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Marks v. Utica First Insurance Co.

United States District Court, W.D. Pennsylvania

October 27, 2017

DEBORAH A. MARKS and SAVANAH M. CHESTER, Plaintiffs,
v.
UTICA FIRST INSURANCE COMPANY, Defendant.

          MEMORANDUM OPINION

          NORA BARRY FISCHER U.S. DISTRICT JUDGE.

         I. Introduction

         Deborah A. Marks and Savanah M. Chester bring this declaratory judgment action seeking a determination that Defendant Utica First Insurance Company (“Utica”) had a duty to defend and indemnify its insured, James D. Lark, in an underlying personal injury action in which Mr. Lark was the driver in an automobile accident that injured Plaintiffs. (Docket No. 1-1). Because Utica declined to defend Mr. Lark in the underlying action, Plaintiffs also assert a claim of bad faith in violation of the Pennsylvania Bad Faith statute, 42 Pa. Cons. Stat. § 8371. (Id.).

         Presently before the Court are the parties' cross-motions for summary judgment limited to a determination of the coverage issue. Specifically, Plaintiffs seek judgment as a matter of law that Utica had a duty to defend and indemnify under the applicable insurance policy (Docket No. 40), while Utica argues that it did not have a duty to defend or indemnify (Docket No. 44). The Motions have been fully briefed and the Court heard oral argument on July 14, 2017. (Docket No. 56). After careful consideration of the parties' positions, and for the following reasons, Plaintiffs' motion for summary judgment will be denied, and Defendants' motion for summary judgment will be granted.

         II. Procedural History and Factual Background

         A. Procedural Background

         Plaintiffs filed a complaint in the Court of Common Pleas of Beaver County, Pennsylvania on October 7, 2016, seeking a declaration that Utica had a duty to defend and indemnify and asserting a claim of bad faith in violation of the Pennsylvania Bad Faith statute, 42 Pa. Cons. Stat. § 8371. Marks v Utica First Ins. Co, Court of Common Pleas of Beaver County, No. 11323-2016, Ex. A to Notice of Removal (Docket No. 1-1, at 1-16). Utica timely removed the case to this court on November 10, 2016, based upon diversity of the parties. (Docket No. 1). Plaintiffs' federal action is based on Utica's declining to defend and indemnify its insured, James Lark dba Lark Landscaping, the owner of a Utica First Insurance Company Policy No. ART 5053893, providing commercial liability coverage. Ex. 1 to Pls.' State Court Complaint (Docket No. 1-1, at 17-115); Ex. A to Pls.' App'x; Ex. C to Def.'s App'x. During the course of the underlying personal injury action Mr. Lark agreed to assign his rights under his commercial liability insurance policy to Ms. Marks and Ms. Chester. Assignment of Claim, Apr. 5, 2016 (Ex. H to Pls.' App'x).

         B. Underlying Personal Injury Action

         The underlying incident involved an October 11, 2014 automobile accident in which a vehicle driven by Ms. Marks, with Ms. Chester as a passenger, was hit by a vehicle pulling a trailer with lawn care equipment aboard driven by Mr. Lark. Ms. Marks, individually and as guardian of her then-minor daughter Ms. Chester, filed a personal injury action (the “Underlying Action”) against Mr. Lark and James D. Lark t/d/b/a/ Lark Landscaping on May 12, 2015, in the Court of Common Pleas in Mercer County at No. 2015-1444 (the “Underlying Complaint”). Marks v Lark, Court of Common Pleas of Mercer County, No. 2015-1444, Ex. 2 to Plaintiffs' State Court Complaint, attached as Ex. A to Notice of Removal (Docket No. 1-1, at 116-130); Pls.' Concise Stmt. Mat. Facts, ¶ 2 (Docket No. 42), Ex. B to Pls.' App'x (Docket No. 43); Def.'s Concise Stmt. Mat. Facts, ¶ 8 (Docket No. 46), Ex. B to Def.'s App'x (Docket No. 47).

         As set forth in the Underlying Complaint, on October 11, 2014, Ms. Marks was driving her 2008 Jeep Patriot automobile northbound on Mercer Avenue in Hermitage, Pennsylvania. Underlying Compl. ¶¶ 5, 10-11. Ms. Chester, at the time a minor, was a passenger in the back seat. Id. ¶ 5. Mr. Lark was driving his 2007 Chevrolet Silverado southbound on Mercer Avenue on route to a landscape job. Id. ¶¶ 6, 7. Mr. Lark was “operating his aforesaid Silverado and pulling a two axle trailer with lawn care equipment aboard.” Id. ¶ 8. At approximately 11:18 a.m., at the intersection of Mercer Avenue and Haywood Street, Mr. Lark attempted to make a left turn onto Haywood Street and struck Ms. Marks' vehicle causing injuries to both Plaintiffs. Id. ¶¶ 10-11.

         Count I of the Underlying Complaint sets forth a negligence claim on behalf of Ms. Marks in which Plaintiffs allege that the damages and injuries sustained in the accident “were the direct and proximate result of the carelessness, recklessness and negligence of the Defendants.” Id. ¶ 13. Specifically, Count I alleges that Mr. Lark was negligent in the following particulars:

a. in that the said Defendant, James D. Lark, was an inexperienced, distracted and incompetent operator of said vehicle;
b. in that said vehicle was operated in a careless, reckless and negligent manner so as to cause same to strike the vehicle in which the Plaintiff traveled in;
c. in failing to have said vehicle under such control so as to avoid a collision with other vehicles lawfully on the roadway;
d. in failing to exercise the high degree of diligence and care required in the operation of motor vehicles at or near an intersection;
e. in failing to exercise the high degree of diligence and care required in the operation of motor vehicles in a high traffic area;
f. in operating said vehicle at said time and place in such a manner as to violate the Motor Vehicle Code of the Commonwealth of Pennsylvania, more specifically Section 3714 “Careless Driving”;
g. in operating said vehicle at said time and place in such a manner as to violate the Motor Vehicle Code of the Commonwealth of Pennsylvania, more specifically Section 3322 “Vehicle Turning Left”;
h. in failing to provide said vehicle with good and sufficient brakes and other proper and necessary appliances and equipment;
i. in making a left turn across traffic without first ascertaining that it was safe to do so;
j. in failing to have said vehicle under proper control and operating said vehicle at an excessive speed given the trailer equipment that was being pulled; and
k. in failing to pay attention to traffic.

Id. Count II of the Underlying Complaint sets forth a negligence claim on behalf of Ms. Chester in which Plaintiffs allege that the damages and injuries sustained in the accident “were the direct and proximate result of the carelessness, recklessness and negligence of the Defendants.” Id. ¶ 22. Count II sets forth identical allegations detailing Mr. Lark's negligent conduct. Id. ¶ 22a.-1.

         At the time of the accident, Mr. Lark was covered by an automobile insurance policy issued by Allstate Insurance Company, with single limit liability coverage of $300, 000. Declaratory Judgment Compl. ¶ 9 (Ex. A to Notice of Removal (Docket No. 1). Allstate provided a defense to Mr. Lark in the underlying litigation, ultimately paying the policy limits of $300, 000 in partial settlement of the claims. Id.

         The settlement also included Mr. Lark's agreement to participate in binding arbitration to determine damages. The arbitration was held on June 21, 2016, with the arbitrator awarding $731, 427 to Ms. Marks and $2, 885, 700 to Ms. Chester. Arbitrator's Decision and Award (Ex. I to Pls.' App'x). As noted, Mr. Lark agreed to assign his rights under the Utica Policy to Ms. Marks and Ms. Chester. Assignment of Claim, Apr. 5, 2016 (Ex. H to Pls.' App'x). The assignment of rights under the Utica insurance policy arose because Utica had denied coverage both before and during litigation of the Underlying Complaint.

         C. The Utica Policy

         The Utica First Insurance Company Policy (the “Policy”) provides commercial liability coverage. The Policy contains a “Contractors Special Policy” with coverage for bodily injury liability requiring Utica to “pay all sums which an ‘insured' becomes legally obligated to pay as ‘damages' due to ‘bodily injury'[] . . . caused by an ‘occurrence' . . . during the policy period.” (Docket No. 1-1 at 34.) The Utica Policy also provides that Utica has “the right and duty to defend in a suit seeking ‘damages' which may be covered under the Commercial Liability Coverage.” (Docket No. 1-1 at 37.)

         1. Mobile Equipment Coverage

         The Policy's “Supplemental Coverages” section includes a subsection titled “Mobile Equipment, ” which provides coverage for bodily injury “resulting from mobile equipment.” (Docket No. 1-1 at 75 (amended).)

         2. ...


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