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Certain Underwriters at Lloyd's London v. Cata Construction

United States District Court, E.D. Pennsylvania

January 13, 2017

CERTAIN UNDERWRITERS AT LLOYD'S LONDON SUBSCRIBING TO POLICY NO. GL1580/01/AM1723, Plaintiff,
v.
CATA CONSTRUCTION, et al., Defendants.

          MEMORANDUM

          Tucker, C.J.

         Before the Court are Plaintiff's uncontested Motion for Summary Judgment (Doc. 14)[1] and Plaintiff's Memorandum of Law in Support thereof (Doc. 14-1). Upon consideration of Plaintiff's submissions and exhibits, Plaintiff's Motion for Summary Judgment is GRANTED.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         Plaintiff, an insurance company, brings this suit seeking declaratory judgment regarding an insurance policy that it issued to its insured, Defendant Cata Construction (“Cata”).[2]Specifically, Plaintiff seeks a declaration that it owed no duty to defend or indemnify its insured in connection with an underlying state lawsuit by Defendant Pulte Group, Inc. (“Pulte”) against Defendant Nassau Construction Company (“Nassau”) for work that Nassau and Cata, as Nassau's subcontractor, performed on a residential construction project known as the Traditions at Washington Crossing, located in Bucks County, Pennsylvania (“Washington Crossing Project”). Plaintiff contends that it owes no duty to defend or indemnify its insured because, in the underlying action, Pulte alleged that it suffered damages stemming from Cata's and Nassau's faulty workmanship. Faulty workmanship, Plaintiff reasons, does not trigger coverage under the governing insurance policy and, therefore, Plaintiff is entitled to summary judgment.

         A. Underlying State Court Lawsuit Over The Washington Crossing Project

         In September 2010, Pulte filed a complaint against various construction contractors that it had hired to perform work on the Washington Crossing Project.[3] After several amendments to its complaint, Pulte finally filed a Fourth Amended Complaint in which it alleged that Nassau was liable for damages incurred in connection with purportedly defective decks and patio doors that Nassau and/or its subcontractors installed on 299 homes in the Washington Crossing Project. Pl.'s Mem. of Law in Supp. Ex. 1-b, at 3 ¶ 8. The Fourth Amended Complaint set forth two causes of action against Nassau: Count 3 (Negligence) and Count 4 (Breach of Contract). Id. at 11-18. Both counts set forth a number of factual allegations indicating that Nassau and/or its subcontractors failed to perform a variety of construction tasks properly. Id.

         1. Joinder Complaint By Nassau Against Cata

         Later, and as a result of Pulte's Fourth Amended Complaint, Nassau filed an Amended Joinder Complaint in which Nassau asserted claims against 18 subcontractors who performed work on the Washington Crossing Project. Pl.'s Mem. of Law in Supp. Ex. 1-b, at 21-93. Among the subcontractors identified was Cata who had performed “cornice work” for Nassau. Id. at 36 ¶ 56. Nassau alleged that Cata was liable, as the cornice subcontractor, for the property damage identified in Pulte's Fourth Amended Complaint. As a result of this litigation, Nassau notified Plaintiff that the underlying state court action might trigger coverage under a Commercial General Liability Policy that Cata had obtained from Plaintiff. See Pl's Mem. of Law in Supp. Ex. 1-c, at 44-48 (indicating that Nassau notified Plaintiff of Plaintiff's potential obligation to cover damages alleged in the underlying state court action).

         B. The Commercial General Liability Policy: Coverages and Definitions

         The Commercial General Liability Policy, CGL Policy GL1580/01AM1723 (“CGL Policy”), was issued by Plaintiff to Cata, and was in effect during the time that Cata performed work on the Washington Crossing Project. See Pl.'s Mem. of Law in Supp. Ex. 1-c, at 17 (providing that the “policy period” ran from “23 May 2001” to “23 May 2002”). The CGL Policy delineates its scope of coverage and identifies the circumstances that would obligate Plaintiff to defend and indemnify Cata under Section I. Section I provides, in pertinent part:

         COVERAGE A BODILY INJURY AND PROPERTY DAMAGE LIABILITY

. . . . We will pay those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury' or ‘property damage' to which this insurance applies. We will have the right and duty to defend the insured against any ‘suit' seeking those damages. However, we will have no duty to defend the insured against any ‘suit' seeking damages for ‘bodily injury' or ‘property damage' to which this insurance does not apply.
. . . . This insurance applies to ‘bodily injury' and ‘property damage' only if: (1) [t]he ‘bodily injury' or ‘property damage' is caused by an ‘occurrence' . . . and (2) [t]he ‘bodily injury' or ‘property damage' occurs during the policy period.

Pl.'s Mem. of Law in Supp. Ex. 1-c, at 25 (emphasis added).

         The CGL Policy definitions for important terms including a definition for the term “occurrence, ” which means, “an accident, including continuous or repeated exposure to substantially the same or general harmful conditions.” Pl.'s Mem. of Law in Supp. Ex. 1-c, at 36 (emphasis added). The definition for the term “occurrence” is further defined by an Endorsement attached to the CGL Policy, which provides “[w]hen used in this policy . . . . ‘occurrence' means an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured.” Id. at 24.

         II. LEGAL STANDARD

         As a preliminary matter, the Court addresses the implications of Defendants' failure to respond to the present Motion for Summary Judgment.

         A. Standard Of Review For Summary Judgment Motions

         When a party fails to respond to a properly filed motion, the Court may treat the motion as uncontested. E.D. Pa. Local R. Civ. P. 7.1(c). In the case of a motion for summary judgment, however, the Court “may not grant an uncontested summary judgment motion without an independent determination that the movant is entitled to judgment under Fed.R.Civ.P. 56.” B&B Fin. Servs. LLC v. Kallock, No. CIV. A. No. 05-1277, 2006 WL 2869529, at *1 (E.D. Pa. Oct. 4, 2006); see Hitchens v. County of Montgomery, 98 Fed. App'x 106, 110 (3d Cir. 2004) (providing the same). Still, “[b]y failing to respond . . . ‘the nonmoving party waives the right to respond to or to controvert the facts asserted in the summary judgment motion.'” Kallock, 2006 WL 2869529, at *1 (citing Reynolds v. Rick's Mushroom Serv., 246 F.Supp.2d 449, 453 (E.D. Pa. 2003)). Thus, when a party fails ...


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