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State Automobile Mutual Insurance Company v. the Frameworkers.Com

August 23, 2012

STATE AUTOMOBILE MUTUAL INSURANCE COMPANY, PLAINTIFF,
v.
THE FRAMEWORKERS.COM, INC., JOSEPH LALLI T/A AND/OR D/B/A THE FRAMEWORKERS.COM, AND DAVID FRANTZ,
DEFENDANTS.



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

MEMORANDUM

State Automobile Mutual Insurance Company ("State Auto") seeks a declaratory judgment from this Court that it owes no duty to defend its insureds, The Frameworkers.com ("Frameworkers") and Joseph Lalli, against a lawsuit brought against them in the Lehigh County Court of Common Pleas. Presently before the Court are the motions for summary judgment filed by State Auto; David Frantz, who is the plaintiff in the state court litigation; and George Carpozi III, Inc. ("Carpozi"), who was allowed to intervene in this case. Frantz's motion asks this Court to decline jurisdiction over State Auto's declaratory judgment case. For the reasons that follow, the Court declines jurisdiction and denies the pending summary judgment motions as moot.

I. BACKGROUND

On February 3, 2010, Frantz filed a lawsuit in the Lehigh County Court of Common Pleas against Carpozi, Frameworkers, Lalli, Mark Eisner, and Mary Frances Eisner. Frantz was working as "an independent contractor hired by the defendants collectively" to work at a property owned by the Eisners. (Pl.'s Mot. for Summ. J. Ex. B [State Court Compl.] ¶ 6.) Carpozi, Frameworkers, and Lalli, who owned Frameworkers, controlled the work of Frantz "and other independent contractors." (Id. ¶ 7.) On January 29, 2009, Frantz was on the third floor of the property clearing frozen precipitation from a tarp when he fell through an opening in the floor that had been covered by the tarp. (Id. ¶¶ 15-16.) According to Frantz, the third floor where he was working was unsafe and the defendants' negligence was responsible for the severe and permanent injuries he suffered. (Id. ¶¶ 16, 18-27.)

On May 19, 2011, State Auto filed a declaratory judgment action in this Court against Frameworkers, Lalli, and Frantz seeking a declaration that it owes no duty to defend its insureds, Frameworkers and Lalli, in Frantz's state court lawsuit. On September 12, 2011, a default was entered against Lalli and Frameworkers because they failed to answer State Auto's Complaint. Following notice of the bankruptcy of Lalli, this case was placed in suspense from October 31, 2011 until March 27, 2012. Carpozi was permitted to intervene in this action on April 24, 2012.

State Auto issued policy number SPP 2260548 to Frameworkers with an effective date of May 14, 2008. (Pl.'s Statement of Undisputed Facts ¶ 6.) The parties dispute whether the incident which caused Frantz's injury is covered by the policy or whether an exclusion precludes coverage. In the bodily injury and property damage coverage section, State Auto agreed to:

[P]ay 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. We may, at our discretion, investigate any "occurrence" and settle any claim or "suit" that may result. But: . . .

No other obligation or liability to pay sums or perform acts or services is covered unless explicitly provided for under Supplementary Payments -- Coverages A and B. (Pl.'s Mot. for Summ. J. Ex. D [Policy].) The policy also states that:

This insurance does not apply to . . .

d. Workers' Compensation And Similar Laws

Any obligation of the insured under a workers' compensation, disability benefits or unemployment compensation law or any similar law.

e. Employer's Liability

"Bodily injury" to:

(1) An "employee" of the insured arising out of and in ...


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