United States District Court, E.D. Pennsylvania
Gerald Austin McHugh United States District Court Judge
This consolidated action is comprised of two suits by separate insurance companies seeking a declaration that they need not defend and indemnify their respective insureds. Both suits are predicated on an action now pending in the Superior Court of Camden County, arising out of an alcohol-fueled violent encounter. Both insurance companies provide homeowner’s insurance to individual defendants in that action. Although I am mindful that courts should not lightly allow a wrongdoer to avoid responsibility by “drinking himself into insurance coverage, ”at this juncture I cannot rule out the possibility that coverage exists.
I. The Underlying Complaint
The duty to defend is a function of the relevant facts in the underlying complaint. John Sweeney, plaintiff in the underlying action, attended the WXTU 28th Anniversary Show at the Susquehanna Center in Camden, New Jersey, on June 2, 2012. Defendants in that lawsuit, Michael Schonewolf, Jr. and Dan Lagreca, who seek coverage in this case, had attended the concert along with three friends. All five were under the age of 21, but were allegedly permitted to engage in underage drinking and other unruly behavior. Sweeney pleads that he was “continuously and violently beaten and kicked about his head and body by . . . Michael Schonewolf, Jr., Dan Lagreca” and the other three men in an event-designated parking lot. Underlying Compl. ¶ 18. The underlying complaint does not provide any additional information about the circumstances surrounding the initiation of the conflict.
Count X of Sweeney’s complaint against Schonewolf is cast as a claim sounding in negligence. After describing the attack, the complaint alleges the following:
124. The negligence, carelessness and recklessness on the part of Defendant, Michael Schonewolf, Jr., consisted of the following:
(a) consuming alcoholic beverages unlawfully by not being of legal age knowing that it would cause significant impairment and lapse of judgment and control, all of which Defendant knew or should have known would pose a high degree of risk or injury and danger to other patrons;
(b) becoming intoxicated/impaired which led Defendant to attack Plaintiff by kicking, hitting and punching him about his head and body that defendant knew or should have known would result in serious injury;
(c) becoming intoxicated/impaired that led to violent and aggressive behavior toward Plaintiff;
(d) creating, inciting and carrying out an altercation with plaintiff and other invitees that resulted in Plaintiff becoming seriously injured;
(e) joining with other Defendants in creating, inciting and carrying out an altercation with plaintiff and other invitees that resulted in Plaintiff becoming seriously injured.
The complaint further alleges that Sweeney suffered injuries as a result of “the negligence, carelessness, recklessness and wantonness” of Schonewolf. Id. at ¶¶ 125-29.
IDS Property Casualty Insurance Company (IDS) insures Schonewolf under a homeowners’ policy. IDS seeks a declaration that it does not have a duty to defend or indemnify Schonewolf in the underlying action. Up to this point, IDS has been providing a defense for Schonewolf in the underlying action.
As to Dan Lagreca, Count XI of Sweeney’s underlying complaint sets forth allegations identical to those against Schonewolf. Id. at ¶¶ 130-37. Lagreca is an insured under a homeowner’s policy issued by Allstate Insurance Company (Allstate). Allstate seeks a declaration that it does not have a duty to defend or indemnify Lagreca in the underlying action. In contrast to IDS, Allstate has not been providing a defense for Lagreca in the underlying action, leading Lagreca to assert counterclaims against Allstate for breach of contract and bad faith.
IDS has moved for summary judgment; Allstate has moved for judgment on the pleadings.
II. IDS Property Casualty Insurance Company’s Declaratory Judgment Claim With Regard to Michael Schonewolf
A. The IDS Policy
IDS issued a homeowners’ insurance policy to Schonewolf’s parents covering the relevant time period. Personal liability coverage under the contract is described as follows:
We will pay all sums arising out of any one occurrence which an insured person becomes legally obligated to pay as damages because of bodily injury or property damage covered by this policy. If a claim is made or suit is brought against the insured person for liability under this coverage, we will defend the insured person at our expense using the lawyers of our choice. We are not obligated to defend after we have paid an amount equal to the limit of our liability. We may investigated or settle any claim or suit as we think appropriate.
“Occurrence” under the policy is defined as:
[A]n accident which is unexpected or unintended from your standpoint resulting in bodily injury or property damage during the policy period. It also includes repeated or continuous exposure to substantially the same general harmful conditions.
The policy also includes the following exclusion under Personal Liability Coverage and Medical Payments to Others Coverage:
5. bodily injury or property damage expected or intended by one or more insured persons, even if the bodily injury or property damage:
a) is of a different kind, quality or degree than initially expected or intended; or b) is sustained by a different person, entity, real or personal ...