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HomeMy WebLinkAbout01-4962 CIVIL (2)MOTOR TRUCK EQUIPMENT IN THE COURT OF COMMON PLEAS OF COMPANY, CUMBERLAND COUNTY, PENNSYLVANIA PLAINTIFF V. GLOBE INDEMNITY COMPANY, DEFENDANT 01-4962 CIVIL TERM IN RE: PRELIMINARY OBJECTION OF DEFENDANT TO PLAINTIFF'S COMPLAINT BEFORE BAYLEY, J. AND HESS, J. OPINION AND INTERIM ORDER OF COURT Bayley, J., January 17, 2002:-- Plaintiff, Motor Truck Equipment Company, filed a complaint against defendant, Royal & SunAIliance USA. The parties, by stipulation, changed the name of defendant to the proper designation of Globe Indemnity Company. In its complaint, plaintiff makes the following averments. Plaintiff maintained a commercial general liability insurance policy with defendant.~ On June 22, 1999, a lawsuit was initiated against plaintiff in the United States District Court for the Eastern District of Texas. The insurance policy with defendant requires defendant to defend and indemnify it for the claims made in the Texas lawsuit. Defendant refused to provide a defense. Plaintiff seeks recovery against defendant on a count for breach of the insurance contract for the costs it incurred in defending the Texas lawsuit. On a count for bad faith, plaintiff seeks The policy is attached as an Exhibit to the complaint. 01-4962 CIVIL TERM general damages, interest, punitive damages, attorney fees and costs, claiming that defendant (1) failed to conduct an adequate investigation on the underlying claim, (2) failed to adequately research the applicable laws, (3) unreasonably interrupted its policy provisions and exclusions, (4) lacked a reasonable basis for refusing to defend it, and (5) refused to make a reasonable offer to settle. Pursuant to Pa. Rule of Civil Procedure 1017(a), defendant filed preliminary objections alleging that the complaint must be dismissed because it fails to state a cause of action for either breach of contract or bad faith. A demurrer will be sustained where a complaint is clearly insufficient to establish any right to relief; any doubt must be resolved in favor of the pleader. County of Allegheny v. Commonwealth, 507 Pa. 360 (1985). A demurrer admits as true all well-pleaded facts, but does not admit conclusions of law, unwarranted inferences from facts, argumentative allegations, or expressions of opinion. Department of General Services v. Celli-Flynn, 115 Pa. Commw. 494 (1988). In Scopel v. Donegal Mutual Insurance Company, 698 A.2d 602 (Pa. Super. 1997), the Superior Court of Pennsylvania stated: [i]t has long been the law of our Commonwealth that the nature of the allegations contained in a complaint control whether an insurer must defend a policyholder. See, e.g, Claypoole, 449 Pa. Super. at 154-56, 673 A.2d at 355; Aetna Casualty and Surety Co. v. Roe, 437 Pa. Super. 414, 422, 650 A.2d 94, 98 (1994); Antrim Mining, 436 Pa. Super. at 527- 29, 648 A.2d at 535. That is, the "insurer is obligated to defend if the factual allegations of the complaint on its face comprehend an injury which is actually or potentially within the scope of the policy." Roe, 437 Pa. Super. at 422, 650 A.2d at 99. (Emphasis added.) -2- 01-4962 CIVIL TERM A decision of whether an insurer has a duty to defend its insured is an issue of law for the court. Id. Defendant attached as an exhibit to its preliminary objections a copy of the lawsuit filed against plaintiff in the United States District Court for the Eastern District of Texas. Pursuant to Rule 1026, defendant's preliminary objections were endorsed with a notice to plaintiff to plead. Plaintiff did not plead a response to the preliminary objections. See, Rule 1017(a). Under Rule 1029(b), plaintiff has admitted the fact that the complaint attached to the preliminary objections constitutes the Texas lawsuit. Defendant argues, and plaintiff disagrees, that we may consider the Texas complaint in resolving these preliminary objections. In Saint Peter's Roman Catholic Parish v. Urban Redevelopment Authority of Pittsburgh, 394 Pa. 194 (1958), the plaintiff averred the existence of a written document and premised its cause of action on that document. The document was not attached to the complaint. The defendant attached the document to its preliminary objection in the nature of a demurrer. The Supreme Court of Pennsylvania concluded that the trial court could properly consider the document.2 In the present case, plaintiff's complaint specifically refers to the Texas lawsuit, and its cause of action is premised upon an alleged duty of defendant to defend it in that suit. Accordingly, we do not have to treat this record as a speaking 2 Contrast the facts in Martin v. Commonwealth, Department of Transportation, 124 Pa. Commw. 625 (1989), where an affidavit was attached to a preliminary objection alleging the existence of facts, as contrasted to a document that was referred to in the plaintiff's complaint. -3- 01-4962 CIVIL TERM demurrer. We will consider the Texas complaint that is attached to defendant's preliminary objections.3 In the Texas complaint, two persons doing business as the Bulldog Company sued Motor Truck Equipment Company. The plaintiffs alleged that a Kenworth tractor they owned was taken to Motor Truck for mechanical problems. Before any repairs were done, the driver was instructed by the owner to have the tractor taken somewhere else for repairs. Payment was tendered for the services that were already rendered by Motor Truck. The service writer and service manager of Motor Truck refused to release the tractor unless the driver signed an invoice which included a "total disclaimer." The driver, acting on the instructions from his employer, refused to sign a disclaimer. Motor Truck held the vehicle to enforce their demand for a signature on the invoice. After a police officer instructed Motor Truck's employees to surrender the vehicle to the owners, it complied. The plaintiffs averred: Defendant, through its agents, servants and employees wrongfully assume [sic] and exercise [sic] dominion and control over plaintiffs' property to the exclusion of, or in a manner inconsistent with, the plaintiffs' rights in said property. Defendant is jointly and severally liable 3 Lawyers just love preliminary objections, and often overlook a judgment on the pleadings as the most effective way to expedite the resolution of a lawsuit. Defendant could have easily avoided this procedural issue by filing an answer to plaintiff's short, simple complaint, then in new matter attaching the complaint in the Texas lawsuit, and then filing a motion for a judgment on the pleadings. We note that defendant also attached to its preliminary objections an opinion in the Texas case of the United States District Court for the Eastern District of Texas. Defendant has quoted from that opinion in its brief. Because the issue is whether defendant is obligated to defend the Texas lawsuit based on the alleqations in the complaint on its face in the Texas case, the decision of the District Court is not relevant. -4- 01-4962 CIVIL TERM to each plaintiff for conversion of plaintiff's tractor and keys, and for said conversion, plaintiff should pay $125,000.00, which is the reasonable market value of said tractor and keys at the time and place of their taking by defendant.4 This was a suit for conversion. In the case sub judice, plaintiff, relying on its position that we could not consider the Texas complaint that is attached to defendant's preliminary objections, did not brief the issue of whether the coverage in defendant's insurance policy required defendant to defend it in the Texas lawsuit. Defendant in its brief did not analyze any provisions of its insurance contract as it relates to that issue. It simply concluded that "The complaint cannot be sensibly understood to describe an accident which potentially attracts coverage under Globe's policy.''5 The policy looks like its over one hundred pages. We are not going to do either attorney's work for them. Accordingly, the following order is entered. INTERIM ORDER OF COURT AND NOW, this day of January, 2002, defendant shall, within fifteen (15) days, file in the chambers of this judge, and Hess, J., a brief addressing the issue set forth in this opinion. Plaintiff shall file a response brief in both chambers not later 4 The plaintiff also sought exemplary damages, interest and attorney fees. 5 We agree with defendant that if it did not have a duty to defend/indemnity plaintiff in the Texas lawsuit, it could not be liable for bad faith in not doing so. -5- 01-4962 CIVIL TERM than ten (10) days thereafter. Defendant may file a reply to that brief not later than seven (7) days thereafter. By the Court, Edgar B. Bayley, J. Brett M. Woodburn, Esquire For Plaintiff Francis P. Burns, III, Esquire For Defendant :sss -6-