NAUTILUS INSURANCE COMPANY v. GLOBAL STAFFING SOLUTION INC.NAUTILUS INSURANCE COMPANY v. GLOBAL STAFFING SOLUTION INC.
Younge, J. August 5, 2026
I. INTRODUCTION
Plaintiff Nautilus Insurance Company (“Nautilus“) has filed this Declaratory Judgment action against Defendants Global Staffing Solutions, Inc. (“Global“) and Gong Thach, seeking a ruling that Nautilus has neither a duty to defend nor indemnify Global and Gong Thach for claims asserted against them in a consolidated state court civil action (“Underlying Actions“) brought on behalf of an injured party and decedent representatives (“Claimants“). In the Underlying Actions, Claimants brought claims for negligence, wrongful death, and survival action against Global and Gong Thach, among others. Before the Court is Nautilus’ Motion for Summary Judgment (ECF No. 246) and Claimants’ Response in Opposition to Nautilus’ Motion for Summary Judgment (ECF No. 256) pursuant to
The following undisputed facts are material to the disposition of the present motion and shall be deemed agreed to by the extensive record. On August 12, 2020, Nautilus brought this declaratory judgment action arguing that it has neither a duty to defend nor indemnify Global Staffing Solutions, Inc. (“Global“), Gong Thach and others under the commercial general liability policy or the excess liability policy (“Nautilus Policies“) issued to Global. See (ECF No. 1.) Nautilus’ motion concerns three underlying civil actions (hereinafter “Underlying Actions“) asserted against Global, Gong Thach, and others. See Third Am. Compl. (ECF No. 201); Cynthia Brown, Administrator of the Estate of Nathan Royal v. Gong Thach, et al., Pennsylvania Court of Common Pleas, Philadelphia County, No. 200601058 (the “Brown Action“); Ordom Huot, Individually and as Administrator of the Estate of Jennifer Huot v. Herr Foods, Inc., et al., Pennsylvania Court of Common Pleas, Philadelphia County, No. 210300367 (the “Huot Action“); and Soeup Dy v. Herr Foods, Inc., et al., Pennsylvania Court of Common Pleas, Philadelphia County, No. 211000157 (the “Dy Action“).
This matter, and the Underlying Actions, arises out of a motor vehicle crash that occurred on October 16, 2019 (“Auto Accident“) that resulted in the death and/or serious bodily injury to numerous passengers in the vehicle. See (ECF No. 201); compare (ECF No. 201) with (ECF No. 238) and (ECF No. 239), and (ECF No. 240). The vehicle was a Ford Econoline E-350 passenger van (“Vehicle“) being operated by Gong Thach. See (ECF No. 201); compare (ECF No. 201) with (ECF No. 238) and (ECF No. 239), and (ECF No. 240). The passengers were Soeup Dy, Jennifer Huot (represented by Ordom Huot) and Nathan Royal (represented by Cynthia Brown) (collectively known as “Claimants“). See (ECF No. 201); compare (ECF No. 201) with (ECF No. 238) and (ECF No. 239), and (ECF No. 240). Gong Thach was transporting Claimants to the
Claimants alleged that Nautilus insured Global, and its employees, at the time of the Auto Accident under the Nautilus Policies. See (ECF No. 201); compare (ECF No. 201) with (ECF No. 238) and (ECF No. 239), and (ECF No. 240). Since Global was purportedly at fault for the deaths and serious bodily injury of Claimants, Claimants contend that Nautilus should also be held liable for Global‘s actions. See (ECF No. 201); compare (ECF No. 201) with (ECF No. 238) and (ECF No. 239), and (ECF No. 240). Nautilus, however, rejects Claimants allegations by relying on the terms of the Nautilus Policies, as outlined below. (ECF No. 246.) This case is compelling because Global is a “temporary employment agency” that had a contract to provide, for all intents and purposes, assembly-line workers for Herr and the Herr Facility, a well-known snack foods company. In fact, their products were in high demand, necessitating a production schedule that ran around the clock. The factory never closed, running on a twenty-four-hour schedule. As is common throughout the industry where workers are paid very little, “call outs” and “no shows” are frequent. To avoid production delays, Herr contracted with Global to supply temporary
On October 16, 2019, the accident occurred while Gong Thach transported the Claimants to/from the Herr Facility. Although Herr has suggested throughout this litigation that it had no responsibility for the accident, it clearly relied on Global to not only find, but also to transport these workers to the Herr Facility, many of whom were recent immigrants to this country and many of whom did not even speak English, much less understand how to get to rural Chester County, Pennsylvania at any hour of a given day.
Accordingly, Claimants brought the Underlying Actions claims before the Philadelphia Court of Common Pleas where trial commenced on October 28, 2024. See (Ex. 3, ECF No. 246.) The jury returned a verdict in favor of Claimants, finding that Global and Gong Thach were each negligent and their negligence resulted in Claimants’ harm totaling $15 million. See (Id.) Thereafter, the parties litigated post-trial motions that resulted in the Court of Common Pleas Judge Schulman granting2 Global‘s Motion Notwithstanding the Verdict on February 18, 2025. (Ex. 10, ECF No. 246.) After having defended Global and Gong Thach for years in the Underlying Actions, Nautilus filed the present action requesting this Court find that neither a duty to defend nor indemnify Global exist pursuant to the Nautilus Policies since there is no verdict or judgment against Global—its insured. See generally (ECF No. 201.) Claimants, however, appealed Judge Schulman‘s order to the Pennsylvania Superior Court.3 See (ECF No. 256.)
Turning to the Nautilus Policies, Nautilus issued two insurance policies to the named insured Global: (1) the commercial lines policy4 with a coverage period of January 8, 2019 to
The CGL Policy contained an insuring agreement stating in relevant part:
1. Insuring Agreement
a. We will pay those sums that the insured becomes legally obligated to pay as damages because of “bodily injury” or “property damage” to which this insurance applies. We will have the right and duty to defend the insured against any “suit” seeking those damages. However, we will have no duty to defend the insured against any “suit” seeking damages for “bodily injury” or “property damage” to which this insurance does not apply. We may, at our discretion, investigate any “occurrence” and settle any claim or “suit” that may result.
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(2) b. This insurance applies to “bodily injury” and “property Damage” only if:
(1) The “bodily injury” or “property damage” is caused by an “occurrence” that takes place in the “coverage territory“;
(2) The “bodily injury” or “property damage” occurs during the policy period; and
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e. Damages because of “bodily injury” include damages claimed by any person or organization for care, loss of services or death resulting at any time from the “bodily injury“.
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The policy also contains the following definitions:
“Bodily injury” is defined as bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time.
“Insured” is defined as any person or organization qualifying as such under Section II – Who is a Insured.
1. “Employee” includes a “leased worker“. “Employee” does not include a “temporary worker“.
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2. “Executive officer” means a person holding any of the officer positions created by your charter, constitution, bylaws or any other similar governing document.
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10. “Leased worker” means a person leased to you by a labor leasing firm under an agreement between you and the labor leasing firm, to perform duties related to the conduct of your business. “Leased worker” does not include a “temporary worker“.
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19. “Temporary worker” means a person who is furnished to you to substitute for a permanent “employee” on leave or to meet seasonal or short-term workload conditions.
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20. “Volunteer worker” means a person who is not your “employee“, and who donates his or her work and acts at the direction of and within the scope of duties determined by you, and is not paid a fee, salary or other compensation by you or anyone else for their work performed for you.
See (Ex. 1, ECF No. 246.)
To support Nautilus’ request for declaratory judgment in their favor, Nautilus relies on Exclusions that exist in its policy issued to Global. The Exclusions contain provisions providing that the CGL policy does not apply to:
2. Exclusions
This insurance does not apply to:
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g. Aircraft, Auto Or Watercraft
“Bodily injury” or “property damage” arising out of the ownership, maintenance, use or entrustment to others of any aircraft, “auto” or watercraft owned or operated by or rented or loaned to any insured. Use includes operation and “loading or unloading“.
This exclusion applies even if the claims against any insured allege negligence or other wrongdoing in the supervision, hiring, employment, training or monitoring of others by that insured, if the “occurrence” which caused the “bodily injury” or “property damage” involved the ownership, maintenance, use or entrustment to others of any aircraft, “auto” or watercraft that is owned or operated by or rented or loaned to any insured.
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“Auto” in relevant part, is defined as “A land motor vehicle, trailer or semitrailer designed for travel on public roads . . .” or “Any other land vehicle that is subject to a compulsory or financial responsibility law or other motor vehicle insurance law where it is licensed or principally garaged.”
The CGL Policy excludes coverage for:
e. Employer‘s Liability
“Bodily injury” to:
(1) An “employee” of the insured arising out of and in the course of:
(a) Employment by the insured; or
(b) Performing duties related to the conduct of the insured‘s business; or
(2) The spouse, child, parent, brother or sister of that “employee” as a consequence of Paragraph (1) above.
This exclusion applies whether the insured may be liable as an employer or in any other capacity and to any obligation to share damages with or repay someone else who must pay damages because of the injury.
See (Ex. 1, ECF No. 246.)
1. Insuring Agreement
a. We will pay on behalf of the “insured” the “ultimate net loss” in excess of the “underlying insurance limit” because of injury or damage caused by a “loss event” to which this insurance applies provided:
(1) The aggregate amount of all limits of “Underlying Insurance“, as shown in the Schedule of “Underlying Insurance“, has been exhausted by payment of judgments, settlements, costs or expenses; and
(2) The “loss event” occurs or is committed during the policy period.
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b. Except to the extent any terms, definitions, limits of insurance, conditions or exclusions of the “controlling underlying insurance” are different from any terms, definitions, limits of insurance, conditions or exclusions of this policy, this policy will provide the same coverage for “ultimate net loss” as provided by the “controlling underlying insurance“. If any terms, definitions, limits of insurance, conditions or exclusions of this policy are more restrictive than those of the “controlling underlying insurance“, then this policy‘s terms, definitions, limits of insurance, conditions or exclusions will apply. However, under no circumstance will this policy provide broader coverage than that provided by the “underlying insurance“.
See (Ex. 2, ECF No. 246.)
Also, the policy contains provisions regarding defending claims against the insured, specifying that:
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
EXCLUSION – ALL AUTOS
This endorsement modifies the insurance provided under the following:
EXCESS LIABILITY POLICY
This insurance does not apply to any injury or damage, costs or expenses arising out of, resulting from, caused or contributed to by the ownership, maintenance, use, loading or unloading or entrustment to others of any auto.
EXCLUSION – EMPLOYER‘S LIABILITY
This endorsement modifies the insurance provided under the following:
EXCESS LIABILITY POLICY
This insurance does not apply to injury, costs or expenses arising out of, resulting from, caused or contributed to by injury to:
1. An “employee” of the “insured” arising out of and in the course of:
a. Employment by the “insured“; or
b. Performing duties related to the conduct of the “insured‘s” business; or
2. The spouse, child, parent, brother or sister of that “employee“; or any other person; as a consequence of Paragraph 1. above.
This exclusion applies whether the “insured” may be liable as an employer or in any other capacity, and to any obligation to share damages with or repay someone else who must pay damages because of the injury.
To the extent coverage is provided by “underlying insurance” for liability assumed by the “insured” under an insured contract this exclusion does not apply to any liability assumed by an “insured“.
As used in this exclusion, “employee” includes a leased worker.
See (Ex. 2, ECF No. 246.)
Notably, Global and Gong Thach have not disputed and/or answered Nautilus’ Third Amended Complaint, and defaults6 have been entered against them for failure to plead or otherwise defend. See generally Dkt. No. 2:20-cv-3937 (6/12/2025). Nautilus’ defense of Global in the Underlying Actions has been subject to a full reservation of rights, which includes a right to not defend and indemnify Global and withdraw from its defense. See (ECF No. 201); compare (ECF No. 201) with (ECF No. 238) and (ECF No. 239), and (ECF No. 240).
III. LEGAL STANDARD
Summary judgment is appropriate if the movant shows “that there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law.”
The movant bears the initial burden of demonstrating the absence of a genuine dispute of a material fact. Goldenstein v. Repossessors Inc., 815 F.3d 142, 146 (3d Cir. 2016). When the movant is the defendant, they have the burden of demonstrating that the plaintiff “has failed to establish one or more essential elements of h[is] case.” Burton v. Teleflex Inc., 707 F.3d 417, 425 (3d Cir. 2013). If the movant sustains their initial burden, “the burden shifts to the nonmoving party to go beyond the pleadings and come forward with specific facts showing that there is a genuine issue for trial.” Santini v. Fuentes, 795 F.3d 410, 416 (3d Cir. 2015) (internal quotations omitted) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)).
IV. DISCUSSION
Pursuant to the Declaratory Judgement Act,
A. Contractual Interpretation Principles
As a preliminary matter, the court must “look to the language of the policies themselves to determine in which instances they will provide coverage.” Kvaerner Metals Div. of Kvaerner U.S., Inc. v. Com. Union Ins. Co., 908 A.2d 888, 896 (Pa. 2006). This Court is tasked with interpreting the parties’ intent as manifested by the insurance policy terms. Madison Construction Co. v. Harleysville Mutual Ins. Co., 557 Pa. 595, 735 A.2d 100, 106 (1999) (citations omitted). “When the language of the policy is clear and unambiguous, [the] court is required to give effect to that
Based on the above-stated principles of contractual interpretation, the Court‘s inquiry is tailored to the agreed-upon terms of the insurance policy. Pennsylvania courts have long-reasoned that the four-corners rule applies to insurance contract disputes when determining an insurer‘s duty to defend and indemnify. See Kvaerner, 908 A.2d at 896. An insurer‘s “duty to defend is triggered, if at all, by the factual averments contained in the complaint itself.” Id. Thus, “[u]nder Pennsylvania law, an insurance company is obligated to defend an insured whenever the complaint filed by the injured party may potentially come within the policy‘s coverage.” Pac. Indem. Co. v. Linn, 766 F.2d 754, 760 (3d Cir. 1985). “Exclusions from coverage contained in an insurance policy will be effective against an insured if they are clearly worded and conspicuously displayed, irrespective of whether the insured read the limitations or understood their import.” Id. at 761 (citing Standard Venetian Blind Co. v. American Empire Insurance Co., 503 Pa. 300, 307 (1983)). And so, this Court will unequivocally apply the four-corners rule here.
B. Language of Nautilus Policies
With these principles in mind, the Court turns to the language of the Nautilus Policies. Nautilus issued to Global a CGL Policy and an Excess Policy. See (ECF No. 201); compare (ECF No. 201) with (ECF No. 238) and (ECF No. 239), and (ECF No. 240). Nautilus, pursuant to the Nautilus Policies’ Insuring Agreement, agreed to pay the sums that Global “becomes legally obligated to pay as damages because of ‘bodily injury’ or ‘property damage’ to which t[he]
Under the CGL Auto Exclusion, Nautilus will not provide coverage to its insured when “‘bodily injury’ arising out of the ownership, maintenance, use or entrustment to others of any ... ‘auto’ ... operated by ... any insured.” See (Ex. 1, ECF No. 246.) The Excess Auto Exclusion provides that the excess coverage “does not apply to any injury or damage ... arising out of, resulting from, caused or contributed to by the ... use... of any auto.” See (Ex. 2, ECF No. 246.) Notably, the Excess Policy does not provide coverage broader than that provided by the CGL Policy. These policy terms are unambiguous.
Assessing relevant precedent interpreting the operative policy term—“arising out of,” the Court finds that such term/phrase, in the context of insurance contracts, are well-settled. In Pennsylvania, a policy provision containing the phrase “arising out of” has an unambiguous meaning and is “satisfied by ‘[b]ut for’ causation, i.e., a cause and result relationship.” Mfrs. Cas. Ins. Co. v. Goodville Mut. Cas. Co., 403 Pa. 603, 170 A.2d 571, 573 (1961). It, therefore, follows that the phrase “arising out of,” in the context of an insurance exclusion, too, has an unambiguous meaning: “causally connected with, not proximately caused by.” Gen. Refractories Co. v. First State Ins. Co., 855 F.3d 152, 159 (3d Cir. 2017).
Comparing the terms of the Nautilus Policies to the allegations in the Underlying Complaint, this Court finds that the undisputed facts from the Underlying Complaint, including those from the October 2024 trial do not trigger the policies’ provisions of coverage. It is undisputed that Nautilus issued insurance coverage to Global, Gong Thach was employed by
C. Nautilus’ Duty to Defend and Indemnify
Under Pennsylvania law, Nautilus will be obligated to defend and indemnify Global in a suit brought by Claimants if it is determined that Claimants’ Underlying Complaint triggers provisions of coverage. See Kvaerner, 908 A.2d at 896. The question before the Court is whether the allegations in the Underlying Complaint triggered coverage under the Nautilus Policies issued to Global. Unfortunately for the Claimants, the answer is No.
i. Duty to Defend
Nautilus did not have a duty to defend Global when it received Claimants’ Underlying Complaint. Claimants brought claims for negligence, wrongful death, and survival action. See (Ex. D, ECF No. 201.) Claimants allege in the Underlying Complaint, in relevant part, that (1) Global
ii. Duty to Indemnify
Having found that the Underlying Complaint does not trigger coverage for Nautilus to defend Global, the Court must consider Nautilus’ obligation to indemnify Global. “Because an insurer‘s duty to defend its insured in a lawsuit is broader than its duty to indemnify, it necessarily follows that it will not have a duty to indemnify an insured for a judgment in an action for which it was not required to provide defense.” Ramara, Inc. v. Westfield Ins. Co., 814 F.3d 660, 673 (3d Cir. 2016); see also Sapa, 939 F.3d at 250. Though related obligations, the two duties are distinct. For example, the duty to indemnify does not materialize until the insurer is required to provide a defense. Although Global‘s liability is being considered by the Pennsylvania Superior Court following Judge Schulman‘s Judgment Notwithstanding the Verdict, Nautilus does not have a duty
D. Claimants’ Counterclaims
i. Breach of Contract and Third-Party Beneficiary Claims
Claimants contend that a breach of contract claim is viable against Nautilus because they are third-party beneficiaries of the Nautilus Policies issued to Global. However, Claimants’ attempt to attribute Global‘s and Gong Thach‘s liability to Nautilus is misplaced. “It is well-settled that under Pennsylvania law, an injured party has no right to directly sue the insurer of an alleged tortfeasor unless a provision of the policy or a statute create[s] such a right.” Apalucci v. Agora Syndicate, Inc., 145 F.3d 630, 632 (3d Cir. 1998). There is no provision of the Nautilus Policies or Pennsylvania law that gives Claimants the right to directly sue Nautilus for Global‘s breach of the Nautilus Policies.
Claimants fail to show that they are intended third-party beneficiaries under the Nautilus Policies. In review of the Underlying Complaint, Claimants fail to direct the Court as to where this right is expressly established in the Nautilus Policies that establishes an injured party could assert a third-party right against Nautilus. See Strutz v. State Farm Mut. Ins. Co., 415 Pa. Super. 371, 374 (1992) (“To be considered a third-party beneficiary in this state it is necessary to show both parties to the contract had an intent to benefit the third party through the contract and did, in fact, explicitly indicate this intent in the contract. We find no such intent in [the tortfeasor‘s] contract of insurance with [the insurer], either explicit or implied. The parties’ intent was to exchange premiums for
ii. Negligence Claim
Claimants further contend that Nautilus’ conduct was negligent. To assert a viable claim of negligence, Claimants must show that: (1) Nautilus owed Claimants a duty of care or obligation recognized by law; (2) Nautilus breached that duty; (3) a causal connection existed between Nautilus’ conduct and the resulting injury; and (4) actual damages occurred. Grove v. Port Auth., 655 Pa. 535, 554 (2019). Here, because Pennsylvania does not recognize a duty owed by Nautilus to Claimants, the Court considers what, if any, duty under tort law is owed by Nautilus to Claimants. There are none. Relying on the plain language of the Nautilus Policies, the duties and obligations owed by Nautilus to Global were expressly identified in the insurance policy. Claimants are not parties to the contract entered into by Nautilus and Global, and, as stated above, are not third-party beneficiaries to said contract. Notably, Claimants fail to identify a duty imposed
iii. Unjust Enrichment Claim
To establish a claim for unjust enrichment, Claimants must show: “(1) benefits conferred on [Nautilus by Claimants], (2) appreciation of such benefits by [Nautilus], and (3) acceptance and retention of such benefits under such circumstances that it would be inequitable for [Nautilus] to retain the benefit without payment of value.” Argue v. Triton Digital Inc., 734 F. App‘x 148, 151 (3d Cir. 2018) (quoting Mark Hershey Farms, Inc. v. Robinson, 171 A.3d 810, 817 (Pa. Super. 2017)). “To sustain a claim of unjust enrichment, a claimant must show that the party against whom recovery is sought either wrongfully secured or passively received a benefit that it would be unconscionable for [them] to retain.” Sovereign Bank v. BJ‘s Wholesale Club, Inc., 533 F.3d 162, 180 (3d Cir. 2008) (citing Torchia v. Torchia, 346 Pa. Super. 229, 499 A.2d 581, 582 (1985)). The Third Circuit has also made clear that such a claim requires more than a showing that a defendant may have benefited in some way from the alleged dispute. Id. (citations omitted).
Pennsylvania courts have long held “that the doctrine of unjust enrichment is inapplicable when the relationship between parties is founded upon a written agreement or express contract, regardless of how ‘harsh the provisions of such contracts may seem in the light of subsequent happenings.‘” Wilson Area Sch. Dist. v. Skepton, 586 Pa. 513, 520 (2006) (citations omitted). Unjust enrichment “imposes a duty, not as a result of any agreement, ... but in spite of the absence of an agreement, when one party receives unjust enrichment at the expense of another.” Lackner v. Glosser, 892 A.2d 21, 34 (Pa. Super. 2006) (citation and internal quotations omitted).
Here, Claimants allege that Nautilus unjustly enriched itself by issuing a policy that did not cover a specific, known risk, then retained the premiums paid by Global for policy coverage at the
Nautilus and Global entered into an arms-length agreement whereby Nautilus agreed to provide commercial general liability and excess liability coverage to Global in strict accordance with the Nautilus Policies’ terms. With Claimants alleging negligence and wrongful death arising out of the use and operation of Global‘s Vehicle and such conduct being in direct conflict with said policies, the Court finds that there is no genuine dispute of material fact and Nautilus is entitled to judgment as a matter of law.
Accordingly, the Court now finds that pursuant to the Declaratory Judgment Act,
V. CONCLUSION
For the reasons stated above, Nautilus’ Motion for Summary Judgment is GRANTED.
An appropriate Order follows.
BY THE COURT:
/s/ John Milton Younge
JOHN M. YOUNGE, J.