THERESA M. WOLFE, ADMINISTRATRIX OF THE ESTATE OF KEVIN T. WOLFE, Appellant
ROBERT ROSS, Appellee
STATE FARM FIRE AND CASUALTY COMPANY, Appellee
Appeal from the Order Entered June 21, 2012. In the Court of Common Pleas of Butler County. Civil Division at No(s): 10-30444.
BEFORE: FORD ELLIOTT, P.J.E., BENDER, P.J.E., BOWES, SHOGAN, ALLEN, OTT, WECHT, STABILE, and JENKINS, JJ. Ford Elliott, P.J.E., Bender, P.J.E., Shogan, Allen, Ott, Stabile, and Jenkins, JJ.
join the Opinion. Wecht, J. files a dissenting opinion.
Theresa M. Wolfe, Administratrix of the Estate of Kevin T. Wolfe, (" Administratrix" ), appeals from the trial court's grant of summary judgment in favor of State Farm Fire and Casualty Company (" State Farm" ) and its corresponding denial of her motion for summary judgment. The issue before us is whether the motor vehicle exclusion in Robert Ross's homeowner's policy with State Farm operates to preclude recovery on the facts herein. The trial court concluded that it did, based on this Court's decision in Wilcha v. Nationwide Mutual Fire Insurance Company, 2005 PA Super 395, 887 A.2d 1254 (Pa.Super. 2005). Administratrix alleges that the exclusion is ambiguous and inapplicable on the facts herein, and that Wilcha should be limited to negligent entrustment or supervision cases. She urges us to adopt and apply the independent concurrent cause rule announced in State Farm Mutual Automobile Insurance Company v. Partridge, 10 Cal.3d 94, 109 Cal.Rptr. 811, 514 P.2d 123 (Cal. 1973), as the law of Pennsylvania. After careful review, we affirm.
Administratrix commenced this civil action for wrongful death and survival against Robert Ross. She alleged the following. In late June 2002, Mr. Ross was the host of a graduation party at his residence where alcoholic beverages were furnished
or made available to the guests, including her decedent, nineteen-year-old Kevin. Kevin became impaired " in his judgment, perception, coordination and responses to the point where he was unable to operate any sort of vehicle safely." Complaint, ¶ 7. " As a direct and proximate result of the impairment caused by the alcohol," Kevin left the party on a dirt bike owned by Mr. Ross's son Justin, " lost control of the vehicle, struck a fixed object and suffered fatal injuries in the collision." Complaint, ¶ 8. All allegations against Mr. Ross sounded in negligence and arose from the furnishing of alcohol to the minor.
State Farm, Mr. Ross's homeowner's carrier, refused to defend the claim and denied coverage based on the policy's exclusion for injuries arising out of the maintenance and use of a motor vehicle owned by an insured. Mr. Ross filed a pro se answer to the complaint in which he denied that he furnished or provided alcoholic beverages to Kevin. In new matter, he averred that, to the extent Kevin consumed alcoholic beverages, he was contributorily negligent, and his own negligence was the proximate cause of his death.
Prior to trial, the parties agreed to enter a consent judgment against Mr. Ross for $200,000. By terms of the agreement, Mr. Ross assigned to Administratrix all of his rights under his homeowner's policy with State Farm, including the right to sue the insurer for breach of contract and bad faith. In addition, Mr. Ross agreed to cooperate with Administratrix and Administratrix agreed to forego execution against any of Mr. Ross's assets and to accept any verdict or settlement from any proceeding against State Farm in full satisfaction of the judgment. The consent judgment was entered on March 8, 2010.
On December 3, 2010, Administratrix proceeded to attempt to collect the judgment by garnishing the proceeds of Mr. Ross's State Farm homeowner's policy, which had liability limits of $100,000. State Farm and Administratrix stipulated to certain facts. The parties agreed that, " [t]he plaintiff's decedent, while operating a motor vehicle, struck a fixed object off the insured location, and suffered fatal injuries in the collision." Joint Stipulation, ¶ 3. " [Administratrix] contends that coverage is afforded under the terms of the State Farm policy, because [her] decedent died as a direct and proximate result of the impairment caused by the alcoholic beverages allegedly furnished and/or made available to him at a graduation party for Ross' son, which was hosted by Ross, which was covered under the State Farm policy, the policy limits of which are $100,000.00." Id. at ¶ 12. " Ross denied that alcohol was provided to the guests, and State Farm contends that even if furnishing alcohol otherwise were covered, the fact that the decedent's death arose out of the operation of a motor vehicle triggers an exclusion which precludes coverage." Id. at ¶ 13. Finally, the parties stipulated that " this case is now ripe for a decision as to whether there is coverage for Ross under the State Farm policy for the claims made in the underlying lawsuit[.]"  Id. at ¶ 16.
Both parties filed motions for summary judgment. The trial court entered summary judgment in favor of State Farm, and denied same as to Administratrix. Administratrix appealed and filed a Pa.R.A.P. 1925(b) concise statement of errors complained of on appeal, and the trial court issued its Pa.R.A.P. 1925(a) opinion.
Administratrix originally presented two issues:
A. Whether the trial court erred in failing to find that the motor vehicle exclusion in a homeowner's insurance policy was ambiguous in that it did not state whether the injury must be proximately caused by use of the motor vehicle or simply causally connected with use of the motor vehicle.
B. Whether the trial court erred in failing to find that the motor vehicle exclusion in a homeowner's insurance policy was inapplicable to claims where the motor vehicle was operated by the victim and where the only claim of negligence against the insured was that he had negligently furnished alcoholic beverages to the underage operator of the vehicle.
Appellant's original brief, at 4. In her supplemental brief, Administratrix focuses on distinguishing Wilcha, which involved claims for negligent entrustment and supervision, from the negligent furnishing of alcohol to a minor claim herein. She also urges us to apply the independent concurrent causation rule to find coverage on the instant facts. Appellant's supplemental brief at 3.
In reviewing the grant of summary judgment, we " may disturb the order of the trial court only where it is established that the court committed an error of law or abused its discretion." Murphy v. Duquesne University, 565 Pa. 571, 777 A.2d 418, 429 (Pa. 2001) (citations omitted). " The interpretation of an insurance policy is a question of law that we will review de novo." Kvaerner Metals Div. of Kvaerner U.S., Inc. v. Commercial Union Ins. Co., 589 Pa. 317, 908 A.2d 888, 897 (Pa. 2006). The following principles inform our review. " Our purpose in interpreting insurance contracts is to ascertain the intent of the parties as manifested by the terms used in the written insurance policy." Babcock & Wilcox Co. v. Am. Nuclear Insurers & Mut. Atomic Energy Liab. Underwriters, 2013 PA Super 174, 76 A.3d 1 (Pa.Super. 2013). Where the contract language is clear and unambiguous, we must give effect to that language unless it violates a clearly expressed public policy. Adamitis v. Erie Ins. Exch., 2012 PA Super 204, 54 A.3d 371 (Pa.Super. 2012). Alternatively, when a policy provision is ambiguous, it is to be construed in favor of the insured and against the insurer. Penn-America Ins. Co. v. Peccadillos, Inc., 2011 PA Super 176, 27 A.3d 259, 265 (Pa.Super. 2011) ( en banc ). A policy provision is ambiguous only when it is " reasonably susceptible of different constructions and capable of being understood in more than one sense" when applied to a particular set of facts. Allstate Fire and Casualty Insurance Co. v. Hymes, 2011 PA Super 200, 29 A.3d 1169, 1172 (Pa.Super. 2011).
Herein, State Farm based its defense on a policy exclusion. Thus, the burden was on the insurer to establish its application. Donegal Mut. Ins. Co. v. Baumhammers, 595 Pa. 147, 938 A.2d 286, 290 (Pa. 2007). The homeowner's policy in question provides that:
COVERAGE L- LIABILITY
If a claim is made or a suit is brought against an insured for damages because of bodily injury or property damage to which this coverage applies, caused by an occurrence, we will:
1. pay up to our limit of liability for the damages for which the insured is legally liable; and
Homeowner's policy, at 15 (emphasis in original). An " occurrence" is defined as:
7. " Occurrence," when used in Section II of this policy, [Exclusions] means an accident, including exposure to conditions, which results in:
a. bodily injury; or
b. property damage;
during the policy period. Repeated or continuous exposure to the same general conditions is considered to be one occurrence."
Homeowner's policy, at 2.
The exclusion at issue provides:
Coverage L [liability] and Coverage M [medical payments] do not apply to
. . . .
e. bodily injury or property damage arising out of the ownership, maintenance, use, loading or unloading of:
. . . .
(2) a motor vehicle owned or operated by or rented or loaned to any insured, or
Homeowner's policy, at 16 (emphasis in original). An ATV " owned by an insured and designed or used for recreational or utility purposes off public roads," is a " motor vehicle" for purposes of liability coverage under the policy " while off an insured location." Homeowner's policy, at 2 (emphasis in original).
The trial court held that the policy provision was not ambiguous on the facts herein and upheld the plain meaning. Administratrix assigns this as error and directs our attention to Eichelberger v. Warner, 290 Pa.Super. 269, 434 A.2d 747 (Pa.Super. 1981), where identical language was held to be ambiguous because it did not define whether it excluded coverage for injuries proximately caused by the motor vehicle or causally connected with the motor vehicle. Since that finding of ambiguity rested upon very different facts, they are pertinent to our analysis.
In Eichelberger, the decedent was the driver of a motor vehicle that ceased operating on a highway, presumably due to a lack of gasoline. Decedent and her passenger walked to a gasoline station and, upon their return with fuel, two men stopped to assist the women. All four persons were gathered near the rear of the vehicle, the decedent positioned partially on the highway. Another vehicle approached and was about to pass the decedent's vehicle at the precise moment when the decedent inadvertently stepped to the left into its path. That vehicle struck decedent and, in the aftermath, the men who had stopped to render assistance were also injured. At trial, the jury found both the driver and decedent to be negligent.
At issue on appeal was whether the liability provisions of decedent's vehicle policy and/or her homeowner's policy provided coverage. Under the terms of the auto policy, the insurer agreed to pay on behalf of its insured all damages due to bodily injury or death sustained by any person
" arising out of the ownership, maintenance, or use of the owned vehicle." Eichelberger, supra at 749. We construed the words " arising out of" to mean the broader " causally connected with" and not " proximately caused by," in accordance with the Supreme Court's decision in Manufacturers Casualty Insurance Co. v. Goodville Mutual Casualty Co., 403 Pa. 603, 170 A.2d 571 (Pa. 1961). We held that " but for" causation, i.e., a cause and result relationship, was enough to satisfy the vehicle policy provision. The decedent's act of unwittingly stepping into the path of an oncoming car while overseeing the refueling of her vehicle was causally connected with ownership, maintenance and use of her vehicle. See Manufacturers Casualty, supra (holding a cause and result relationship is enough to satisfy the " arising out of" provision of an automobile insurance policy). Thus, there was coverage under the decedent's automobile insurance policy.
Under the terms of the decedent's homeowner's policy, the insurance company agreed to pay all damages its insured became legally obligated to pay as damages for bodily injury " caused by an occurrence." Eichelberger, supra at 750. An occurrence was defined as " an accident, including injurious exposure to conditions, which results, during the policy term, in bodily injury or property damage." Id. However, the policy contained an exclusion for liability for bodily injury " arising out of the ownership, maintenance, operation, use, loading or unloading of . . . any motor vehicle owned or operated by or rented or loaned to any insured." Id.
In determining the applicability of the exclusionary clause in the homeowner's policy, the issue was whether the injuries to the decedent arose from the decedent's use of her motor vehicle. We found the policy to be ambiguous because it did not state whether the injury had to be proximately caused by the motor vehicle or simply causally connected with it. We noted that " different canons of construction applied to exclusionary clauses as distinguished from coverage clauses" and relied upon the rule in Manufacturers Casualty, supra. We held that " for purposes of an exclusionary clause, when the words 'arising out of' the use of an automobile are read strictly against the insurer, then it must be concluded that this clause acts to exclude only those injuries which are proximately caused by the automobile." Eichelberger, supra at 752. When this exclusion was read strictly against the insurer, it did not apply to the decedent's conduct as the injuries were proximately caused by the decedent's movement, not by the use of her vehicle.
State Farm contends that there is no ambiguity surrounding the words " caused by" on the facts herein as the motor vehicle was both the proximate cause and the cause in fact of the injury to decedent. The insurer directs our attention to Wilcha, supra and Allstate Property and Cas. Ins. Co. v. Filachek, 2011 WL 2111219 (E.D. Pa. 2011), where identical policy language was held to be unambiguous and enforced on similar facts. In addition, the insurer maintains that in Wilcha and Filachek, decided decades after Eichelberger, it was the cause of the injury, not the
conduct of the insured, which determined whether the exclusion applied. According to State Farm, that is why claims based on the insured's conduct, such as negligent entrustment, negligent supervision, and furnishing alcohol to a minor, do not escape the effect of the exclusion.
In Wilcha, parents sued the operator of a motor vehicle that collided with the dirt bike operated by their thirteen-year-old son. The driver brought claims of negligent entrustment against the parents. The parents did not dispute that the homeowner's policy excluded coverage for accidents involving a motor vehicle and that their son was using and/or operating a motor vehicle, as that term was defined in the homeowner's policy, when the accident occurred. The issue was whether the claims of negligent entrustment and supervision directed toward the Wilchas triggered a duty to defend on the part of their homeowner's carrier.
We relied upon Pulleyn v. Cavalier Insurance Corporation, 351 Pa.Super. 347, 505 A.2d 1016, 1020 (Pa.Super. 1986) ( en banc ), where we held that the insurer had no duty to defend a negligent entrustment claim against an employer under a casualty policy which contained an exclusion for personal injury arising from maintenance or use of an automobile operated by an employee in the course of his employment. In Pulleyn, we reasoned that it was not the negligent entrustment of the vehicle that caused the plaintiff's injuries, but rather the use of the vehicle by the employee that caused the harm.
This distinction was also critical in Motorists Mutual Insurance Company v. Kulp, 688 F.Supp. 1033 (E.D. Pa. 1988), a decision the Wilcha Court found to be persuasive. In that case, a minor sustained injury while riding a mini-bike furnished by his aunt and uncle on adjacent property. His parents asserted claims of negligent supervision and entrustment against the aunt and uncle, and they in turn submitted the claims to their homeowner's carrier. The homeowner's policy contained a motor vehicle exclusion that was virtually identical to the one at issue herein. The insurer filed a declaratory judgment action to determine whether the policy provided coverage for the claims. The district court, citing Pulleyn, supra, held that the motor vehicle exclusion applied and precluded coverage as it was the use of the bike that triggered the insureds' ...