United States District Court, M.D. Pennsylvania
ROBERT D. MARIANI, District Judge.
I. Procedural History
On May 9, 2013, Plaintiff, United Financial Casualty Company ("United"), filed a Complaint (Doc. 1). On June 25, 2013, Defendants, A.M. Skier Agency, Inc., AM Skier Partners, Inc. (herein collectively known as "AM Skier"), and Kimberly Latsch, moved to dismiss (Doc. 9). The parties have fully briefed the motion, and it is ripe for decision. For the reasons set forth below, the Court will grant in part and deny in part Defendants' motion.
Plaintiff is an insurance company located in Ohio (Complaint, Doc. 1 at ¶ 1; Producer's Agreement, Doc. 1-1 at 7), and Defendants are A.M. Skier Agency, Inc., an insurance producer, AMSkier Partners, Inc., and Kimberly Latsch, an employee of AM Skier (Doc. 1 at ¶ 6; Doc. 1-1 at 7). All Defendants are residents of Pennsylvania (Doc. 1 at ¶¶ 2-3, 5).
This case is between citizens of Ohio and Pennsylvania and the amount in controversy is $122, 500.00. The court therefore has jurisdiction pursuant to 28 U.S.C. § 1332.
II. Factual Allegations
Plaintiff alleges that pursuant to a Producers Agreement, Defendants AM Skier were authorized to provide insurance products for United Financial Casualty Company (Doc. 1 at ¶ 10). This Agreement prohibited Defendants from "submit[ting] to [Plaintiff] any application for insurance... for any class of risk not specified in the Underwriting Requirements" ( Id. at ¶ 11). The Underwriting Requirements, which Defendants possessed, delineated "unacceptable risks for hired auto-coverage and employers non-owned liability coverage under a commercial auto policy, " including "restaurant/pizza/fast-food delivery" ( Id. at ¶ 13).
From a period of on or about May 25, 2007, through May 25, 2011, AM Skier produced, and subsequently annually renewed, a commercial insurance policy to Settlers Inn, Ltd. ( Id. at ¶¶ 14-17). Each annual policy "did not provide hired auto coverage or employers non-owned liability coverages" ( Id. ). Plaintiff asserts that Settlers Inn, Ltd. falls within the category of a restaurant/pizza/fast-food delivery business and that Defendant Latsch, wrongfully and without Plaintiffs knowledge, represented to the principals of Settlers Inn, Ltd. that their policy "provided coverage which it did not in fact provide, to wit, hired auto coverage or employer's non-owned liability coverages" ( Id. at ¶¶ 18, 24). As evidence, Accord Certificates of insurance demonstrated that the policies purported to provide Settlers Inn, Ltd. with hired auto coverage or employer's non-owned liability coverages ( Id. at ¶ 25).
On May 11, 2011, Colleen Stevens, a Settlers Inn, Ltd. employee acting within the scope of her employment, was involved in an automobile accident with Joseph D. Hussey in Wayne County, Pennsylvania ( Id. at ¶¶ 19, 20). While Stevens "had a personal policy with Progressive Advanced Insurance Company with third party liability limits of $25, 000.00 at the time" of the accident, Hussey's serious injuries allowed for "excess exposure to Mrs. Stevens based on the limits of her personal policy" ( Id. at ¶¶ 21, 22). Due to Defendants' representations to Plaintiff that Settlers Inn, Ltd.'s policies contained hired auto coverage or employer's non-owned liability coverages, Plaintiff settled Hussey's claims against Settlers Inn, Ltd. and Stevens for $122, 500.00 ( Id. at ¶ 27). During this time, Plaintiff "incurred attorneys' fees and costs in investigating and settling the Hussey claim in the amount of $21, 128.00" ( Id. at ¶ 28).
In relevant part, the Producer's Agreement between AM Skier and United provides:
[AK Skier] will indemnify, defend, and hold [United] harmless for and from all Losses that [United] sustain[s] due to [AM Skier's] negligence, any wrongful acts, errors or omissions on [AM Skier's] part, or [AM Skier's] failure to comply with the provisions of this Agreement or [the] Underwriting Requirements.
(Producer's Agreement, Article X(8)). On August 7, 2012, Plaintiff tendered a demand for indemnity under this Agreement provision but Defendants refused to pay Plaintiff (Doc. 1 at ¶¶ 32, 33).
As a result, Plaintiff now brings claims against Defendants for Breach of Contract (Count I), Equitable Subrogation ...