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Hartford Casualty v. New Hope Healthcare

March 16, 2011


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


Hartford Casualty Insurance Company ("Hartford") brought this action seeking a declaration that it has no duty to defend or indemnify New Hope Healthcare, Inc. ("New Hope") pursuant to a business liability insurance policy in a negligence action pending in Pennsylvania state court.*fn1 Hartford argues that the claims against New Hope in the underlying action are for professional negligence which are specifically excluded from coverage; or, in the alternative, the policy is void because New Hope made material misrepresentations in its application.

New Hope contends that Hartford has a duty to defend and indemnify it because the complaint in the underlying action does not allege professional negligence. It also contests that it knowingly included any materially false information in its application that would void the policy.

After reviewing the policy and the plaintiff's complaint in the underlying action, we conclude that Hartford has not met its burden of demonstrating that the insurance policy excuses it from defending New Hope or that the policy is void. Accordingly, Hartford's motion for summary judgment will be denied.

The Underlying Action

Mercedes Davis ("Davis"), on behalf of the estate of her late husband, Robert Davis ("Robert"), and in her own right, sued New Hope in the Berks County Court of Common Pleas. Her complaint asserts four causes of action arising out of the death of her husband while he was a resident of a personal care home. Davis alleges that New Hope, as manager of the personal care home owned by Evergreen Eldercare, Inc. ("Evergreen"), breached its duty of care to Robert by leaving him unsupervised and allowing him to leave the facility undetected on the night of December 14, 2007. Robert was discovered the next morning on the home's grounds with a right femoral neck fracture and contusions, which caused him severe pain, shock, and emotional damages. She claims his injuries placed him in a "weakened physical condition" and ultimately contributed to his death in September, 2009.

The state court complaint contains four counts. The first and third counts are brought on behalf of the estate; and the second and fourth counts, in the plaintiff's own right. The first count asserts a negligence cause of action for damages under the Pennsylvania Survival Act, 42 PA CONS. STAT. § 8302 (2010). The second count is for loss of consortium. The third and fourth counts, labeled as alternative theories, mirror the first and second counts. However, citing the MCARE Act, 40 PA STAT. ANN. § 1303.503 (2010), they specifically allege a deviation from "acceptable professional standards" applicable to a "health care provider."

The complaint recites the duty New Hope allegedly owed to the decedent and lists a number of negligent acts and omissions on New Hope's part. With respect to NewHope's duties, the complaint alleges that New Hope, in its role as manager of the home, owed a "high duty of care to maintain a safe, secure and stable residential environment, and to assure appropriate policies and effective procedures to assure that Robert, and other residents, would have access to their assigned rooms at all times, and to provide reasonable and necessary security procedures and facilities to provide for the reasonable needs, security and safety of the residents, and in particular, the plaintiff, Robert."*fn2

The litany of negligence allegations appears in paragraph 21 of the complaint, which reads as follows:

21. The aforesaid occurrence, and the damages and injuries sustained by the plaintiffs . . . were caused by the negligence, carelessness, mismanagement, and failure to use due care of the defendant, New Hope, which consisted of the following:

a. Failing to provide a safe and secure residential environment;

b. Failing to allow Robert access to his personal living quarters;

c. Failing to implement and maintain an effective key protocol for residents' rooms;

d. Failing to have a key available to staff personnel in order to allow Robert to have access to his assigned room;

e. Failing to adopt and follow procedures for providing access to locked patient rooms;

f. Failing to bring a key, or take steps to obtain a room key, to the premises after it was determined that no room key was available on the premises;

g. Failure to install and/or maintain a properly functioning exit alarm system;

h. Failing to monitor the premises, including patient rooms, during night hours and to be cognizant of the whereabouts of the residents, particularly the Plaintiff, Robert L. Davis;

i. Failing to train staff members properly to the resident care duties assigned;

j. Failing to maintain sufficient staffing to adequately supervise the residents on the premises;

k. Failing to attend to the safety and security of Robert once placing him in an unfamiliar room;

l. Failing to maintain appropriate procedures and facilities to ascertain the ...

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