The opinion of the court was delivered by: Arthur J. Schwab United States District Court Judge
MEMORANDUM OPINION RE CROSS MOTIONS FOR SUMMARY JUDGMENT (DOCS. NOS. 66 AND 70)
After careful consideration of plaintiff Western World Insurance Co.‟s ("Western‟s") complaint seeking a declaratory judgment pursuant to 28 U.S.C. § 2201, defendant Delta Property Management Inc.‟s ("Delta‟s") answer thereto, Delta‟s counterclaim and Western‟s answer thereto, and the cross motions for summary judgment and memoranda of law, the Court finds there is no genuine issue of material fact on the matter of insurance coverage, and declares that Western is not obligated to defend or indemnify Delta in a state court wrongful death action pursuant to the assault and battery exclusion of their insurance policy.
A.Complaint and Statements of Material Facts
Western‟s complaint states that Delta owns and manages apartment buildings, including one in Pittsburgh, Pennsylvania where one of the tenants stabbed to death another tenant, Ms. Laura L. Maas, in May, 2008, and that it provided general liability insurance on that building. Complaint, ¶¶ 8-12. As required by the policy, Delta promptly notified Western of its potential exposure to liability, which Western acknowledged by letter dated June 6, 2008 ("2008 letter"). Plaintiff‟s Concise Statement of Material Facts (doc. no. 68), ¶ 5; Plaintiff‟s Appendix (doc. no. 69), at 3-5. The 2008 letter explicitly referenced the Assault and Battery ("A&B") exclusion of the policy, which states:
ASSAULT AND BATTERY EXCLUSION
This insurance does not apply to any claim arising out of an assault and/or battery or out of any act or failure to act to prevent or suppress an assault and/or battery whether caused by the insured, an employee, a patron or any other person.
This exclusion applies to all causes of action arising out of an assault and/or battery including, but not limited to, allegations of negligent hiring, placement, training, or supervision, or to any act, error, or omission relating to an assault and/or battery.
Complaint, ¶ 15 and Exhibit B to Complaint.
The 2008 letter also advised Delta "that should a claim be presented against Delta . . . , there is a strong possibility that no coverage would be provided. We, of course, will reserve any final opinion until such time that a claim is presented . . . ." Plaintiff‟s Appendix (doc. no. 9) at 3. Based on the information before it at that time, Western further advised Delta that it "would not cover" such a claim, that all "rights and policy defenses are reserved," that Western would investigate the matter "under a full reservation of rights with the understanding that the Company has not, does not, nor shall not in any manner waive any of its rights or defenses . . . to deny coverage to you based on the policy‟s terms, conditions, provisions, exclusions or definitions. In addition, Western . . . specifically reserves the right to supplement this letter and further disclaim the duty to defend or indemnify" if additional information warranted further disclaimer. Id. at 3-4 (emphasis added).
After the Estate of Laura L. Maas filed a wrongful death and survivor action in the Court of Common Pleas of Allegheny County, Delta notified Western of the lawsuit and supplied it a copy of the complaint. Western initially provided a defense and responded by letter dated October 26, 2009 ("2009 letter"), which advised Delta that because plaintiff (the Maas estate) seeks both compensatory damages and "exemplary damages to punish a wrongdoing," such punitive damages will not be covered under the policy‟s "punitive or exemplary damages exclusion." Id. at 9-10. The letter also advised Delta that it was providing a defense through a law firm in Pittsburgh, but that Delta could select its own counsel at its own expense. Id. at 10.
On February 9, 2010, Western sent Delta another letter formally advising Delta that it was declining coverage for any of the Estate of Maas claims arising from the stabbing, by reason of the A&B exclusion, that punitive damages were also excluded from coverage, that Western would continue to provide a defense until the Court ruled on a complaint for a declaratory judgment that it intended to ...