MUTUAL BENEFIT INSURANCE COMPANY, Appellant, v. Joseph B. HAVER t/a Haver Pharmacy, John Macko and Candace M. Macko, his Wife, Appellees.
Supreme Court of Pennsylvania.
March 5, 1999.
725 A.2d 743
Argued Sept. 15, 1998.
submitting to a brief detention—especially if that individual is trying to obfuscate some criminal conduct—but police officers do not intrude on any deeply ingrained notion of liberty simply by asking a question or initiating an extremely brief detention to ensure the safety of the citizenry. That is why the standard of “reasonable suspicion” required for an investigative stop is far less exacting than the standard of “probable cause” for an arrest, which is itself far less exacting than the necessary “proof beyond a reasonable doubt” required to convict. These different standards are driven by the vastly different levels of intrusion that are implicated by investigative stops, arrests, and finаlly by convictions.
Here, after an admirable collaboration between a concerned senior citizen, an ex-police officer, and a current police officer, and after diligent police work corroborating the significant details of the senior citizen‘s tip, two hundred and fifty-six packets of crack cocaine were seized from a purveyor of illegal narcotics. In suppressing this evidence, the majority fails to demonstrate why a departure from the sound reasoning of the United States Supreme Court and our sister states is warranted. I respectfully dissent.
Justice NEWMAN and Justice SAYLOR join this dissenting opinion.
John E. Nickoloff, Library, for Joseph Haver t/a Haver Pharmacy.
Matthew Taladay, DuBois, for John and Candace Macko.
Before FLAHERTY, C.J., and ZAPPALA, CAPPY, CASTILLE, NIGRO and NEWMAN, JJ.
OPINION
ZAPPALA, Justice.
We grantеd allocatur to address the issue of whether an insurance carrier has a duty to defend and possibly indemnify an insured pharmacist against a claim that is based upon his distribution of controlled substances, when the insurance policy explicitly excludes coverage for bodily injuries which are a consequence of “knowing endangerment” by the pharmacist. We hold that the carrier hаs neither a duty to defend nor a duty to indemnify.
On December 2, 1993, John and Candace Macko, Appellees, filed a complaint against Joseph B. Haver, who is also an Appellee, seeking recovery for damages allegedly sustained by Candace Macko as a result of
Mutual Benefit filed a Complaint for Declaratory Judgment asserting that it was not required to defend or indemnify Haver because the insurance policy contained the following provision:
Section IIC, Liability Not Insured
6. ENDANGERMENT OR HARM
We do not cover bodily injury or property damage whether or not expected or intended by the insured, which is a consequence of an insured‘s willful harm or knowing endangerment. This does not prohibit modification of this provision if done by us in writing.
R.R. at 37a (emphasis omitted) (emphasis added). Mutual Benefit argued that Mrs. Macko‘s injuries were a consequence of Haver‘s “knowing endаngerment” of her via his distribution of the contraband to her. Mutual Benefit also filed a motion for summary judgment against the Mackos on the same grounds as its declaratory action. The Mackos responded with their own motion for summary judgment. They argued that their complaint alleged negligence, not willful, knowing conduct, that the policy contained an endorsement which covered the type of conduct alleged in their complaint against Haver, and that any inconsistencies between the exclusionary language relied upon by Mutual Benefit and the endorsement must be resolved against Mutual Benefit, since it drafted the policy. The trial judge denied Mutual Benefit‘s motion and granted the Mackos’ motion, and, in doing so, held that Mutual Benefit was obligated to both defend Haver and indemnify him for any damages assessed pursuant to the Mackos’ underlying complaint.
A Superior Court panel affirmed with respect to Mutual Benefit‘s duty to defend, but reversed with respect to its duty to indemnify, holding that it would be premature to decide that issue. Judge Saylor, now Justice Saylor, dissented from the panel‘s decision, since, in his view, Mutual Benefit should not have been obligated to defend or indemnify Havеr in the Mackos’ underlying lawsuit. We granted Mutual Benefit‘s Petition for Allowance of Appeal and now reverse Superior Court‘s Order requiring Mutual Benefit to defend Haver. We also hold that Mutual Benefit does not have a duty to indemnify Haver under the terms of its insurance contract with him.
A carrier‘s duties to defend and indemnify an insured in a suit brought by a third party depend upon a determination of whether the third party‘s complaint triggers coverage. General Accident Insurance Co. of America v. Allen, 547 Pa. 693, 706, 692 A.2d 1089, 1095 (1997); Wilson v. Maryland Casualty Co., 377 Pa. 588, 595, 105 A.2d 304, 307 (1954). Haver and the Mackos argue that coverage is triggered and that the knowing endangerment exclusion to coverage is not implicated by the Mackos’ complaint because the complaint does not contain allegations of willful or knowing misconduct by Haver, but instead, asserts claims of negligence in conduct that was below the standard of care required of a pharmacist. However, the particular cause of action that a complainant pleads is not determinative of whether coverage has been triggered. Instead it is necessary to look at the factual allegations contained in the complaint. See Scopel v. Donegal Mutual Insurance Co., 698 A.2d 602 (Pa.Super.1997); Aetna Casualty and Surety Co. v. Roe, 437 Pa.Super. 414, 422, 650 A.2d 94, 98 (1994). We agree with Mutual Benefit that to allow the manner in which the complainant frames the request for redress to control in a case such as this one would encourage litigation through the use of artful pleadings designed to avoid exclusions in liability insurance policies. Appellant‘s
In reaching this conclusion, we reject the argument that the policy is ambiguous because it contains, in conjunction with the exclusionary language, an endorsement providing coverage for “professional liability,” which is defined in the policy to include “malpractice.” The Mackos cite Black‘s Law Dictionary, Sixth Edition, 1991, for the definition of malpractice, which, in the last line of its definition includes “any professional misconduct, unreasonable lack of skill or fidelity in professional or fiduciary duties, evil practice, or illegal or immoral conduct.” The Mackos, and to some degree Haver, conclude that this definition of malpractice is inconsistent with the language in the policy excluding coverage for knowing endangerment, and, therefоre, the resultant ambiguity must be resolved against Mutual Benefit, as the drafter of the policy, and in favor of coverage. Their argument is that the terms evil practice, illegal conduct, and immoral conduct imply that intentional acts are a part of malpractice and therefore covered under the endorsement, while at the same time such intentional conduct contradicts the “knowing” portion of the knowing endangerment exclusion contained in the policy.
We reject this argument for a number of reasons. First, irrespective of how Black‘s Law Dictionary defines the term “malpractice,” we have described malpractice as consisting of “a negligent or unskillful performance by a physician of the duties which are devolved incumbent upon him on account оf his relations with his patients, or of a want of proper care and skill in the performance of a professional act.” Hodgson v. Bigelow, 335 Pa. 497, 504, 7 A.2d 338, 342 (1939).2 This definition does not extend to the evil and illegal conduct relied upon by the Mackos and Haver. Therefore, there is no ambiguity created by the use of that term in the endorsement providing coverage for professional liability and the knowing endangerment exclusion in the policy. Second, when we are interpreting a contract such as the insurance policy in this case, our duty is to “ascertain the intent of the parties as manifested by the language of the written agreement.” Standard Venetian Blind Co. v. American Empire Insurance Co., 503 Pa. 300, 305, 469 A.2d 563, 566 (1983). The context in which the term malpractice was used in the endorsement, as
well as the morе common usage of the term, support the conclusion that when Haver and Mutual Benefit entered into this contract neither party intended to have it cover conduct such as that alleged in the Mackos’ complaint (i.e., illegal distribution of prescription drugs). The definition of professional
C. Professional liability includes error or omission, malpractice, or mistake in connection with rendering or failure to render professional services at your retail drug store.3
R.R. at 46 (emphasis in original policy). This language clearly indicates that the term malpractice was intended to cover negligent conduct, rather than intentional misconduct as advocated by Appellees. Finally, any ambiguity arising from the use of the term malpractice in the endorsement, as a result of the potentially evil or illegal connotation that might be attributable to that term, is illusory, since it would be against the public policy of this Commonwealth to permit a carrier to offer insurance for damages assessed as a result of evil or illegal conduct.4
Haver argues that there is no evidence of record in this case to support Mutual Benefit‘s allegation that Haver willfully harmed or knowingly endangered Mrs. Macko. As stated above, in determining whether a carrier has a duty to defend or indemnify an insured we look to the complaint filed against the insured. Thus, our determination that the factual allegations in the Mackos’ complaint against Haver constitute knowing endangerment as a matter of law, makes this argument moot, since there need not be evidence on the record for us to make this decision. For the same reason, we reject the Mackos’ argument that Haver‘s deposition testimony denying that he ever intended to harm Mrs. Macko prevents the knowing endangerment language from barring coverage.5
For the reasons discussed above, we reverse that portion of Superior Court‘s order requiring Mutual Benefit to defend Haver and affirm that portiоn of the order refusing to recognize a duty, on Mutual Benefit‘s behalf, to indemnify Haver for any damages assessed against him in the Mackos’ action.
Justice SAYLOR did not participate in the consideration or decision of this case.
Justice NIGRO files a Concurring Opinion in which Justice NEWMAN joins.
Justice NEWMAN files a Concurring Opinion in which Chief Justice FLAHERTY joins.
NIGRO, Justice, concurring.
I join the Majority since I fully agree that Haver‘s conduct, as allеged in the Mackos’ complaint, falls within the “knowing endangerment” exclusion contained in the insurance policy, and therefore, that Mutual Benefit has no duty to either defend or to indemnify Haver. The Mackos’ complaint essentially alleges that Haver supplied Candace Macko with dangerous and addictive drugs, without prescription, despite knowledge of her addiction and rеquests by her family and physician to stop. As the Majority
I write separately, however, to note that previous to the filing of the Mackos’ lawsuit, Haver pled guilty to federal criminal charges of “knowingly, intentionally, and unlawfully” distributing controlled substances to Candace Macko under
Justice NEWMAN joins in the concurring opinion.
NEWMAN, Justice, concurring.
I join the majority because I agree that Mutual Benefit has no duty to either defend or to indemnify Haver as the conduct at issue falls within the “knowing endangerment” exclusion contained within the policy of insurance. I further agree with the concurring opinion of Mr. Justice Nigro that Haver, having pled guilty to the federal criminal charges, cannot credibly argue that the allegations in the complaint sound in negligence.
In this statement, I write separately, however, because I believe that in analyzing this matter, we should not concentrate simply on the criminal actions of Haver and whether his conduct fits within the exclusion contained in the policy of insurance. According to the facts of this case, I believe that regardless of the averments in the complaint or the language of the policy of insurance, it is against public policy to allow insurance coverage for an illegal drug transaction. My reading of the record before us is that Ms. Mackо is a substance abuser who illegally bought a large quantity of controlled substances without a prescription from Haver for a period of approximately four years. Ms. Macko‘s conduct, as well as Haver‘s, was part of an illegal drug transaction, and is no less so because Haver was a pharmacist rather than a street corner pusher. See, e.g., Commonwealth v. Gordon, 511 Pa. 481, 515 A.2d 558, 560-61 (1986) (pharmacist engaging in illicit and clandestine drug deals for prescription drugs is like common “street pusher“). There is little difference between this case and the case of drugs on the corner, and we should not treat it differently. Id.
It is my opinion that the public policy of this Commonwealth does not allow insurance coverage for a criminal venture where one who has participated in criminal аcts by obtaining drugs illegally can recover from the other participant‘s insurance carrier simply because the result of the crime had bad or unintended results for one of the participants. I am mindful that this court should not lightly formulate judicial pronouncements of public policy. Muschany v. United States, 324 U.S. 49, 60, 65 S.Ct. 442, 89 L.Ed. 744 (1945); Guardian Life Insurance Company of America v. Zerance, 505 Pa. 345, 479 A.2d 949, 954 (1984); Mamlin v. Genoe, 340 Pa. 320, 17 A.2d 407, 409 (1941). However, in the circumstances of this case, I believe that both the legislature and the courts of this Commonwealth have uniformly held that the drug transaction that occurred here is against the public‘s health, safety, morals, and welfare. See, e.g.,
Thus, I would reverse the decision of the Superior Court because no circumstances should require an insurance carrier to provide coverage for its insured‘s criminal acts that harm a participant in a crime who is
Chief Justice FLAHERTY joins this concurring opinion.