The opinion of the court was delivered by: RICHARD B. SURRICK, District Judge
Presently before the Court is Plaintiff Alea London Limited's
Motion for Summary Judgment. (Doc. No. 19.) Plaintiff filed its
Motion on February 4, 2004. Responses to the Motion were due
fourteen days later. E.D. Pa. Local Rule 7.1(c). Defendant
Property & Casualty Insurance Company of Hartford ("Hartford")
timely filed its response on February 17, 2004, stating that it
took no position on the merits of Plaintiff's Motion. (Doc. No.
20.) The other Defendants, Howard Rudley, Edith Rudley, Robert
Handfinger, and Albert Davis, all acting pro se, failed to timely
file responses to Plaintiff's Motion. On May 24, 2004, we ordered
Defendants to respond to Plaintiff's Motion within fourteen days,
stating that if they failed to do so, the Court would rule on
Plaintiff's Motion without the benefit of Defendants' responses.
(Doc. No. 21.) Defendants Davis and Handfinger then moved for an
extension of time in which to respond to Plaintiff's Motion.
(Doc. Nos. 22, 23.) On June 23, 2004, we granted their motions
for an extension and ordered all Defendants to respond to
Plaintiff's Motion within ten days, again stating that if they
failed to do so, the Court would rule on Plaintiff's Motion
without the benefit of their responses. (Doc. No. 26.) We indicated that
no further extensions would be granted. (Id.) As of the date of
this Memorandum & Order, Hartford is the only Defendant to file a
response to Plaintiff's Motion. This is the Court's decision on
Plaintiff's Motion.
On October 25, 2002, the Rudleys and Handfinger sued Hartford
and Davis in the Court of Common Pleas for Philadelphia County,
Pennsylvania (the "Common Pleas Action"). (Doc. No. 19, Ex. A.)
In the Common Pleas Action, the plaintiffs alleged that on or
about June 30, 2001, Davis owned an apartment located in
Philadelphia, Pennsylvania, that he rented to Handfinger. (Id.
¶¶ 5-6.) On or about June 30, 2001, one of the tenants residing
in the same building as Handfinger used a washing machine that
broke and leaked water. The water caused the ceiling of
Handfinger's apartment to collapse and some pipes to break.
(Id. ¶¶ 9-11.) As a result of the leak and/or ceiling collapse,
Handfinger's furniture and clothing became wet and subsequently
contaminated with mold, causing Handfinger to suffer the physical
effects of mold contamination. (Id. ¶¶ 12, 23.) Handfinger was
forced to move out of the apartment and into the Rudley's home.
(Id. ¶ 13.) As a result, the Rudley's home is now contaminated
with mold. (Id. ¶ 14.)
At the time of these events, the Rudleys and Handfinger were
insured by Hartford. (Id. ¶ 15.) The Rudleys and Handfinger
brought the Common Pleas Action against Hartford and Davis to
recover for the damage to their properties and persons. Count One
alleges that Hartford breached its insurance contracts with the
Rudleys and Handfinger by failing to provide coverage for the
cost to decontaminate their home, furniture, and other
belongings. (Id. ¶¶ 7-17.) Counts Two and Three allege that
Davis was negligent for a variety of reasons and is liable to Handfinger for the damages cause by the mold contamination.
(Id. ¶¶ 18-35.) The final Count seeks punitive damages on the
grounds that Davis acted in an intentional, wilful, wanton,
malicious, and/or reckless manner indifferent to the safety and
well being of Handfinger. (Id. ¶¶ 36-39.)
Upon receiving the complaint in the Common Pleas Action, Davis
submitted a claim to Plaintiff, his insurer, asking Plaintiff to
defend and indemnify him for all claims asserted in the Common
Pleas Action. (Id., Ex. 2.) The insurance policy that Plaintiff
issued to Davis (the "Policy")
*fn1 includes a clause
entitled, "MOLD AND FUNGI EXCLUSION CLAUSE," which states:
Notwithstanding any other provision in this policy,
this insurance does not apply to the following:
Under the Commercial Property Coverage:
for any loss or damage involving in any way the
actual or potential presence of mold, mildew or fungi
of any kind whatsoever, whether or not directly or
indirectly caused by or resulting from any peril
insured under this Policy.
Under the Commercial General Liability Coverage:
(1) Any sums which any Insured becomes legally
obligated to pay as damages because of Bodily Injury,
Property Damage, Personal Injury, Advertising Injury
or Medical Payments directly or indirectly relating
to the actual, potential, alleged or threatened
presence of mold, mildew or fungi of any kind
whatsoever, or any materials containing them at any
time.
(2) Any loss, cost or expense:
(a) any Insured or any other person or organization
may incur in testing for, monitoring, removing, treating or in
any way responding to the actual, potential, alleged
or threatened presence of mold, mildew or fungi of
any kind whatsoever, or any materials containing
them, whether as a result of a request, demand,
statutory or regulatory requirement or otherwise; or
(b) any Insured or any other person or organization
may incur in connection with any claim or suit on
behalf of any governmental authority or any person or
organization relating to the actual, potential,
alleged or threatened presence of mold, mildew or
fungi of any kind whatsoever, or any materials
containing them.
(3) Underwriters will have no duty or obligation to
defend any Insured with respect to any claim of suit
seeking any such damages.
(Id., Ex. C.)
The Policy also contains a clause entitled, "EXCLUSION
PUNITIVE OR EXEMPLARY DAMAGES," which states, in relevant part:
This insurance does not apply to any claim of or
indemnification for punitive or exemplary damages. If
a suit seeking both compensatory and punitive or
exemplary damages has been brought against you for a
cl[ai]m within the coverage provided by this policy,
we will provide defense for such action. We will not
have any obligation to pay for any costs, interest or
damages attributable to punitive or exemplary
damages.
(Id., Ex. D at 3.)
According to Plaintiff, the Policy clearly and unambiguously
excludes coverage for the defense or indemnification of the
mold-related and punitive damages claims asserted in the Common
Pleas Action. For these reasons, Plaintiff seeks a declaratory
judgment that it has no duty under the Policy to (1) defend or
pay costs to or on behalf of Davis in connection with the Common
Pleas Action; (2) indemnify Davis for any judgment, settlement,
or other award of monies as damages, including punitive damages,
arising out of the Common Pleas Action; or (3) pay monies, including punitive damages, on behalf of Davis to the
Rudleys, Handfinger, or Hartford in connection with the Common
Pleas Action. We have jurisdiction over this case pursuant to
28 U.S.C. § 1332 because Plaintiff and Defendants are of diverse
citizenship and the amount in controversy exceeds $75,000.
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 bears the burden of proving that no genuine issue of
material fact is in dispute. Adickes v. S.H. Kress & Co.,
398 U.S. 144, 157 (1970). Once the moving party carries this initial
burden, the nonmoving party may not rest upon the mere
allegations in its pleading, but must set forth specific facts
showing that there is a genuine issue for trial. FED. R. CIV. P.
56(e). When, as in this case, a motion for summary judgment is
unopposed, "the Court is required to conduct its own examination
of whether granting summary judgment is appropriate." Fekade v.
Lincoln Univ., 167 F. Supp.2d 731, 738 (E.D. Pa. 2001); FED. R.
CIV. P. 56(e) ("If the adverse party does not so respond, summary
judgment, if appropriate, shall be entered against the adverse
party."). In considering a motion for summary judgment, we will
not resolve factual disputes or make credibility determinations,
and we must view facts and inferences in the light most favorable
to the nonmoving party. Siegel Transfer, Inc. v. Carrier
Express, Inc., 54 F.3d 1125, 1127 (3d Cir. 1995).
An insurer has no duty to defend or indemnify an insured if the
insurance contract excludes coverage over the claims made in the underlying
litigation. Certain Underwriters at Lloyd's of London v. Lehigh
Hoagie City, Inc., No. 96-cv-3282, 1997 WL 50416, at *2 (E.D.
Pa. Feb. 6, 1997) (citing Gene's Rest. v. Nationwide Ins. Co.,
548 A.2d 246, 246 (Pa. 1988)); see also Keystone Spray Equip.,
Inc. v. Regis Ins. Co., 767 A.2d 572, 574 (Pa. Super. 2001)
("It is well established that an insurer need only defend an
insured in a claim if the insurance contract provides coverage
for a suit of that nature.") (citing Gene's Rest., 548 A.2d at
246).*fn2 In order to determine whether an insured is
entitled to coverage under an insurance policy, we must compare
the allegations in the underlying litigation with the provisions
of the policy. Keystone Spray Equip., 767 A.2d at 574. "In
examining the language of an insurance policy, we are mindful
that `[w]hile any ambiguities in an insurance contract will be
resolved in favor of the insured, a court is required to give
effect to clear and unambiguous language.'" Estate of Higgins ex
rel. Higgins v. Washington Mut. Fire Ins. Co., 838 A.2d 778, 781
(Pa. Super. 2003) (quoting Coppola v. Insurance Placement
Facility of Pa., 563 A.2d 134, 136 (Pa. Super. 1989)). If
coverage cannot possibly extend to the claims at issue in the
underlying action, then the insurer has no duty to either
indemnify or defend the insured. Lehigh Hoagie City, 1997 WL
50416, at *2.
After comparing the claims made in the Common Pleas Action with
the provisions of the Policy, we are compelled to conclude that
Plaintiff has no duty under the Policy to defend or indemnify
Davis in connection with the claims made in the Common Pleas
Action. Count One in the Common Pleas Action is a breach of
contract claim asserted by the Rudleys and Handfinger against
Hartford. We can find nothing in the Policy that would obligate
Plaintiff to defend or indemnify Davis in connection with such a
claim. (See Doc. No. 19, Ex. E.) Counts Two and Three seek to hold Davis liable for damages caused by
mold contamination. The Policy clearly excludes coverage over
such claims. (See id., Ex. C. ("Notwithstanding any other
provision in this policy, this insurance does not apply to the
following . . . [a]ny sums which any Insured becomes legally
obligated to pay as damages because of Bodily Injury, Property
Damage, Personal Injury, Advertising Injury or Medical Payments
directly or indirectly relating to the actual, potential, alleged
or threatened presence of mold, mildew or fungi of any kind
whatsoever, or any materials containing them at any time. . . .
[or] [a]ny loss, cost or expense . . . any Insured or any other
person or organization may incur in connection with any claim or
suit on behalf of any governmental authority or any person or
organization relating to the actual, potential, alleged or
threatened presence of mold, mildew or fungi of any kind
whatsoever, or any materials containing them.").) The final ...