Kiely Ex Rel. Feinstein v. Phila. Contributionship Ins. Co.
206 A.3d 1140
Pa. Super. Ct.2019Background
- Plaintiff Margaret M. Kiely, as attorney-in-fact for insured Christine Feinstein, sued insurer Philadelphia Contributionship Insurance Co. (PCIC) after PCIC denied a defense in an underlying tort suit by employee Nydia Parkin alleging assault, IIED, breach of contract, false imprisonment, and punitive damages.
- Feinstein had a Homeowner’s policy (liability for bodily injury from an "occurrence"/accident) and an Umbrella policy (additional bodily injury limits plus separate "personal injury" coverage, with exclusions for expected/intended injury and injuries related to employment).
- PCIC issued initial and comprehensive denials, concluding Parkin’s pleadings alleged intentional conduct or were otherwise excluded; Kiely sued for declaratory judgment, breach of contract, and bad faith.
- Trial court denied cross-motions for summary judgment; at trial Kiely presented only lay testimony about Feinstein’s alleged mental impairment but no medical expert evidence; PCIC moved for and obtained a compulsory nonsuit at the close of plaintiff’s case.
- Trial court excluded consideration of extrinsic evidence to expand coverage beyond the four corners of the underlying complaint and concluded Parkin alleged an intentional assault (not an "occurrence"), so PCIC had no duty to defend; appellate court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Parkin’s underlying complaint potentially alleged a covered "occurrence" triggering a duty to defend | Parkin’s broad allegations could encompass non‑intentional conduct or mental incapacity; insurer should defend while investigating Feinstein’s mental state | Complaint alleges a purposeful assault; under policy definitions an "occurrence" means an accident, and allegations show intentional act excluded from coverage | Held for PCIC: the complaint alleges intentional conduct, not an "occurrence," so no duty to defend |
| Whether insurer must provide a defense while investigating insured’s mental capacity (and whether M’Naghten standard should apply) | Insurer should defend pending investigation into Feinstein’s capacity; trial court erred by applying M’Naghten | Insurer may deny coverage if complaint does not, on its face, allege mental incapacity that would make the act non‑intentional | Court did not decide applicability of M’Naghten because extrinsic evidence cannot be used to create coverage where complaint does not allege incapacity; affirmed nonsuit |
| Whether extrinsic evidence (lay testimony about mental condition) may be considered to trigger duty to defend | Kiely offered lay evidence of stroke, bipolar disorder, and later dementia to show possible lack of intent | Coverage is determined by comparing policy to the four corners of the complaint; extrinsic evidence cannot expand duty to defend | Court held extrinsic evidence should not be considered; it erred to admit it for coverage determination and nonsuit was proper |
| Whether exclusionary ruling moots plaintiff’s claim for attorney’s fees and sanctions over fee documentation | Kiely argued fees should be recoverable as damages for insurer’s wrongful denial/bad faith | If no duty to defend, fee claim for defense costs is moot; trial court also sanctioned Kiely for failing to produce fee documentation | Court found no duty to defend, so fee issue is moot and sanctions ruling stands |
Key Cases Cited
- Donegal Mut. Ins. Co. v. Baumhammers, 938 A.2d 286 (Pa. 2007) (insurer must defend if underlying allegations potentially fall within policy; courts resolve coverage in declaratory actions)
- Kvaerner Metals Div. of Kvaerner U.S., Inc. v. Commercial Union Ins. Co., 908 A.2d 888 (Pa. 2006) (duty to defend determined solely from four corners of complaint; extrinsic evidence may not be used to trigger coverage)
- Gene’s Restaurant, Inc. v. Nationwide Ins. Co., 548 A.2d 246 (Pa. 1988) (insurer’s duty to defend measured by allegations in plaintiff’s pleadings)
- Am. & Foreign Ins. Co. v. Jerry’s Sport Ctr., Inc., 2 A.3d 526 (Pa. 2010) (duty to defend broader than duty to indemnify; persists until claim is confined to an uncovered recovery)
- Scampone v. Highland Park Care Center, LLC, 57 A.3d 582 (Pa. 2012) (standard of review for compulsory nonsuit on appeal; plaintiff given benefit of all reasonable inferences)
- Kvaerner Metals (also cited for definition of "accident/occurrence" as unexpected event), 908 A.2d 888 (Pa. 2006)
- State Farm Mut. Auto. Ins. Co. v. Martin, 660 A.2d 66 (Pa. Super. 1995) (public policy disfavors insurance coverage for intentional acts)
- Germantown Ins. Co. v. Martin, 595 A.2d 1172 (Pa. Super. 1991) (discussed M’Naghten and "expected or intended" exclusion; treated as inapposite dicta in this case)