39 Pa. D. & C.5th 24
Pennsylvania Court of Common P...2014Background
- On Jan. 2, 2008 Shawn Nalesnik (plaintiff) fell from a ladder while working on property owned by Blue Label Properties, LLC (insured) and sued the insured for personal injuries.
- At the time Blue Label had a commercial general liability policy issued by United National Insurance Company (insurer) with a $1,000,000 limit.
- Insurer refused to defend the insured, invoking an independent-contractor exclusion in the policy that disclaims duty to defend claims arising from work performed by volunteers, independent contractors, or subcontractors.
- Plaintiff (not a named insured and not a party to the policy) filed a declaratory judgment action against the insurer (joining the insured as indispensable party), seeking a judicial declaration that the insurer must defend and, if necessary, pay any judgment.
- Insurer demurred, arguing plaintiff lacks standing because the insurer’s duties run only to its insured and plaintiff is not an intended third-party beneficiary of the policy.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a non-party injured claimant may bring a declaratory action to compel insurer to defend/pay under insured’s liability policy | Nalesnik: insurer breached policy; he can enforce insurer’s duty to defend/pay because outcome affects his recovery | United National: duty runs only to the insured; claimant is not a contracting party nor an intended third‑party beneficiary, so lacks standing | Held for insurer: claimant lacks standing; preliminary objection sustained |
| Whether plaintiff is an intended third‑party beneficiary of the insurance contract | Nalesnik: plaintiff is entitled to performance (defense/payment) that benefits him as an injured third party | Insurer: policy was procured for insured’s protection; no intent to confer enforceable rights on third parties; plaintiff is neither creditor nor donee beneficiary | Held: not an intended beneficiary under Restatement §302/Scarpitti; no third‑party beneficiary rights |
Key Cases Cited
- In re Hickson, 821 A.2d 1238 (Pa. 2003) (standing requires substantial, direct, and immediate interest)
- Koresko v. Farley, 844 A.2d 607 (Pa. Cmwlth. 2004) (standing requires adverse effect on plaintiff’s interest)
- Stilp v. Commonwealth, 910 A.2d 775 (Pa. Cmwlth. 2006) (declaratory judgment subject to standing requirements)
- Hicks v. Saboe, 555 A.2d 1241 (Pa. 1989) (insurer’s duty generally runs to insured, not third parties)
- Fizz v. Kurtz, Dowd & Nuss, Inc., 519 A.2d 1037 (Pa. Super. 1987) (third‑party beneficiary requirement to enforce insurance contract)
- Spires v. Hanover Fire Ins. Co., 70 A.2d 828 (Pa. 1950) (third‑party recovery requires contract expression of intent to benefit third party)
- Scarpitti v. Weborg, 609 A.2d 147 (Pa. 1992) (adopts Restatement §302 test for intended third‑party beneficiaries)
- Guy v. Liederbach, 459 A.2d 744 (Pa. 1983) (explaining creditor vs. donee third‑party beneficiary categories)
- Burks v. Federal Ins. Co., 883 A.2d 1086 (Pa. Super. 2005) (parties’ intent to benefit third party must be within contemplation at formation)
- Wm. Penn Parking Garage, Inc. v. City of Pittsburgh, 346 A.2d 269 (Pa. 1975) (causal proximity in standing analysis)
- Kollar v. Miller, 176 F.3d 175 (3d Cir. 1999) (discussing direct action under Pennsylvania Insurance Insolvency Act)