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COMMONWEALTH PENNSYLVANIA v. RUSSELL STANDARD CORPORATION ET AL. (10/18/88)

decided: October 18, 1988.

COMMONWEALTH OF PENNSYLVANIA, DEPARTMENT OF TRANSPORTATION, PLAINTIFF
v.
RUSSELL STANDARD CORPORATION ET AL., DEFENDANTS



Original jurisdiction in the case of Commonwealth of Pennsylvania, Department of Transportation v. Russell Standard Corporation et al.

COUNSEL

Brian H. Baxter, Deputy Attorney General, with him, Mark E. Garber, Chief, Tort Litigation Unit, and LeRoy S. Zimmerman, Attorney General, for plaintiff.

Robert A. Arcovio, Winters, McKenna & Arcovio, P.C., for defendants.

Judges Barry and McGinley, and Senior Judge Kalish, sitting as a panel of three. Opinion by Judge McGinley. This decision was reached prior to the resignation of Judge MacPhail.

Author: Mcginley

[ 120 Pa. Commw. Page 469]

Plaintiff Commonwealth of Pennsylvania, Department of Transportation (DOT) filed a complaint in our original jurisdiction seeking a declaratory judgment against Russell Standard Corporation (Russell Standard), a highway construction contractor and Fireman's Fund, an insurance company, on a Certificate of Insurance Russell Standard obtained from Fireman's Fund in order to perform maintenance on a state highway pursuant to a contract with DOT. In Count I of its complaint DOT alleges that Russell Standard has breached its contractual duty to indemnify and defend DOT in three underlying actions brought in the Court of Common Pleas of Erie County which arose out of an accident on the highway where Russell Standard performed the roadwork. DOT requests that Russell Standard insure, defend and indemnify DOT for any loss resulting from the accident. In Count II DOT alleges that Fireman's Fund breached its contractual insurance obligation owed to DOT pursuant to the Certificate of Insurance it issued Russell Standard. DOT requests that Fireman's Fund be required to furnish legal representation to DOT in all legal proceedings arising out of the underlying actions in the Erie trial court.

[ 120 Pa. Commw. Page 470]

Both DOT and Russell Standard in conjunction with Fireman's Fund filed motions for summary judgment which are presently before our Court. On June 30, 1982, DOT issued invitation bid-proposals to various contractors across the state including Russell Standard. After submitting the low bid, Russell Standard was awarded a contract to perform an oil and chip seal coat operation on Route 8 in Erie County in an area known as "Smiley Hill." The contract, known as a purchase requisition, provided that DOT's Form 408 Specifications, requiring a Certificate of Insurance indemnifying DOT for any liability loss during the project, must be obtained.*fn1 Russell Standard obtained a Certificate of Insurance from Fireman's Fund which named DOT as an additional insured.

Russell Standard, in turn, subcontracted with Cross Construction Company who actually performed the oil and chip operation on August 1-2, 1982. On November 2, 1982, Fireman's Fund issued another Certificate of Insurance naming Russell Standard as an insured, but not including DOT. On August 31, 1983, the driver of a tractor trailer proceeding down Route 8 on Smiley Hill lost control and struck an automobile coming up the hill thereby killing the driver and two passengers in the automobile.

[ 120 Pa. Commw. Page 471]

All three decedents' estates filed wrongful death and survival actions against DOT, among other defendants. Those actions have been settled. However, DOT has filed an action in our Court for declaratory judgment in order to require Russell Standard or Fireman's Fund to pay attorneys' fees and indemnify DOT for their settlement payments resulting from the three Erie trial court actions. However, we need only address the parties' motions for summary judgment which are currently before our Court for disposition.

Summary judgment shall be granted if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Pa. R. Civ. P. No. 1035(b). It is to be entered, however, only in the clearest of cases when no doubt exists as to the absence of a triable issue of fact. Williams v. Pilgrim Life Ins. Co., 306 Pa. Superior Ct. 170, 452 A.2d 269 (1982).

DOT contends it is entitled to summary declaratory judgment ordering both defendants to pay attorneys' fees and indemnify DOT in the Erie trial court actions in that the bid-invitation proposal accepted by Russell Standard obligates them to furnish insurance coverage for DOT "for any loss that might accrue" and also that the "completed operations coverage" clause in the insurance ...


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