United States District Court, Eastern District of Pennsylvania
L. Felipe Restrepo United States District Judge
Plaintiff, Citizens Insurance Company of America (“Citizens”), initiated this declaratory judgment action against defendants, Gerald V. Ung (“Ung”) and Edward DiDonato, seeking a declaration that, under a homeowners insurance policy (“the Policy”) issued by Citizens to Ung’s parents, Citizens is not obligated to defend and indemnify Ung in connection with a civil lawsuit currently pending in the Philadelphia Court of Common Pleas (“underlying state action”).Before the Court are plaintiff’s motion for summary judgment and the cross-motions for summary judgment filed by defendants, Ung and DiDonato, respectively. For the reasons explained below, the motions filed by defendants for summary judgment are granted with respect to Citizens’ duty to defend Ung in the underlying state action, and denied as premature with regard to Citizens’ duty to indemnify Ung. Plaintiff’s cross-motion is denied, and this civil action is dismissed without prejudice to Citizens’ right to re-file with regard to Citizens’ duty to indemnify.
On December 30, 2011, defendant DiDonato initiated the underlying state action by filing a Complaint (JA, Ex. A) against Gerald Ung and other parties. On February 15, 2011, DiDonato filed the operative Amended Complaint in the underlying state action (JA, Ex. B). That Amended Complaint alleges, among other things, that during the early morning hours of January 17, 2010 Ung assaulted and shot DiDonato, who was unarmed, several times with a gun while walking in Center City Philadelphia resulting in Didonato suffering serious and debilitating injuries requiring continuing extensive medical treatment. (JA 22-24, 34, 46-48.)
Citizens issued a homeowners insurance policy, effective October 31, 2009 to October 31, 2010, to Ung’s parents, Narinee H. Ung and John Ung. (JA, Ex. C.) Ung’s parents live in Virginia, and the Policy was in force on the date of the shooting. (JA 52.)
The Policy explains that Citizens has duties to defend and indemnify the insureds under certain conditions. It states that, “[Citizens] will provide the insurance described in this policy in return for the premium and compliance with all applicable provisions of this policy” (JA 55).
“Section II - Liability Coverages” of the Policy regarding “Personal Liability” provides:
If a claim is made or a suit is brought against an “insured” for damages because of “bodily injury” or “property damage” caused by an “occurrence” to which this coverage applies, we will:
1. Pay up to our limit of liability for the damages for which the “insured” is legally liable. . . .
2. Provide a defense at our expense by counsel of our choice, even if the suit is groundless, false or fraudulent. We may investigate and settle any claim or suit that we decide is appropriate. Our duty to settle or defend ends when the amount we pay for damages resulting from the “occurrence” equals our limit of liability.
(JA 66.) An “occurrence” means an accident which results, during the Policy period, in bodily injury or property damage. (JA 55.) Under the Policy, personal liability coverage does not apply to bodily injury that is “expected or intended by the ‘insured.’” (JA 66.) “Section II - Conditions” in the Policy includes the following:
3. Duties After Loss. In case of an accident or “occurrence, ” the “insured” will perform the following duties that apply. You will help us by seeing that these duties are performed:
a. Give written notice to us or our agent as soon as is practical, which sets forth:
(1) The identity of the policy and “insured”;
(2) Reasonably available information on the time, place and circumstances of the accident or “occurrence”; and
(3) Names and addresses of any claimants and witnesses; b. Promptly forward to us every notice, demand, summons or other process relating to the accident or “occurrence.”
Prior to Ung’s deposition on January 24, 2013, he was unaware that his parents had a homeowners or general liability insurance policy. See Ung Aff. ¶ 5 (JA 169). Ung also stated that he had no reason to believe that his parents’ homeowners insurance could cover claims against him given that he was an adult at the time. Id. ¶¶ 7-9 (JA 169).
On January 24, 2013, during Ung’s deposition, he was asked whether his parents had a homeowners insurance policy, and he was told that if they were insured, the carrier would be required to defend and indemnify him for personal liability. See Ung Dep. 1/24/13, at 1, 12-24 (JA 282, 333). Ung, through his mother, promptly put Citizens on notice of this claim four days later, on January 28, 2013.
Ung’s parents have testified that prior to January 24, 2013 they had no reason to believe that their homeowners insurance would cover claims against their son who was over 18 years old at the time and attending law school in a different state. See Aff. of Narinnee H. Ung ¶ 7 (JA 171); Aff. of John S. Ung ¶ 7 (JA 173). They further testified that Citizens never explained to them that such an incident could be covered under their homeowners policy. See Id . ¶ 8 (JA 173); Aff. of Narinnee Ung ¶ 8 (JA 173). It appears that Ung’s counsel in the underlying state action was also unaware that coverage might exist under these circumstances. See, e.g., Interrogs. of Def. Lucy’s Hat Shoppe, LLC Directed to Def. Ung ¶ 21 (JA 186-87).
Citizens contends that it is not obligated to defend or indemnify Ung in the underlying state action because Ung breached the Policy’s notice provisions. See Pl.’s Br. 8-12. Plaintiff further argues that it has no duty to defend or indemnify Ung because the Complaint in the underlying state action does not allege an “occurrence” for purposes of the Policy and that the Policy’s “Expected or Intended” exclusion applies. Id. at 13-19. In particular, plaintiff contends that the facts alleged in the Amended Complaint in the underlying state action and the nature of ...