The opinion of the court was delivered by: Mitchell, M.J.
Plaintiff, The Travelers Home and Marine Insurance Company ("Travelers"), brings this action seeking a declaratory judgment that it owes no duty to defend or indemnify Defendant Keith Liston ("Liston") with respect to any lawsuit that may be filed against him arising out of the death of Dr. Praveen Jammula, who drowned in a swimming pool at property owned by Liston on May 23, 2009. Also named as defendants are Ambika Jammula (Dr. Jammula‟s widow), individually and as administratrix of the estate of Praveen Jammula, and Dr. Jammula‟s two minor children, Anirudh R. Jammula and Sahitya N. Jammula. Since the filing of this case, an underlying lawsuit has been filed on behalf of Dr. Jammula and his heirs against Liston and others in the Court of Common Pleas of Westmoreland County. Travelers notes that it has provided a defense to Liston in that action pursuant to a reservation of rights.
Currently pending before the Court for disposition is a motion for summary judgment, filed by Travelers. For the reasons that follow, the motion will be denied.
Liston was at all times relevant to this suit a chiropractor with an office at 1259 University Drive in Dunbar, Pennsylvania. (Liston Examination Under Oath ("EUO") at 20- 26.)*fn1 Along with the rental of 1259 University Drive for his practice, Liston also owned two properties at all times relevant to this lawsuit: 144 Old Franklin Road in Donegal, Pennsylvania (the "Donegal Property") and 571 Bitner Road in Dunbar, Pennsylvania (the "Bitner Road Property"). (Liston EUO at 42-43.) Liston purchased the Donegal Property in June 2006 from the Estate of Sullivan D‟Amico, for the amount of $550,000.00. (Liston EUO at 43.)
To finance the purchase of the Donegal Property, Liston took out mortgages in the collective amount of approximately $480,000.00 on the house. (Liston EUO at 43, 57.) Liston‟s original purpose in purchasing the house was to live in it for a few years with his girlfriend, Amanda Smith ("Smith"), and then "flip it" for a profit. (Liston EUO at 44; Giese Dep. at 31.*fn2
The Bitner Road Property was purchased by Liston "as just a flip," part of Liston‟s business of flipping houses. The renovations to that house were not done for him and Smith to live there. (Giese Dep. at 60.)
For the period of time prior to October 2008, Liston and Smith would stay at the Donegal Property the majority of the time, including nights. (Giese Dep. at 26-27.) Beginning in October of 2008, Liston decided to begin renting the Donegal Property. (Liston EUO at 48-49; Giese Dep. at 24, 106.)
Liston stated that the reason he began to rent the house was to help "lessen the burden of the house." (Liston EUO at 49, 73.) One of their friends said it would be a great way to make money. (Giese Dep. at pages 31-32, 39.)
Liston and Smith stated that, when they began to rent the Donegal Property, they would move out of it while renters were present, but would stay there when renters were not present.
They took pictures, most of the clothing and food with them. They kept some clothing, toiletries and personal items in a locked closet; other clothes would be placed at the Bitner Road Property. Furniture and appliances were not moved. (Liston EUO at 58-59, 72-73; Giese Dep. at 27, 56, 76-77, 94-95.)
On the days renters were not at the Donegal Property, Liston and Smith would spend most of their days and nights there, although they would also stay at the Bitner Road Property. (Giese Dep. at 25-28.) Smith stated that, in the beginning (winter of 2008), the Donegal Property was only rented on weekends and she and Liston would stay there during the week, although she did not like staying at the Donegal Property and tried to avoid doing so whenever possible. (Giese Dep. at 27-28.) She estimated that, of all the days that renters were not at the Donegal Property, she and Liston spent approximately 50% or less of those days at the Donegal Property. They also spent time at the barn on the property, which was being renovated to be used as another rental property. (Giese Dep. at 28-29.)
However, Liston stated that he stayed at the Donegal Property 99% of the time during the fall of 2008 and the winter of 2008/2009 and if it wasn‟t rented he was there. (Liston EUO at 59-60.) Moreover, when asked by Travelers‟ attorney to estimate the number of days that he spent at the Donegal Property in 2009, Liston responded as follows:
Pretty much any time they‟re not here. Because as soon as they would leave, we would go up that day. So, like, say for instance, they would check out November 8th, we would go up there and clean that day. We had a cleaning lady come up, and we‟d just, you know, bring up clothes and things like that. So pretty much all the other days .. That‟s the day they checked out early in the morning before eleven o‟clock, and we‟d go there and clean, and we‟d bring our stuff up and stay until the next person come in.... Unless it was a back-to-back rental. Then we wouldn‟t. (Liston EUO at 63-64.)
The mortgage and utilities for the Donegal Property were paid out of the bank account for Liston‟s chiropractic business. (Liston EUO at 107, 111-12; Giese Dep. at 44, 55.) Some supplies were paid for by Smith out of "whichever account had the most money at the time we would use that card," including her account, Liston‟s account, a joint account and his clinic account. (Giese Dep. at 43-44.) Smith would pay the expenses, bills and utilities for the Bitner Road Property out of her own personal account. (Liston EUO at 105-06; Giese Dep. at 45.)
To prepare the house for rental, Liston and Smith put pamphlets of local restaurants in their house, bought towels, extra dishes and silverware, and kept a locked closet with cleaning supplies and extra sheets. They also added bunk beds and additional mattresses to the house to accommodate additional sleepers. (Giese Dep. at 79-80.) With the additional mattresses added to the four already in the house, the property slept up to 18 people. (Giese Dep. at 80-81.)
Liston and Smith renovated a barn that existed on the Donegal Property to rent and market separately as a rental unit. The Barn renovation was finished by July of 2009. (Giese Dep. at 29-30.) The Barn on the Donegal Property was approximately 2,000 to 2,500 square feet, and contained two separate living areas, with two bedrooms and a bathroom for each living area. (Giese Dep. at 30.) An additional swimming pool-the second on the property-was installed near the Barn on the Donegal Property for the use of renters of the Barn. (Liston EUO at 114; Giese Dep. at 29-30; Crossland Dep. at 52.*fn3
Smith was in charge of marketing the Donegal Property for rental, and of facilitating these rentals. (Liston EUO at 50, 60, 121-22.) To facilitate this, the Donegal Property was marketed on several websites that specialized in the marketing of rental and vacation properties, including www.HomeAway.com as well as www.vacationrentals.com. (Liston EUO at 50; Giese Dep. at 46.) These websites provided access to five separate vacation rental marketing websites, at a cost of $300.00 a year. (Giese Dep. at 46-47.) Liston and Smith initially marketed the Donegal Property as "Majestic Mountain Estate," but then changed the name of the marketing title to "Back Acres Estate." (Giese Dep. at 85-86)
The Donegal Property was rented on a day-to-day or weekly basis for vacationers; they did not offer long-term leases. (Giese Dep. at 106.) To facilitate credit card transactions for the rental of the Donegal Property, a PayPal account was set up strictly for this purpose. (Giese Dep. at 87-88.) This PayPal account was set up in the name of "Back Acres Estate" and was never used for any other purpose by Smith or Liston. (Giese Dep. at 87-88; ECF No. 39 Ex. O.)
From the beginning of this rental period, there were no restrictions on rental dates-any date on the calendar was available for rental. (Liston EUO at 67; Giese Dep. at 56-57.) However, only short-term vacation rentals were offered, not month-to-month or long-term leases. (Giese Dep. at 106.)
Smith also created for the Donegal Property a "renter‟s handbook" that would be left in the Donegal Property as a reference for renters. (Giese Dep. at 49-50.) Travelers has attached to its Appendix a document similar to Smith‟s "renter‟s handbook," and it includes much of her original work. (ECF No. 39 Ex. E.) Smith‟s version of the renter‟s handbook did say "Back Acres Estate" on it. (Giese Dep. at 49-50, 54.) Besides the renter‟s handbook, a series of pamphlets for local attractions and restaurants were left in the drawer in the kitchen for renters to utilize. (Giese Dep. at 53-54.)
Once the Barn at the Donegal Property was completed, that began to be marketed separately from the main house. Liston and Smith had separate accounts for the Barn as well as the main house at the Donegal Property on www.HomeAway.com. (Giese Dep. at 59.) The Barn was considered a cheaper rental alternative to the bigger house located on the Donegal Property. (Giese Dep. at 59.)*fn4 Furthermore, in July of 2009, Liston‟s brother Kevin or Kevin‟s trainer came up with an idea to open a fitness facility/fitness boot camp on the Donegal Property, although these plans never came to fruition. (Giese Dep. at 73-74.)
The 2009 Corporate Tax for Liston Incorporated lists "Rental House-Donegal PA" under Form 8825, "Rental Real Estate Income and Expenses of a Partnership or an S Corporation." (ECF No. 39 Ex. C.) All rental income and expenses were "claimed" on this 2009 Corporate Tax Return of Liston Incorporated. Liston Incorporated claimed, as deductible business expenses for the Donegal Property, such items as cleaning the house, insurance premiums, repairs, utilities, interest, and even traveling to and from the Donegal Property. Liston‟s 2009 personal tax return shows a $40,022 loss under "Rental real estate, royalties, partnerships, S corporations, trusts, etc." from Liston, Incorporated. (ECF No. 39 Ex. D at 1, 4.)
When the Donegal Property was first listed for rental in the fall of 2008, Liston hired a cleaning woman, Beth Crossland, to help clean the property in between rentals of it. (Crossland Dep. at 12-15.) When the Donegal Property was rented, Liston or Smith would contact Crossland to come clean. (Crossland Dep. at 13.) Crossland would sometimes clean the property alone, and sometimes with the help of Liston and/or Smith. She received between $50 and $125 per cleaning. (Crossland Dep. at 13, 17-18.) Crossland would only clean the Donegal Property after renters checked out; she never cleaned the property after Liston and Smith stayed there. (Crossland Dep. at 15, 17-18.) In November of 2009, after rentals stopped, Liston stopped contacting Crossland about cleaning the Donegal Property. (Crossland Dep. at 21.)
The Donegal Property was always rented for money. (Liston EUO at 67.) Liston indicates that all of the money from the rental of the Donegal Property was put back into the property. (Liston EUO at 123.)
As part of her responsibilities for rentals of the Donegal Properties, Smith kept a spreadsheet of renters who rented the property, although she admitted it was not always 100% accurate. (Liston EUO at 60-61; Giese Dep. at 33; ECF No. 39 Ex. F.) The first page of the Rental Spreadsheet shows renters of the Donegal Property house. The second page of the Rental Spreadsheet shows renters of the finished Barn on the Donegal Property. (Giese Dep. at 72.) Liston did not have anything to do with this spreadsheet, as Smith was solely responsible for it. (Liston EUO at 60-61.)
In response to inquiries for rental sent through one of the websites they marketed through, Smith would have a form e-mail she would send in response. (Giese Dep. at 85-86; ECF No. 39 Ex. L at 1-2.) They also developed a standard rental contract to use with ...