written document attached as Exhibit B to the Complaint speaks for itself and is its own best evidence of its contents. After reasonable investigation, Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegation that the September 8, 1998 letter was Rufe's initial contact with Caretti and, therefore, the allegation is deemed to be denied in accordance with Pa. R.C.P. 1029(c), and strict proof thereof is demanded at the time of trial. Further, Defendants deny that Rufe received a file from "PMA." To the contrary, Pennsylvania Manufacturers Indemnity Company, the company that issued the Policy, forwarded the Parker file to Rufe. 9 18. Upon information and belief, the allegations contained in paragraph 18 of the Complaint are admitted with the qualification that the subpoena is a written document that speaks for itself and is its own best evidence of its contents. 19. Upon information and belief, the allegations contained in paragraph 19 of the Complaint are admitted. 20. The allegations contained in paragraph 20 of the Complaint are admitted in part and denied in part. Upon information and belief, it is admitted that Rufe returned the Papetti subpoena to Caretti indicating the process-server could not find Papetti at the address that had been provided by Caretti. After reasonable investigation, Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegation that Rufe made no further efforts to locate Papetti, such as hiring a private investigator or conducting a search through the United States Postal Service, or even looking in the telephone directory and, therefore, the allegations are deemed to be denied in accordance with Pa. R.C.P. 1029(c), and strict proof thereof is demanded at the time of trial. 21. The allegations contained in paragraph 21 of the Complaint are admitted in part and denied in part. Upon information and belief, it is admitted that, at the first hearing on September 24, 1998, Caretti sent Kline and Weaver to testify on behalf of Caretti. As to the remaining allegations contained in paragraph 21 of the Complaint, Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations that Rufe left the hearing without discussing the case with either Klein or Weaver, nor did he inform them that the case had been continued and, therefore, the allegations are deemed to be denied in accordance with Pa. R.C.P. 1029(c), and strict proof thereof is demanded at the time of trial. 10 22. Upon information and belief, the allegations contained in paragraph 22 of the Complaint are admitted. 23. The allegations contained in paragraph 23 of the Complaint are admitted in part and denied in part. Upon information and belief, it is admitted that the Commissioner presiding over the first hearing granted the continuance. After reasonable investigation, Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations that Rufe left the hearing without discussing the case with either Klein or Weaver, and did not inform them that the case had been continued and, therefore, the allegations are deemed to be denied in accordance with Pa. R.C.P. 1029(c), and strict proof thereof is demanded at the time of trial. 24. The allegations contained in paragraph 24 of the Complaint are admitted. 25. The allegations contained in paragraph 25 of the Complaint are admitted. 26. The allegations contained in paragraph 26 of the Complaint are admitted in part and denied in part. It is admitted that on the morning of October 28, 1998, the scheduled second hearing date, Rufe contacted Klein and requested him to attend the hearing later that day. The remaining allegations contained in paragraph 26 of the Complaint are denied. Upon information and belief, it is denied that Rufe contacted Klein on the morning of October 28, 1998 for the first time. To the contrary, upon information and belief, Rufe had communicated with Mr. Klein, through Caretti, regarding Parker's claim prior to October 28, 1998. It is further specifically denied that Parker's case was turned over to "PMA." To the contrary, Parker's claim was turned over to Pennsylvania Manufacturers Indemnity Company, which was the company that issued the Policy. The remaining Defendants identified by Plaintiff as "PMA" had no obligation to Caretti with regard to Parker's claim or the handling thereof. 11 27. After reasonable investigation, Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations of paragraph 27 of the Complaint and, therefore, the allegations are deemed to be denied in accordance with Pa. R.C.P. 1029(c), and strict proof thereof is demanded at the time of trial. 28. Upon information and belief, the allegations contained in paragraph 28 of the Complaint are admitted. 29. Upon information and belief, the allegations contained in paragraph 29 of the Complaint are admitted. 30. The allegations contained in paragraph 30 of the Complaint are admitted with the qualification that the date of the Commissioner's ruling in favor of Parker and granting Workers' Compensation benefits to him as well as the reasons for such award are a matter of record and are set forth in the Commissioner's decision, which written document speaks for itself and is its own best evidence of its contents. 31. The allegations contained in paragraph 31 of the Complaint are denied. It is denied that PMA agreed to provide to Caretti workers' compensation insurance. To the contrary, the Policy was issued by Pennsylvania Manufacturers Indemnity Company. In further response, the Policy is a written document which speaks for itself and is its own best evidence of its contents. It is further specifically denied that Caretti agreed to pay to PMA insurance premiums. To the contrary, and as set forth in the Policy, Caretti agreed to pay Pennsylvania Manufacturers Indemnity Company insurance premiums. 32. The allegations contained in paragraph 32 of the Complaint are denied as stated. To the extent that the allegations contained in paragraph 32 allege that "PMA" calculates any amount with regard to Caretti's insurance premiums, the same is expressly denied. To the 12 contrary, the Policy was issued by Pennsylvania Manufacturers Indemnity Company, and the other "PMA" companies to which Plaintiff collectively refers have no obligation to Caretti. In further response, insofar as the allegations contained in paragraph 32 refer to, rely upon or purport to characterize the terms of the Policy and potentially other written documents regarding the manner in which premium is calculated, those written documents speak for themselves and are their own best evidence of their contents. 33. The allegations contained in paragraph 33 of the Complaint are denied as stated. Insofar as the allegations contained in paragraph 33 refer to, rely upon or purport to characterize the terms of the Policy and potentially other written documents regarding the manner in which premium is calculated, those written documents speak for themselves and are their own best evidence of their contents. 34. The allegations contained in paragraph 34 are admitted with the qualification that, to the extent that the allegations refer to, rely upon or purport to characterize the terms of the Policy or the rules, regulations, manuals, procedures, guidelines or policies of NCCI with regard to the manner or method by which Caretti's, or any employer's, experience modification factor is calculated or finally determined, all such written documents speak for themselves and are their own best evidence of their contents. 35. The allegations contained in paragraph 35 of the Complaint, and all subparagraphs thereof, are denied as stated insofar as the allegations contained therein refer to, rely upon and purport to characterize or proffer Caretti's preferred interpretation of the rules, regulations, manuals, procedures, guidelines or policies of NCCI that might have been utilized in calculating Caretti's or any employer's experience modification factor or the terms of the Policy. hi further response, the allegations contained in paragraph 35,and all subparagraphs thereof, of 13 the Complaint are denied insofar as the allegations contained therein allege that all of the Defendants identified as "PMA" had a role with regard to NCCI's calculation of Caretti's experience modification factor. To the contrary, the Policy was issued by Pennsylvania Manufacturers Indemnity Company, and the other "PMA" companies to which Plaintiff collectively refers had no obligation with regard to NCCI's calculation of Caretti's experience modification factor. With regard to each of the subparagraphs of paragraph 35: (a) The allegations contained in paragraph 35(a) of the Complaint are denied as stated. It is specifically denied that on or before June 30 of each year, Caretti (the insured company in this case) provides PMA, its insurance carrier, with a list of all employees injured while working for Caretti during the previous three (3) years. To the contrary, Caretti provided information to Pennsylvania Manufacturers Indemnity Company, which is the company that issued the Policy to Caretti. The other "PMA" companies to which Plaintiff collectively refers had no obligation with regard to NCCI's calculation of Caretti" s experience modification factor. In further response, insofar as the allegations of paragraph 35(a) refer to, rely upon or purport to characterize or proffer Caretti's interpretation of the NCCI rules, regulations, policies, procedures and guidelines for the calculation of an employer's experience; modification factor or the terms of the Policy issued by Pennsylvania Manufacturers Indemnity Company, the same are expressly denied insofar as those written documents speak for themselves and are their own best evidence of their contents. 14 (b) Upon information and belief, the allegations contained in paragraph 35(b) of the Complaint are admitted with the qualification that the calculation of Caretti's experience modification factor was determined in accordance with the rules, regulations, policies, procedures and guidelines established by NCCI and in accordance with the terms of the Policy issued by Pennsylvania Manufacturers Indemnity Company, all of which written documents speak for themselves and arc; their own best evidence of their contents. (c) The allegations contained in paragraph 35(c) of the Complaint are denied as stated. It is expressly denied that "PMA" reported Caretti's injuries in Maryland to NCCI. To the contrary, the Policy was issued by Pennsylvania Manufacturers Indemnity Company, and the other "PMA" companies to which Plaintiff collectively refers had no obligation with regard to NCCI's calculation of Caretti's experience modification factor. In further response, insofar as the allegations contained in paragraph 35(c) refer to, rely upon or purport to characterize NCCI's rules, regulations, policies, procedures or guidelines for the calculation of an employer's experience modification factor or the terms and conditions of the Policy issued by Pennsylvania Manufacturers Indemnity Company, the same are expressly denied insofar as all of those written documents speak for themselves and are their own best evidence of their contents. 36. The allegations contained in paragraph 36 of the Complaint are denied as stated. To the contrary, the Policy was issued by Pennsylvania Manufacturers Indemnity Company and 15 the other "PMA" companies to which Plaintiff collectively refers had no obligation with regard to NCCI's calculation of Caretti's experience modification factor. In further response, insofar as the allegations contained in paragraph 36 refer to, rely upon or purport to characterize the rules, regulations, policies, procedures or guidelines by which NCCI calculates an employer's experience modification factor or the terms of the Policy issued to Caretti by Pennsylvania Manufacturers Indemnity Company, the same are expressly denied insofar as those written documents speak for themselves and are their own best evidence of their contents. 37. The allegations contained in paragraph 37 of the Complaint are denied as stated. To the contrary, the Policy was issued by Pennsylvania Manufacturers Indemnity Company and the other "PMA" companies to which Plaintiff collectively refers had no obligation with regard to NCCI's calculation of Caretti's experience modification factor. In further response, insofar as the allegations contained in paragraph 37 refer to, rely upon or purport to characterize the rules, regulations, policies, procedures or guidelines by which NCCI calculates an employer's experience modification factor or the terms of the Policy issued to Caretti by Pennsylvania Manufacturers Indemnity Company, the same are expressly denied insofar as those written documents speak for themselves and are their own best evidence of their contents. 38. The allegations contained in paragraph 38 of the Complaint are denied as stated insofar as the allegations refer to, rely upon or purport to characterize the rules, regulations, policies, procedures or guidelines by which NCCI calculates an employer's experience modification factor or the terms of the Policy issued to Caretti by Pennsylvania Manufacturers Indemnity Company, all of which written documents speak for themselves and are their own best evidence of their contents. 16 39. The allegations contained in paragraph 39 of the Complaint are denied as stated insofar as the allegations contained in paragraph 39 refer to, rely upon or purport to characterize the rules, regulations, policies, procedures or guidelines by which NCCI calculates an employer's experience modification factor at any particular time since all of those written documents speak for themselves and are their own best evidence of their contents. 40. The allegations contained in paragraph 40 of the Complaint are denied as stated insofar as the allegations contained in paragraph 40 refer to the "PMA" companies collectively. To the contrary, the Policy was issued by Pennsylvania Manufacturers Indemnity Company and the other "PMA" companies to which Plaintiff collectively refers had no obligation with regard to NCCI's calculation of Caretti's experience modification factor. In further response, insofar as the allegations contained in paragraph 40 refer to, rely upon or purport to characterize the rules, regulations, policies, procedures or guidelines by which NCCI calculates an employer's experience modification factor or the terms of the Policy, the same are expressly denied insofar as those written documents speak for themselves and are their own best evidence of their contents. 41. The allegations contained in paragraph 41 of the Complaint are denied as stated. To the contrary, the Policy was issued by Pennsylvania Manufacturers Indemnity Company and the other "PMA" companies to which Plaintiff collectively refers had no obligation to Caretti under the Policy with regard to the collection or refund of prernium. In further response, insofar as the allegations contained in paragraph 41 refer to, rely upon or purport to characterize the terms of the Policy, the same is expressly denied insofar as that written document speaks for itself and is its own best evidence of its contents. 17 42. The allegations contained in paragraph 42 of the Complaint are denied as stated insofar as the allegations refer to, rely upon or purport to characterize the terms of the Policy or any potentially affected policies or the rules, regulations, manuals, procedures, guidelines or policies of NCCI with regard to the manner or method by which Caretti's, or any employer's, experience modification factor or insurance premiums are calculated or finally determined, all such written documents speak for themselves and are their own best evidence of their contents. 43. The allegations contained in paragraph 43 of the Complaint and the footnote referenced therein, are denied as stated insofar as the allegations refer to, rely upon or purport to characterize the terms of the Policy or any potentially affected policies and, further are denied as stated to the extent that the allegations refer to, rely upon or purport to characterize the terms of the Policy or the rules, regulations, manuals, procedures, guidelines or policies of NCCI with regard to the manner or method by which Caretti's, or any employer's, experience modification factor or insurance premiums are calculated or finally determined, all such written documents speak for themselves and are their own best evidence of their contents. After reasonable investigation, Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations contained in footnote 1 of Caretti's Complaint and, therefore, the allegations contained in footnote 1 of Caretti's Complaint are deemed to be denied in accordance with Pa. R.C.P. 1029(c), and strict proof thereof is demanded at the time of trial. Further, it is specifically denied that Caretti has paid insurance premiums to "PMA". To the contrary, Caretti has paid workers' compensation insurance premiums to Pennsylvania Manufacturers Indemnity Company, which is the company that issued the Policy to Caretti. 18 COUNT I - BREACH OF CONTRACT 44. The allegations contained in paragraph 44 of the Complaint consist entirely of an incorporation by reference of the preceding paragraphs of the Complaint and, accordingly, no answer is required. To the extent that a response might be deemed to be required by the Court, Defendants hereby incorporate paragraphs 1-43, inclusive, of this Answer and New Matter as though fully set forth at length herein. 45. The allegations contained in paragraph 45, and all subparagraphs thereof, of the Complaint constitute conclusions of law to which no response is required. To the extent that a response might be deemed to be required by the Court, the allegations contained in paragraph 45, and all subparagraphs thereof, are denied. Insofar as the allegations contained in paragraph 45, and all subparagraphs thereof, refer to "PMA" collectively, as having failed to perform its obligations under the Policy, the same is denied. The Policy was issued by Pennsylvania Manufacturers Indemnity Company, and the other "PMA" companies to which Plaintiff collectively refers had no obligation with regard to the deferise of Parker's claim. In further response, it is specifically denied that Pennsylvania Manufacturers Indemnity Company failed to adequately defend Caretti as required by the Policy. To the contrary, Pennsylvania Manufacturers Indemnity Company did adequately defend Caretti in accordance with the terms and conditions of the Policy. Insofar as the allegations of paragraph 45, and all subparagraphs thereof, refer to, rely on and purport to characterize the duties or obligations, if any, created by the Policy, the same is expressly denied insofar as the Policy is a written document which speaks for itself and is its own best evidence of its contents. With regard to the subparagraphs of paragraph 45 of the Complaint: 19 (a) It is denied that Pennsylvania Manufacturers Indemnity Company failed to adequately defend Caretti as required by the Policy in that Rufe allegedly failed to contact Caretti to begin preparation of the case until approximately three (3) weeks prior to the first hearing. To the contrary, Caretti was provided an adequate defense. Further, these Defendants are without knowledge or information sufficiient to form a belief as to the truth of the averment that Rufe failed to contact Caretti to begin preparation of the case until approximately three (3) weeks prior to the hearing and, therefore, the allegations are deemed to be denied in accordance with Pa. R.C.P. 1029(c), and strict proof thereof is demanded at the time of trial. (b) It is denied that Pennsylvania Manufacturers Indemnity Company failed to adequately defend Caretti as required by the Policy in that Rufe allegedly failed to request documents regarding Parker's prior injury in order to have them in hand during the first hearing on September 24, 1998. To the contrary, Caretti was provided an adequate defense. Further, these Defendants are without knowledge or information sufficient to form a belief as to the truth of the averment that Rufe failed to request the documents regarding Parker's prior injury in order to have them in hand during the first hearing on September 24, 1998 and, therefore, the allegations are deemed to be denied in accordance with Pa. R.C.P. 1029(c), and strict proof thereof is demanded at the time of trial. (c) It is denied that Pennsylvania Manufacturers Indemnity Company failed to adequately defend Caretti as required by the Policy in that Rufe failed to 20 inform Caretti of the reasons causing the first hearing to be continued. To the contrary, Caretti was provided an adequate defense. Further, Defendants are without knowledge or iinformation sufficient to form a belief as to the truth of the allegations that Rufe failed to inform Caretti of the reasons causing the first hearing to be continued and, therefore, the allegations are deemed to be denied in accordance with Pa. R.C.P. 1029(c), and strict proof thereof is demanded at trial. (d) It is denied that Pennsylvania Manufacturers Indemnity Company failed to adequately defend Caretti as required by the Policy in that Rufe failed to contact any Caretti witness until the morning of the second scheduled hearing. To the contrary, Caretti was provided an adequate defense. Further, the Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegation that Rufe failed to contact any Caretti witness until the morning of the second scheduled hearing and, therefore, the allegations are deemed to be denied in accordance with Pa. R.C.P. 1029 (c), and strict proof thereof is demanded at the time of trial. (e) It is denied that Pennsylvania Manufacturers Indemnity Company failed to adequately defend Caretti as required by the Policy in that "PMA" failed to offer any defenses on the part of Caretti. To the contrary, Caretti was provided an adequate defense by Pennsylvania Manufacturers Indemnity Company, the company that issued the Policy. Further, upon information and belief, defenses were offered to Parker's claim. 21 (f) It is denied that "PMA" failed to adequately defend Caretti as required by the Policy in that "PMA" failed to keep Caretti informed as to the status of the case. To the contrary, Caretti was provided an adequate defense by Pennsylvania Manufacturers Indemnity Company, the company that issued the Policy, and Caretti was informed of the status of the case by Pennsylvania Manufacturers Indemnity Company, Rufe, the Maryland Workers' Compensation authorities and Caretti's own employees. (g) The allegations contained in paragraph 45(g) of the Complaint constitute conclusions of law to which no response: is required. To the extent that a response might be deemed to be required by the Court, it is specifically denied that "PMA" failed to satisfy any fiduciary obligations which it assumed and owed to Caretti. To the contrary, "PMA" neither assumed nor owed any duties to Caretti. Pennsylvania Manufacturers Indemnity Company satisfied each and every fiduciary obligation which it might have assumed or owed to Caretti. 46. The allegations contained in paragraph 46 and all subparagraphs thereof of the Complaint are denied. Insofar as the allegations of paragraph 46 and all subparagraphs thereof, refer to the "PMA" companies collectively, the allegations are denied. The Policy was issued by Pennsylvania Manufacturers Indemnity Company. The other "PMA" companies to which Plaintiff collectively refers had no obligation with regard to the investigation of the Parker claim. To the extent that the allegations contained in paragraph 46, and all subparagraphs thereof, refer to, rely upon or purport to characterize the terms, conditions or requirements of the Policy, the 22 same is expressly denied insofar as the Policy is a written document which speaks for itself and is its own best evidence of its contents. As to each of the subparagraphs of paragraph 46: (a) It is specifically denied that Pennsylvania Manufacturers Indemnity Company failed to conduct any search to locate John Papetti. To the contrary, upon information and belief, efforts were undertaken by Rufe, Caretti and possibly others to locate John Papetti. (b) It is specifically denied that Rufe failed to interview any Caretti witnesses in person or failed to interview any witness prior to the day of the hearing. Upon information and belief, Rufe did speak with representatives of Caretti prior to the day of hearing to discuss and investigate the circumstances surrounding Parker's claim. (c) It is specifically denied that Pennsylvania Manufacturers Indemnity Company failed to investigate the possibility of settlement of the Parker claim. To the contrary, the possibility of settlement was investigated. 47. The allegations contained in paragraph 47 of the Complaint constitute conclusions of law to which no response is required. To the extent that a response might be deemed to be required by the Court, the allegations contained in paragraph 47 of the Complaint are denied. Insofar as the allegations contained in paragraph 47 refer to "I'MA" collectively, the allegations are denied. The "PMA" companies other than Pennsylvania Manufacturers Indemnity Company had no obligation with regard to the investigation of the Parker claim. Upon information and belief, no further investigation would have discovered sufficient information to defeat Parker's claim against Caretti. 23 48. The allegations contained in paragraph 48 of the Complaint constitute conclusions of law to which no response is required. To the extent that a response might be deemed to be required by the Court, the allegations contained in paragraph 48 of the Complaint are denied. The Policy was issued solely by Pennsylvania Manufacturers Indemnity Company and the other "PMA" companies to which Plaintiff collectively refers had no obligation with regard to the handling of Parker's claim. To the extent that the allegations contained in paragraph 48of the Complaint refer to, rely upon or purport to characterize the terms, conditions or requirements of the Policy, the same is expressly denied insofar as the Policy is a written document which speaks for itself and is its own best evidence of its contents. It is further specifically denied that Pennsylvania Manufacturers Indemnity Company breached the Policy in the handling of Parker's claim and that Caretti's insurance premiums for workers' compensation insurance have increased on account of an increase in Caretti's MOD as a result of the breach of the Policy in the handling of Parker's claim. To the contrary, Pennsylvania Manufacturers Indemnity Company did not breach the Policy in the handling of Parker's claim and no increase of premium occurred as a result of any act or omission of Pennsylvania Manufacturers Indemnity Company. WHEREFORE, Defendants, Pennsylvania Manufacturers' Association Insurance Company, Manufacturers Alliance Insurance Company, Pennsylvania Manufacturers Indemnity Company and Mid-Atlantic States Casualty Company, respectfully request this Honorable Court enter judgment in their favor and against Plaintiff, Caretti, Inc., as to all claims and causes of action asserted in Count I of the Complaint and, further, that this Honorable Court deny Plaintiff all forms of relief sought by Plaintiff in the ad damnum provisions in the "wherefore" clauses at the end of Count I of Plaintiff's Complaint and award Defendants such farther and additional relief as may be deemed just and appropriate. 24 II. COUNT II - BREACH OF FIDUCIARY DUTY 49. The allegations contained in paragraph 49 of the Complaint consist entirely of an incorporation by reference of prior paragraphs of the Complaint and, therefore, no response is required. To the extent that a response might be deemed to be required by the Court, Defendants incorporate by reference herein paragraphs 1-48, inclusive, of this Answer and New Matter as though fully set forth at length. 50. The allegations contained in paragraph 50 of the Complaint constitute conclusions of law to which no response is required. To the extent that a response might be deemed to be required by the Court, the allegations of paragraph 50 of the Complaint are denied as stated. To the contrary, the fact that an insurer and insured entered into an insurance contract does not create a fiduciary responsibility with regard to any and all circumstances which might arise. In further response, to the extent that the allegations contained in paragraph 50 of the Complaint provide no factual or legal context whatsoever to clarify the nature or circumstances allegedly giving rise to the purported fiduciary responsibility between an insurer and insured upon which Plaintiff bases its allegations, these Defendants lack sufficient knowledge or information to form a belief as to the truth of the averments regarding any and all hypothetical or undefined circumstances relied upon by Plaintiff and, therefore, the allegations of paragraph 50 of the Complaint are deemed to be denied in accordance with Pa. R.C.P. 1029(c), and strict proof thereof is demanded at the time of trial. 51. The allegations contained in paragraph 51 of the: Complaint constitute conclusions of law to which no response is required. To the extent that a. response might be deemed to be required by the Court, the allegations contained in paragraph 51 of the Complaint are denied as 25 stated. To the contrary, the fact that an insurer and insured entered into an insurance contract does not create in the insurer an affirmative duty to act in ;good faith and with due care in representing the interests of the insured in all claims brought against its insured by third parties under all facts and all circumstances. In further response, insofar as the allegations contained in paragraph 51 of the Complaint fail to provide any context or factual setting upon which the Defendants could form any opinions or conclusions regarding whether to admit or deny same, the Defendants are without knowledge or information sufficient to form a belief as to the truth of the averments contained in paragraph 51 and, therefore, the allegations are deemed to be denied in accordance with Pa. R.C.P. 1029(c), and strict proof thereof is demanded at the time of trial. 52. The allegations contained in paragraph 52 of the Complaint constitute conclusions of law to which no response is required. To the extent that a response might be deemed to be required by the Court, the allegations contained in paragraph 52 of the Complaint are denied as stated. To the contrary, the fact that an insurer and insured entered into an insurance contract does not create a duty on the part of the insurer to investigate all claims filed against its insured by third parties under all facts and all circumstances. In further response, insofar as the allegations contained in paragraph 52 fail to provide any factual support or context by which the Defendants could form any analysis or conclusions regarding, whether to admit or deny same, these Defendants are without knowledge or information sufficient to form a belief as to the truth of the averments contained in paragraph 52 of the Complaint and, therefore, the allegations are deemed to be denied in accordance with Pa. R.C.P. 1029(c), and strict proof thereof is demanded at the time of trial. 53. The allegations contained in paragraph 53 and. all subparagraphs thereof of the Complaint are denied. The Policy was issued Pennsylvania Manufacturers Indemnity Company, 26 and the other "PMA" companies to which Plaintiff collectively refers had no obligation with regard to the investigation of the Parker claim. To the extent that the allegations contained in paragraph 53, and all subparagraphs thereof, refer to, rely upon or purport to characterize the terms, conditions or requirements of the Policy, the same are expressly denied insofar as the Policy is a written document which speaks for itself and is its own best evidence of its contents. Further, Parker's claim was adequately investigated. As to each of the subparagraphs of paragraph 53: (a) It is specifically denied that Pennsylvania Manufacturers Indemnity Company failed to conduct any search to locate John Papetti. To the contrary, upon information and belief, efforts were undertaken by Rufe, Caretti and possibly others to locate John. Papetti. (b) It is specifically denied that Pennsylvania Manufacturers Indemnity Company's counsel failed to interview any Caretti witness in person, and failed to interview any witness prior to the day of the hearing. Upon information and belief, Rufe spoke with representatives of Caretti prior to each hearing to discuss and investigate the facts and circumstances surrounding Parker's claim. (c) It is specifically denied that Pennsylvania Manufacturers Indemnity Company failed to investigate the possibility of settlement of the Parker claim. To the contrary, the possibility of settlement was investigated. 54. The allegations contained in paragraph 54, and all subparagraphs thereof, of the Complaint constitute conclusions of law to which no response; is required. To the extent that a response might be deemed to be required by the Court, the allegations contained in paragraph 54, 27 and all subparagraphs thereof, are specifically denied. Insofar as the allegations contained in paragraph 54, and all subparagraphs thereof, refer to "PMA"' collectively, the allegations are denied. The Policy was issued by Pennsylvania Manufacturers Indemnity Company, and the other "PMA" companies to which Plaintiff collectively refers had no obligation with regard to the defense of the Parker claim. In further response, Pennsylvania Manufacturers Indemnity Company did adequately defend Caretti. With regard to the subparagraphs of paragraph 54 of the Complaint: (a) It is denied that Pennsylvania Manufacturers Indemnity Company failed to adequately defend Caretti as required by the Policy in that Rufe allegedly failed to contact Caretti to begin preparation of the case until approximately three (3) weeks prior to the hearing. To the contrary, Caretti was provided an adequate defense. Further, these Defendants are without knowledge or information sufficient to form a belief as to the truth of the averment that Rufe failed to contact Caretti to begin preparation of the case until approximately three (3) weeks prior to the hearing and, therefore, the allegations are deemed to be denied in accordance with Pa. R.C.P. 1029(c), and strict proof thereof is demanded at the time of trial.. (b) It is denied that Pennsylvania Manufacturers Indemnity Company failed to adequately defend Caretti as required by the Policy in that Rufe allegedly failed to request documents regarding Parker's prior injury in order to have them in hand during the first hearing on September 24, 1998. To the contrary, Caretti was provided an adequate defense. Further, these Defendants are without knowledge or information sufficient to form a 28 belief as to the truth of the averment that Rufe failed to request the documents regarding Parker's prior injury in order to have them in hand during the first hearing on September 24, 1998 and, therefore, the allegations are deemed to be denied in accordance with Pa. R.C.P. 1029(c), and strict proof thereof is demanded at the time of trial. (c) It is denied that Pennsylvania Manufacturers Indemnity Company failed to adequately defend Caretti as required by the Policy in that Rufe allegedly failed to inform Caretti of the reasons causing the first hearing to be continued. To the contrary, Caretti was provided an adequate defense. Further, Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegations that Rufe failed to inform Caretti of the reasons causing the first hearing to be continued and, therefore, the allegations are deemed to be denied in accordance with Pa. R.C.P. 1029(c), and strict proof thereof is demanded at trial. (d) It is denied that Pennsylvania Manufacturers Indemnity Company failed to adequately defend Caretti as required by the Policy in that Rufe failed to contact any Caretti witness until the morning of the second scheduled hearing. To the contrary, Caretti was provided an adequate defense. Further, the Defendants are without knowledge or information sufficient to form a belief as to the truth of the allegation that Rufe failed to contact any Caretti witness until the morning of the second scheduled hearing and, therefore, the allegations are deemed to be denied in accordance with Pa. R.C.P. 1029 (c), and strict proof thereof is demanded at the time of trial. 29 (e) It is denied that Pennsylvania Manufacturers Indemnity Company failed to adequately defend Caretti as required by the Policy in that "PMA" allegedly failed to offer any defenses on the part of Caretti. To the contrary, Caretti was provided an adequate defense by Pennsylvania Manufacturers Indemnity Company, the company that issued the Policy. Further, defenses were offered to Parker's claim. (f) It is denied that "PMA" failed to adequately defend Caretti as required by the Policy in that "PMA" allegedly failed to keep Caretti informed as to the status of the case. To the contrary, Caretti was provided an adequate defense by Pennsylvania Manufacturers Indemnity Company, the company that issued the Policy, and Caretti was kept informed of the status of the case by Pennsylvania Manufacturers Indemnity Company, Rufe, the Maryland Workers' Compensation authorities and Caretti's employees. 55. The allegations contained in paragraph 55 of the Complaint constitute conclusions of law to which no response is required. To the extent that a response might be deemed to be required by the Court, the allegations contained therein are denied. Pennsylvania Manufacturers Indemnity Company issued the Policy to Caretti and none of the other "PMA" companies to which Plaintiff collectively refers had any obligation with regard to the investigation or defense of Parker's claim. Further, it is specifically denied that Pennsylvania Manufacturers Indemnity Company failed to properly investigate or defend Parker's claim. To the contrary, Pennsylvania Manufacturers Indemnity Company did properly investigate and defend Parker's claim. It is further denied that any alleged act or omission of Pennsylvania Manufacturers Indemnity 30 Company or counsel selected by it constituted a breach of an;y fiduciary duty that might have been owed to Caretti. To the contrary, neither Pennsylvania Manufacturers Indemnity Company nor Rufe breached any fiduciary duty which might have been owed to Caretti. 56. The allegations contained in paragraph 56 of the Complaint constitute conclusions of law to which no response is required. To the extent that a response might be deemed to be required by the Court, the allegations contained in paragraph 56 of the Complaint are denied. Pennsylvania Manufacturers Indemnity Company issued the Policy to Caretti, and none of the other "PMA" companies to which Plaintiff collectively refers had any obligation with regard to the investigation or defense of the Parker claim. It is further specifically denied that Pennsylvania Manufacturers Indemnity Company failed to act in good faith and due care in representing the interests of its insured, Caretti. To the contrary, at all times, Pennsylvania Manufacturers Indemnity Company acted with the utmost good faith and due care in representing the interests of its insured, Caretti with regard to the investigation and defense of the Parker claim. WHEREFORE, Defendants, Pennsylvania Manufacturers Association Insurance Company, Manufacturers Alliance Insurance Company, Pennsylvania Manufacturers Indemnity Company and Mid-Atlantic States Casualty Company, respectfully request this Honorable Court enter judgment in their favor and against Plaintiff, Caretti, Inc., as to all claims and causes of action asserted in Count II of the Complaint and, further, that this Honorable Court deny Plaintiff all forms of relief sought by Plaintiff in the ad damnum provisions in the "wherefore" clauses at the end of Count II of Plaintiff's Complaint and award Defendants such further and additional relief as may be deemed just and appropriate. 31 NEW MATTER 57. The averments contained in paragraphs 1 through 56, inclusive, of this Answer and New Matter are incorporated herein by reference as though fully set forth at length. 58. At no time during Rufe's handling of the investigation and defense of the Parker claim did Caretti object to Rufe about the manner in which Rufe was handling the investigation or the defense of the Parker claim. 59. At no time during Rufe's handling of the investigation and defense of the Parker claim did Caretti object to Pennsylvania Manufacturers Indemnity Company about the manner in which Rufe was handling the investigation or the defense of the Parker claim. 60. If it is determined that each of the companies collectively referred to by Plaintiff as "PMA" in the Complaint had any duty or obligation to Plaintiff under the Policy or otherwise with regard to the investigation or defense of the Parker claim (all of which is expressly denied) then, in that event, at no time during Rufe's handling of the investigation and defense of the Parker claim did Caretti object to "PMA" about the manner in which Rufe was handling the investigation or the defense of the Parker claim. 61. At all times during Rufe's investigation and defense of the Parker claim, Caretti consented to the manner in which Rufe handled the investigation and the defense of the Parker claim. 62. By consenting, whether expressly or impliedly, to Rufe's handling of the investigation and defense of the Parker claim, Caretti has waived the claims asserted in the Complaint. 32 63. By virtue of Caretti's consent, whether express or implied, to Rufe's handling of the investigation and defense of the Parker claim, each of the claims asserted in the Complaint are barred by the equitable doctrine of laches. 64. By failing to object to Rufe's handling of the investigation and defense of the Parker claim during the pendency of the Parker claim before the Maryland Workers Compensation Commission, Caretti failed to provide Rufe 'with notice of Caretti's alleged dissatisfaction and thereby deprived Rufe of an opportunity to withdraw from the defense of the claim or to attempt to cure the alleged defects in his performance. 65. By failing to object to Rufe's handling of the investigation and defense of the Parker claim during the pendency of Parker's claim before the ]Maryland Workers Compensation Commission, Caretti failed to provide Pennsylvania Manufacturers Indemnity Company with notice of Caretti's alleged dissatisfaction and thereby deprived Pennsylvania Manufacturers Indemnity Company of an opportunity to replace Rufe or to attempt to cure the alleged defects in Rufe's performance. 66. If it is determined that each of the companies collectively referred to by Plaintiff as "PMA" in the Complaint had any duty or obligation to Plaintiff under the Policy or otherwise with regard to the investigation or defense of the Parker claim (all of which is expressly denied) then, in that event, by failing to object to Rufe's handling of the investigation and defense of the Parker claim during the pendency of the Parker claim before the Maryland Workers Compensation Commission, Caretti failed to provide PMA with notice of Caretti's alleged dissatisfaction and thereby deprived PMA of an opportunity to replace Rufe or to attempt to cure the alleged defects in Rufe's performance. 33 67. Caretti's silence as to the alleged deficiencies in Rufe's performance was in breach of Caretti's obligations as an insured under the Policy. 68. Caretti's silence as to the alleged deficiencies in Rufe's performance was in breach of Caretti's obligations of good faith and fair dealing with Pennsylvania Manufacturers Indemnity Company. 69. Caretti's silence as to the alleged deficiencies in Rufe's performance caused or substantially contributed to the damages which Caretti now claims to have suffered as set forth in the Complaint. 70. Caretti's claims and causes of action as set forth in the Complaint are based upon the alleged professional negligence and/or legal malpractice of Rufe in the investigation and defense of the Parker claim. 71. In his investigation and defense of the Parker claim, Rufe exercised the skill, knowledge, or judgment that is usually exercised in the circumstances by members in good standing in the legal community in substantially similar matters. 72. Rufe was not negligent in his investigation and defense of the Parker claim. 73. No act or omission of Rufe caused or contributed to any loss or damages of Caretti, if any such loss or damages there may be, with regard to the investigation or defense of the Parker claim. 74. The substantive law of the State of Maryland governs the disposition of all claims set forth in the Complaint. 75. All of the claims and causes of action set forth in the Complaint accrued in the State of Maryland. 34 76. The alleged acts and omissions of Rufe about which Plaintiff complains in the Complaint occurred in the State of Maryland. 77. The alleged acts and omissions of Pennsylvania Manufacturers Indemnity Company about which Plaintiff complains in the Complaint occurred in the State of Maryland. 78. If it is determined that each of the companies collectively referred to by Plaintiff as "PMA" in the Complaint had any duty or obligation to Plaintiff under the Policy or otherwise with regard to the investigation or defense of the Parker claim (all of which is expressly denied) then, in that event, the alleged acts and omissions of "PMA" about which Plaintiff complains in the Complaint occurred in the State of Maryland. 79. The investigation of Parker's workers compensation claim occurred in the State of Maryland. 80. The defense of Parker's workers compensation claim occurred in the State of Maryland before the Maryland Workers Compensation Commission. 81. By no later than October 28, 1998, the date of the second hearing in the Parker workers compensation proceedings, Caretti knew of the occurrence of each and every act and omission of Rufe, Pennsylvania Manufacturers Indemnity Company or "PMA" which are alleged to form the basis of Caretti's claims in this action. 82. The breach of contract claim set forth in Count I of the Complaint is barred, in whole or in part, by the statute of limitations applicable to such claims under the law of the State of Maryland. 83. The breach of fiduciary duty claim set forth in Count H of the Complaint is barred, in whole or in part, by the statute of limitations applicable to such claims under the law of the state of Maryland. 35 84. In the alternative, the breach of contract claim set forth in Count I of the Complaint is barred, in whole or in part, by the applicable statute of limitations of the Commonwealth of Pennsylvania. 85. hi the alternative, the breach of fiduciary duty claim set forth in Count II of the Complaint is barred, in whole or in part, by the applicable statute of limitations of the Commonwealth of Pennsylvania. 86. Caretti expressed no objection, dissatisfaction or concern to any of the Defendants with regard to the manner in which the Parker claim was investigated or defended until Parker's claim was determined to be compensable. 87. Caretti's claims are barred by the equitable doctrine of unclean hands. 88. The Maryland Workers Compensation Commission was free to accept or reject, in whole or in part, the testimony of any witness who might have testified in the Parker workers compensation proceedings. 89. Had any of Caretti's employees testified in the Parker workers compensation proceedings, there was no guarantee that Parker's claim would not be found to be compensable. 90. Caretti has not been damaged in any manner or amount by any alleged act or omission of Rufe. 91. Caretti has not been damaged in any manner or amount by any alleged act or omission of Pennsylvania Manufacturers Indemnity Company. 92. If it is determined that each of the companies collectively referred to by Plaintiff as "PMA" in the Complaint had any duty or obligation to Plaintiff under the Policy or otherwise with regard to the investigation or defense of the Parker claim (all of which is expressly denied) 36 • damaged in any manner or amount by any alleged act or then, in that event, Caretti has not been omission of "PMA ' in whole or in part because Caretti equitable relief are barred, damages. 93. Caretti's claims for remedy at law for money complete non-statutory or may not be possesses a full, adequate and comp uitable relief with regard to actions that may al or factual impossibility of the 94. Caretti's claims for eq taken by or through NCCI are barre d by virtue of the leg performance demanded cognizable in the context of a 95. Caretti's claims for purely economic loss are not duty. ainst tort claim for breach of fiduciary to the Courts. authority to provide relief as ag As a condition precedent Manufacturers Alliance 96. lvlanufacturersI Association Insuranc<- COrnpan ' must be a valid and Pennsylvania Company, there Insurance Company, and Mid-Atlantic States Casualty tible of interpretation by the enforceable policy of insurance issued by them to C uetti suscep Pennsylvania Manufacturers' Association Court There is no policy of insurance issued by or Mid-Atlantic States Manufacturers Alliance Insurance Company, Court and provide the relief Insurance Company' interpreted by Casualty Company in this case that can be requested by the Caretti* ed therein, fails to set claim for relief alleged 97 The Complaint, and each and every of the Defendants* cognizable claim for relief against any forth sufficient facts to state any 98, The Complaint fails to state any cogzilzable claim based upon or arising out of the ainst terms or conditions of the Policy. 99. The Complaint fails to state any cognizable claim for breach of contract ag any of the Defendants. 37 100. any cognizable claim for breach of fiduciary duty The Complaint fails to state covert' as against any of the Defendants barred b y its own • stopped and actions and conduct from T. 101. Cazetti use certain. ed in the . ed therein, are complaint claim foi' relief alleged are barred by all eg d each and every ed therein, 102. The Complaint, an and every claim for relief alleg ]aint, an d each an103. The Comp barred by of unclean hands ed equitable doctrine therein, are 104. for relief alleg each and every claim the The Complaint' and if any, the eq diligence to mitigate its losses, uitable defense of laches. reasonable care and dxhg 105. Caretti has not used connection wl? the acts and omissions edl suffered by CaTettlin if any, alleg y and the damageSi that event, taint are therefore barred' of the Defendants then, in alleged in the Come ages from, auuY full or in part to the Should Caretti recover dam reduced in damages 106. ount of said damages if roximately contribute Defendants are entitled to have the am extent d to Carett' , that the acts and/or omissions of others p of the Defendants was in any such damages there are' en by or on behalf of any Any conduct or action undertah ts' business and 107. t to the reasonable conduct of Defendan without malice and pursuan good faith, indicate ery so was lawful, Justified and privileged. 108. Defendants reserve the right to assert additional defenses if discov Association ]nsuraz anted. Manufacturers that such defenses are waix penes Ylvania Marrufacturexs Indem ?EREFORE, Defendants, Pe?sy]vania Alliance Insurance; Company' Company Manufacturers 39 Company and Mid-Atlantic States Casualty Company, respectfully request this Honorable Court enter judgment in their favor and against Plaintiff, Caretti, Inc;., as to all claims and causes of action asserted in the Complaint and, further, that this Honorable Court award Defendants such further and additional relief as may be deemed just and appropriate. Respectfully submitted, PIETRAGALLO, BOSICK & GORDON DATE: June 23, 2003 By: M ordon, Esq. Pa. . #25561 Bryan K. Shreckengost, Esq. Pa. I.D. #69098 Pietragallo, Bosick & Gordon Firm #834 One Oxford Centre - 38c" Floor Pittsburgh., Pennsylvania 15219 (412) 263-2000 Attorneys for Defendants 39 VERIFICATION I, Bryan K. Shreckengost, Esquire, as counsel for the Defendants in this action, am providing this Verification pursuant to the provision of Pennsylvania Rule of Civil Procedure 1024(c) to expedite the filing of this pleading insofar as the; Verifications of the Defendants cannot be obtained within the time allowed for filing this pleading. This statement of verification is made subject to the penalties of 18 Pa.C.S. §4904 relating to unsworn falsification to authorities which provides that if I knowing make false statements, I may be subject to criminal penalties. Date: 3 O3 B ar K. Shrecke igost, Esquir CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing Answer and New Matter was served by United States first class mail, postage pre-paid, this 23rd day of June, 2003, upon: Thomas S. Beckley, Esquire BECKLEY & MADDEN 212 North Third Street P.O. Box 11998 Harrisburg, PA 17108-1998 (Attorneys for Plaintiff t M# ordon, Esq. Pa. M. #25561 Bryan K. Shrecken.gost, Esq. Pa. I.D. #69098 Pietragallo, Bosick & Gordon Firm #834 One Oxford Centre - 38 h Floor Pittsburgh, Pennsylvania 15219 (412) 263-2000 Attorneys for Defendants ._. C +'?.,i n lep y f!?' ??.`7 C? ._a _ ?' :. ? __ v d ?? N , i ?. .? n 1 7 f? s ?. X7 'r CARETTI, INC., Plaintiff, V. PENNSYLVANIA MAUNFACTURERS' ASSOCIATION INSURANCE COMPANY, MANUFACTURERS ALLIANCE INSURANCE COMPANY, PENNSYLVANIA MANUFACTURERS INDEMNITY COMPANY, and MID- ATLANTIC STATES CASUALTY COMPANY, IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA ACTION IN EQUITY NO. 02-2701 DEFENDANTS' VERIFICATION OF ANSWER AND NEW MATTER Defendants. VERIFICATION I, John Burke, Assistant Vice-President of Claims for the Defendants, do hereby verify that the averments of fact set forth in the foregoing Answer and New Matter are true and correct based on knowledge, information and belief and that I am authorized to execute this Verification on behalf of the Defendants. This Verification is made subject to the penalties of 18 Pa.C.S.A. § 4904 relating to unworn falsification to authorities. Date: By: W Name' ohn Burke Title: Assistant Vice-President CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing Defendants' Verification of Answer and New Matter was served by United States first class mail, postage pre-paid, this 14s' day of July, 2003, upon: Thomas S. Beckley, Esquire BECKLEY & MADDEN 212 North Third Street P.O. Box 11998 Harrisburg, PA 17108-1998 (Attorneys for Plaintiff 6 ojo/ / M rdon, Esq. Pa. . . #25561 Bryan K. Shreckengost, Esq. Pa. I.D. #69098 Pietragallo, Bosick & Gordon Firm #834 One Oxford Centre - 38a' Floor Pittsburgh, Pennsylvania 15219 (412) 263-2000 Attorneys for Defendants C _. ?n CARETTI, INC., IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff, V. PENNSYLVANIA MANUFACTURERS' ASSOCIATION INSURANCE COMPANY, MANUFACTURERS ALLIANCE INSURANCE COMPANY, PENNSYLVANIA MANUFACTURERS INDEMNITY COMPANY, and MID- ATLANTIC STATES CASUALTY COMPANY, ACTION IN EQUITY NO. 02-2701 Defendants. NOTICE OF SERVICE OF DISCOVERY Notice is hereby given of the service by Defendants, Pennsylvania Manufacturers Association Insurance Company, Manufacturers Alliance Insurance Company, Pennsylvania Indemnity Company and Mid-Atlantic States Casualty Company, upon all counsel of record of discovery consisting of Defendants' First Set of Interrogatories and First Request for Production of Documents Directed to Plaintiff by forwarding the same to them the l't day of August, 2003, via U.S. mail, postage prepaid, at the address listed on the attached certificate of service. PIETRAGALLO, BOSICK & GORDON By:ia ?n M k rdon PA #25561 Bryan K. Shreckengost PA ID #69098 The Thirty-Eighth Floor One Oxford Centre Pittsburgh, PA 15219 (412) 263-2000 Attorneys for Defendants, Pennsylvania Manufacturers' Association Insurance Company, Manufacturers Alliance Insurance Company, Pennsylvania Manufacturers Indemnity Company, and Mid-Atlantic States Casualty Company CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing NOTICE OF SERVICE OF DISCOVERY was served by U.S. first class mail, postage pre-paid, this I" day of August, 2003, upon the following: Thomas S. Beckley, Esquire Beckley & Madden 212 North Third Street P.O. Box 11998 Harrisburg, PA 17108-1998 (Attorneys for Piainti, fJi r? OD CARETTI, INC., IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff, V. PENNSYLVANIA MANUFACTURERS' ASSOCIATION INSURANCE COMPANY MANUFACTURERS ALLIANCE INSURANCE COMPANY, PENNSYLVANIA MANUFACTURERS INDEMNITY COMPANY, and MID- ATLANTIC STATES CASUALTY COMPANY, ACTION IN EQU]TY NO. 02-2701 Defendants. MOTION TO COMPEL, AND NOW, come the Defendants, Pennsylvania Manufacturers' Association Insurance Company, Manufacturers Alliance Insurance Company, Pennsylvania Manufacturers Indemnity Company, and Mid-Atlantic States Casualty Company, by and through their attorneys, Pietragallo, Bosick & Gordon, and file the within Motion to Compel stating as follows: 1. On August 1, 2003, Defendants served their First Set of Interrogatories Directed to Plaintiff as well as the First Request for Production of Documents Directed to Plaintiffs. Attached hereto as Exhibit "A" is a copy of Defendants' First Set of Interrogatories. Attached hereto as Exhibit "B" is a copy of Defendants' First Request for Production of Documents. 2. To date, Plaintiff has failed to respond to Defendants' discovery requests. 3. Upon information and belief, unless ordered to do so, Plaintiff will not respond to Defendants' discovery. WHEREFORE, Defendants respectfully request this Court order and direct Plaintiff to respond to Defendants' discovery requests within ten (10) days of the date hereof. Respectfully submitted, PIETRAGALLO, BOSICK & GORDON By, ark ordon P[V#25561 Bryan K. Shreckengost PA ID #69098 The Thirty-Eighth Floor One Oxford Centre Pittsburgh, PA 15219 Tel.: (412) 263-2000 Fax: (412) 261-5292 Attorneys for Defendants, Pennsylvania Manufacturers' Association Insurance Company, Manufacturers Alliance Insurance Company, Pennsylvania Manufacturers Indemnity Company, and Mid-Atlantic States Casualty Company -2- EXHIBIT A CARETTI, INC., IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff, V. PENNSYLVANIA MANUFACTURERS' ASSOCIATION INSURANCE COMPANY, MANUFACTURERS ALLIANCE INSURANCE COMPANY, PENNSYLVANIA MANUFACTURERS INDEMNITY COMPANY, and MID- ATLANTIC STATES CASUALTY COMPANY, ACTION IN EQUITY NO. 02-2701 Defendants. DEFENDANTS' FIRST SET' OF INTERROGATORIES DIRECTED TO PLAINTIFF AND NOW, come the Defendants, Pennsylvania Manufacturers' Association Insurance Company, Manufacturers Alliance Insurance Company, Pennsylvania Manufacturers Indemnity Company, and Mid-Atlantic States Casualty Company, by and through their attorneys, Pietragallo, Bosick & Gordon, pursuant to the applicable Pennsylvania Rules of Civil Procedure, and serves this First Set of Interrogatories directed to Plaintiff, and demands that Plaintiff provide written and verified responses to these Interrogatories within thirty (30) days. 1. Unless the context clearly requires otherwise, the following definitions shall apply: a. The term "document" means without limitation: 1. All written or printed material of any kind, including the original and all non-identical copies, whether different from the originals by reason of any notation made on such copies or otherwise, including, but not limited to, correspondence, memoranda, e-mail, notes, diaries, statistics, letters, telegrams, minutes, agendas, expense accounts, contracts, reports, studies, checks, statements, receipts, returns, summaries, pamphlets, notations of any sort (including notes of telephone conversations or meetings), invoices and all drafts, modifications and changes or amendments to any of the foregoing; 2. All graphic and manual records or representations of any kind, including, but not limited to, photographs, charts, graphs and records; 3. All electronic, mechanical or recorded records or representations of any kind, including, but not limited to, cassettes, computer software, e-mail and printouts and tape recordings; and 4. Any other document or thing, as set i'orth in the Pennsylvania Rules of Civil Procedure. b. The conjunctions "and" and "or" shall be individually interpreted in every instance as meaning "and/or" and shall not be interpreted disjunctively to exclude any information otherwise within the scope of any interrogatory. C. A "document" or "communication" refers to a given subject matter where that document or communication constitutes, embodies, comprises, reflects, identifies, states, deals with, comments on or responds to, describes, analyzes, contains information concerning, or is in any way pertinent to the subject matter, including, but not limited to, documents concerning the presentation of other documents. d. Whenever appropriate in this request, the singular form of a word should be interpreted as plural and vice versa. e. The word "person(s)" means individuals and entities, including, but not limited to, sole proprietorships, firms, associations, companies, partnerships, joint ventures, corporations, trusts, estates and any other legal or business or governmental entity. -2- f. The word "identify" when used in conjunction. with an individual means to state that individual's full name, last known home address, last known home and business telephone numbers, present or last known business affiliations or employer(s), business address, job title, exact and/or approximate date and place of death, if deceased. g. The word "identify" with respect to a person other than an individual means to state its name, address and telephone number and the name of the principal individuals with knowledge of the subject matter of these interrogatories. h. The word "identify" when used with respect to a document or documents means to state its custodian, location and general description of the document or documents, including the specification of (1) the nature or type of the document (e.g. letter, memorandum, etc.); (2) the date or the document, (3) its general subject matter; (4) the author and (5) the title, file number or other designation thereof. i. The term "relating to" means consisting of, referring to, reflecting or being in any way logically or factually connected with the matter discussed. j. The term "you" and/or "Plaintiff' refers to Plaintiff, Caretti, Inc. and its agents and representatives, including attorneys. k. The term "Defendant" or "Defendants" refers to Pennsylvania Manufacturers' Association Insurance Company, Manufacturers Alliance Insurance Company, Pennsylvania Manufacturers Indemnity Company, and/or Mid-Atlantic States Casualty Company. -3- II. a. These interrogatories shall be continuing in nature and supplemental answers shall be required promptly if you, directly or indirectly, obtain further or different information from the time answers to these interrogatories are served. b. If you claim privilege as a ground for not responding to any request in any interrogatory, in whole or in part, describe the factual and legal basis for your claim in sufficient detail so as to permit the court to adjudicate the validity of the claim. Also identify by date, author, and address each document and the subject matter contained therein subject to the claimed privilege. Identify to whom copies were distributed and to whom such claim of privilege relates. C. If you claim that any document or tangible thing requested to be identified herein was in existence at one time but has been lost, discarded or destroyed, identify such document or thing as completely as possible, including an explanation of what type of document or thing it was; when and how it was lost or destroyed; why it was disposed of or destroyed; and who knows its contents. d. In responding to these interrogatories, you are required to furnish all information known or available to you, regardless of whether such information is directly in your possession or that of your representatives, attorneys, or experts, as well as their respective agents, employees or representatives. e. If any of these interrogatories cannot be answered fully and completely, you shall answer to the extent possible, specifying the reasons for your inability to answer the remainder and stating the substance of your knowledge, information or belief concerning the subject matter of the unanswered portion. -4- III. INTERROGATORY NO. 1: Identify all persons providing any information in response to these Interrogatories and, for each such person, identify the Interrogatory or Interrogatories for which each such person provided information. ANSWER: INTERROGATORY NO. 2: Identify every person who provided any information or documents in your responses to Defendants' First Request for Production of Documents Directed to Plaintiff in this action and, for each such person, identify the information and document(s) provided by that person and the paragraph of the Request for Production of Documents for which the information or document(s) were provided by each such person. ANSWER: -5- INTERROGATORY NO. 3: State each and every fact upon which you rely in support of your contention, as set forth in paragraph 14(b) of your Complaint that, "Parker was not working at the cement mixer nor was he required (nor did he) carry any bags of cement." ANSWER: INTERROGATORY NO. 4: State each and every fact upon which you rely in support of your contention, as set forth in paragraph 14(d) of your Complaint that, "Charles `Chuck' Kline (`Kline'), Caretti's foreman on the Project, confirmed that Papetti carried the bags of cement to the cement mixer ...." ANSWER: INTERROGATORY NO. 5: State each and every fact upon which you rely in support of your contention, as set forth in paragraph 14(e) of your Complaint that, "Caretti had several other employees on the Project who did not see Parker carry any bags of cement to the cement mixer." ANSWER: -6- INTERROGATORY NO. 6: State each and every fact upon which you rely in support of your contention, as set forth in paragraph 17 of your Complaint that, "Rufe made his initial contact with Caretti on September 8, 1998, approximately six weeks after he had received the file from PMA." ANSWER: INTERROGATORY NO. 7: State each and every fact upon which you rely in support of your contention, as set forth in paragraph 20 of your Complaint that, "Mr. Rufe returned the subpoena to Caretti indicating the process server could not find Papetti at the address; however, Rufe made no further efforts to locate Papetti such as hiring a private investigator or conducting a search through the United States Postal Service, or even looking in the telephone directory." ANSWER: INTERROGATORY NO. 8: State each and every fact upon which you rely in support of your contention, as set forth in paragraph 27 of your Complaint that, "Kline, at the time, was supervising several employees on a Caretti project and was unable, with effectively no prior notice, to leave the project in order to attend the hearing." ANSWER: -7- INTERROGATORY NO. 9: State each and every fact upon which you rely in support of your contention, as set forth in paragraph 45(e) of your Complaint that, "PMA failed to offer any defenses on the part of Caretti." ANSWER: INTERROGATORY NO. 10: State each and every fact upon which you rely in support of your contention, as set forth in paragraph 46(a) of your Complaint that, "PMA failed to conduct any search to locate John Papetti." ANSWER: INTERROGATORY NO. 11: State each and every fact upon which you rely in support of your contention, as set forth in paragraph 46(c) of your Complaint that, "PMA failed to investigate the possibility of settlement." ANSWER: -8- INTERROGATORY NO. 12: State each and every fact upon which you rely in support of your contention, as set forth in paragraph 47 of your Complaint that, "[h]ad PMA properly investigated Parker's claim, PMA would have discovered sufficient information to successfully defeat Parker's claim against Caretti." ANSWER: INTERROGATORY NO. 13: State the name and present address of all persons who are witnesses to the events set forth in your Complaint. ANSWER: INTERROGATORY NO. 14: Identify all persons who you have interviewed or otherwise communicated with regarding the events set forth in your Complaint. ANSWER: -9- INTERROGATORY NO. 15: State whether you have obtained any statement, whether oral or written, from any person with regard to the matters set forth in your Complaint. If so, and with respect to each such person, state: a. the name and present address of the person who gave the statement; b. the name and present address of the person to whom the statement was given; C. when the statement was given; d. where the statement was given; e. identify all persons present when the statement was given; and f. whether the statement was written or oral.. ANSWER: INTERROGATORY NO. 16: Identify every person present at the worksite where :Parker claims to have suffered an injury to his back, and for each such person state their position with Caretti and the nature of their work being performed that day. ANSWER: -10- INTERROGATORY NO. 17: Identify the nature of the work which was being performed by Caretti, including the location of the work and the client for whom the work was being performed by Caretti at the time Parker claims to have suffered his injury. ANSWER: INTERROGATORY NO. 18: Identify all Caretti employees who have, at any time, discussed Parker's alleged injury with Mr. Rufe and, for each such person, identify the following: a. the date of each communication; b. the substance of each communication; and c. whether such employee was asked by Attorney Rufe to serve as a witness in the worker's compensation proceeding involving Theodore Parker. ANSWER: INTERROGATORY NO. 19: Identify all Caretti employees who had any contact or communication with any representative of PMA regarding Parker's worker's compensation claim. For each such person identify the following: a. the dates of each communication; -11- b. the subject matter and substance of each communication; and c. the person with whom the Caretti employee had such communication. ANSWER: INTERROGATORY NO. 20: Identify all damages you claim against PMA in this lawsuit. ANSWER: INTERROGATORY NO. 21: Identify all Caretti employees who had any contact or communication with any representative of NCCI regarding Parker's worker's compensation claim. For each such person identify the following: d. the dates of each communication; e. the subject matter and substance of each communication; and f. the person with whom the Caretti employee had such communication. ANSWER: -12- INTERROGATORY NO. 22: Please identify each expert you intend to call as a witness at the trial of this matter and for each expert state: a. the subject matter about which the expert is to testify; b. the substance of the facts and opinions tai which the expert is expected to testify; and c. the summary of the grounds for each opinion. ANSWER: INTERROGATORY NO. 23: Describe in detail all oral or written admissions that you claim were made by PMA with regard to the subject matter of this action. ANSWER: INTERROGATORY NO. 24: Describe in detail all oral or written admissions that you claim were made by Mr. Rufe with regard to the subject matter of this action. ANSWER: -13- INTERROGATORY NO. 25: Please identify each person you intend to call as a witness at the trial of this matter and for each person state: a. the subject matter about which the person is to testify; b. the substance of the facts to which the person is expected to testify; and c. the summary of the anticipated testimony of each person. ANSWER: INTERROGATORY NO. 26: Identify all efforts made by or on behalf of Caretti to locate John Papetti between June 5, 1998 and October 28, 1998. ANSWER: INTERROGATORY NO. 27: Describe the efforts made by Caretti to attempt to settle Parker's worker's compensation claim and, with regard to such efforts state the following: a. the date such efforts were undertaken; b. the person(s) involved in the efforts to attempt to settle Parker's claim; and c. the outcome of the effort(s) to attempt: to settle Parker's claim. ANSWER: -14- INTERROGATORY NO. 28: State each and every fact which you believe would have been sufficient to defeat Parker's claim for worker's compensation benefits, but which was not presented to the Maryland Worker's Compensation Commission. ANSWER: INTERROGATORY NO. 29: Identify Parker's immediate supervisor on July 5, 1998. ANSWER: INTERROGATORY NO. 30: Identify the position(s) held by Brenda Schubauer for Caretti during the period from June 5, 1998 through October 28, 1998 and with regard to each position state the following: a. title of the position; b. dates Ms. Schubauer held each position; and c. the duties of each such position. ANSWER: -15- INTERROGATORY NO. 31: Identify the position(s) held by Roland Kline for Caretti during the period from June 5, 1998 through October 28, 1998 and with regard to each such position state the following: d. title of the position; e. dates Mr. Kline held each position; and f. the duties of each such position. ANSWER: INTERROGATORY NO. 32: Identify the position(s) held by Brad Weaver for Caretti during the period from June 5, 1998 through October 28, 1998 and with regard to each such position state the following: g. title of the position; h. dates Mr. Weaver held each position; and i. the duties of each such position. ANSWER: INTERROGATORY NO. 33: Do you contend that there was any improper act or omission of PMA in the handling of the Parker claim after October 28, 1998? If so, state each and every fact in support of your contention that there was an improper act or omission by PMA after October 28, 1998. ANSWER: -16- INTERROGATORY NO. 34: Do you contend that there was any improper act or omission of the attorneys handling the Parker claim after October 28, 1998? If so, state each and every fact in support of your contention that there was an improper act or omission by the attorneys handling the Parker claim after October 28, 1998. ANSWER: INTERROGATORY NO. 35: Did Caretti maintain a program or policy of placing its workers who were receiving worker's compensation benefits into a light duty program at any time between January 1, 1998 and December 31, 2000? If so, explain the nature of Caretti's light duty program or policy. ANSWER: INTERROGATORY NO. 36: During the period from June 5, 1998 through October 28, 1998 did Caretti maintain telephone logs, registers or similar documentation regarding calls received by Caretti from third persons? If so, identify the custodian of all such documents. ANSWER: -17- INTERROGATORY NO. 37: Identify every Caretti employee who you contend should have been called as a witness during the worker's compensation proceedings with respect to Parker's claim. With respect to each such person state the following: a. the substance of the testimony of each such witness that you believe to be relevant and material to the defense of Parker's worker's compensation claim; b. the position(s) held by each such person with Caretti during the period from June 5, 1998 through October 28, 1998, inclusive; C. the location at which each such person was assigned to work for Caretti on October 28, 1998; and d. whether Caretti identified each such person to Attorney Rufe as a possible witness for the defense of the Parker claim. ANSWER: -18- PIETB:AGALLO, BOSICK & GORDON By:- k rdon PA ID #25561 Bryan K. Shreckengost PA, ID #69098 The Thirty-Eighth Floor One Oxford Centre Pittsburgh, PA 15219 (412) 263-2000 Attorneys for Defendants, Pennsylvania Manufacturers' Association Insurance Company, Manufacturers Alliance Insurance Company, Pennsylvania Manufacturers Indemnity Company, and Mid-Atlantic States Casualty Company -19- CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing DEFENDANTS' FIRST SET OF INTERROGATORIES DIRECTED TO PLAINTIFF was served by U.S. first class mail, postage pre-paid, this I" day of August, 2003, upon the following: Thomas S. Beckley, Esquire Beckley & Madden 212 North Third Street P.O. Box 11998 Harrisburg, PA 17108-1998 (Attorneys for Plaintiff) EXHIBIT B CARETTI, INC., IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff, V. PENNSYLVANIA MANUFACTURERS' ASSOCIATION INSURANCE COMPANY, MANUFACTURERS ALLIANCE INSURANCE COMPANY, PENNSYLVANIA MANUFACTURERS INDEMNITY COMPANY, and MID- ATLANTIC STATES CASUALTY COMPANY, ACTION IN EQUITY NO. 02-2701 Defendants. DEFENDANTS' FIRST REQUEST FOR PRODUCTION OF DOCUMENTS DIRECTED TO PLAINTIFF AND NOW, come the Defendants, Pennsylvania Manufacturers' Association Insurance Company, Manufacturers Alliance Insurance Company, Pennsylvania Manufacturers Indemnity Company, and Mid-Atlantic States Casualty Company, by and through their attorneys, Pietragallo, Bosick & Gordon, pursuant to the applicable Pennsylvania Rules of Civil Procedure, and serves this First Request for Production of Documents Directed to Plaintiff, and demands that Plaintiff provide written responses and produce the documents sought in these Requests within thirty (30) days. 1. Unless the context clearly requires otherwise, the following definitions shall apply: a. The term "document" means without limitation: 1. All written or printed material of any kind, including the original and all non-identical copies, whether different from the originals by reason of any notation made on such copies or otherwise, including, but not limited to, correspondence, memoranda, e-mail, notes, diaries, statistics, letters, telegrams, minutes, agendas, expense accounts, contracts, reports, studies, checks, statements, receipts, returns, summaries, pamphlets, notations of any sort (including notes of telephone conversations or meetings), invoices and all drafts, modifications and changes or amendments to any of the foregoing; 2. All graphic and manual records or representations of any kind, including, but not limited to, photographs, charts, graphs and records; 3. All electronic, mechanical or recorded records or representations of any kind, including, but not limited to, cassettes, computer software, e-mail and printouts and tape recordings; and 4. Any other document or thing, as set forth in the Pennsylvania Rules of Civil Procedure. b. The conjunctions "and" and "or" shall be individually interpreted in every instance as meaning "and/or" and shall not be interpreted disjunctively to exclude any information otherwise within the scope of any request. C. A "document" or "communication" refers to a given subject matter where that document or communication constitutes, embodies, comprises, reflects, identifies, states, deals with, comments on or responds to, describes, analyzes, contains information concerning, or is in any way pertinent to the subject matter, including, but not limited to, documents concerning the presentation of other documents. d. Whenever appropriate in this request, the singular form of a word should be interpreted as plural and vice versa. -2- e. The word "person(s)" means individuals and entities, including, but not limited to, sole proprietorships, firms, associations, companies, partnerships, joint ventures, corporations, trusts, estates and any other legal or business or governmental entity. f. The word "identify" when used in conjunction with an individual means to state that individual's full name, last known home address, last known home and business telephone numbers, present or last known business affiliations or employer(s), business address, job title, exact and/or approximate date and place of death, if deceased. g. The word "identify" with respect to a person other than an individual means to state its name, address and telephone number and the name; of the principal individuals with knowledge of the subject matter of these requests. h. The word "identify" when used with respect to a document or documents means to state its custodian, location and general description of the document or documents, including the specification of (1) the nature or type of the document (e.g. letter, memorandum, etc.); (2) the date or the document, (3) its general subject matter; (4) the author and (5) the title, file number or other designation thereof. i. The term "relating to" means consisting of, referring to, reflecting or being in any way logically or factually connected with the matter discussed. j. The term "you" and/or "Plaintiff' refers to Plaintiff, Caretti, Inc. and its agents and representatives, including attorneys. k. The term "Defendant" or "Defendants" refers to Pennsylvania Manufacturers' Association Insurance Company, Manufacturers Alliance Insurance Company, Pennsylvania Manufacturers Indemnity Company, and/or Mid-Atlantic Staters Casualty Company. -3- H. INSTRUCTIONS a. These requests shall be continuing in nature and supplemental answers shall be required promptly if you, directly or indirectly, obtain further or different information from the time answers to these requests are served. b. If you claim privilege as a ground for not responding to any request, in whole or in part, describe the factual and legal basis for your claim in sufficient detail so as to permit the court to adjudicate the validity of the claim. Also identify by date, author, and address each document and the subject matter contained therein subject to the claimed privilege. Identify to whom copies were distributed and to whom such claim of privilege relates. C. If you claim that any document or tangible thing requested to be produced herein was in existence at one time but has been lost, discarded or destroyed, identify such document or thing as completely as possible, including an explanation of what type of document or thing it was; when and how it was lost or destroyed; why it was disposed of or destroyed; and who knows its contents. d. In responding to these requests, you are required to furnish all information known or available to you, regardless of whether such information is directly in your possession or that of your representatives, attorneys, or experts, as well as their respective agents, employees or representatives. e. If any of these requests cannot be answered fully and completely, you shall answer to the extent possible, specifying the reasons for your inability to answer the remainder and stating the substance of your knowledge, information or belief concerning the subject matter of the unanswered portion. -4- III. REQUEST FOR PRODUCTION OF DOCUMENTS 1. Produce all documents which Caretti sent to or received from Attorney Rufe regarding the Parker claim. 2. Produce all documents which Caretti sent to or received from the Maryland Worker's Compensation Commission regarding the Parker claim. 3. Produce all documents which Caretti sent to or received from PMA regarding the Parker claim. 4. Produce all documents which Caretti sent to or received from NCCI regarding the Parker claim. 5. Produce all documents which Caretti sent to or received from any insurance broker or insurance agent regarding the Parker claim. 6. Produce all documents which constitute, refer to or relate to the calculation and payment of Caretti's insurance premiums for worker's compensation insurance during the period January 1, 1995 to the present. 7. Produce the job description for the position held by Parker on June 5, 1998. 8. Produce the job description for the job held by Roland Kline on June 5, 1998. 9. Produce the job description for the job held by Roland Kline on October 28, 1998. 10. Produce all documents which in any way constitute, refer to or relate to Parker's employment with Caretti at any time. 11. Produce all documents which in any way constitute, refer to or relate to John Papetti's employment with Caretti at any time. 12. Produce Caretti's employee handbook in effect on June 5, 1998. 13. Produce Caretti's employee work rules in effect on June 5, 1998. -5- 14. Produce a copy of Parker's employment contract and/or the collective bargaining agreement which applied to Parker's employment with Caretti on June 5, 1998. 15. Produce all documents which constitute, refer to or relate to Caretti's calculation of its damages as claimed in this action. 16. Produce all statements of witnesses which in any manner refer to or relate to the circumstances which form the basis for Caretti's claims in this action. 17. Produce all documents which constitute, refer to or relate to any light duty program maintained or utilized by Caretti during the period of'January 1, 1998 to the present. 18. Produce all documents regarding Roland Kline's employment with Caretti at any time. 19. Produce all documents, including time, payroll, work assignments and other materials which identify or describe Roland Kline's assignment and location on October 28, 1998. 20. Produce all documents regarding Brad Weaver's employment with Caretti at any time. 21. Produce all documents, including time, payroll, work assignments and other materials which identify or describe Brad Weaver's assignment and location on October 28, 1998. 22. Produce all documents which refer to or relate to telephone calls and/or telephone messages received by Caretti from outside sources during the period June 5, 1998 through October 28, 1998. 23. Produce all documents which Caretti has provided to any expert witness with regard to the subject matter of this case. -6- 24. Produce all documents which Caretti has received from any witness or third person regarding the subject matter of this case. 25. Produce all documents received from or sent to NCCI by Caretti. 26. Produce complete copies of retrospective premium adjustments issued to Caretti between January 1, 1995 and the present. 27. Produce complete copies of all loss runs issued to Caretti from January 1, 1995 to the present which form the basis of the retrospective premium adjustments. 28. Produce complete copies of the current loss run issued to Caretti. 29. Produce Notice(s) of increase of premium issued to Caretti from January 1, 1999 to the present. 30. Produce copies of statistical reports provided to NCCI and/or any state rating bureau from January 1, 1998 to the present. 31. Produce any request for revision of statistical information sent to NCCI or any state rating bureau, designed to retrospectively impact the experience modification factor of Caretti. 32. Produce any and all documents which support and/or are identified in Plaintiffs answers to Defendants' First Set of Interrogatories. 33. Produce true and correct copies of any documents which Plaintiff intends to offer into evidence at the time of trial of this lawsuit. 34. Produce true and correct copies of any and all expert reports which Plaintiff intends to offer at the time of trial of this lawsuit. -7- 35. Produce all documents which constitute, refer to or relate to any proposals provided to Caretti for worker's compensation insurance coverage from January 1, 1998 to the present. 36. Produce copies of all worker's compensation insurance policies providing coverage to Caretti at any time from January 1, 1998 through the present, including all endorsements, agreements and/or amendments thereto. 37. Produce any and all documents, correspondence, or reports from any consultants prepared prior to the commencement of this action, reviewing, summarizing, or in any way commenting upon the manner in which the Parker claim was handled or defended. 38. Produce any and all documents, correspondence, reports from consultants, risk managers or other insurance advisors including any summaries thereof, reviewing or analyzing the manner in which the Parker claim was handled or defended, and received by Caretti prior to the commencement of the within lawsuit. 39. Produce all documents which constitute, refer to or relate to any audit performed by any person or entity for purposes of calculating Caretti's worker's compensation premiums from January 1, 1998 to the present. 40. Produce all documents which constitute, refer to or relate to Kline's daily itinerary and work assignments for Caretti during the period June 5, 1998 through October 28, 1998, inclusive. 41. Produce all documents which constitute, refer to or relate to daily itinerary and work assignments for all persons identified in response to Interrogatory No. 37 of Defendant's First Set of Interrogatories for the period June 5, 1998 through October 28, 1998, inclusive. -8- 42. Produce all documents which constitute, refer to or relate to any communications between Caretti and Kline regarding any and all attempts to secure Kline's attendance at any worker's compensation proceeding with regard to the Parker claim. 43. Produce all documents which constitute, refer to or relate to Caretti's efforts to investigate the facts and circumstances surrounding Parker's claim for worker's compensation benefits. 44. Produce all documents which constitute, refer to or relate to Caretti's attempts to locate John Papetti. 45. Produce all documents which constitute, refer to or relate to information that Caretti provided to Attorney Rufe with regard to locating John Papetti. 46. Produce all documents which Caretti contends supports its claim that Parker's worker's compensation claim should have been denied by the Maryland Worker's Compensation Commission. PIETRAGALLO, BOSICK & GORDON By k ordon PA-M #25561 Bryan K. Shreckengost PA ID #69098 The Thirty-Eighth Floor One Oxford Centre Pittsburgh, PA 15219 (412) 263-2000 Attorneys for Defendants, Pennsylvania Manufacturers' Association Insurance Company, Manufacturers Alliance Insurance Company, Pennsylvania Manufacturers Indemnity Company, and Mid-Atlantic States Casualty Company -9- CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing DEFENDANTS' FIRST REQUEST FOR PRODUCTION OF DOCUMENTS DIRECTED TO PLAINTIFF was served by U.S. first class mail, postage pre-paid, this I't day of August, 2003, upon the following: Thomas S. Beckley, Esquire Beckley & Madden 212 North Third Street P.O. Box 11998 Harrisburg, PA 17108-1998 (Attorneys for Plainti CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing MOTION TO COMPEL was served by U.S. first class mail, postage pre-paid, this3i? day of October, 2003, upon the following: Thomas S. Beckley, Esq Beckley & Madden 212 North Third Street P.O. Box 11998 Harrisburg, PA 17108-1998 (Attorneys for Plaintiff) rj r.; s r, C._ C S ri -;.. '= * ? e ?., ? c: , f. ..1 ? J ii '' i -' :tiJ ?D OT I Z. 7 &;"j CARETTI, INC., IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff, V. PENNSYLVANIA MANUFACTURERS' ASSOCIATION INSURANCE COMPANY MANUFACTURERS ALLIANCE INSURANCE COMPANY, PENNSYLVANIA MANUFACTURERS INDEMNITY COMPANY, and MID- ATLANTIC STATES CASUALTY COMPANY, Defendants. ACTION IN EQUITY NO. 02-2701 ORDER OF COURT AND NOW, this day of OcG-rI?- , :2003, upon consideration of Defendants' Motion to Compel discovery, it is hereby ORDERED that said Motion is resr t,.,.L GRANTED. Plaintiff, Caretti, Inc., shall to Defendants' First Set of Interrogatories Directed to Plaintiff and to Defendants' First -/Ate-t (ao) Request for Production of Documents Directed to Plaintiff within ) days of the date oflthis Order. BY THE COURT: 1 ??44 6`? 1?,aL J. Y- VN ,`,!M2N!N?c! uu:llini £-170 £t j U CARETTI, INC., IN THE COURT OF COMMON PLEAS, Plaintiff OF CUMBERLAND COUNTY, :PENNSYLVANIA V. PENNSYLVANIA MANUFACTURERS' ACTION INEQUITY ASSOCIATION INSURANCE COMPANY, MANUFACTURERS ALLIANCE INSURANCE COMPANY, NO. 02-2701 PENNSYLVANIA MANUFACTURERS INDEMNITY COMPANY and MID-ATLANTIC STATES CASUALTY COMPANY, Defendants PLAINTIFF CARETTI, INC.'S, ANSWER TO DEFENDANTS' NEW MATTER AND NOW comes the Plaintiff, Caretti, Inc. ("Caretti," herein), which, by and through its attorneys, files this Answer to Defendants' (hereinafter referred to collectively as "PMA") New Matter, stating: 57. Caretti hereby incorporates herein by reference as though set forth in full the averments of Paragraphs 1-56 of Caretti's Complaint. 58. Denied as stated. PMA had a contractual duty to investigate and defend the Parker claim, and Caretti relied on PMA to perform that contractual duty in good faith. PMA's and Mr. Rufe's failure to apprise Caretti of the status and progress of the investigation and/or defense of the Parker claim denied Caretti any effective opportunity to object to the manner in which Mr. Rufe was or was not conducting that investigation and/or defense. 1 59. Denied. To the contrary, Caretti did object to the manner in which Mr. Rufe handled the investigation and defense of the Parker claim, and, as a direct consequence of Caretti's objections, Mr. Rufe was dismissed and new Counsel was engaged to handle the Parker claim. 60. Denied. To the contrary, Caretti did object to the manner in which Mr. Rufe handled the investigation and defense of the Parker claim, and, as a direct consequence of Caretti's objections, Mr. Rufe was dismissed and new Counsel was engaged to handle the Parker claim. 61. Paragraph 61 of Defendants' New Matter sets forth a conclusion of law that requires no response. By way of further answer, denied. Caretti did not "consent" to the manner in which Mr. Rufe handled the investigation and defense of the Parker claim, nor could Caretti have "consented," since Caretti did not engage Mr. Rufe -- PMA did. Moreover, since neither Mr. Rufe nor PMA kept Caretti informed concerning either the status of the defense of Parker's claim, or the progress of any investigation Rufe may or may not have conducted, Caretti had no basis on which to "consent," and no effective opportunity to object, to manner in which Mr. Rufe handled the matter. 62. Paragraph 62 of Defendants' New Matter sets forth a conclusion of law that requires no response. By way of further answer, denied. Caretti hereby incorporates herein by reference as though set forth in full its answers to Paragraphs 58-61 of Defendants' New Matter. 63. Paragraph 63 of Defendants' New Matter sets forth a conclusion of law that requires no response. By way of further answer, denied. Caretti hereby incorporates herein by reference as though set forth in full its answers to Paragraphs 58-61 of Defendants' New Matter. 64. Paragraph 64 of Defendants' New Matter sets forth a conclusion of law that requires no response. By way of further answer, denied. Caretti hereby incorporates herein by reference as though set forth in full its answers to Paragraphs 58-61 of Defendants' New Matter. In 2 addition, the defects in Mr.Rufe's handling of the investigation and defense of the Parker claim should have been obvious, both to Rufe and to PMA. Caretti in no way prevented Mr. Rufe from withdrawing from the defense of the Parker claim, or from curing the defects in his performance. 65. Paragraph 65 of Defendants' New Matter sets forth a conclusion of law that requires no response. By way of further answer, denied. Caretti hereby incorporates herein by reference as though set forth in full its answers to Paragraphs 58-61 and 64 of Defendants' New Matter. Caretti believes and therefore avers that both Pennsylvania Manufacturers Indemnity Company's ("PMIC," herein) and PMA's failure to replace Rufe or to attempt to cure the defects in his performance resulted from their failure to monitor the handling of the investigation and defense of the Parker claim by the law firm that PMA or PMIC had hired. Caretti in no way prevented PMA or PMIC from overseeing Mr. Rufe's performance, or from engaging alternative counsel, nor did Caretti have any duty, contractual or otherwise, to monitor for PMA or PMIC the performance of the counsel that PMA or PMIC had retained. 66. Paragraph 66 of Defendants' New Matter sets forth a conclusion of law that requires no response. By way of further answer, denied. Caretti hereby incorporates herein by reference as though set forth in full its answers to Paragraphs 58-61 and 64-65 of Defendants' New Matter. 67. Paragraph 67 of Defendants' New Matter sets forth a conclusion of law that requires no response. By way of further answer, denied. Caretti hereby incorporates herein by reference as though set forth in full its answers to Paragraphs 58-61 and 64-65 of Defendants' New Matter. 68. Paragraph 68 of Defendants' New Matter sets forth a conclusion of law that requires no response. By way of further answer, denied. Caretti hereby incorporates herein by reference as though set forth in full its answers to Paragraphs 58-61 and 64-65 of Defendants' New Matter. 3 69. Paragraph 69 of Defendants' New Matter sets forth a conclusion of law that requires no response. By way of further answer, denied. To the contrary, no act or omission by Caretti caused the law firm hired by PMA or PMIC to defend the Parker claim to: (a) fail to obtain in a timely manner documents relating to a prior injury suffered by Parker; (b) fail to interview any Caretti witnesses in person; (c) fail to contact any Caretti witness until the morning of the rescheduled hearing; (d) fail to seek a continuance of the second hearing when it became clear that no Caretti witness could be there due to a lack of prior notice; (e) fail to call any witnesses on Caretti's behalf at the hearing on Parker's claim; and (f) fail to offer any defenses on Caretti's behalf at the hearing on Parker's claim. These failures by PMA's or PMIC's counsel in the handling of the investigation and defense of Parker's claim, and not any act or omission by Caretti, caused the damages which Caretti seeks to recover in its complaint. Caretti hereby incorporates herein by reference as though set forth in full its answers to Paragraphs 58-61 and 64-65 of Defendants' New Matter. 70. Paragraph 70 of Defendants' New Matter sets forth a conclusion of law that requires no response. By way of further response, denied. Caretti's claim arises out of PMA's or PMIC's breach of its contractual duty to defend Caretti against the Parker claim. Moreover, Caretti's complaint is a written document, the contents of which speak for themselves, and any attempt to characterize Caretti's complaint in a manner inconsistent with the contents thereof is denied. 71. Paragraph 71 of Defendants' New Matter sets forth a conclusion of law that requires no response. By way of further answer, denied. Caretti hereby incorporates herein by reference as though set forth in full its answer to Paragraph 69 of Defendants' New Matter. The counsel hired by PMA or PMIC to defend Caretti against Parker's claim did not exercise the skill, 4 knowledge or judgment usually exercised "by members in good standing in the legal community in substantially similar matters." 72. Paragraph 72 of Defendants' New Matter sets forth a conclusion of law that requires no response. By way of further answer, denied. Caretti hereby incorporates herein by reference as though set forth in full its answers to paragraphs 69 and 71 of Defendants' New Matter, and the averments set forth in Paragraphs 1-56 of Caretti's Complaint. 73. Paragraph 73 of Defendants' New Matter sets forth a conclusion of law that requires no response. By way of further answer, denied. Caretti hereby incorporates herein by reference as though set forth in full its answers to Paragraphs 69 and 71 of Defendants' New Matter, and the averments set forth in Paragraphs 1-56 of Caretti's Complaint. The damages sought by Caretti in its Complaint arose directly from the manner in which the law firm hired by PMA or PMIC handled the investigation and defense of the Parker claim. 74. Paragraph 74 of Defendants' New Matter sets forth a conclusion of law that requires no response. 75. Paragraph 75 of Defendants' New Matter sets forth conclusions of law that require no response. By way of further answer, denied as stated. It is admitted that the events which Parker alleged caused him a work-related injury allegedly occurred in Maryland. It is also admitted that the proceedings before the Maryland Workers' Compensation Commission occurred in Maryland. PMA or PMIC issued the insurance policy (upon which Caretti bases its claim) to Caretti in Pennsylvania. 76. Denied. To the contrary, the acts and omissions about which Caretti complains occurred both in the Commonwealth of Pennsylvania and in the State of Maryland. 5 77. Denied. To the contrary, the acts and omissions about which Caretti complains occurred both in the Commonwealth of Pennsylvania and in the State of Maryland. 78. Denied. To the contrary, the acts and omissions about which Caretti complains occurred both in the Commonwealth of Pennsylvania and in the State of Maryland. 79. Denied. To the contrary, upon information and belief, neither PMA, PMIC nor Mr. Rufe investigated Parker's workers' compensation claim. 80. Denied. To the contrary, upon information and belief, neither PMA, PMIC nor Mr. Rufe offered any defense on Caretti's behalf before the Maryland Workers' Compensation Commission to Parker's workers' compensation claim. 81. Denied, to the contrary, Caretti still does not know if it is aware of "each and every act and omission" that has given rise to the claims asserted, and caused the damages suffered, by Caretti in this case. Moreover, in July, 2000, PMA failed to communicate to Parker Caretti's offer to him of a light-duty position, which would have helped to mitigate Caretti's damages. Additionally, Caretti did not begin to suffer damages on account of PMA's or PMIC's breach of its contract with Caretti until calendar year 2000, and Caretti has suffered damages on account of the breach in 2000, 2001, 2002 and 2003. 82. Paragraph 82 of Defendants' New Matter sets forth a conclusion of law that requires no response. 83. Paragraph 83 of Defendants' New Matter sets forth a conclusion of law that requires no response. 84. Paragraph 84 of Defendants' New Matter sets forth a conclusion of law that requires no response. 6 85. Paragraph 85 of Defendants' New Matter sets forth a conclusion of law that requires no response. 86. Denied as stated. Caretti hereby incorporates herein by reference as though set forth in full its answers to Paragraphs 58-61, 64-65, 69 and 79-80 of Defendants' New Matter. 87. Paragraph 87 of Defendants' New Matter sets forth a conclusion of law that requires no response. 88. Paragraph 88 of Defendants' New Matter sets forth a conclusion of law that requires no response. 89. Paragraph 89 of Defendants' New Matter sets forth a conclusion of law that requires no response. By way of further answer, Caretti believes, and therefore avers, that if PMA or PMIC had properly defended Caretti against Parker's claim, then the claim would have been denied. By failing to call any witnesses or offer any defense on Caretti's behalf before the Maryland Workers' Compensation Commission, and allowing Parker's allegation that he suffered a workplace injury at Caretti's jobsite to go uncontradicted, PMA, PMIC and/or Mr. Rufe effectively foreclosed any chance that the Commission would find Parker's claim to be noncompensable 90. Denied. Caretti hereby incorporates herein by reference as though set forth in full its answers to Paragraphs 61, 64-65, 69, 79-80 and 89 of Defendants' New Matter, and the averments set forth in Paragraphs 1-56 of its Complaint. 91. Denied. Caretti hereby incorporates herein by reference as though set forth in full its answers to Paragraphs 61, 64-65, 69, 79-80 and 89 of Defendants' New Matter, and the averments set forth in Paragraphs 1-56 of its Complaint. 7 92. Denied. Caretti hereby incorporates herein by reference as though set forth in full its answers to Paragraphs 61, 64-65, 69, 79-80 and 89 Of Defendants' New Matter, and the averments set forth in Paragraphs 1-56 of its Complaint. 93. Paragraph 93 of Defendants' New Matter sets forth a conclusion of law that requires no response. By way of further answer, denied. In order to afford Caretti complete relief, PMA or PMIC should be directed to submit a correction to NCCI relating to the Parker claim. 94. Paragraph 94 of Defendants' New Matter sets forth a conclusion of law that requires no response. By way of further answer, denied. It is certainly legally and factually possible for PMA or PMIC to submit a correction request to NCCI which eliminates the Parker claim as a basis for calculating Caretti's experience modification factor. Caretti hereby incorporates herein by reference as though set forth in full the averments contained in Paragraphs 1-56 of its Complaint. 95. Paragraph 95 of Defendants' New Matter sets forth a conclusion of law that requires no response. 96. Paragraph 96 of Defendants' New Matter sets forth conclusions of law that require no response. By way of further answer, upon information and belief, all four of the Defendants are identified on the policy issued to Caretti. 97. Paragraph 97 of Defendants' New Matter sets forth a conclusion of law that requires no response. 98. Paragraph 98 of Defendants' New Matter sets forth a conclusion of law that requires no response. 99. Paragraph 99 of Defendants' New Matter sets forth a conclusion of law that requires no response. 8 100. Paragraph 100 of Defendants' New Matter sets forth a conclusion of law that requires no response. 101. Paragraph 101 of Defendants' New Matter sets forth a conclusion of law that requires no response. 102. Paragraph 102 of Defendants' New Matter sets forth a conclusion of law that requires no response. By way of further answer, denied. By removing the Parker claim from the set of data used by NCCI to calculate Caretti's experience modification factor ("MOD") for Maryland, and then recalculating Caretti's MOD so that it does not reflect the Parker claim, and then multiplying Caretti's base insurance premium for the years 2000, 2001, 2002 and 2003 by the recalculated MOD, it will be possible to determine with certainty the damages suffered by Caretti on account of PMA's or PMIC's failure to investigate and defend the Parker claim. 103. Paragraph 103 of Defendants' New Matter sets forth a conclusion of law that requires no response. 104. Paragraph 104 of Defendants' New Matter sets forth a conclusion of law that requires no response. 105. Paragraph 105 of Defendants' New Matter sets forth a conclusion of law that requires no response. By way of further answer, denied. To the contrary, Caretti has availed itself of the means reasonably available to it to mitigate its damages. 106. Paragraph 106 of Defendants' New Matter sets forth a conclusion of law that requires no response. 107. Paragraph 107 of Defendants' New Matter sets forth conclusions of law that require no response. By way of further answer, denied. Caretti hereby incorporates herein by reference as though set forth in full the averments set forth in Paragraphs 1-56 of Caretti's Complaint. 9 108. Paragraph 108 of Defendants' New Matter attempts to reserve the right to assert additional defenses that become known to Defendants during the course of discovery, and requires no response. WHEREFORE, Plaintiff, Caretti, Inc., continues respectfully to request the Court to enter an Order awarding to Caretti the relief requested in Caretti's Complaint. Dated: December 15, 2003 Of Counsel BECKLEY & MADDEN 212 North Third Street P. O. Box 11998 Harrisburg, PA 17108-11998 (717 233-7691 Respectfully submitted Tliomas A. Beckley, squire Thomas S. Beckley, Esquire Attorneys for Plaintiff, Caretti, Inc. 10 I, Gregory R. Hess, hereby verify that I am an adult individual; that I am President of Caretti, Inc.; that I am authorized to make this statement of behalf of Caretti, Inc.; that I have read the foregoing document, and that the facts set forth in the foregoing document are true to the best of my knowledge, information and belief. I understand that false statements herein are made subject to the penalties of 18 Pa.C.S. § 4904 relating to unsworn falsification to authorities. Caretti, Inc. ess, esident I, Thomas S. Beckley, Esquire, hereby certify that on this day a true and correct copy of the foregoing document was served upon the persons and in the manner indicated below: Brian K. Shreckengost, Esquire Pietragallo, Bosick & Gordon The Thirty-Eighth Floor One Oxford Centre Pittsburgh, Pennsylvania 15219 DATED: December 15, 2003 - Thomas S. Beck ey u? - - -n m Y C ) - c1 CARETTI, INC., : IN THE COURT OF COMMON PLEAS Plaintiff : OF CUMBERLAND COUNTY, : PENNSYLVANIA V. ACTION IN EQUITY PENNSYLVANIA MANUFACTURERS' ASSOCIATION INSURANCE NO. 02-2701. COMPANY, MANUFACTURERS ALLIANCE INSURANCE COMPANY, PENNSYLVANIA MANUFACTURERS INDEMNITY COMPANY, and MID- ATLANTIC STATES CASUALTY COMPANY, Defendants MOTION TO COMPEL Plaintiff, Caretti, Inc., ("Caretti"), which, by and through its attorneys, Thomas A. Beckley, Esquire, Thomas S. Beckley, Esquire, and Beckley & Madden, of Counsel, moves this Court to enter an Order pursuant to Pennsylvania Rule of Civil Procedure 4019 directing Defendants to serve full and complete answers to Caretti's First Set of Interrogatories and First Request for Production of Documents served upon Defendants, and in support thereof, avers as follows: 1. On December 1, 2003, Caretti served its First Set of Interrogatories and First Request for Production of Documents on Defendants. A true and correct copy of Caretti's discovery requests are attached hereto as Exhibit A. 2. Pursuant to Pennsylvania Rules of Civil Procedure 4006(a)(2) and 4009.12, Defendants' responses to Caretti's discovery requests were due on or before December 31, 2003. 3. On March 1, 2004, counsel for Caretti wrote a letter to counsel for Defendants requesting that Defendants provide responses to Caretti's discovery requests. A true and correct copy of this letter is attached hereto as Exhibit B. 4. On March 16, 2004, counsel for Defendants wrote a letter to counsel for Caretti stating that Defendants would provide their responses by March 26, 2004. 5. To the best of counsel's recollection, upon Defendants' counsel's request, counsel for Caretti gave Defendants one additional week, or until April 2, 2004, to respond to Caretti's discovery requests. This informal extension was never reduced to writing. 6. To date, Defendants have not responded to Caretti's discovery requests. 7. Because Defendants have failed to respond to date, Caretti believes and avers that Defendants will not respond to Caretti's discovery requests absent a court order pursuant to Pennsylvania Rule of Civil Procedure 4019. WHEREFORE, Plaintiff, Caretti, Inc., respectfully requests this Court to enter an Order directing Defendants to file full and complete Answers to Caretti's First Set of Interrogatories and First Request for Production of Documents within twenty (20) days or suffer appropriate sanctions to be imposed upon further application to this Court. DATED: April 28, 2004 Respectfully submitted, Of Counsel BECKLEY & MADDEN 212 North Third Street is A. Beckley, Es une Post Office Box 11998 Harrisburg, Pennsylvania 17108-1998 Li (717) 233-7691 Thomas S. Beckley, Esquire Attorneys for Plaintiff, Caretti, hic. EXHIBIT A BEC'KLEY& MADDEN AmmoRNEYs Am Lew C? 00V 918 Nox Tmn HxREVr wsTUTllCEBOZnI HARRISBURG. PENNSYLVANIA 17108.1998 AREA o Z 717 mEr.E 0R 48 691 F" NO. (717) 8 740 =EM. 232560 December 1, 2003 Brian K. Shreckengost, Esquire Pietragallo, Bosick & Gordon The Thirty-Eighth Floor One Oxford Centre Pittsburgh, Pennsylvania 15219 VIA FIRST CLASS MAIL RE: Caretti, Inc. v. PMA Dear Brian: Enclosed herewith you will find Caretti's First Set of Interrogatories and First Set of Document Requests directed to PMA. Very truly yours, BECKLEY & MADDEN Thomas S. Beckley cc: Caretti, Inc. 0 9 CARETTI, INC., : IN THE COURT OF COMMON PLEAS Plaintiff OF CUMBERLAND COUNTY, PENNSYLVANIA V. : ACTION IN EQUITY PENNSYLVANIA MANUFACTURERS' : ASSOCIATION INSURANCE : NO. 02-2701 COMPANY, MANUFACTURERS ALLIANCE INSURANCE COMPANY, PENNSYLVANIA MANUFACTURERS INDEMNITY COMPANY, and MID- ATLANTIC STATES CASUALTY COMPANY, Defendants DATED: December 1, 2003 TO: Pennsylvania Manufacturers' Association Insurance Company Manufacturers Alliance Insurance Company Pennsylvania Manufacturers Indemnity Company Mid-Atlantic States Casualty Company c/o Bryan K. Shreckengost, Esquire Pietragallo, Bosick & Gordon The Thirty-Eighth Floor One Oxford Centre Pittsburgh, Pennsylvania 15219 PLAINTIFFS' FIRST SET OF DOCUMENT REQUESTS TO DEFENDANTS You are required to respond to these document requests within thirty (30) days of service, pursuant to Pennsylvania Rule of Civil Procedure 4009.12. 1. DEFINITIONS AND INSTRUCTIONS 1. "Documents" is used in its broadest sense and means the original, or, if unavailable, a complete copy, and each copy which is non-identical because of marginal notations, revisions or otherwise, of any medium, upon which anything is recorded or • from which anything can be recorded to include, without 1vnitation, the following: letters, emails, correspondence, memoranda, notes, reports, records, pictures, videos, electronic and other recordings, diaries, calendars, papers, data sheets, bills, contracts, computer printouts, information in computers, information stored on any electronic media, inter-office and intra-office communications, logs, drawings, graphs and charts. 2. "Person" means any natural person, corporation, partnership, association, or other entity. 3. "You" means Defendants, Pennsylvania Manufacturers' Association Insurance Company, Manufacturers Alliance Insurance Company, Pennsylvania Manufacturers Indemnity Company, and Mid-Atlantic States Casualty Company (collectively referred to as "PMA"), or any one of them, including, without limitation, their officers, directors, managing agents, agents, employees, and/or representatives. 4. "Identify," when used in reference to a communication, means to set forth: a. The identification of the person by whom, and each person, to whom each such communication was made and all persons present at the time; b. The date and time the communication was made or activity took place; C. The place at which it occurred; d. The means by which it occurred (e.g., by telephone, electronic transmission, letter, or in person); and e. The substance of the communication or activity. 5. "Identify" or "Identification," when used in reference to a person, means to set forth the person's: 2 E a. Full name; b. Present or last known home address and telephone number; C. Present or last known business address and telephone number; d. Present or last known employer or affiliation; e. Title, rank or position at time of involvement with you; and f. For persons other than natural persons the name and address of each officer and general manager. 6. "Identify," when used in reference to documents, means to set forth: a. The nature of the documents (e.g., letter, memorandum, contract, personal notes); b. The date thereof; C. The identification of each author, addressee, and recipient; d. The title of the document and short description of its subject matter; e. Any file number, identifying mark, or code of the document; and f. The location of the document by address, city, and state, and the identification of the present custodian. 7. The plural includes the singular, and vice versa. 8. Masculine includes feminine, and vice versa. 9. The conjunctive includes the disjunctive, and vice versa. 10. "Everything" when used herein means all things, including, but not limited to, communications, activities and documents, contracts, and telephone calls. 11. "Every" means the same as "everything." 12. "Activity" when used herein means every contract, event, or thing other than a communication or document. 3 • 0 H. REQUESTS Plaintiff, Caretti, Inc. ("Caretti"), requests that you produce the following documents at the law offices of Beckley & Madden, 212 North Third Street, Post Office Box 11998, Harrisburg, Pennsylvania 17108, within thirty (30) days: 1. All documents constituting, evidencing, referring and/or relating to communications exchanged between you and Caretti from June 5, 1998, through the present, regarding or relating to Theodore Parker's claim for workmen's compensation benefits which he filed against Caretti ("Claim"). 2. All documents constituting, evidencing, referring and/or relating to communications exchanged between you and John Rufe regarding or relating to the Claim. 3. All documents constituting, evidencing, referring and/or relating to communications exchanged between John Rufe and Caretti regarding or relating to the Claim. 4 LJ 4. Copies of all of Mr. Parker's medical records. 0 5. Copies of all pleadings, briefs or any other documents which Mr. Rufe and/or PMA filed with the Maryland Workmen's Compensation Bureau and/or the Maryland Workers Compensation Commission regarding the Claim. 6. A complete copy of Mr. Rufe's file regarding the Claim. 5 7. A complete copy of PMA's file regarding the Claim. 8. Copies of all contracts between PMA and Mr. Rafe which relate in any way to the Claim. 9. Copies of all insurance policies issued by PNLk to Caretti from June, 1998, through the present, including, without limitation, all policies in effect in June, 1998. 6 0 10. Copies of all of Rufe's bills and/or invoices that he or his law firm submitted to PMA regarding the Claim. 11. All documents constituting, evidencing, referring and/or relating to communications exchanged between Mr. Rufe and Mr. Rose regarding the Claim. 12. All documents constituting, evidencing, referring or relating to communications exchanged between you and Mr. Rose regarding the Claim. 7 • 0 13. All documents identified in or requested to be identified in Caretti's First Set of Interrogatories directed to you. 14. All documents that support or relate to any of the allegations made in your Answer and/or New Matter filed in response to Caretti's Complaint. 15. All documents constituting, evidencing, preferring or relating to any communications between PMA and NCCI regarding the claim. 8 0 0 16. All documents which you intend to introduce its exhibits at the trial of this matter. DATED: December 1, 2003 Respectfully submitted, Of Counsel BECKLEY & MADDEN 212 North Third Street Post Office Box 11998 Harrisburg, Pennsylvania 17108-1998 (717) 233-7691 .'???%?i /?fJ?='i /?f ,rte Thomas. A. Beckley, Esquire .- i Thomas, S. Beckley, Esquire Attorneys for Plaintiff, Caretti, Inc. 9 • 0 CARETTI, INC., : IN THE COURT OF COMMON PLEAS Plaintiff : OF CUMBERLAND COUNTY, PENNSYLVANIA V. ACTION IN EQUITY PENNSYLVANIA MANUFACTURERS' : ASSOCIATION INSURANCE : NO. 02-27011 COMPANY, MANUFACTURERS ALLIANCE INSURANCE COMPANY, PENNSYLVANIA MANUFACTURERS INDEMNITY COMPANY, and MID- ATLANTIC STATES CASUALTY COMPANY, Defendants DATED: December 1, 2003 TO: Pennsylvania Manufacturers' Association Insurance Company Manufacturers Alliance Insurance Company Pennsylvania Manufacturers Indemnity Company Mid-Atlantic States Casualty Company c/o Bryan K. Shreckengost, Esquire Pietragallo, Bosick & Gordon The Thirty-Eighth Floor One Oxford Centre Pittsburgh, Pennsylvania 15219 CARETTI, INC.'S FIRST SET OF INTERROGATORIES DIRECTED TO DEFENDANTS You are required to respond to these Interrogatories within thirty (30) days of service pursuant to Pennsylvania Rule of Civil Procedure 4006(a)(2). 1. DEFINITIONS AND INSTRUCTIONS 1. "Documents" is used in its broadest sense and means the original, or, if unavailable, a complete copy, and each copy which is non.-identical because of marginal notations, revisions or otherwise, of any medium, upon which anything is recorded or • 0 from which anything can be recorded to include, without limitation, the following: letters, correspondence, memoranda, notes, reports, records, pictures, videos, e-mails, electronic and other recordings, diaries, calendars, papers, data sheets, bills, contracts, computer printouts, information in computers, information stored on any electronic media, inter-office and intra-office communications, logs, drawings, graphs and charts. 2. "Person" means any natural person, corporation, partnership, association, or other entity. 3. "You" means Defendants, Pennsylvania Manufacturers' Association Insurance Company, Manufacturers Alliance Insurance Company, Pennsylvania Manufacturers Indemnity Company, and Mid-Atlantic States Casualty Company (collectively referred to as "PMA"), or any one of them, including, without limitation, their officers, directors, managing agents, agents, employees, and/or representatives. 4. "Identify," when used in reference to a communication, means to set forth: a. The identification of the person by whom, and each person, to whom each such communication was made and all persons present at the time; b. The date and time the communication was made or activity took place; C. The place at which it occurred; d. The means by which it occurred (e.g., by telephone, electronic transmission, letter, or in person); and e. The substance of the communication or activity. 5. "Identify" or "Identification," when used in reference to a person, means to set forth the person's: 2 • 0 a. Full name; b. Present or last known home address and telephone number; C. Present or last known business address and telephone number; d. Present or last known employer or affiliation; e. Title, rank or position at time of involvement with you; and f. For persons other than natural persons the name and address of each officer and general manager. 6. "Identify," when used in reference to documents, means to set forth: a. The nature of the documents (e.g., letter, memorandum, contract, personal notes); b. The date thereof; C. The identification of each author, addressee, and recipient; d. The title of the document and short description of its subject matter; e. Any file number, identifying mark, or code of the document; and f. The location of the document by address, city, and state, and the identification of the present custodian. 7. The plural includes the singular, and vice versa. 8. Masculine includes feminine, and vice versa. 9. The conjunctive includes the disjunctive, and vice versa. 10. "Everything" when used herein means all things, including, but not limited to, communications, activities and documents, contracts, and telephone calls. 11. "Every" means the same as "everything." 12. "Activity" when used herein means every contract, event, or thing other than a communication or document. 3 LJ H. INTERROGATORIES L7 1. Identify all persons who provided any information in response to these Interrogatories and, for each such person, identify the Interrogatory or Interrogatories for which each such person provided information. 2. Identify every person who provided any information or documents in your responses to Caretti, Inc.'s ("Caretti") First Set of Document Requests Directed to PMA and, for each such person, identify the information and document(s) provided by that person and the number of the Document Request for which the information or document(s) were provided by each such person. 4 0 L-1 3. Identify every person with knowledge of the facts averred in PMA's Answer and New Matter. 4. Identify all documents constituting or evidencing communications exchanged between you and Caretti from June 4, 1998, through the present relating in any way to the claim filed by Theodore Parker against Caretti for workers' compensation benefits ("Claim"). 5 L? L-1 5. Identify all documents constituting or evidencing communications exchanged between you and John Me, Esquire, regarding or relating to the Claim. 6. Set forth the amount or percentage of John Rune's law practice that involves the defense of workers' compensation claims. State how long Mr. Rufe had practiced law prior to 1998. State how long Mr. Rufe had practiced workers' compensation law prior to 1998. • 0 7. Identify each person employed by PMA with whom Mr. Rufe or anyone employed in Mr. Rufe's office spoke or communicated with either verbally or in writing regarding the Claim. For each such communication, set forth the substance of the communication and the date of the communication. 8. Set forth who made the decision to retain Mr. Rufe to defend the Claim on behalf of Caretti and who actually retained Mr. Rufe. Set forth how the decision to retain Mr. Rufe was made. 7 i Ll 9. Set forth the date upon which Mr. Rufe was initially retained and how he was retained. Identify who paid Mr. Rufe's legal bills. lo. Set forth whether PMA had ever retained Mr. Rufe prior to June, 1998, to defend workers' compensation claims, and, if so, approximately how many times PMA had retained him to defend workers' compensation claims. 8 s • 11. Set forth whether PMA has retained Mr. Rufe since October, 1998, to defend any workers' compensation claims, and, if it has, approximately how many times. 12. Set forth all efforts PMA and Mr. Rufe made to locate John Papetti prior to October 28, 1998. Efforts made by PMA: Efforts made by John Rufe: • • 13. Identify all communications of any kind between John Rufe and Caretti regarding the Claim. For each communication, identify all documents which evidence, reference or relate to the communication. 14. Identify all communications of any kind between PMA and Caretti regarding the Claim. For each communication, identify all documents which evidence, reference or relate to the communication. 10 • • 15. State whether Mr. Rufe presented any witnesses on behalf of Caretti during the hearing held on October 28, 1998. If he did not present any witnesses, state why he did not. 16. Identify all persons employed by Caretti with whom Mr. Rufe and/or PMA spoke prior to the hearing on October 28, 1998. For each such person identified, set forth the date, place and substance of the communication, and the manner in which the communication occurred. 11 • C 17. State whether Mr. Rufe ever communicated with Caretti concerning the possibility of settling the Parker claim prior to the hearing on October 28, 1998. If he did, identify: (a) the individual with whom Mr. Rufe communicated; (b) the date, place, manner and substance of the communication; and (c) any documents that evidence, relate to or reference the communication. 18. State whether Mr. Rufe and/or PMA ever requested a continuance of the hearing held on October 28, 1998, and, if not, the reasons for not requesting a continuance. State whether Mr. Rufe ever requested a supplemental hearing to present evidence on behalf of Caretti after October 28, 1998. 12 • • 19. Identify all evidence presented by Mr. Rufe on behalf of Caretti during the hearing held on October 28, 1998. 20. Set forth when Mr. Rufe was replaced as counsel for PMA. State why he was replaced and who made the decision to replace him, and whether Mr. Rufe was paid for any services he rendered in connection with the Parker claim. 13 9 0 21. State whether PMA has ever attempted to calculate the amount of additional workers' compensation insurance premiums that Caretti has paid to PMA on account of the Claim. If such a calculation has been made, state who made it and the amount of the increase in Caretti's premium caused by the Parker claim. 22. State whether PMA and/or Mr. Rufe obtained any statements from Caretti, and, if so, identify the person who made the statement, the (late upon which it was made, and the substance of the statement. 14 0 a 23. Set forth all communications between PMA and NCCI regarding the Claim including the date of the communication, the parties to the communication, how the communications were made (i.e., verbally, in writing, electronically, etc.), and the substance of the communication. 24. Identify each person you intend to call as a non-expert witness at the trial of this case, and for each person identified, state your relationship with the witness and the substance of the facts to which the witness is expected to testify. 15 0 a 25. Identify all exhibits you intend to introduce during the trial of this matter. 26. Identify each expert you intend to call as a witness at the trial of this matter, and for each expert state: (a) The subject matter about which the expert is expected to testify; and (b) The substance of the facts and opinions to which the expert is expected to testify and a summary of the grounds for each opinion. (You may file as your answer to this interrogatory the report of the expert or have the interrogatory answered by your expert.) 16 • 0 27. Set forth the total amount PNIA has paid to Parker and/or on his behalf regarding the Claim. 28. State whether Parker's claim has been settled, and, if it has, set forth the terms of the settlement, the date of the settlement, and who made the decision to settle the Claim and why that person(s) made the decision to settle the Claim. 17 • C 29. Has PMA and/or Pennsylvania Manufacturers Indemnity Company ("PMIC") commenced any legal action against Mr. Rufe and/or his law firm relating to the Parker Claim. If the answer is yes, identify the court or other tribunal in which the action was commenced, and provide the docket number assigned to the action. 30. State whether Mr. Rufe interviewed or discussed the Parker Claim with any of Caretti's employees during the hearing scheduled on September 24, 1998. If he did not, state why he failed to do so. 18 0 0 31. State whether Mr. Rufe and/or PMA conducted any surveillance of Mr. Parker prior to the hearing on October 28, 1998. If the answer is no, state why no surveillance was conducted. 32. State whether Mr. Rufe and/or PMA requested Parker to undergo an Independent Medical Exam ("MIE") prior to the hearing on October 28, 1998. If the answer is no, state why an IME was not conducted prior to October 28, 1998. DATED: December 1, 2003 Of Counsel BECKLEY & MADDEN 212 North Third Street Post Office Box 11998 Harrisburg, Pennsylvania 17108-1998 (717) 233-7691 Respectfully submitted, Tho nas A. Beckley, gsgh Thomas S. Beckley, Esquire Attome,?s for Plaintiff, Caretti, Inc. 19 EXHIBIT B 11 As ODDS n7 TVXZ"o 283,7601 • BEC'RT=& MADDEN AmmoravaRs AT Lsw CVAW R Oo 919 No TAD 8s eosro2s7ose U922 HARRISBURG, PENNBYLVANIA 1710£-1998 WAX NO. nT 2838746 M. M. 232560 March 1, 2004 Brian K. Shreckengost, Esquire Pietragallo, Bosick & Gordon The Thirty-Eighth Floor One Oxford Centre Pittsburgh, Pennsylvania 15219 RE: Caretti, Inc. v. PMA Dear Brian: VIA FIRST CLASS MAIL On December 1, 2003, we mailed to you Caretti's First Set of Interrogatories and First Set of Document Requests directed to PMA. We would request that you provide answers to the discovery requests immediately in order to avoid the filing of a motion to compel. Thanks. Very truly yours, BECKLEY & MADDEN Thomas S. Beckley cc: Caretti, Inc. EXHIBIT C • i PAW PIETRAGALLO BOSICK & GORDON ATTORNEYS AT LAW THE THIRTY-EIGHTH FLOOR ONE OXFORD CENTRE PITTSBURGH, PENNSYLVANIA 15219 TELEPHONE NO.: 412-263-2000 FACSIMILE NO.: 412-261-5295 Bryan K. Shreckengost Our File No.: PMA-60546 Thomas S. Beckley, Esq. Beckley & Madden Cranberry Court 212 N. Third Street P. O. Box 11998 Harrisburg, PA 17108-1998 March 16, 2004 Direct Dial No.: (412) 263-1829 E-mail: BKS@PBandG.com Re: Caretti, Inc. v. Pennsylvania Manufacturers' Association Insurance Company, et al.; Court of Common Pleas of Cumberland County, PA; No. 02-2701 Dear Mr. Beckley: Please accept this letter confirming our discussion yesterday wherein I advised that I would provide you with responses to your client's outstanding discovery on or befor March 26, 2004. Thank you for your cooperation in this regard. Very truly yours, i? Bry K.Shreckengost BKS/kly Ohio Pennsylvania West Virginia (740) 282-6705 (412) 263-2000 (304) 748-4246 CERTIFICATE OE SE.RYICE', I, Thomas S. Beckley, Esquire, hereby certify that on this day a true and correct copy of the foregoing document was served upon the persons and in the manner indicated below: SERVICE BY FIRST CLASS MAM Brian K. Shreckengost, Esquire. Pietragallo, Bosick & Gordon The Thirty-Eighth Floor One Oxford Centre Pittsburgh, Pennsylvania 152119 DATED: April 28, 2004 Thomas S. Beckley > ? 4 T U ? ? Stl n c:s a 0 O APR 3 0 2004 CARETTI, INC., : IN THE COURT OF COMMON PLEAS Plaintiff : OF CUMBERLAND COUNTY, : PENNSYLVANIA V. PENNSYLVANIA MANUFACTURERS' ASSOCIATION INSURANCE COMPANY, MANUFACTURERS ALLIANCE INSURANCE COMPANY, PENNSYLVANIA MANUFACTURERS INDEMNITY COMPANY, and MID- ATLANTIC STATES CASUALTY COMPANY, Defendants ACTION IN EQUITY NO. 02-2701 ORDER AND NOW, this y ` day of - I?7 , 2004, after consideration of Plaintiff's Motion to Compel, it is hereby ORDERED that said motion is GRANTED. ",,Defendants shall ?.n,rl. pxeuide answers to Plaintiff's First Set of Interrogatories and First Request for Production of Documents within twenty (20) days of the date of service of this Order. Service of this Order may be made by first class mail. V/ SO ORDERED t ! In, C 1Etb1?1?01-?D? ?y? d ii_t r CARETTI, INC., : IN THE COURT OF COMMON PLEAS Plaintiff OF CUMBERLAND COUNTY, PENNSYLVANIA V. ACTION INEQUITY PENNSYLVANIA MANUFACTURERS' ASSOCIATION INSURANCE NO. 02-2701 COMPANY, MANUFACTURERS ALLIANCE INSURANCE COMPANY, PENNSYLVANIA MANUFACTURERS INDEMNITY COMPANY, and MID- ATLANTIC STATES CASUALTY COMPANY, Defendants STATEMENT OF INTENTION TO PROCEED Plaintiff, Caretti, Inc., intends to proceed with the above-captioned matter. DATED: July 25, 2006 Of Counsel BECKLEY & MADDEN 212 North Third Street Post Office Box 11998 Harrisburg, Pennsylvania 17108-1998 (717) 233-7691 Respectfully submitted, Thomas A. eckley, sure Thomas S. Beckley, Esquire Attorneys for Plaintiff, Caretti, Inc. f I, Thomas S. Beckley, Esquire, hereby certify that on this day a true and correct copy of the foregoing document was served upon the persons and in the manner indicated below: Brian K. Shreckengost, Esquire Pietragallo, Bosick & Gordon The Thirty-Eighth Floor One Oxford Centre Pittsburgh, Pennsylvania 15219 DATED: July 25, 2006 Thomas S. Beckley r? - 7 7 { il Y CARETTI, INC., : IN THE COURT OF COMMON PLEAS Plaintiff OF CUMBERLAND COUNTY, PENNSYLVANIA V. ACTION IN EQUITY PENNSYLVANIA MANUFACTURERS' ASSOCIATION INSURANCE : NO. 02-2701 COMPANY, MANUFACTURERS ALLIANCE INSURANCE COMPANY, PENNSYLVANIA MANUFACTURERS INDEMNITY COMPANY, and MID- ATLANTIC STATES CASUALTY COMPANY, Defendants STATEMENT OF INTENTION TO PROCEED Plaintiff, Caretti, Inc., intends to proceed with the above-captioned matter. DATED: September 1, 2009 Of Counsel BECKLEY & MADDEN 212 North Third Street Post Office Box 11998 Harrisburg, Pennsylvania 17108-1998 (717) 233-7691 Respectfully submitted, omas A. Beckley, sq ire Thomas S. Beckley, Esquire Attorneys for Plaintiff, Caretti, Inc. CERTIFICATE OF SERVICE I, Thomas S. Beckley, Esquire, hereby certify that on this day a true and correct copy of the foregoing document was served upon the persons and in the manner indicated below: SERVICE BY FIRST CLASS MAIL Brian K. Shreckengost, Esquire Pietragallo, Bosick & Gordon The Thirty-Eighth Floor One Oxford Centre Pittsburgh, Pennsylvania 15219 DATED: September 1, 2009 Thomas S. Beckley 77 4.3 Tt' 2069 SE --2 P ?.- 14