PERONACE v. KINSALE INSURANCE COMPANY
2:25-cv-00158
| E.D. Pa. | Jun 30, 2025Background
- Plaintiff Rocco Peronace owned a property in Glenside, PA and hired RPM Builders to construct a residence on it, with a contract spanning from June 2020 to January 2024.
- An addendum stated that if the project was not completed by December 1, 2022, RPM would assign its rights to any insurance policy to the Plaintiff.
- RPM executed a commercial general liability (CGL) insurance policy with Kinsale Insurance, effective from February 1, 2024 to February 1, 2025, after the deadline for completion but during ongoing delays and damage.
- Property damage allegedly due to poor construction and exposure to weather occurred prior to and continued after the policy’s inception, including a plumbing failure in February 2024.
- The Plaintiff obtained a state court judgment against RPM and then sought to recover under the insurance policy, claiming assignment and coverage for the damages.
- Kinsale denied coverage, resulting in litigation first in state court (removed to federal) involving breach of contract and bad faith claims; Kinsale moved to dismiss and to strike amended pleadings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing via Assignment | Assignment valid since it arose after damage and was conditioned on completion failure | Assignment invalid: policy prohibits assignment prior to a covered loss and effective policy period | Assignment invalid; Plaintiff lacks standing |
| Coverage as an "Occurrence" under CGL Policy | Alleged damages from weather, leaks, and subcontractor errors are unintended and accidental occurrences | Faulty workmanship and foreseeable weather effects are not "occurrences" under PA law | No covered "occurrence" alleged; coverage not triggered |
| Subcontractor Exception to "Your Work" Exclusion | Subcontractor-caused defects could trigger exception to exclusion and provide coverage | Exception does not create coverage where none exists under plain definition of "occurrence" | Exception does not override lack of covered occurrence |
| Procedural Validity of Second Amended Complaint | Refinements in second amended complaint made in good faith, not prejudicial, and clarify facts | Plaintiff filed amendment without consent or leave; amendments are futile and do not cure defects | Second amended complaint stricken as procedurally improper |
Key Cases Cited
- Kvaerner Metals Div. of Kvaerner U.S., Inc. v. Commercial Union Ins. Co., 908 A.2d 888 (Pa. 2006) (Faulty workmanship is not an "occurrence" under a CGL policy.)
- Millers Capital Ins. Co. v. Gambone Bros. Dev. Co., 941 A.2d 706 (Pa. Super. Ct. 2007) (Weather-exacerbated damages from poor workmanship do not trigger CGL policy coverage.)
- Egger v. Gulf Ins. Co., 903 A.2d 1219 (Pa. 2006) (Assignments post-loss may be permitted under Pennsylvania law, but not pre-loss assignments in violation of policy terms.)