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Anglo American Investments, LLC v. Utica First Insurance Co.

February 26, 2009


The opinion of the court was delivered by: Louis H. Pollak

Pollak, J.


Plaintiff Anglo American Investments, doing business as the restaurant Pizza Peddler ("plaintiff" or "Pizza Peddler"), brings this action against its insurance company, defendant Utica First Insurance, alleging that Utica First breached its contract obligations and acted in bad faith when it declined to defend or indemnify Pizza Peddler in a tort action brought in the Chester County Court of Common Pleas. The matter comes to this court pursuant to the court's diversity jurisdiction, 28 U.S.C. § 1332. Now before the court is Utica First's motion to dismiss Pizza Peddler's complaint. For the reasons that follow, Utica First's motion will be granted.*fn1


The underlying tort action was brought by Robert Occhuzzo, who had a physical altercation with a Pizza Peddler employee, Stephen Frayne, on August 20, 2005. Occhuzzo and some friends were patrons at the Pizza Peddler, a restaurant located in West Chester, Pennsylvania. According to Occhuzzo's complaint in the Chester County Court of Common Pleas, Occhuzzo made a comment to one of his companions about a young woman who was also in the restaurant at that time. A waiter informed Occhuzzo that the woman was the girlfriend of Frayne, who was working that evening. Some time later, Occhuzzo and his companions left the restaurant, and Occhuzzo went to his car. Frayne, though still "on the clock" at Pizza Peddler, left the restaurant and stood behind Occhuzzo's car, blocking Occhuzzo from pulling out and leaving. Frayne began screaming obscenities and threatening violence to Occhuzzo and his companions. Occhuzzo got out of his car and told Frayne to calm down and go back to work. Frayne moved toward Occhuzzo, still screaming. Occhuzzo "made further attempts to calm Frayne," but Frayne then "intentionally and suddenly, without provocation, reason, or justification, repeatedly struck Mr. Occhuzzo with a closed fist about his left eye and face." Occhuzzo Compl. ¶ 16. Mr. Occhuzzo suffered physical injuries, including bruising, swelling, bleeding, and a cut to his right eye requiring five stitches.

On September 20, 2005, Occhuzzo's attorney sent a letter to Pizza Peddler, stating that he represented Occhuzzo and that he wished to resolve any claims Occhuzzo might have against Pizza Peddler. Compl. Ex. A. Pizza Peddler forwarded this letter to Utica First, its insurance provider. Utica First responded on September 23, 2005. Compl. Ex. B. The letter informed Pizza Peddler that because of exclusions in the insurance policy, Utica First would not be providing coverage for Occhuzzo's claims.

Occhuzzo filed a complaint against Pizza Peddler and Frayne on May 9, 2006 in the Chester County Court of Common Pleas. The first two counts, battery and assault, are alleged against Pizza Peddler and Frayne. The third count alleges intentional infliction of emotional distress against both Pizza Peddler and Frayne. Count four, against Pizza Peddler only, alleges negligent supervision. The fifth count alleges negligence against Frayne only.

Pizza Peddler sent Occhuzzo's complaint to Utica First, again seeking a defense and indemnification under the insurance policy. On May 23, 2006, Utica First responded, indicating that, as noted in the September 2005 letter, because of certain exclusions to the insurance policy it would not provide a defense or indemnification. Pizza Peddler then hired private counsel to defend against Occhuzzo's claims.*fn2

On January 31, 2008, Pizza Peddler filed a complaint against Utica First in this court. The first count of Pizza Peddler's complaint alleges breach of contract, and the second count alleges bad faith denial of coverage under 42 Pa. Cons. Stat. § 8371, including allegations of bad faith failure to defend, indemnify, and investigate. In lieu of answering, Utica First moved for dismissal of the complaint under Federal Rule of Civil Procedure 12(b)(6), contending that it had no duty to defend or indemnify Pizza Peddler and that therefore Pizza Peddler's complaint does not state a claim upon which relief can be granted.


In order to determine whether plaintiff's complaint in this court has stated claims on which relief can be granted, the court must determine whether, as a matter of law, Utica First had a duty to provide Pizza Peddler with a defense against Occhuzzo's complaint. As the Third Circuit has explained, "[u]nder Pennsylvania law, an insurance company is obligated to defend an insured whenever the complaint filed by the injured party may potentially come within the policy's coverage." Pacific Indem. Co. v. Linn, 766 F.2d 754, 760 (3d Cir. 1985) (internal citations omitted). The insurer's obligation to defend is determined solely by the allegations of the complaint in the action, and if even a single claim in the complaint is potentially covered, the insurer must defend all claims until there is no possibility that the plaintiff could recover on a covered claim. Frog. Switch & Mfg. Co., Inc. v. Travelers Ins. Co., 193 F.3d 742, 746 (3d Cir. 1999). A court may not look past the complaint in reviewing whether the obligation to defend has been triggered. Kvaerner Metals Div. of Kvaerner U.S., Inc. v. Commercial Union Ins. Co., 908 A.2d 888, 896 (Pa. 2006). If an insurer seeks to avoid its duty to defend under the policy on the basis of a stated exclusion, the insurer bears the burden to prove the applicability of that exclusion. Canal Ins. Co. v. Underwriters at Lloyd's London, 435 F.3d 431, 435 (3d Cir. 2006) (citing Madison Constr. Co. v. Harleysville Mut. Ins. Co., 735 A.2d 100, 106 (Pa. 1999)). Any ambiguities in the policy language must be construed in favor of the insured, and where terms are unambiguous they must be given their plain meaning. St. Paul Fire and Marine Ins. Co. v. Lewis, 935 F.2d 1428, 1431 (3d Cir. 1991).

If any of the claims in Occhuzzo's complaint could potentially come within the coverage of the Pizza Peddler's insurance policy, Utica First had a duty to provide a defense in the state court proceeding. To determine whether this is indeed the case, the court must review the scope of the insurance policy Pizza Peddler purchased from Utica First and then examine the allegations in the Occhuzzo complaint to ascertain if coverage is potentially triggered.

A. The Policy

Though Pizza Peddler did not attach a copy of the policy to its complaint, the court may still review the policy without converting the present motion to dismiss into one for summary judgment.*fn3 The policy is the basis of plaintiff's complaint and is expressly referenced in plaintiff's allegations. "Although a district court may not consider matters extraneous to the pleadings, a document integral to or explicitly relied upon in the complaint may be considered without converting the motion to dismiss into one for summary judgment." U.S. Express Lines, Ltd. v. Higgins, 281 F.3d 383, 388 (3d Cir. 2002) (internal quotation marks and citations omitted) (emphasis in original). Because plaintiff's claims "could not be evaluated without some reference to" the ...

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