workers' compensation insurance coverage from USF & G, it
misrepresented that the drivers leased by Transco to Pennco
under the leasing agreement were validly insured with workers'
compensation coverage. Defendants' negligence claim against Mark
Insurance Agency appears to have two components: (1) that
through the issuance of certificates of insurance, Mark
Insurance Agency negligently misrepresented that the drivers
leased by Transco to Pennco were validly insured with workers'
compensation coverage; and (2) that Mark Insurance Agency
negligently failed to advise Defendants that the USF & G policy
excluded operations within the Commonwealth of Pennsylvania.
See Amended Third-Party Complaint at 6-7.
Mark moves for summary judgment on the ground that there is no
evidence that Mark Insurance Agency made any representation to
Pennco to the effect that drivers leased from Transco to Pennco
were insured by Transco's workers' compensation policy, and such
a representation is key to Defendants' fraudulent and negligent
misrepresentation claims. Further, Mark argues that it had no
duty to Pennco other than providing accurate information on the
certificates of insurance, and accordingly, it cannot be liable
for any alleged failure to disclose certain information to
Under Pennsylvania law, the elements of fraud are as follows:
(1) a representation; (2) which is material to the transaction
at hand; (3) made falsely, with knowledge of its falsity or
recklessness as to whether it is true or false; (4) with the
intent of misleading another into relying on it; (5) justifiable
reliance on the misrepresentation; and (6) the resulting injury
was proximately caused by the reliance. See Bortz v. Noon,
556 Pa. 489, 729 A.2d 555, 560 (1999). The elements of a negligent
misrepresentation claim are: (1) a misrepresentation of a
material fact; (2) made under circumstances in which the
misrepresenter ought to have known of its falsity; (3) with an
intent to induce another party to act on it; and (4) which
results in injury to a party acting in justifiable reliance on
the misrepresentation. See id. Central to both causes of
action is a representation alleged to be false.
Mark Insurance Agency bases its motion on the testimony of
Defendant Harry Grossman, President of Pennco, who testified at
his deposition that the sole basis for his belief that Mark
Insurance Agency had represented that drivers leased from
Transco to Pennco were insured by Transco's workers'
compensation policy (the alleged actionable misrepresentation)
was the issuance of the certificates of insurance in question,
and not some other verbal or written representation made by
Mark. See Grossman Dep. at 220, 225. The certificates of
insurance relied on by Defendants contain the following
language: "[t]his certificate is issued as a matter of
information only and confers no rights upon the certificate
holder. This certificate does not amend, extend or alter the
coverage afforded by the policies below." Certificates of
Insurance, Exhibits A-C to Defendants' Amended Third-Party
Complaint. The certificates further state:
This is to certify that the policies of insurance
listed below have been issued to the insured named
above for the policy period indicated.
Notwithstanding any requirement, term or condition of
any contract or other document with respect to which
this certificate may be issued or may pertain, the
insurance afforded by the policies described herein
is subject to all the terms, exclusion and conditions
of such policies.
Id. The certificates of insurance issued to Pennco explicitly
state that they provide no coverage greater than or inconsistent
with the relevant insurance policy.
Because Defendants have presented no evidence that any
information on the certificates of insurance was inaccurate, and
Defendants' misrepresentation claims are based on the
certificates of insurance, Mark argues that Defendants'
misrepresentation claims against it must fail.
The Court is persuaded by Mark Insurance Agency's argument.
Defendants and Donegal attempt to put a number of additional
facts before the Court in an effort to demonstrate that the
issuance of the certificates of insurance constituted a
misrepresentation when viewed in the larger context of
Defendants' interaction with Mark Insurance Agency; however,
those facts are not material to the misrepresentation claims
Defendants have asserted against Mark. This is so because
Defendant Grossman has admitted that the sole basis for his
belief that the Transco drivers leased to Pennco were insured
under the Transco workers' compensation policy (the alleged
actionable misrepresentation) was the issuance of the
certificates of insurance, not some other communication or
representation made by Mark. Because no party has alleged or
demonstrated that the certificates themselves contain inaccurate
information, Defendants' misrepresentation claims must fail.
Defendants and Donegal make an additional argument regarding
the fraud claim that Defendants have asserted against Mark
Insurance Agency. They point to case law suggesting that to be
actionable, a misrepresentation need not be in the form of a
positive assertion, but may consist of concealment of that which
should have been disclosed. See Wilson v. Donegal Mutual Ins.
Co., 410 Pa.Super. 31, 598 A.2d 1310 (1991). They argue that
Mark Insurance Agency in effect "concealed" the fact that
drivers leased from Transco to Pennco were excluded from
coverage under the Transco policy. However, as noted by Mark
Insurance Agency, there is no evidence in the record that Mark
Insurance Agency "concealed" any fact from Pennco. Moreover,
Mark argues that it cannot be liable for allegedly concealing
something which it had no duty to disclose. Under Storti v.
Minnesota Mutual Life Ins. Co., 331 Pa.Super. 26, 479 A.2d 1061
(1984), an insurance agent's duty with regard to certificate
holders is met as long as the information contained on the
certificates of insurance is accurate and is not contrary to the
policy. As noted above, Defendants have presented no evidence
that the information contained on the certificates of insurance
is inaccurate or somehow contrary to the policy, and the
certificates themselves directed the holder to the policy for
the terms of coverage.
With regard to the "failure to notify" portion of Defendants'
negligence claim, Mark Insurance Agency similarly cannot be
liable for any failure to notify Defendants in the absence of
some duty to disclose certain information. As just discussed
above, an insurance agent's duty with regard to certificate
holders is met as long as the information contained on the
certificate of insurance is accurate and is not contrary to the
policy. See Storti, 479 A.2d at 1063.
Further, although Defendants and Donegal recite additional
facts designed to show that Mark Insurance Agency was engaged in
some sort of conspiracy with Transco to defraud Pennco and other
trucking companies throughout the United States, those facts are
legally irrelevant to the instant motion, as no one has asserted
a conspiracy claim against Mark Insurance Agency. Moreover,
additional facts regarding Mark Insurance Agency's interactions
with other trucking companies is similarly irrelevant to
Defendants' misrepresentation claims against Mark Insurance
Agency, which by their nature concern only alleged
misrepresentations made to
Defendants. For all of the reasons discussed above, there is no
genuine issue of material fact as to the absence of a
misrepresentation made by Mark Insurance Agency to Defendants;
accordingly, Mark Insurance Agency is entitled to summary
judgment on Defendants' claims against it.
One final matter remains to be addressed. In its motion, Mark
Insurance Agency also seeks summary judgment on any direct
claims brought by Donegal against it; however, Mark acknowledges
that Donegal has asserted no direct claims against it in this
action. As there is no pending claim asserted against Mark
Insurance Agency by Donegal, Mark's request for summary judgment
on this nonexistent claim must be denied.
Accordingly, for the reasons discussed in this memorandum, IT
IS ORDERED THAT:
(1) USF & G's Motion for Summary Judgment (Doc.
No. 71) on the only claim asserted against it,
count 3 of the Amended Third-Party Complaint, is
GRANTED. The Clerk of Court is directed to enter
judgment in favor of USF & G and against
Defendants on count 3 of the Amended Third-Party
(2) USF & G's Motion for Leave to File Cross-claim
for Indemnity Against Third-Party Defendant Mark
Insurance Agency (Doc. No. 119) is DENIED as moot.
(3) USF & G's Motion in Limine to Preclude Donegal
and Pennco From Offering Evidence of or Making
Reference to USF & G's Role in the Worker's
Compensation Proceedings (Doc. No. 123) is DENIED
(4) USF & G's Motion in Limine to Preclude or
Limit the Proposed Testimony of Expert Constance
Foster and to Bar Plaintiff From Offering Evidence
in Support of Defendant's Claim against USF & G
(Doc. No. 125) is DENIED as moot.
(5) Mark Insurance Agency's Motion for Summary
Judgment (Doc. No. 75) on the remaining claims
asserted against it, counts 2 and 3 of the Amended
Third-Party Complaint, is GRANTED. The Clerk of
Court is directed to enter judgment in favor of
Mark Insurance Agency and against Defendants on
counts 2 and 3 of the Amended Third-Party
(6) Mark Insurance Agency's Motion in Limine to
Preclude or Limit the Testimony of Constance
Foster (Doc. No. 127) is DENIED as moot.
(7) The pretrial conference scheduled for January
31, 2001 at 10:00 AM is CANCELED. Jury selection
and trial currently scheduled for February 5,
2001, and February 12, 2001, respectively, are
(8) On or before February 15, 2001, Plaintiff
shall file a written report notifying the Court of
the status of its claim against Third-Party