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Lancer Insurance Co. v. Harleysville Mutual Insurance

United States District Court, E.D. Pennsylvania

June 9, 2015




This action results from an underlying lawsuit involving a car accident. Lancer Insurance Company, the plaintiff here, is the insurer of the defendants in the underlying lawsuit. In this case, Lancer seeks a declaratory judgment that two other insurance companies – Harleysville Mutual Insurance and American Alternative Insurance – also owe coverage to those defendants, and must therefore defend and indemnify them in the underlying lawsuit. Those insurance companies have moved for judgment on the pleadings. For the reasons that follow, the Court will deny the motion, but sua sponte dismiss the action without prejudice.


Defendant Kenneth Propst allegedly owns several companies, including: Defendant Archbald Vanpool, Inc. (“AVP”), which is insured by Plaintiff Lancer Insurance Company (“Lancer”); Buy Rite Service Center (“Buy Rite”), an auto repair shop insured by Defendant Harleysville Mutual Insurance (“Harleysville”), where Propst allegedly services the vehicles owned and operated by his various businesses; Propst Bussing and Transporation Co., Inc. (“PBT”), which is insured by Defendant American Alternative Insurance Company (“American”); and others. Compl. ¶¶ 15-24, ECF No. 1.

In 2011, Propst was involved in a single-vehicle accident, with Defendant Lori Trojanowicz riding as his passenger. Compl. ¶¶ 11-12. As a result of injuries she claims to have sustained in the accident, Trojanowicz filed a civil action (“the underlying lawsuit”) against Propst, AVP, and Ford Motor Company (which is not a party to the instant case) in the Court of Common Pleas of Lackawanna County, Pennsylvania, where the accident occurred. See Lackawanna County Civil Action, Compl. Ex. 1, ECF No. 1-1.

Trojanowicz alleges in the underlying lawsuit that Propst and/or AVP owned the vehicle involved in Propst’s accident, which occurred in the course and scope of Propst’s employment with AVP. Id. ¶¶ 9-12. She further alleges that the accident was caused by a defective rear axle that Propst and/or AVP knew or should have known about, and that Propst and/or AVP negligently failed to take appropriate actions to ensure the vehicle’s safe operation. Id. ¶¶ 21-29.

On July 10, 2014, Lancer – again, AVP’s insurer – filed the instant Complaint for Declaratory Judgment. ECF No. 1. Lancer argues that to the extent that the allegations of the underlying lawsuit include negligence on the part of Propst and/or AVP, they may be entitled to coverage under either or both of the insurance policies issued to Propst entities by Harleysville and American. Lancer believes that Buy Rite is the alter ego of Propst and/or AVP. Compl. ¶ 22. Accordingly, Lancer “seeks a declaration whether either or both the [Harleysville] policy and/or the [American policy] provides such coverage to Propst and/or to AVP for the underlying lawsuit, ” Compl. ¶ 27, including a declaration that Harleysville and American “are required to defend and indemnify Propst and/or AVP in the underlying lawsuit, ” Id. at 5.

American filed an Answer. ECF No. 25. Nationwide Mutual Insurance Company (“Nationwide”) – Harleysville’s successor by merger – also filed an Amended Answer, as well as a Counterclaim/Crossclaim for Declaratory Judgment against Lancer, American, Propst, AVP, and Trojanowicz. ECF No. 33. Nationwide seeks a declaratory judgment that it owes no obligation to defend and/or indemnify Propst and/or AVP in the underlying lawsuit or, in the alternative, that the Harleysville policy is excess to all liability insurance available to Propst and/or AVP. Nationwide Answer 21.

Nationwide filed a Motion for Judgment on the Pleadings. ECF No. 26. Lancer filed a brief in opposition, ECF No. 28, and Nationwide filed a reply brief, ECF No. 34. American joined Nationwide’s Motion for Judgment on the Pleadings, ECF No. 27. Lancer then filed an opposition noting the distinctions between Nationwide and American, ECF No. 29, and American filed a reply brief, ECF No. 30. The motion is now ripe for disposition.


Federal Rule of Civil Procedure 12(c) provides, “[a]fter the pleadings are closed – but early enough not to delay trial – a party may move for judgment on the pleadings.” Judgment on the pleadings is appropriate only if the moving party “clearly establishes that no material issue of fact remains to be resolved and that he is entitled to judgment as a matter of law.” Society Hill Civic Ass’n v. Harris, 632 F.2d 1045, 1054 (3d Cir. 1980) (citation omitted). In reviewing a Rule 12(c) motion, a court “must view the facts presented in the pleadings and the inferences to be drawn therefrom in the light most favorable to the nonmoving party.” Rosenau v. Unifund Corp., 539 F.3d 218, 221 (3d Cir. 2008) (quoting Jablonski v. Pan Am. World Airways, Inc., 863 F.2d 289, 290-91 (3d Cir. 1988)).

When a party’s Rule 12(c) motion is “based on the theory that the plaintiff failed to state a claim, ” the motion “is reviewed under the same standards that apply to a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6).” Caprio v. Healthcare Revenue Recovery Grp., LLC, 709 F.3d 142, 146-47 (3d Cir. 2013). In order to withstand a motion to dismiss, a complaint must include factual allegations sufficient to “raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Satisfying that standard “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id. Rather, the pleadings “must contain sufficient factual matter, which if accepted as true, states a facially plausible claim for relief.” Caprio, 709 F.3d at 147. A claim possesses such plausibility “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).


Nationwide makes several arguments, the first of which – that Lancer lacks standing to bring this ...

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