Appeal from the Order Entered February 2, 2012 In the Court of Common Pleas of Lancaster County Civil Division at No(s): CI-10-022578
BEFORE: BOWES, J., OLSON, J., and WECHT, J.
Marina Denovitz (with Christos Politopoulas and Dionysios Mihalopoulas, "Appellants") challenges the trial court's February 2, 2012 order granting summary judgment to Mutual Benefit Insurance Company ("Insurer"). In granting Insurer's motion for summary judgment, the trial court determined that it was bound by our Supreme Court's decision in Pennsylvania Manufacturers' Association Insurance Co. v. Aetna Casualty and Surety Insurance Co., 233 A.2d 548 (Pa. 1967) (hereinafter "PMA"). In so doing, however, the trial court opined that PMA was flawed, and was at odds with subsequent decisions of this Court. We disagree with the trial court's view that PMA controls this case. Thus, we reverse.
The trial court has related the factual and procedural background of the case as follows:
On June 6, 2005, [Owners] purchased commercial real property located at 365 West Main Street in Leola, Pennsylvania, (the "Property") from Leola Associates, L.P. The Property includes a business known as Leola Family Restaurant. [Owners] then created Leola Restaurant Corporation of which they are officers ("Employer"). (New Matter, ¶ 37-39.) [Employer] was created to run the day-to-day operations of the restaurant.
On the same date, Owners entered into a written agreement in which they leased the Property to Employer ("Lease"). (Compl. Ex. E.) The Lease required Employer to name Owners as additional insureds on Employer's liability insurance. (Compl. Ex. E ¶ 1(d).)
On December 5, 2007, [Denovitz] was employed by Employer working at Leola Family Restaurant. (Compl. Ex. A ¶ 3.) Denovitz was walking down a flight of stairs taking trash to an outdoor trash containment area when the stairs became loose and she fell to the ground. (Compl. Ex. A ¶ 5.) As a result of the fall, Denovitz claims she sustained physical injury including a torn rotator cuff. (Compl. Ex. A ¶ 6.) On September 24, 2009, Denovitz filed a suit against Owners for their alleged negligent maintenance of the Property ("Denovitz action".) (Compl. Ex. A.)
Owners sought coverage for this claim from [Insurer] under two insurance policies issued by [Insurer] to Employer. The first policy was a Business Owners Policy, and the second was a Commercial Umbrella Policy [("Umbrella Policy")]. (Compl. Exs. B, C.) By letter dated December 4, 2009, [Insurer] disclaimed coverage under both policies. (Compl. Ex. D.) In the letter, [Insurer] asserted that Owners did not qualify as insureds under the Business Owners Policy, and although Owners qualified as insureds under the [Umbrella Policy], the Employers' Liability Exclusion endorsement excluded any coverage under that policy. (Compl. Ex. D.) By letter dated February 23, 2010, [Insurer] advised Owners that it had withdrawn its disclaimer of coverage and agreed to defend Owners in the Denovitz action with a reservation of its right to disclaim coverage in the future and seek a judicial determination that no coverage was owed. (Compl. Ex. F.)
On March 12, 2010, [Insurer] filed suit in the Court of Common Pleas of Lancaster County seeking a declaratory judgment that it owed no coverage to Owners under either policy. After the pleadings were closed, [Insurer] filed a Motion for Judgment on the Pleadings. On December 27, 2010, [the trial court] granted [Insurer's] Motion as to the Business Owners Policy but denied its Motion as to the [Umbrella Policy].
On September 23, 2011, [Insurer] filed a Motion for Summary Judgment seeking to eliminate coverage under the Umbrella Policy. In its Motion, [Insurer] claims that Summary Judgment is appropriate since the term "insured" under the Umbrella Policy includes . . . Employer and therefore, the Employers' Liability Exclusion precludes coverage to all insureds, including . . . Owners.
Trial Court Opinion ("T.C.O."), 2/2/2012, at 3. Disapproving of PMA, but finding that PMA controlled this case, the trial court granted Insurer's motion for summary judgment. This appeal followed.
Before we analyze both the trial court's reasons for disagreeing with the PMA decision and the parties' arguments, we take note of the requisite background principles governing our review. The trial court correctly stated the principles that apply to summary judgment, as follows:
Summary judgment is appropriate only when "there is no issue of any material fact as to a necessary element of the cause of action." Pa.R.C.P. 1035.2(1). The record, including the pleadings and depositions, "must be viewed in the light most favorable to the non-moving party." Davis v. Pennzoil, 264 A.2d 597, 601 (Pa. 1970). All doubts regarding the existence of a material issue must be resolved in favor of denying the Motion for Summary Judgment. Id.
T.C.O. at 3 (citations modified). We have delineated our standard of review as follows:
Upon appellate review, we are not bound by the trial court's conclusions of law, but may reach our own conclusions. In reviewing a grant of summary judgment, [we] may disturb the trial court's order only upon an error of law or an abuse of discretion. The scope of review is plenary and the appellate court applies the same standard for summary judgment as the trial court.
Grandelli v. Methodist Hosp., 777 A.2d 1138, 1144 (Pa. Super. 2001) (quoting McCarthy v. Dan LePore & Sons Co., Inc., 724 A.2d 938, 940-41 (Pa. Super. 1998)).
If the language of an insurance policy is clear and unambiguous, that contract must be construed consistently with its plain and ordinary meaning. Travelers Cas. & Sur. Co. v. Castegnaro, 772 A.2d 456, 459 (Pa. 2001). The trial court correctly stated the following additional principles:
[A]ny ambiguities in an insurance contract must be resolved in favor of the insured. Coppola v. Ins. Placement Facility of Penna., 563 A.2d 134, 136 (Pa. 1989) (citing Standard Venetian Blind Co. v. Amer. Empire Ins., 469 A.2d 563, 566 (Pa. 1983)). It is equally well-settled that "[n]o word in a contract is to be treated as surplusage or redundant if any reasonable meaning consistent with the other parts can be given to it." General Mills Inc. v. Snavely, 199 A.2d 540, 544 (Pa. 1964) (citing Morris v. Am. Liab. & Sur. Co., 195 A. 201, 202 (Pa. 1936)). Words are to be interpreted in their normal meaning, unless doing so would be contrary to a clearly expressed public policy. Allstate ...