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Selective Way Insurance Co. v. Travelers Property Casualty Company of America

July 8, 2010


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


This declaratory judgment action involves an insurance coverage dispute between the plaintiff, Selective Way Insurance Company ("Selective Way") and the defendant, Travelers Property and Casualty Company of America ("Travelers"), after an automobile accident in Tunkhannock, Pennsylvania that occurred on October 3, 2005. The accident gave rise to a state civil action,*fn1 and Selective Way, the insurer for the named defendants, settled the lawsuit for $14.25 million.

Selective Way filed the instant action because it claims that Travelers had an obligation to provide a defense and indemnity to two defendants, Keith Stalker and Stafursky Paving, Inc. ("Stafursky Paving"). Selective Way and Travelers both move for summary judgment. For the reasons stated below, the Court will grant Travelers' motion.

I. Summary Judgment Record

Stafursky Paving is a Pennsylvania corporation that primarily provides excavation, construction and paving services. It also provides hauling services to third-party companies. David Stafursky is the President of Stafursky Paving. Dep. of Keith Stalker 10:1-18 ("Stalker Dep."), Ex. G to Pl.'s M.; Dep. of David Stafursky 5:3-9 ("Stafursky Dep."), Ex. H. to Pl.'s M.*fn2

At the time of the accident, Stafursky Paving had approximately ten tri-axle dump trucks, which were kept at its business address in Archibald, Pennsylvania. The trucks were licensed in the company's name, and they were maintained and owned by Stafursky Paving. Stalker Dep. 13:1-24; Stafursky Dep. 10:13-18.

At the time of the accident, States Aggregate ("S.A.")*fn3 was a business that produced crushed stone and asphalt materials for roads. Since approximately some time in the 1980s, S.A. would occasionally contact Stafursky Paving to haul materials. To schedule a truck for hauling, Vernon Tompkins, an employee of S.A., would contact Stafursky Paving by telephone and request a dump truck for a specific day. S.A. would then have the truck and driver for that day for as long as necessary. Dep. of Vernon Tompkins 9:5-9, 10:23-11:24, 8:5-14, 13:19-25, 15:24-17:6 ("Tompkins Dep."), Exhibit I to Pl.'s M.

The Friday before October 3, 2005, Mr. Stafursky spoke with Mr. Tompkins regarding hauling for an ongoing paving project. The exchange was an oral exchange, and there is no written contract memorializing the terms of the agreement. Stafursky Dep. 7:10-24, 12:3-19; Tompkins Dep. 10:23-11:24.

Pursuant to the conversation with Mr. Tompkins, Mr. Stafursky assigned Keith Stalker, a Stafursky Paving employee, to report to the S.A. blacktop plant in Clifford, Pennsylvania on October 3, 2005, at 7 a.m. Mr. Stafursky also determined which Stafursky Paving dump truck Mr. Stalker would use. S.A. never chose the truck or the driver for its hauling projects, but, theoretically, S.A. could call Stafursky Paving if it sent a truck that was not a dump truck or sent a driver who did not perform properly. Such problems, however, had never occurred and did not occur on the day of the accident. Stafursky Dep. 7:3-8:4; Stalker Dep. 22:7-9, 19:18-20:6, 23:10-12; Tompkins Dep. 25:18-30:14.

Mr. Stalker determined his own route to drive to the S.A. plant on October 3, 2005. When Mr. Stalker arrived at the plant around 7 a.m., an S.A. employee told him when to load and where he was going. After Mr. Stalker's truck was loaded with asphalt, he received a bill of lading with the delivery address. Mr. Stalker was to deliver the material to a resurfacing project on State Road 29/309. Stalker Dep. 20:17-21:5, 23:16-25:14; Tompkins Dep. 32:21-25, 33:14-23.

Mr. Stalker left to deliver the materials around 8:30 a.m. When he arrived at the delivery location, he provided an S.A. employee with the bill of lading for signing. He then waited his turn to dump the materials. Any driver, including S.A.'s own employees who performed hauling, would follow these procedures. Stalker Dep. 25:8-10, 26:3-9, 28:11-20; Tompkins Dep. 33:1-13, 59:20-60:9.

After Mr. Stalker unloaded his truck, he returned to S.A. to obtain another load to be hauled to the same location. After delivering the second load, he returned to S.A. to obtain a third load. Mr. Stalker deposited the third load, and he left the job site at 2:55 p.m., having completed the hauling for S.A. A truck driver would know that he was done hauling if he was not told to get another load; he would then be signed out. Stalker Dep. 26:13-29:23, 33:5-24, 34:6-9; Tompkins Dep. 25:14-17.

Mr. Stalker intended to drive back to Stafursky Paving in Archibald, Pennsylvania. In all of his driving, to the S.A. plant, to and from the hauling points, and back to Stafursky Paving, Mr. Stalker chose his own route. Mr. Tompkins explained in his deposition that S.A., as a matter of business practice, did not designate a driver's route for hauling because the drivers know the particular weight limit restrictions of each road and bridge. After repeated questions asking whether, theoretically, Mr. Tompkins could tell a driver to take a particular route, Mr. Tompkins responded, "Theoretically I could tell the driver anything I wanted to." Stalker Dep. 34:14-19, 25:25-26:2, 27:11-12, 33:1-4, 35:6-11; Tompkins Dep. 18:23-21:25.

On his way back from the S.A. worksite to the Stafursky Paving plant, prior to arriving there, Mr. Stalker's truck was involved in an accident. Stalker Dep. 35:20-22.

Mr. Stalker did not perform any hauling for any other company other than S.A. that day. Mr. Stalker did not perform any other duties for Stafursky Paving that day. Because of the agreement with S.A., Stafursky Paving would not have been able to lease the truck that Mr. Stalker drove or Mr. Stalker himself to any other person or company that day. At the same time, Mr. Stalker was is Stafursky Paving's dispatch, in that he could communicate with the company through radio. If Stafursky Paving had another job for Mr. Stalker after he completed the hauling for S.A., then it could have directed Mr. Stalker to the new job, and Mr. Stalker would have complied. Stalker Dep. 40:7-13, 38:16-39:1; Stafursky Dep. 16:13-18, 13:22-14:13, 10:4-12.

S.A. paid Stafursky Paving $6.25 per ton of material hauled. This amount accounted for all of Stafursky Paving's overhead costs for the project, including the costs of paying Mr. Stalker. Stafursky Paving provided Mr. Stalker with a weekly paycheck, from which it deducted taxes. Mr. Stalker was never paid directly by S.A. for his services. Stalker Dep. 37:11-21, 22:16-23:3, 35:17-19; Stafursky Dep. 8:20-9:1, 13:11-16, 19:7-18.

In full force and effect at the time of the accident was a commercial automobile policy issued by Travelers to the Estate of Donald B. Stabler, Q-Tip Trust and/or Stabler Companies ("Travlers policy"). Also in effect was a "Broadened Named Insured Endorsement," which modified "insured" in the Travelers policy to include "any organization, other than a partnership or joint venture, over which you maintain ownership or majority interest on the effective date of the policy." Travelers Policy, Ex. C to Pl.'s M.; Traveler's Endorsement, Ex. D to Pl.'s M.

It is undisputed that, as of the effective date of the policy, Stabler Companies maintained an ownership interest in S.A. It is also undisputed that S.A. qualified as an insured under the Travelers policy, and that S.A. was an insured on the date of the automobile accident. Pl.'s Request for Admissions, Ex. E to Pl.'s M.

With respect to business auto coverage, the Travelers policy provides:

A. Coverage

We will pay all sums an "insured" legally must pay as damages because of "bodily injury" or "property damage" to which the insurance applies, caused by an "accident" and resulting from an ...

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