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GENE'S RESTAURANT v. NATIONWIDE INSURANCE CO. (09/27/88)

decided: September 27, 1988.

GENE'S RESTAURANT, INC., APPELLANT,
v.
NATIONWIDE INSURANCE CO., APPELLEE



Appeal from the Order of the Superior Court, No. 01438PHL86, dated December 3, 1986, affirming the Order of the Court of Common Pleas of Philadelphia dated January 10, 1986, at July Term, 1982, No. 2020

COUNSEL

Anthony J. Sciolla, Jr., Huntington Valley, for appellant.

Robert Keller, Philadelphia, for appellee.

Nix, C.j., and Larsen, Flaherty, McDermott, Zappala, Papadakos and Stout, JJ. Zappala, J., concurs in the result. Papadakos, J., files a dissenting opinion.

Author: Stout

[ 519 Pa. Page 308]

OPINION OF THE COURT

In this case we consider an insurer's duty to defend under a comprehensive general liability policy.

The question arises out of the refusal of Nationwide Insurance Company to defend its insured, Gene's Restaurant, Inc., against a complaint in trespass alleging the willful and malicious assault and beating of one of its patrons, Patricia A. Aschenback. Nationwide refused to defend on the ground of noncoverage. Gene's Restaurant then filed an action in assumpsit against Nationwide seeking to recover the amount it had expended for costs and fees incurred in defending the trespass action. An arbitration panel found in favor of Gene's Restaurant. In the de novo, non-jury trial which followed upon appeal, the Court of Common Pleas found in favor of Nationwide and held, as a matter of law, that an insurer may base its decision to defend solely on the allegations of the Complaint. The Superior Court affirmed, 362 Pa. Superior Ct. 642, 520 A.2d 1219, and so do we.

An insurer's duty to defend an action against the insured is measured, in the first instance, by the allegations in the plaintiff's pleadings . . .

[I]n determining the duty to defend, the complaint claiming damages must be compared to the policy and a determination made as to whether, if the allegations are sustained, the insurer would be required to pay resulting judgment . . . . the language of the policy and the allegations of the complaint must be construed together to determine the insurer's obligation.

7C J. Appleman, Insurance Law and Practice § 4683, at 42, 50 (W. Berdel ed. 1979) (footnotes omitted). See also Cadwallader v. New Amsterdam Casualty Co., 396 Pa. 582, 152 A.2d 484 (1959); 14A G. Couch, Insurance § 51:44, at 458-69 (M. Rhodes 2d rev. ed. 1982); 1A H. Long, The Law of Liability Insurance § 5.02, at 5-19 to -39, § 5.04, at 5-41 to -42 (1987).

[ 519 Pa. Page 309]

Following these principles, we make the requisite comparison. Paragraph four of the ...


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