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Pincus v. Chubb Group of Insurance Co.

March 27, 2009

JEFFREY PINCUS,
v.
CHUBB GROUP OF INSURANCE COMPANIES AND GREAT NORTHERN INSURANCE COMPANY



The opinion of the court was delivered by: Ditter, J.

MEMORANDUM AND ORDER

This case comes before me on an insurer's motion that will be treated as one for summary judgment. The plaintiff contends that the defendant failed to defend him and failed to provide indemnification when he was sued in state court for various acts of intentional, harmful conduct. For the reasons that follow, I will grant the defendant's motion.

The plaintiff, Jeffrey Pincus, alleges that the defendant, Great Northern Insurance Company,*fn1 wrongfully failed to provide defense and liability coverage for claims against him asserted in state court by a woman who contended that Pincus had sexually assaulted and raped her and that she suffered physical and emotional damages as a result. He alleges that he incurred legal costs of $59,800 to defend those claims and paid $100,000 to settle the matter. Furthermore, Pincus asserts a claim for "bad faith" against Great Northern. Great Northern contends that contract terms and exclusion provisions in the policies preclude defense and liability coverage for Pincus and filed a motion to dismiss or, in the alternative, for summary judgment.

Having carefully considered the defendant's motion (Doc. No. 3), the plaintiff's response (Doc. No. 4), and the defendant's further reply (Doc. No. 5), I make the following findings:

1. Federal Rule of Civil Procedure 12(d) provides that if, on a motion to dismiss under Rule 12(b)(6) "matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment under Rule 56. All parties shall be given a reasonable opportunity to present all the material that is pertinent to the motion." Fed. R. Civ. P. 12(d).

2. I accepted and considered documents outside of the pleadings in my review of Great Northern's motion, including copies of the insurance policies certified as true and complete by the defendant (Doc. No. 3-4). Therefore, I am treating Great Northern's motion as a motion for summary judgment. Given that the motion was framed in the alternative as a motion for summary judgment, that Pincus filed a response to the motion, and that Pincus did not object to the submission of documents outside the pleadings, I find that the defendant was given a reasonable opportunity to respond. See Hilfirty v. Shipman, 91 F.3d 573, 578-79 (3d Cir. 1996).

3. The rules governing a motion for summary judgment are well-established. It should be granted if the moving party can show there is no genuine dispute as to the material facts and that the movant is entitled to judgment as a matter of law. However, it must be denied if a material fact is in dispute so that a reasonable jury could find for the non-moving party. Finally, all ambiguities and reasonable inferences must be drawn in favor of the non-moving party.

4. Under Pennsylvania law, an insurer's duty to defend an action brought by a third party against its insured is determined solely by the factual allegations in the third party's complaint. Pacific Indem. Co. v. Linn, 766 F.2d 754, 760 (3d Cir. 1985). "It is the face of the complaint and not the truth of the facts alleged therein which determines whether there is a duty to defend." Erie Ins. Exchange v. Muff, 851 A.2d 919, 926 (Pa. Super. Ct. 2004). An insurer is obligated to defend its insured if the complaint alleges conduct that may potentially come within the policy's coverage. Id. Although similar, an insurer's duty to indemnify is more limited. An insurer must indemnify its insured only if liability is found for conduct that actually falls within the scope of the policy. Britamco Underwriters, Inc. v. C.J.H., Inc., 845 F. Supp 1090, 1094 (E.D. Pa. 1994).

5. The interpretation of an insurance policy is a question of law for the court, which must read the policy as a whole and construe it according to the plain meaning of its terms. Id. at 1093.

6. The Great Northern insurance policies state, in pertinent part, that Great Northern will "cover damages a covered person is legally obligated to pay for personal injury. . . caused by an occurrence, unless. . . an exclusion applies."*fn2 (Doc. No. 3-4 at 26; see also Doc. No. 3-4 at 63.)

Furthermore, Great Northern "will defend a covered person against any suit seeking covered damages for personal injury." (Doc. No. 3-4 at 27, 65.)

7. Two exclusions in the policies are relevant to this matter. First, the intentional acts exclusion provides that Great Northern "do[es] not cover any damages arising out of an act intended by any covered person to cause personal injury or property damage, even if the injury or damage is of a different degree or type than actually intended or expected." (Doc. No. 3-4 at 32, 67.) Second, the business pursuits exclusion provides that Great Northern "do[es] not cover any damages arising out of a covered person's business pursuits, investment or other for-profit activities, for the account of a covered person or others, or business property." (Doc. No. 3-4 at 32, 67.)

8. I find that Great Northern did not have a duty to defend Pincus, because the underlying state court complaint asserts conduct by Pincus that is excluded from coverage by Great Northern's policies.

9. The underlying state court complaint alleges that Pincus intentionally lured a woman into a limousine with misrepresentations that she would be performing modeling work, plied her with alcohol, inappropriately touched and groped her, refused to take her home despite her repeated requests that he do so, and took her into his apartment where he pinned her wrists to the floor and violently raped her. (Doc. No. 3-5 at 4-19.) The complaint asserts a ...


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