The opinion of the court was delivered by: Joyner, District Judge.
In considering a summary judgment motion, the court must view
the facts in the light most favorable to the non-moving party and
all reasonable inferences from the facts must be drawn in favor
of that party as well. Troy Chemical Corp. v. Teamsters Union
Local No. 408, 37 F.3d 123, 126 (3rd Cir. 1994); U.S. v.
Kensington Hospital, 760 F. Supp. 1120 (E.D.Pa. 1991);
Schillachi v. Flying Dutchman Motorcycle Club, 751 F. Supp. 1169
(E.D.Pa. 1990). See Also: Williams v. Borough of West Chester,
891 F.2d 458, 460 (3rd Cir. 1989); Tziatzios v. U.S., 164
F.R.D. 410, 411, 412 (E.D.Pa. 1996). "Material" facts are those
facts that might affect the outcome of the suit under the
substantive law governing the claims made. An issue of fact is
"genuine" only "if the evidence is such that a reasonable jury
could return a verdict for the nonmoving party" in light of the
burdens of proof required by substantive law. The Philadelphia
Musical Society, Local 77 v. American Federation of Musicians of
the United States and Canada, 812 F. Supp. 509, 514 (E.D.Pa.
1992) citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
248, 252, 106 S.Ct. 2505, 2510, 2512, 91 L.Ed.2d 202 (1986).
By this motion, Plaintiff argues that summary judgment must be
granted in its favor because there are no issues of material fact
as to whether Travelers owes a defense to BCSA. In so arguing,
Plaintiff relies upon the language*fn1 in the Aetna/Travelers
policy which provides, in relevant part:
"ADVERTISING INJURY" means injury arising out of one or more of
the following offenses:
d. Infringement of copyright, title, or slogan.
"PERSONAL INJURY" means injury, other than "bodily injury,"
arising out of one or more of the following offenses:
b. False arrest, detention or imprisonment;
c. Malicious prosecution;
It is a well-accepted principle that an insurer's duty to
defend is conceptually distinct from and legally independent of
its duty to indemnify, that is, its obligation to pay a judgment.
Erie Insurance Exchange v. Transamerica Insurance Company,
516 Pa. 574, 583, 533 A.2d 1363, 1368 (1987); USX Corporation v.
Adriatic Insurance Company, 99 F. Supp.2d 593, 611 (W.D.Pa.
2000). If the complaint filed against the insured avers facts
which would support a recovery that is covered by the policy, it
is the duty of the insurer to defend until such time as the claim
is confined to a recovery that the policy does not cover. Erie
Insurance Exchange, supra, citing Cadwallader v. New Amsterdam
Casualty Co., 396 Pa. 582, 152 A.2d 484 (1959); Frog Switch &
Manufacturing Co. v. Travelers Insurance Co.,
(3rd Cir. 1999); Northern Insurance Company of New York v.
Aardvark Associates, Inc.,
, 195 (3rd Cir. 1991).
Stated otherwise, since the insurer agrees to relieve the insured
of the burden of defending even those suits which have no basis
in fact, the obligation to defend arises whenever the complaint
filed by the injured party may potentially come within the
coverage of the policy. Redevelopment Authority of Cambria
County v. International
Insurance Co., 454 Pa. Super. 374, 389, 685 A.2d 581, 588
To determine whether a claim may potentially come within the
coverage of a policy, the court must ascertain the scope of the
insurance coverage, and then analyze the allegations in the
complaint. Diamond State Insurance Co. v. Ranger Insurance Co.,
47 F. Supp.2d 579, 584 (1999). It should be noted that the
determination of coverage is not based solely on the particular
cause of action pleaded, but instead it is necessary to look at
the factual allegations contained in the complaint. USX Corp. v.
Adriatic, 99 F. Supp.2d at 611, citing, inter alia, Mutual
Benefit Insurance Co. v. Haver, 555 Pa. 534, 725 A.2d 743, 745
(1999). The averments of the underlying complaint must be
liberally construed with all doubts as to whether the claims may
fall within the policy coverage to be resolved in favor of the
insured. Id.; Roman Mosaic & Tile Co. v. Aetna Casualty & Surety
Co., 704 A.2d 665, 669 (Pa.Super. 1997).
According to CGU, the complaint in the underlying Angelico
matter alleges facts (i.e. defamation and libel) which could
potentially trigger Travelers' defense obligations. Travelers,
however, maintains that it owes no duty to defend or indemnify
BCSA because, despite the averments of slander, the only two
counts directed to its insured seek damages for group boycott and
for monopoly and conspiracy to monopolize in violation of the
Sherman Act, 15 U.S.C. § 1 and 2. In taking this position,
Defendant relies upon Roman Mosaic and Tile Co. v. Aetna
Casualty and Surety Co., 704 A.2d 665 (Pa.Super. 1997).
In the Roman Mosaic & Tile case, the plaintiff was sued by a
former employee for sexual discrimination and harassment.
Specifically, the plaintiff in that underlying action contended
that Roman Mosaic discriminated and harassed her by permitting
its employees to urinate in her work shoes, to make derogatory
remarks based on her gender by referring to her as a "slut," "fat
pig," and "whore," to throw a wheelbarrow at her, to place her in
a wire cage and drag it around the job site and to place her in a
metal drum and roll it around the job site.
Following the settlement of that underlying lawsuit, Plaintiff
company and one of its insurers instituted their own action
against Aetna and PMA Insurance Companies to compel them to
contribute to the settlement, arguing that the claims in the
underlying action fell under the "personal injury" provisions
contained in both policies. In affirming the trial court's entry
of summary judgment in favor of the two defendant insurers, the
Pennsylvania Superior Court observed that if the nature of the
allegations and claims raised in the underlying complaint arose
out of the torts enumerated in the policy, those claims would
potentially fall under the coverage of the policy and the
defendant companies would be under the duty to defend. However,
reasoned the Court, nowhere in the complaint did the plaintiff
employ the words false imprisonment, defamation or invasion of
privacy. Nowhere in the complaint did the plaintiff specifically
assert a claim for anything other than sexual harassment and
gender discrimination. Thus, the Superior Court concluded,
[t]he underlying plaintiff's injuries were not
causally connected with individual acts of false
imprisonment, defamation or invasion of privacy. Nor
were her injuries pled as being the result of those
enumerated causes of action. Rather the nature of the
factual allegations and claims raised in the
complaint clearly plead that plaintiff's injuries
were the result of collective instances of sexual
harassment and gender discrimination over a period of
years. Thus, those injuries are part and parcel of
her sexual harassment lawsuit. As previously stated,
the actual details of Ms. Jesiolowska's injuries are
not dispositive of whether appellees had a duty to
defend. Rather, it is the nature of the allegations
and claims that fixes the determination. Here,
because the nature of the allegations and claims
raised in the underlying
suit consist of injuries resulting from acts of
harassment and discrimination, acts not covered by
the policies, appellees were under no duty to defend
and the court's order granting summary judgment to
appellees was proper.
704 A.2d at 669.
In this case, the complaint in the Angelico action alleges,
in pertinent part:
18. On September 19, 1989, Dr. Angelico resigned from
defendant Panebianco-Yip and established a solo
practice maintaining Active Privileges at both LVH
and St. Luke's. . . .
21. Prior to Dr. Angelico's admission to the St.
Luke's medical staff, defendant BCSA had an exclusive
contract with St. Luke's to perform all heart
surgery. Dr. Angelico was one of the first physicians
to join the staff after St. Luke's opened cardiac
surgery to other Lehigh Valley surgeons.
22. Dr. Angelico began to build his practice at St.
Luke's as his reputation for excellence became known
in the community. In the first couple of years while
working for the Panebianco-Yip group, Dr. Angelico
performed approximately 150 open heart surgeries per
year. As a sole practitioner, he increased the number
of open heart procedures averaging 200 to 250
annually since 1990, in addition to an equal number
of non-cardiac surgical procedures. . . .
30. As is clearly demonstrated by the above data,
defendants LVH, St. Luke's, Panebianco-Yip and BCSA
collectively had sufficient market share to control
the market, including pricing and market allocation.
31. Dr. Angelico, as the lone substantial independent
sole practitioner, threatened defendants' control of
the market, and defendants, therefore, embarked on a
campaign and conspiracy to eliminate Dr. Angelico as
a competitor and an independent force in the market
through various predatory acts.
32. Although successful in building his practice
during this period, it was not without difficulty.
When Dr. Angelico first began working at St. Luke's,
the two surgeons in BCSA, Drs. Terrill Theman and
William Hoffman, attempted to monopolize operating
room time and intensive care bed allocation, thereby
limiting Dr. Angelico's ability to compete.
33. When Dr. Angelico's practice increased despite
the efforts of defendant BCSA to control the number
of surgeries, defendant BCSA, with the clandestine
help of defendant St. Luke's, began a campaign of
slander and innuendo directed at destroying Dr.
Angelico's reputation and competing practice.
34. Defendant BCSA, through Dr. Theman and his
agents, circulated letters containing derogatory
remarks about Dr. Angelico among St. Luke's nurses
loyal to BCSA seeking their signature in an effort to
limit competition. Dr. Theman also began a personal
letter writing campaign against Dr. Angelico falsely
alleging that Dr. Angelico was disruptive and
neglectful of patient care. Dr. Theman even recruited
the wife of his associate Dr. Hoffman, Margaret
Kraybill, M.D., to write false and malicious
statements about Dr. Angelico, even sending copies of
the false statements to Dr. Angelico's referring
cardiologists. Defendant BCSA and its representatives
knew its remarks about Dr. Angelico were false.
Thus, unlike Roman Mosaic & Tile, Dr. Angelico has
specifically pled that the injuries which he allegedly suffered
were caused in part by the defamatory and slanderous remarks made
by Drs. Theman, Kraybill and Hoffman and by the campaign of
slander which BCSA waged against him in an effort to destroy his
professional reputation and competing practice and thereby
monopolize the coronary graft surgical market. As is clear from
the foregoing, Pennsylvania law dictates that we look beyond the
technical confines of the legal theories under which