The opinion of the court was delivered by: DITTER, JR.
J. WILLIAM DITTER, JR., UNITED STATES DISTRICT JUDGE.
This declaratory judgment action involves insurance coverage and raises the question: does the phrase "arising out of and in the course of employment" refer to an attack on an employee by a co-worker for purely personal reasons for which the employee's estate seeks to hold the employer liable? The parties have filed motions for summary judgment and there being no material facts in dispute,
the matter of the appropriate insurance coverage is one of law. Little v. MGIC Indemnity Corp., 836 F.2d 789 (3d Cir. 1987).
Forum Insurance Co. brought this suit to resolve whether it has a duty to defend and indemnify Allied Security, Inc. in a personal injury action brought in the Court of Common Pleas for Philadelphia County, Trahey v. Allied Security, Inc., No. 5086 (October Term 1983).
In that case, the administrator for the estate of Ronald F. Trahey brought claims for wrongful death, survival, and punitive damages arising from the fatal assault and beating of Trahey by a co-worker, Vito Vinciguerra. Both men were security guards for Allied Security at the time of the attack. The administrator alleges that Vinciguerra acted outside the scope of his employment and assaulted decedent solely for personal reasons. He further alleges that Allied Security had actual or constructive notice of prior assaults by Vinciguerra or was aware of his animosity towards Trahey; and that the assault was caused by Allied's negligence and recklessness including, inter alia, failure to supervise and control its employees, improper hiring, and failure to provide a safe workplace. The parties agree that the state action pleads a common-law claim outside the scope of the Pennsylvania Workmen's Compensation Act, 77 Pa. Cons. Stat. Ann. §§ 1 et seq., which excludes from coverage "an injury caused by an act of a third person intended to injure the employee because of reasons personal to him, and not directed against him as an employee or because of his employment, . . ."
Id. at § 411(1). See, e.g., Gillespie v. Vecenie, 292 Pa. Super. 11, 436 A.2d 695 (1981) (allegations that an employee was attacked by a co-worker for purely personal reasons stated a common-law action against the employer).
On June 24, 1988, the jury in Trahey returned a verdict in favor of plaintiff and against Allied Security in the amount of $ 800,000 on the wrongful death and survival claims. By special interrogatory, the jury found that Vinciguerra acted solely for personal reasons and thus outside the scope of the Act; that Allied was negligent in the hiring, retention, placement, supervision or control of Vinciguerra; and that this negligence was a substantial factor in the death of Ronald Trahey.
At the time of the assault on Trahey, Allied was covered under a Security Guard Policy issued by Forum Insurance which provided coverage for damages:
Coverage A - By reason of personal injury and/or property damage including Products Hazards, arising out of Security Guard Services. . . .
Coverage B - By reason of any negligent act, error or omission committed by the Named Insured in the conduct of Security Guard Services . . . .
Coverage under Forum's policy, however, was excluded for any claim arising out of:
2. Any obligation for which the Named Insured or any carrier as his insurer may be held liable under any workers compensation, unemployment compensation or disability benefits law, or under any similar law.
3. Bodily injury, sickness or disease, including death or disability at any time resulting therefrom to any employee of the Named Insured arising out of and in the course of his employment by the Named Insured or to any obligation of the Named Insured to indemnify another because of damages arising out of such injury (emphasis added).
Allied Security was also covered under a "Workmen's Compensation and Employers' Liability Policy" issued by Liberty Mutual Insurance Company which covered Allied for liability under a workers' compensation law or for injury by accident or disease to an employee of the insured "arising out of and in the course of his employment by the insured . . . ."
The policy expressly defines "accident" to cover an assault and battery.
Both the Forum and Liberty Mutual policies obligate the insurers to defend Allied Security against any claim within their coverage. Under Pennsylvania law,
an insurer's duty to defend is determined on the basis of the allegations of the complaint in the underlying action.
The duty to defend arises whenever a claim potentially comes within the coverage of the policy. Pacific Indemnity Co. v. Linn, 766 F.2d 754, 760 (3d Cir. 1985); Reliance Insurance Co. v. Lexington Insurance Co., 1987 U.S. Dist. LEXIS 4853, No. 86-6560 (E.D. Pa. 1987). Here, it can hardly be disputed that the administrator's claims fall within coverage B of the Forum policy as hiring and supervising of employees and providing a safe workplace, all of which, it is alleged, Allied Security negligently performed, are necessary functions in the conduct of security guard services.
Forum asserts, however, that exclusion three removes those claims from policy coverage; therefore, it does not have a duty to defend Allied Security. For the reasons that follow, I agree.
The phrase "arising out of and in the course of his employment" is not defined in either the Forum or Liberty Mutual policy. I find no reason, nor has any been proffered, why the phrase should not be given the same meaning under each policy.
If the administrator's claims in Trahey arise out of and in the course of Trahey's employment, they fall within coverage B of the policy issued by Liberty Mutual which then has a duty to defend.