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Selective Way Insurance Company v. Thomas Head

April 14, 2011

SELECTIVE WAY INSURANCE COMPANY
v.
THOMAS HEAD, INDIVIDUALLY AND T/A HEAD & SON HOME IMPROVEMENT



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

MEMORANDUM RE: MOTION TO INTERVENE

I. Introduction

Currently before this Court is the Petition of Michael J. Iannuzzi to Intervene Pursuant to Federal Rule of Civil Procedure 24 (ECF No. 5) to contest this declaratory judgment action filed by Plaintiff Selective Way Insurance Company ("Selective") against Defendant Thomas Head, individually and trading as Head & Son Home Improvement ("Head"). The declaratory judgment action arises out of a Commercial General Liability Coverage insurance agreement between Selective and Head ("the insurance policy"). Selective asks the Court to declare that Petitioner Michael Iannuzzi ("Iannuzzi") was an "employee" of Head within the meaning of the insurance policy when he sustained injuries in a trench excavation project on October 1, 2008. Selective further seeks a declaratory judgment that it has no obligation to pay any liability coverage for any claim asserted by Iannuzzi against Head under the insurance policy, as such claims are barred by the Workmen's Compensation Act, 77 P.S. § 481(b). Head has failed to appear in this action, and a default has been entered against Head.

Prior to the commencement of this lawsuit, Iannuzzi filed a negligence action against Head seeking damages for the injuries he sustained in the October 1, 2008 accident, captioned Michael J. Iannuzzi v. Thomas A. Head, d/b/a Tom A. Head & Sons a/k/a Head & Son Home Improvements, et al., Court of Common Pleas of Philadelphia County, September Term 2010, No. 001298 (the "state court action"). Iannuzzi now moves to intervene in this federal court action as a defendant on the grounds that he is a necessary party to this action, or alternatively, because this action involves a common question of law or fact as the state court action. In accordance with controlling Third Circuit precedent, Liberty Mutual Insurance Co. v. Treesdale, Inc., 419 F.3d 216 (3d Cir. 2005), and for the following reasons, the Court will deny the Petition to Intervene.

II. Factual and Procedural History

The Court briefly reviews the facts relevant to this Petition. Selective issued a Commercial General Liability Coverage insurance policy to Head & Son Home Improvement, policy number S 1587664, effective May 30, 2008 to May 30, 2009 (Compl. Ex. A). The insuring agreement states:

We will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury" or "property damage" to which this insurance applies. We will have the right and duty to defend the insured against any "suit" seeking those damages. However, we will have no duty to defend the insured against any "suit" seeking damages for "bodily injury" or "property damage" to which this insurance does not apply.

Ex. A, Commercial General Liability Coverage Form, at 1. In the "Exclusions" section, the insurance policy provides: "This insurance does not apply to. . . [a]ny obligation of the insured under a workers' compensation, disability benefits or unemployment compensation law or any similar law." Id. at 2. The policy further excludes coverage for "bodily injury" to "[a]n 'employee' of the insured arising out of and in the course of: (a) Employment by the insured; or (b) Performing duties related to the conduct of the insured's business." Id. This exclusion applies "whether the insured may be liable as an employer or in any other capacity," including when the insured has "any obligation to share damages with or repay someone else who must pay damages because of the injury." Id. The insurance policy's definition of an "employee" excludes a "temporary worker." Id. at 13. A "temporary worker" is "a person who is furnished to you to substitute for a permanent 'employee' on leave or to meet seasonal or short-term workload conditions." Id. at 16.

Selective alleges that on October 1, 2008, Iannuzzi was excavating a trench and installing shoring material at 455 Flamingo Street, Philadelphia, Pennsylvania, when the trench collapsed, allegedly injuring Iannuzzi. Compl. ¶¶ 25-32. Selective alleges that Iannuzzi agreed to work for Head, the subcontractor on the 455 Flamingo Street project, in exchange for $150 cash per day. Compl. ¶ 23. Head reported the claim involving Iannuzzi to Selective on or about June 2, 2009. Compl. ¶ 33.

On September 14, 2010, Iannuzzi filed the above-captioned civil action for damages in the Court of Common Pleas of Philadelphia County, in which he alleged, in relevant part, that negligence by Head caused the trench collapse resulting in injury to Iannuzzi. Compl. Ex. B.

On December 2, 2010, Selective filed the Complaint against Head, which pleads four counts: Count I, for a declaration that Michael Iannuzzi was an employee of Head & Son Home Improvement at the time of the accident on October 1, 2008; Count II, for a declaration that Selective has no duty to indemnify Head & Son Home Improvement as the claim is barred by the Workmen's Compensation Act as Michael Iannuzzi was an employee of Head & Son Home Improvement; Count III, for a declaration that Selective has no duty to indemnify Head & Son Home Improvement as the claim is barred by the Employers Liability and Workers Compensation Exclusions; and Count IV, for a declaration that Selective has no duty to indemnify Head & Son Home Improvement as any claims asserted by Head & Son Home Improvement are not covered under the applicable policy of insurance.

Selective served a summons and the Complaint on Head on December 13, 2010 (ECF No. 2). Head failed to answer or otherwise respond. Selective requested that the clerk enter a default against Head (ECF No. 3), which was entered on February 10, 2011. On February 22, 2011, this Court entered an Order (ECF No. 4) that Selective file a motion for default judgment. On March 4, 2011, Michael J. Iannuzzi filed the instant Petition to Intervene (ECF No. 5). Selective filed a Response and Motion to Strike the Motion to Intervene on March 14, 2011 (ECF No. 8).

III. The Parties' Contentions

Petitioner Iannuzzi contends he is a necessary party in interest in the declaratory judgment action pursuant to Fed. R. Civ. P. 24(a)(2). Iannuzzi claims that by virtue of his state court negligence claim against Head, he has an interest in the subject matter of the declaratory judgment action, which if granted would determine his legal status as an "employee" to Head and exclude his claim from coverage under the terms of the insurance policy. Iannuzzi asserts that a favorable judgment for Selective would impair Iannuzzi's interest by adversely impacting his legal right to maintain his state court negligence action against Head. Specifically, Iannuzzi asserts he has a legal right to prove his status as an independent contractor in the state court action, which may determine whether Head can avail itself of the Workmen's Compensation Act. Iannuzzi contends that no one is representing his interests in this action. In the alternative, Iannuzzi contends that he should be permitted to intervene under ...


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