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BRITAMCO UNDERWRITES, INC. v. STOKES

April 5, 1995

BRITAMCO UNDERWRITES, INC., Plaintiff,
v.
JOHN J. STOKES, JR., JACK STOKES, JR., JACK STOKES' OLD ALE HOUSE II, and DENNIS BARTON, Defendants.



The opinion of the court was delivered by: MARVIN KATZ

 AND NOW, this 5th day of April, 1995, upon consideration of the Motion Of Plaintiff Britamco Underwriters, Inc. For Judgment On The Pleadings And To Dismiss Counterclaim and the defendants' respective responses, it is hereby ORDERED that plaintiff's Motion is GRANTED.1

 I. BACKGROUND

 Britamco Underwriters, Inc. ("Britamco"), initiated this declaratory judgment action Pursuant to 42 Pa. C.S.A. ยง 7532, et seq., seeking a declaration that it has no duty to defend or indemnify its insureds in a state court action brought by Dennis Barton against John J. Stokes, Jr. and his establishment, Jack Stokes' Old Ale House II (the "Ale House"). *fn2" In the state court action, Barton seeks damages for injuries resulting from an alleged assault and battery by the Ale House's "bouncer/doorman." Pl.'s Mot. Ex. E. Britamco contends that Barton's claims are not covered by the insurance policy at issue (the "Policy") for two reasons. Britamco's first contention is that the assault and battery out of which Barton's claims arise is not an "occurrence," as that term is defined in the Policy and, accordingly, injuries arising therefrom are not covered by the Policy. See Terra Nova Ins. Co., Ltd. v. North Carolina Ted, Inc., 715 F. Supp. 688, 691-92 (E.D. Pa. 1989) (citing Gene's Restaurant, Inc. v. Nationwide Ins. Co., 519 Pa. 306, 548 A.2d 246 (1988)); Terra Nova Ins. Co., Ltd. v. Thee Kandy Store, Inc., 679 F. Supp. 476 (E.D. Pa. 1988). Britamco's second contention is that Barton's claims are expressly excluded from coverage under the language of the Policy's assault and battery exclusion. See Britamco Underwriters, Inc. v. Grzeskiewicz, 433 Pa. Super. 55, 639 A.2d 1208, 1211-12 (Pa. Super. 1994).

 II. ANALYSIS

 Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). The moving party has the burden of demonstrating the absence of any genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). *fn3"

 A. The Duty to Defend

 Britamco seeks discharge of both its duty to defend and its duty to indemnify. *fn4" The duty to defend is a distinct obligation separate and apart from the duty to indemnify. Erie Ins. Exchange v. Transamerica Ins. Co., 516 Pa. 574, 582, 533 A.2d 1363, 1368 (1987). The duty to defend arises whenever claims asserted by the injured party potentially come within the coverage of the policy, Gedeon v. State Farm Mutual Automobile Ins. Co., 410 Pa. 55, 56, 188 A.2d 320, 321 (1963), while the duty to indemnify arises only when the insured is determined to be liable for damages within the coverage of the policy. See, e.g., Employers Reinsurance Corp. v. Sarris, 746 F. Supp. 560, 566-568 (E.D. Pa. 1990). It follows then, that when the claims in the underlying action have not been adjudicated, the court entertaining the declaratory judgment action must focus on whether the underlying claims could potentially come within the coverage of the policy. Air Products and Chemicals, Inc. v. Hartford Accident and Indemnity Co., 25 F.3d 177, 179 (3d Cir. 1994). *fn5" If there is a possibility that any *fn6" of the underlying claims could be covered by the policy at issue, the insurer is obliged to provide a defense at least until such time as those facts are determined, and the claim is narrowed to one patently outside of coverage. C. Raymond Davis & Sons, Inc. v. Liberty Mut. Ins. Co., 467 F. Supp. 17, 19 (E.D. Pa. 1979). On the other hand, if there is no possibility that any of the underlying claims could be covered by the policy at issue, judgment in the insurer's favor with regard to the duty to defend and indemnification is appropriate. See, e.g., Germantown Ins. Co. v. Martin, 407 Pa. Super. 326, 595 A.2d 1172 (Pa. Super. 1991), alloc. denied, 612 A.2d 985 (Pa. 1992). Therefore, the operative question is whether the allegations in the complaint could potentially fall within the coverage of the policy. Gedeon 410 Pa. at 56, 188 A.2d at 321; Air Products, 25 F.3d at 179. *fn7"

 B. The Policy's Terms

 The insurance policy at issue between Britamco and the Ale House contains the following provision and definition:

 
The Company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of:
 
A. bodily injury or
 
B. property damage
 
to which this insurance applies caused by an occurrence. . . .
 
"occurrence" means an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured.

 Pl.'s Mot. Ex. B at 000033, 000013 (emphasis original). The Policy also contains the following exclusion:


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