Westfield Insurance Company v. Astra Foods Inc.
134 A.3d 1045
Pa. Super. Ct.2016Background
- Ramos, an employee of a staffing company (BK), was injured while working at Astra’s facility cleaning an exhaust fan; he obtained a workers’ compensation award finding he was not a "borrowed employee" of Astra.
- Westfield had issued Astra both a workers’ compensation policy and a commercial general liability (CGL) policy; Westfield participated in the WC proceeding.
- A civil jury later awarded Ramos $763,413 against Astra in a personal-injury suit.
- Westfield sought a declaratory judgment that the CGL policy’s employer’s-liability exclusion (which treats a “leased worker” as an employee) precluded coverage for Ramos. Astra moved for summary judgment; the trial court granted summary judgment for Westfield.
- Astra appealed, arguing collateral estoppel, judicial estoppel, and public-policy/illusory-coverage challenges to the CGL exclusion that defines a leased worker as an employee. The appellate court affirmed.
Issues
| Issue | Plaintiff's Argument (Astra) | Defendant's Argument (Westfield) | Held |
|---|---|---|---|
| Whether collateral estoppel bars Westfield from relitigating Ramos’ employment status under the CGL definition of “leased worker” | WCJ’s prior ruling that Ramos was not a "borrowed employee" should preclude relitigation because the legal issue is identical | The CGL definition of "leased worker" is a contractual term distinct from the common-law "borrowed employee" doctrine; issue is not identical | Collateral estoppel does not apply because the prior issue (borrowed employee) is not identical to the contractual leased-worker definition |
| Whether Westfield is judicially estopped from challenging Ramos’ employment status | Westfield previously argued Ramos was not Astra’s employee before the WCJ, so it should be barred from an inconsistent position here | Westfield did not assume a position about the CGL contractual term in the WC proceeding; Astra also waived the argument by not raising it below | Waived on appeal; alternatively, judicial estoppel fails because Westfield did not previously assert the contractual leased-worker position |
| Whether the CGL employer’s-liability exclusion (including leased workers as employees) is unconscionable or contrary to public policy (illusory coverage) | Inclusion of leased workers in the exclusion renders Astra uninsured for Ramos’ claim and makes the CGL coverage illusory — Westfield collected premiums but avoids coverage | The exclusion is a clear, unambiguous contractual term; unlike Heller, Westfield was not statutorily required to offer coverage nor did the exclusion render the policy illusory for Astra’s expected claims | The exclusion is not void as against public policy; Heller is distinguishable and does not compel invalidation of the CGL exclusion |
| Whether trial court erred in denying Astra’s cross-motion for summary judgment based on the WCJ finding | The prior WC finding (no borrowed employee) entitles Astra to judgment as a matter of law on coverage | Westfield contends the WC issue differs from the CGL contractual definition and thus cross-motion fails | Denial affirmed; the issues are not identical and genuine legal difference exists |
Key Cases Cited
- Hovis v. Sunoco, 64 A.3d 1078 (Pa. Super. 2013) (summary judgment standard; plenary review)
- Kituskie v. Corbman, 682 A.2d 378 (Pa. Super. 1996) (elements of collateral estoppel)
- JFC Temps, Inc. v. Workers’ Comp. Appeal Bd. (Lindsay), 680 A.2d 862 (Pa. 1996) (borrowed-employee test: right to control)
- Mullins v. Sun Co., 763 A.2d 398 (Pa. Super. 2000) (borrowed-employee factors)
- Burton v. Republic Ins. Co., 845 A.2d 889 (Pa. Super. 2004) (insurance contract interpretation principles)
- Heller v. Pennsylvania League of Cities & Municipalities, 32 A.3d 1213 (Pa. 2011) (public-policy/illusory-coverage analysis for exclusions)
- Meridian Oil & Gas Enters., Inc. v. Penn Cent. Corp., 614 A.2d 246 (Pa. Super. 1992) (appellate review of legal questions)