Plaintiff Karen Mancini has filed this direct action against defendant State Farm Fire & Casualty Co. ("State Farm"), the insurer of JML Construction, Inc. ("JML") which had a contract to build a residence for plaintiff. Plaintiff seeks a declaratory judgment that State Farm is liable for a money judgment which plaintiff has obtained against the now insolvent JML.
Before the court is the motion of State Farm to dismiss the complaint under Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim upon which relief can be granted. We accept as true for present purposes all well-pleaded facts in the complaint. In deciding a motion to dismiss, we may also consider matters of public record and any exhibits attached to the complaint. E.g., Pension Benefit Guar. Corp. v. White Consol. Indus., 998 F.2d 1192, 1196 (3d Cir. 1993).
Plaintiff, as noted above, entered into a contract with JML to build a residence. According to the complaint, JML defaulted, and plaintiff sued it in the Court of Common Pleas of Montgomery County in 2006. See Dugan v. JML Constr., No. 06-3089 (Montg. Cnty.).State Farm initially entered an appearance for JML under a reservation of rights. While the action was pending, it filed a lawsuit in this court for a declaration that it had no duty to defend or indemnify JML. Plaintiff was not a party to this action. State Farm Fire and Cas. Co. v. JML Constr., Inc., No. 10-3893 (E.D. Pa.). By this time, JML was insolvent and did not defend the federal court action. Our colleague, Judge Thomas N. O'Neill, Jr., entered a default judgment in favor of State Farm on November 18, 2010.Shortly thereafter, State Farm's counsel withdrew his appearance for JML in the Montgomery County action. JML's private counsel also withdrew his appearance. Ultimately, a trial was held in that court, and a judgment was entered in favor of plaintiff and against JML in the amount of $548, 615.41. Because of JML's insolvency, plaintiff has been unsuccessful in executing on the judgment. It now seeks a declaration that State Farm is liable to her in this amount.
Plaintiff invokes the Pennsylvania Insurance Insolvency Act ("Insolvency Act"), 40 Pa. Cons. Stat. Ann. § 117, which provides in relevant part:
No policy of insurance against loss or damage resulting from accident to or injury suffered by an employee or other person and for which the person insured is liable, or against loss or damage to property caused by animals or by any vehicle drawn, propelled or operated by any motive power and for which loss or damage the person insured is liable, shall hereafter be issued or delivered in this State by any corporation, or other insurer, authorized to do business in this State, unless there shall be contained within such policy a provision that the insolvency or bankruptcy of the person insured shall not release the insurance carrier from the payment of damages for injury sustained or loss occasioned during the life of such policy, and stating that in case execution against the insured is returned unsatisfied in an action brought by the injured person, or his or her personal representative in case death results from the accident, because of such insolvency or bankruptcy, then an action may be maintained by the injured person, or his or her personal representative, against such corporation, under the terms of the policy, for the amount of the judgment in the said action, not exceeding the amount of the policy.
The Insolvency Act permits an injured party to bring a direct action against a tortfeasor's insurer to collect on a judgment only under limited circumstances. As explained by our Court of Appeals in Kollar v. Miller, 176 F.3d 175, 181 (3d Cir. 1999), an injured party may do so when:
(1) the insured is insolvent; (2) an accident or other covered event has occurred; (3) the insured is liable for the accident; (4) a judgment has been entered against the insured; (5) the third party has unsuccessfully sought to execute the judgment against the insured; and (6) the insurance company is a liability insurer for the insolvent insured.
State Farm counters that the plaintiff's claims, as outlined in the complaint in the Montgomery County court, do not fit within the provisions of the Insolvency Act because an accident or other covered event has not occurred. In the Montgomery County action, plaintiff sued JML for breach of contract, breach of express warranty, breach of implied warranties, and violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law, 73 Pa. Cons. Stat. Ann. §§ 201-1 et seq. "arising out of construction defects in a residence that JML contracted to build for her.
" The Insolvency Act, as noted above, is restricted to claims against an insurer covered by a policy of insurance "for loss or damage resulting from accident to or injury suffered by an employee or other person and for which the insured person is liable or against loss or damage to property caused by animals or by any vehicle drawn, propelled or operated by any motive power." The Pennsylvania Superior Court has stated that "this section appears to be limited to personal injuries and 'damages to property caused by animals or by any vehicle drawn, propelled or operated by any motive power.'" Philadelphia Forrest Hills Corp. v. Bituminous Cas. Corp., 222 A.2d 493, 494 (Pa. Super. Ct. 1966); Blair v. Ranger Ins. Co., 1996 U.S. Dist. LEXIS 1651 at *3 (E.D. Pa. Feb. 16, 1991). Likewise, our Court of Appeals noted in Kollar that in order to succeed under the Insolvency Act, a plaintiff must establish that "an accident or other covered event has occurred." See Kleban v. Nat'l Union Fire Ins. Co. of Pittsburgh, 771 A.2d 39, 42 (Pa. Super. Ct. 2001).
Plaintiff did not allege in the Montgomery County action any personal injuries or plead property damage caused by animals or vehicles with "motive power." Rather, the plaintiff had a contractual relationship with JML to build a home. Her underlying lawsuit against JML sought damages for the contractor's faulty construction.
Moreover, the claims plaintiff asserted in her Montgomery County action are not encompassed within the term accident as defined under the insured's State Farm policy.Again, these claims dealt with the faulty ...