The opinion of the court was delivered by: Donetta W. Ambrose, Senior District Judge
In this declaratory judgment action, Plaintiff insurers, National Fire Insurance Company of Hartford ("National Fire") and Transportation Insurance Company ("Transportation"), seek a declaration of non-coverage for a suit filed against their insured, Robinson, a fan manufacturer, under a Commercial General Liability ("CGL") policy issued by National and a Manufacturers Errors and Omissions ("E & O") policy and Umbrella Policy issued by Transportation.
The dispute arises out of the alleged failure of three industrial fans that Defendant Robinson allegedly designed, manufactured, and sold to Archer-Daniel-Midlands Co. ("ADM"). In the underlying suit, ADM alleged that Robinson, pursuant to contract, provided ADM with certain equipment. ADM contends that the equipment "failed catastrophically." In particular, the underlying Complaint alleges that the equipment "contained design defects causing the failures." The underlying action asserts claims for breaches of contract, express warranty, implied warranties of fitness for a particular purpose and merchantability, negligence in design. After receiving the initial demand from ADM, Robinson filed a claim under the General Liability policy. National Fire and Transportation responded with a reservation of rights letter, asserting that coverage was not likely available, due to various exclusions and because the failure of a defective product was not an "occurrence" under the policy. National Fire has undertaken to defend Robinson under the CGL policy, subject to that reservation of rights.
Before the Court is Defendant Robinson‟s Motion for Partial Summary Judgment, solely as to the insurers‟ duty to defend under both policies. In addition, Plaintiff National Fire has filed a Cross-Motion, as to the same issue. For the following reasons, Defendant‟s Motion will be denied, in part as moot, and Plaintiff‟s will be granted.
Summary judgment shall be granted if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). In considering a motion for summary judgment, the Court must examine the facts in a light most favorable to the party opposing the motion. International Raw Materials, Ltd. v. Stauffer Chem. Co., 898 F. 2d 946, 949 (3d Cir. 1990). The moving party bears the burden of demonstrating the absence of any genuine issues of material fact. United States v. Omnicare, Inc., 382 F.3d 432 (3d Cir. 2004).
The parties agree that Pennsylvania law applies to this matter.
"Pennsylvania's courts have taken a relatively broad view in discerning whether a complaint triggers the insurer's duty to defend." Berg Chilling Sys. v. Hull Corp., 70 F. Appx. 620, 624 (3d Cir. 2003). An insurance company's duty to defend a suit against an insured is determined solely on the basis of the allegations of the complaint in the underlying action. St. Paul Surplus Lines Insurance Co. v. 1401 Dixon's Inc., 582 F. Supp. 865, 867 (E.D. Pa. 1984). That duty "is broader than the duty to indemnify, in that the former duty arises whenever an underlying complaint may 'potentially' come within the insurance coverage." Frog, Switch & Mfg.,193 F.3d 742, 746 (3d Cir. 1999).*fn1 If the underlying complaint contains more than one cause of action, and one of them would constitute a claim within the scope of the policy's coverage, the insurer must defend the complaint until it can confine the claim to a recovery excluded from the scope of the policy. American States v. Maryland Cas., 628 A.2d 880, 887 (Pa. Super. Ct. 1993).*fn2 Conversely, an insurer is not required to defend a claim when it is apparent on the face of the complaint that none of the injuries fall within the purview of the insurance policy. Peerless Ins. Co. v. Brooks Sys. Corp., 617 F. Supp. 2d 348, 356 (E.D. Pa. 2008). Under these standards, the cause of action pleaded in the underlying complaint is not determinative; instead, the Court must look to the facts pleaded therein. Mutual Beneficial Ins. Co. v. Haver, 725 A.2d 743, 745 (Pa. 1999). Moreover, insurance policies are to be interpreted according to their plain language. American Legacy Found., RP v. Nat'l Union Fire Ins. Co., 623 F.3d 135, 139 (3d Cir. 2010).
In determining the existence of a duty to defend, the factual allegations of the underlying complaint against the insured are to be liberally construed in favor of the insured, and the court must "resolve all doubts as to coverage in favor of the insured." Westport Ins. Corp. v. Black, Davis & Shue Agency, Inc., 513 F. Supp. 2d 157, 165 (M.D. Pa. 2007). The insured bears the burden of demonstrating that a claim falls within a policy‟s grant of coverage. Scottsdale Ins. Co. v. City of Easton, 379 Fed. Appx. 139, 143 (3d Cir. 2010).
III. THE PARTIES' MOTIONS