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Allstate Property and Casualty Insurance Co. v. Schellberg

United States District Court, E.D. Pennsylvania

April 22, 2014

ALLSTATE PROPERTY AND CASUALTY INSURANCE CO
v.
CHRISTOPHER SCHELLBERG, et al.

MEMORANDUM

MARY A. McLAUGHLIN, District Judge.

This is a declaratory judgment action brought by Allstate Property and Casualty Insurance Company ("Allstate") against defendants Christopher Schellberg, Donald J. Schellberg, and Ormaly Fenelle regarding Allstate's duty to defend and indemnify the defendants in an underlying state court personal injury action. Before the Court is the defendants' motion to dismiss. The defendants argue that the Court should decline its discretionary jurisdiction over this matter pursuant to 28 U.S.C. § 2201. The Court will decline to exercise its jurisdiction over this matter at this time, and will stay this case pending resolution of the parallel declaratory judgment action in state court.

I. Background

This declaratory judgment action relates to a personal injury action filed by Vincenzo ("Vince") and Bridget Palazzolo (together the "Palazzolos") in the Court of Common Pleas of Chester County arising out of an incident that occurred on July 4, 2011. The complaint filed by the Palazzolos alleges that, while intoxicated, Christopher Schellberg struck Vince Palazzolo in the head with a golf club "with such force and violence that the blow shattered Vince's skull and left Vince unconscious." The Palazzolo's complaint asserts a negligent entrustment claim against defendants Donald J. Schellberg and Ormaly Fenelle, claiming that they negligently entrusted alcohol and golf clubs to their son, Christopher Schellberg. Subject to Allstate's reservation of rights, Allstate is providing defense counsel for the defendants in the personal injury action. Compl. ¶¶ 10-11, 13.

In this action, Allstate seeks a declaration that it does not have a duty to defend or indemnify the defendants in the underlying personal injury action. At the time of the incident, Christopher Schellberg, Donald J. Schellberg, and Ormaly Fenelle were insured persons under a homeowners insurance policy issued by Allstate to Donald J. Schellberg. Allstate argues that the claims in the Palazzolo's complaint do not fall within coverage of the homeowners insurance policy because they are subject to the following exclusion:

1. We do not cover any bodily injury or property damage intended by, or which may reasonably be expected to result from the intentional or criminal acts or omissions of, any insured person. The exclusion applies even if:
a. such insured person lacks the mental capacity to govern his or her conduct;
b. such bodily injury or property damage is of a different kind or degree than that reasonably intended or expected; or
c. such bodily injury or property damage is sustained by a different person other than intended or reasonably expected.
This exclusion applies regardless of whether or not such insured person is actually charged with, or convicted of, a crime.

Id. at ¶¶ 17-18.

Allstate's complaint also alleges that Donald J. Schellberg and Ormaly Fenelle are jointly obligated for the intentional and/or criminal acts of Christopher Schellberg, and therefore Allstate has no duty to defend or indemnify Donald J. Schellberg and Ormaly Fenelle, pursuant to the following provision of the homeowners insurance policy:

The terms of this policy imposes joint obligations on persons defined as an insured person. This means that the responsibilities, acts and failures to act of a person defined as an insured person will be ...

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