United States District Court, E.D. Pennsylvania
FREDERICK MUTUAL INSURANCE CO. Plaintiff
DONALD HALL, Individually and trading as HALLSTONE, INC. and MARIE A. HALL, Individually and trading as HALLSTONE, INC. and HALLSTONE, INC. and R. LEE HULKO and BRADLEY B. FAIR Defendants
civil action for declaratory judgment was tried non-jury
before the undersigned on April 24, 2017. The parties have
filed their proposed factual findings, legal conclusions and
briefing and the matter is now ripe for adjudication. We
therefore now make the following:
Plaintiff, Frederick Mutual Insurance Company is a duly
authorized and licensed Maryland insurance company which
maintains its principal place of business at 57 Thomas
Johnson Drive, Frederick, Maryland 21702.
Defendants Donald Hall and Marie A. Hall are adult
individuals, husband and wife who reside at 723 Telegraph
Road, Perkasie, Bucks County, Pennsylvania 18944 and who
regularly conduct business and/or trade as Hallstone, Inc.
Defendant Hallstone, Inc. is a business entity of unknown
type with a principal place of business at 723 Telegraph
Road, Perkasie, Bucks County, Pennsylvania, 18944.
primary business of Hallstone and Donald Hall is stone
Frederick Mutual Insurance Co. is, and at all times relevant
to this action was, licensed and/or authorized to sell
insurance in Pennsylvania.
Defendants R. Lee Hulko and Bradley B. Fair are adult
individuals who reside at 4310 Tollgate Road, New Hope, Bucks
County, Pennsylvania 18938.
Beginning in or around March 2006, Defendants Hulko and Fair
contracted with Defendants Hallstone and/or Donald Hall for
the performance of certain custom stone work to be done in
conjunction with a number of improvements which they were
making to their home and property on Tollgate Road. Under the
contract, “[a]ll material [was] guaranteed to be as
specified and the above work [was] to be performed in
accordance with the drawings and specifications submitted for
the above work and completed in a substantial workmanlike
manner”. By the time all of the stonework was completed
in 2008, Hulko and Fair had paid Hall/Hallstone nearly $300,
000 for the work performed over a period of some three years.
Sometime in 2005, Donald Hall had been told by a builder for
whom he was working that he needed to obtain “maximum
coverage” in the aggregate amount of $1 million/$2
million. In response, Mr. Hall contacted Andrew Rumbold at
the Fraser Insurance Agency in Doylestown, PA and asked him
for insurance in those amounts which would provide
“soup to nuts” coverage.
Rumbold submitted an application to and a down payment on Mr.
Hall's behalf to Frederick Mutual and, in September 2005,
Frederick Mutual wrote an “artisans” policy,
Policy No. APP2050248, for Mr. Hall/Hallstone which
purportedly provided coverage in the amounts requested and
which remained in force for the period September 27, 2005
through September 27, 2006.
the 2005-2008 time frame, it was Frederick Mutual's
policy to mail two copies of newly written/issued policies to
the insurance agency - one for the insured and one for the
agent with the expectation that it was the responsibility of
the agent to review the policy with the insured and either
hand deliver or mail the insured their copy. Thereafter, all
billing and subsequent communications, such as policy renewal
materials, were to be sent directly from Frederick Mutual to
the insured. In this case, there is no evidence that
Frederick Mutual ever mailed a full copy of the policy to the
Fraser Agency or directly to Mr. Hall t/a Hallstone, Inc.
Rather, the only thing received by the Fraser Agency and/or
Mr. Hall/Hallstone was a copy of the declarations sheet
showing what the coverages were.
the conclusion of the one-year policy term, Hallstone did not
renew the existing policy. However, beginning on or about
August 1, 2007, Frederick Mutual did issue another policy to
Hallstone, identical to the one which was in force for the
September, 2005 - September, 2006 time frame, which remained
in place until February, 2008 when it was cancelled for
non-payment of premium.
Fraser Agency is an independent insurance agency and as such
can and will place insurance with any of the insurance
companies for whom it is approved and/or with whom it has a
relationship. Although by contract it represents and is an
agent for the insurance companies, as an independent agency
it can “shop” insurance for customers who come to
it seeking the best rate for the most or specific coverage.
According to the Fraser Agency's website:
As your independent insurance agent, we truly represent you,
the insured, and not just the insurance companies. ... We put
the best interests of our clients first from recommending
coverages to claims counseling.”
was the case with most of the contractors who approached Mr.
Rumbold seeking to obtain insurance, Mr. Hall did not make
any specific requests for coverage, aside from stating his
desire for “soup to nuts” coverage and did not
ask any questions about exactly what would be covered under
his policy with Frederick Mutual. Mr. Rumbold did not have
any substantive discussions with Mr. Hall about what was
and/or was not covered under the policy at issue and at no
time did Mr. Rumbold sit down with Mr. Hall and explain the
policy to him.
Contrary to Frederick Mutual's purported policies and
procedures, the Fraser Agency never received copies of the
Frederick Mutual policies which were issued to Hallstone.
Rather, it received only copies of the declarations page.
Fraser Agency never either mailed or hand-delivered a copy of
the Hallstone policies to Mr. Hall nor did Mr. Rumbold ever
sit down to review or explain what was or was not covered to
Mr. Hall. Likewise, Mr. Hall never asked any questions or
sought any information about what the Frederick Mutual
policy(ies) did or did not cover.
was Mr. Hall's belief that “if something was done
inadvertently, ” or if his business did something and
someone made a claim against his business that he might be
liable for, he would be covered for it.
Hall recalls only receiving a declarations sheet (“dec
sheet”) showing the type and amount of coverage from
Frederick Mutual. While Mr. Hall never received a copy of the
full policy from either the Fraser Agency or in the mail from
Frederick Mutual, Mr. Rumbold never received any complaint or
request from Mr. Hall that he hadn't received a copy of
his policy and there is no evidence that Mr. Hall ever sought
a full copy or complained to anyone about his not having
“dec sheet” issued on Policy No. APP2050248
consisted of two pages at the top of which was the title
“ARTISANS DECLARATIONS” and name
and address of the Frederick Mutual Insurance Company and the
additional notations that it was FORM: PA -
Artisans and “Direct Bill - insured, PA -
Annual.” The Insured was listed as “Hallstone
Inc., 723 Telegraph Road, Perkasie, PA 18944" and the
Agency 510, “Fraser Diversified, Inc., t/a R.A. Fraser
Agency 33 Union Street, Suite #3, Doylestown, PA 18901, (215)
340-1888. The following language appeared on the first page:
In return for the payment of the premium, and subject
to all the terms of the policy, we agree to provide you with
the insurance as stated in this policy.
POLICY PERIOD: from 9/27/2005 to 9/27/2006, 12:01 AM
standard time at the insured premises
Form of Business: Corporation Type of
The following forms and endorsements are made a part
of this policy at time of issue.
AP-100 (Ed. 2.0) Contractors Special Policy
AP-0335 (Ed. 11/01) Amendatory Endorsement - Pennsylvania
ML-120 (Ed. 2.0) Insurance Consultation Services Exemption
GL-894 (Ed. 2.0) Punitive Damages Exclusion
AP-0690 (Ed. 6/02) Exclusion - Exterior Insulation and Finish
AP-0689 (Ed. 6/02) Exclusion - Wet Rot, Dry Rot, Bacteria,
Fungi, or Protists - Contracting Operations
AP-0643 (12 99) Known Injury or Damage Amendments
BP-336 (Ed. 1.0) Premium Payments
FMT (Ed. 2/03) Terrorist Disclosure Notice
GL-899 (Ed. 2.0) Cross Liability Exclusion
AP-0360 (Ed. 7/03) Limited Fungus and Related Perils Coverage
LOCATION: Location Address: 723
Telegraph Road Perkasie, PA 18944 COUNTY: Bucks
Property Deductible Limit $250; Personal Property Off
Premises Limit $0
STRUCTURE: Non-Sprinklered Frame
Protective Device - None
COV A - Building Limit $0 Premium $0
COV B - Business Personal Property Limit $0 Premium $0
COV C - Loss of Income Limit $0 Premium $0
VALUATION: Actual Cash Value - Building Actual Cash Value -
Business Personal Property
Auto Increase - None
Total Structure Premium - $0
Total Location Premium - $0
Second Page of the Artisans Declarations contained the
Commercial liability Coverages Apply to All
COMMERCIAL LIABILITY COVERAGE
Property Damage Liability Deductible $250
General Aggregate Limit $2, 000, 000 per policy period
Products/Completed Work Aggregate Limit $2, 000, 000 per
Cov L - Bodily Injury/Property Damage $1, 000, 000 per
Cov M - Medical Payments $5, 000 per person
Cov N - Products/Completed Work $1, 000, 000 per ...