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Szeles Real Estate Development Company, LP v. Hartford Casualty Insurance Co.

United States District Court, Third Circuit

July 25, 2013

SZELES REAL ESTATE DEVELOPMENT COMPANY, L.P.
v.
THE HARTFORD CASUALTY INSURANCE COMPANY

MEMORANDUM

John R. Padova, J.

Plaintiff Szeles Real Estate Development Co., LP (“Szeles”) brings this action for declaratory relief arising out of an insurance policy issued by Defendant The Hartford Casualty Insurance Co. (“Hartford”). Presently before the Court is Hartford's Motion to Dismiss. For the reasons that follow, we grant the Motion.

I.BACKGROUND

The Complaint alleges the following facts. Szeles leased commercial real estate to Berkshire Health Partners (“Berkshire”) pursuant to the terms of a lease agreement (the “Lease”). (Compl. ¶ 5.) Berkshire is insured under a general liability insurance policy, Policy No. 44SBA T17041, issued by Hartford (the “Policy”). (Id. ¶ 2; Policy, attached as Ex. B to Compl.) As part of its obligations under the Lease, Berkshire listed Szeles as an additional insured under the Policy. (Compl. ¶ 7.)

On November 21, 2006, Judith Gausch, a Berkshire employee, suffered an injury while opening a door on Berkshire's premises. (Id. ¶ 9.) The door had been installed by another entity, KS Heagy Contractor/Property Maintenance, Inc. (“Heagy”). (Id.) Gausch commenced a personal injury action against Szeles and Heagy in the Berks County Court of Common Pleas, Gausch v. Szeles Real Estate Dev. Co., LLC, & K.S. Heagy Contractor/Prop. Maint., Inc., Civ. A. No. 08-15424 (Berks Cnty. Ct. of Common Pleas 2009) (the “Gausch action”). (Id. ¶ 10; see id. Ex. D.) Relying on its status as an additional insured under the Policy, Szeles attempted to tender its defense in the Gausch action to Hartford. (Id. ¶ 11.) Hartford refused Szeles's tender request. (Id. ¶ 12.) Hartford acknowledged Szeles's status as an additional insured under the Policy, but based its denial of coverage on the Policy's excess “other insurance” clause. (Id.)

Szeles requests that we find and declare that Hartford is under a duty to defend and indemnify Szeles in the Gausch action. (Id. ¶ 15.) Hartford has filed a Motion to Dismiss for failure to state a claim upon which relief may be granted pursuant to Federal Rule of Civil Procedure 12(b)(6).

II.LEGAL STANDARD

When considering a motion to dismiss pursuant to Rule 12(b)(6), we “consider only the complaint, exhibits attached to the complaint, [and] matters of public record, as well as undisputedly authentic documents if the complainant's claims are based upon these documents.” Mayer v. Belichick, 605 F.3d 223, 230 (3d Cir. 2010) (citing Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993)). We take the factual allegations of the complaint as true and draw all reasonable inferences in favor of the plaintiff. DelRio-Mocci v. Connolly Props., Inc., 672 F.3d 241, 245 (3d Cir. 2012) (citing Warren Gen. Hosp. v. Amgen Inc., 643 F.3d 77, 84 (3d Cir. 2011)). Legal conclusions, however, receive no deference, and the court is “not bound to accept as true a legal conclusion couched as a factual allegation.” Papasan v. Allain, 478 U.S. 265, 286 (1986) (cited with approval in Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)).

A plaintiff's pleading obligation is to set forth “a short and plain statement of the claim, ” Fed.R.Civ.P. 8(a)(2), which gives the defendant “'fair notice of what the . . . claim is and the grounds upon which it rests.'” Twombly, 550 U.S. at 555 (alteration in original) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). The complaint must contain "'sufficient factual matter to show that the claim is facially plausible, ' thus enabling „the court to draw the reasonable inference that the defendant is liable for [the] misconduct alleged.'” Warren Gen. Hosp., 643 F.3d at 84 (quoting Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009)). “The plausibility standard is not akin to a „probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556). In the end, we will dismiss a complaint if the factual allegations in the complaint are not sufficient "'to raise a right to relief above the speculative level.'” West Run Student Hous. Assocs., LLC v. Huntington Nat'l Bank, 712 F.3d 165, 169 (3d Cir. 2013) (quoting Twombly, 550 U.S. at 555).

III.DISCUSSION

The Complaint alleges that the Policy requires Hartford to defend and indemnify Szeles in the Gausch action. (Compl. ¶ 15(B).) Hartford has moved to dismiss the Complaint for failure to state a claim upon which relief may be granted, arguing that: (1) the Policy's employee injury exclusion provision bars coverage for injuries suffered by Berkshire employees; and (2) the Lease entered into by Berkshire and Szeles does not qualify under the “insured contract” exception to the Policy's employee injury exclusion provision.[1]

Hartford argues that the Policy contains an employee injury exclusion provision which precludes coverage for Szeles in the Gausch action because Gausch, an employee of named insured Berkshire, was injured during the course of her employment, and the Policy excludes from coverage injuries to employees that occur in the course of their employment. The Policy's employee injury exclusion provision reads, in pertinent part:

This insurance does not apply to: . . . .
e.Employer’s Liability “Bodily ...

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