Ramara, Inc. v. Westfield Insurance
69 F. Supp. 3d 490
E.D. Pa.2014Background
- Ramara seeks declaratory relief and breach of contract for Westfield’s duty to defend/indemnify in Axe’s underlying personal injury suit.
- Westfield issued a commercial umbrella policy naming Ramara as additional insured; underlying injury involved Fortress employee Axe on Ramara’s project site.
- Axe sued Ramara and Sentry; Fortress, Axe’s employer, is immune from suit under Pennsylvania Workers’ Compensation Act.
- The policy contains an Additional Insured Endorsement, an Other Insurance Endorsement, an Employer’s Liability Exclusion, and a Separation of Insureds clause.
- Judge Dalzell previously denied a motion to dismiss; Ramara now moves for partial summary judgment and Westfield (joined by Axe’s employer) cross-moves for summary judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Duty to defend triggered by underlying complaint | Ramara; coverage should trigger under both interpretations of Additional Insured Endorsement | Westfield; claims require Fortress-caused injury | Yes; duty to defend triggered under both interpretations |
| Employer’s Liability Exclusion preclusion | Separation of Insureds and non-Ramara employee Axe limit exclusion | Exclusion applies to Ramara as employer | No; exclusion does not bar Ramara’s coverage |
| Umbrella follow-form coverage applicability | Follow-form umbrella mirrors primary; coverage extends | Identical issue; no separate effect | Yes; umbrella provides same duty to defend as underlying policy |
| Breach of contract and defense costs | Failure to defend constitutes breach; fees incurred must be recovered | Defendant can limit liability | Yes; Westfield liable for breach and defense costs; need briefing on amounts |
Key Cases Cited
- Erie Ins. Exch. v. Transamerica Ins. Co., 516 Pa. 574 (Pa. 1987) (duty to defend when complaint may potentially be covered by policy)
- Am. & Foreign Ins. Co. v. Jerry’s Sport Ctr., Inc., 606 Pa. 584 (Pa. 2010) (duty to defend if factual allegations may fall within policy coverage)
- Stidham v. Millvale Sportsmen’s Club, 421 Pa. Super. 548; 618 A.2d 945 (Pa. Super. Ct. 1992) (duty to defend when coverage potentially applies; liberal notice to insured)
- Politopoulos v. Mut. Ben. Ins. Co., 75 A.3d 528 (Pa. Super. Ct. 2013) (separation of insureds and employer liability analysis under policy)
- Frain v. Keystone Ins. Co., 433 Pa. Super. 462; 640 A.2d 1352 (Pa. Super. Ct. 1994) (ambiguity in policy language; interpret in insured’s favor)
- Bensalem Township v. International Surplus Lines, Ins. Co., 38 F.3d 1303 (3d Cir. 1994) (reasonable expectations doctrine; business insured context)