MEMORANDUM
Currently pending before the Court is the Motion for Summary Judgment of Plaintiff Westfield Insurance Company. For the following reasons, the Motion is granted and judgment is entered in favor of Plaintiff on the entirety of its Complaint.
I. FACTUAL AND PROCEDURAL BACKGROUND
A. The Policies
This case arises out of a series of insurance policies between Plaintiff Westfield Insurance Company (“Westfield”) and Defendants Bellevue Holding Company, BHC Builders, Inc., BHC Venture, Inc., and BHC Developers LP (collectively “BHC” or “Defendants”). From February 28, 2004 through February 28, 2010, Westfield issued to Bellevue Holding Company six multi-part commercial policies, each possessing a commercial general Lability (“CGL”) coverage part and a commercial umbrella coverage part. These policies (the ‘Westfield Policies” or “Policies”) include: CWP 8 263 070 (2/28/04-2/28/05) (WP 0001-35); CWP 8 263 070 (2/28/05-2/28/06) (WP 00036-70); CWP 8 263 070 (2/28/06-2/28/07) (WP 00071-105); CWP 8 263 070 (2/28/07-2/28/08) (WP 00106-140); CWP 8 263 070 (2/28/08-2/28/09) (WP 00142-275); and CWP 8 263 070 (2/28/09-2/28/10) (WP 00176-211). (Pl.’s Mot. Summ. J., Ex. B.) The following entities are Named Insureds under the Westfield Policies: Bellevue Holding Company, Bellevue Contractors, LLC, Bellevue Realty Company, BHC Developers, LP, BHC Venture, and BHC Builders, Inc. (Id.)
The Insuring Agreement Portion of the qql coverage part in each Policy states as follows:
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.
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.
(Id. CGL Part § l(l)(a-b).) The Westfield Policies go on to define “occurrence” as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” (Id. CGL Part § V(13).) In addition, they specifically exclude “‘[bjodily injury’ or ‘property damage’ for which the insured is obligated to pay damages by reason of the assump
The Insuring Agreement for the commercial umbrella coverage part in each Policy provides, in pertinent part, as follows:
1. Insuring Agreement
a. We will pay “ultimate net loss” in excess of the “retained limit” that the insured becomes legally obligated to pay as damages because of “personal 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 “personal 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.
b. This insurance applies only if the “personal injury” or “property damage” occurs during the policy period and is caused by an “occurrence”
(Id. Umbrella Part § I(l)(a-b).) The definition of “occurrence” is identical to that in the CGL coverage part. (Id. Umbrella Part § V(16)(a).)
B. The Underlying Actions
The BHC Defendants, as property developers, built a residential community of new homes in Avondale, Pennsylvania. As a result of this construction, eight actions were commenced against BHC in the Pennsylvania Court of Common Pleas, Chester County, each alleging damage to the individual property (the “Property”). These actions include: Barto v. BHC Builders, Inc., No. 09-8287 (the “Barto Action”); Crowley v. BHC Builders, Inc., No. 11-11385 (the “Crowley Action”); Eberle v. BHC Venture, Inc., No. 09-13241 (the “Eberle Action”); Ench v. BHC Builders, Inc., No. 09-08288 (the “Ench Action”); Epstein v. BHC Builders, Inc., No. 09-08286 (the “Epstein Action”); Francois v. BHC Builders, Inc., No. 09-05168 (the “Francois Action”); McCullough v. BHC Builders, Inc., No. 11-12325 (the “McCullough Action”); and Travers v. BHC Builders, Inc., No. 09-05169 (the “Travers Action”) (collectively the “Underlying Actions” or “Actions”). (Pi’s Mot. Summ. J., Ex. A, Tabs 1-8.) Because the nature of these Underlying Actions governs the coverage decision in this case, the Court individually summarizes each of them.
1. The Barto Action
The Barto Action alleges that, in June 2008, the plaintiffs purchased their home in Avondale, Pennsylvania from the original owners of the Property. (Pl.’s Mot. Summ. J., Ex. A, Tab 1 (“Barto Compl.”), ¶ 9.) Upon hearing about potential problems in their community, the plaintiffs hired an expert to perform an invasive, external forensic review of their home. (Id. ¶ 17.) At that time, they were made aware of extensive hidden construction problems with their home, including defective stucco wall system, defective windows, and resultant damage. (Id.) The plaintiffs allege that the problems with their home were related to BHC’s failure to construct the home in a workmanlike manner, failure to disclose hidden defects known to BHC, false marketing of a home to the public which was not fit for habitation, refusal to honor express and/or implied warranties, refusal to take plaintiffs’ concerns serious
2. The Crowley Action
The Crowley Action is virtually identical to the Barbo Action. The Complaint in Crowley alleges that the plaintiffs moved into their home in 2002, having purchased it directly from BHC, and, in January 2010, contacted BHC about water damage issues with the Property. (Pl.’s Mot. Summ. J., Ex. A, Tab 2 (“Crowley Compl.”) ¶¶ 15-17.) BHC, however, failed to make workmanlike repairs, which resulted in further damage. (Id. H 19.) On January 21, 2010, the plaintiffs hired an expert who first made them aware of the extensive hidden construction problems with their home. (Id. ¶ 19.) BHC, however, allegedly failed to respond to the plaintiffs’ complaints other than to accuse them of causing the damage themselves. (Id. ¶ 21.) The plaintiffs allege that the problems with their Property were related to BHC’s failure to construct the home in a workmanlike manner, failure to disclose hidden defects known to BHC, false marketing of a home not fit for habitation, refusal to honor all warranties (including express and/or implied warranties) failure to construct a home in a non-negligent manner, and failure to construct a home in accordance with accepted industry standards. (Id. ¶ 23.) The complaint contains eight causes of action: (1) negligence; (2) breach of warranty; (3) breach of express warranty; (4) negligent misrepresentation; (5) fraud/intentional misrepresentation; (6) punitive damages; (7) violation of unfair trade practices and consumer protection law; and (8) product liability. (Id. ¶¶ 24-71.)
3. The Eberle Action
The Eberle Action also involves a suit by the purchasers of a BHC-constructed home in Avondale, Pennsylvania. (Pl.’s Mot. Summ. J., Ex. A, Tab 3 (“Eberle Compl.”) ¶ 30.) In that case, the plaintiffs became aware, in November 2008, of significant building and structural defects to other stucco homes in their neighborhood. (Id. ¶ 36.) Subsequently, they had an inspection of the Property performed to determine whether their Property had any water/mold/stucco or other structural damage. (Id. ¶ 37.) That inspection revealed substantial damage, for which they received remediation quotes in the range from $71,729.50 to $127,992.41. (Id. ¶¶ 40-41.) The plaintiffs sued multiple entities involved with the construction of their home. With respect to BHC, the plaintiffs alleged negligence for failure to follow pertinent codes, failure to ensure that its subcontractors followed pertinent codes, and failure to timely notify the Township of certain phases of construction to allow it to perform regular inspections. (Id. ¶¶ 43-62.) The complaint also alleged breach of contract (unworkmanlike performance) due to its construction of the Property in a “poor, improper, and unworkmanlike manner” and its failure to cure its breaches. (Id. ¶¶ 70-77.) Finally, plaintiffs claimed breach of express and implied warranties, based on the One Year Warranty and Ten Year Warranty covering various aspects of the Property. (Id. ¶¶ 78-86.)
4. The Ench Action
The plaintiffs in the Ench Action purchased their Property in January 1999 from Defendants. (Pl.’s Mot. Summ. J., Ex. A, Tab 4 (“Ench Compl.”) ¶ 9.) In
5. The Epstein Action
In the Epstein Action, the plaintiffs purchased the Property in March of 2007, unaware of any defects in the home. (Pi’s Mot. Summ. J., Ex. A, Tab 5 (“Epstein Compl.”) ¶ 9.) As in the other actions, BHC was the builder of the property and had indicated to the original buyers that it was “fit for habitation, built with good workmanship, and free from defects.” (Id. ¶ 10.) In April 2009, the plaintiffs first discovered water stains in their family room and a “soft spot” on the floor of the laundry room. (Id. ¶ 15.) After making inquiries in the neighborhood, they learned that many homes in the community were experiencing serious water penetration issues within their homes. (Id.) In May 2009, the plaintiffs hired an expert who performed a forensic review of their home and discovered extensive hidden construction problems. (Id. ¶ 17.) The plaintiffs allege that the problems were related to the failure of BHC to construct the home in a workmanlike manner, failure to disclose hidden defects, causing of the plaintiffs to rely on the defendants, false marketing of a home not fit for habitation, refusal to honor implied and/or express warranties, failure to construct a home in a non-negligent manner, and failure to construct a home in accordance with industry standards. (Id. ¶ 20.) Like many of the aforementioned complaints, the Epstein complaint sets forth the following causes of action: (1) negligence; (2) breach of warranty; (3) breach of express warranty; (4) negligent misrepresentation; (5) fraudulent misrepresentation; (6) punitive damages; (7) violation of unfair trade practices and consumer protection law; and (8) product liability. (Id. ¶¶ 21-68.)
6. The Francois Action
The Francois Action bears striking similarity to the Epstein Action. In that case, the plaintiffs purchased their Property
7. The McCullough Action
The plaintiffs in the McCullough Action purchased their home from the previous owners on December 17, 2006, and were under the belief that the Property was, in all respects, fit for habitation, built with good workmanship, and free from defects. (PL’s Mot. Summ. J., Ex. A, Tab 7 (“McCullough Compl.”), ¶¶ 11, 13.) Over the course of time, the plaintiffs saw signs of water penetration problems on their home — a problem experienced by several neighboring homes in the community. (Id. ¶ 18.) They hired an expert in December 2009, who confirmed that there were water penetration issues and extensive hidden construction problems with their home, including a defective stucco wall system, defective windows, and resultant damage. (Id. ¶ 19.) The plaintiffs claim that these problems resulted from BHC’s failure to construct the home in a workmanlike manner, failure to disclose hidden defects, false marketing of a home not fit for habitation, refusal to honor all warranties, failure to construct the home in a non-negligent manner, and failure to construct the home in accordance with accepted industry standards. (Id. ¶ 21.) The McCullough Complaint also has eight causes of action: (1) negligence; (2) breach of warranty; (3) breach of express warranty; (4) negligent misrepresentation; (5) fraud/intentional misrepresentation; (6) punitive damages; (7) violation of unfair trade practices and consumer protection law; and (8) product liability. (Id. ¶¶ 22-69.)
8. The Travers Action
Finally, in the Travers Action, the plaintiffs purchased the Property from the original owners in April 2001, under the belief that the Property was fit for habitation, built with good workmanship, and free from defects. (PL’s Mot. Summ. J., Ex. A, Tab 8 (“Travers Compl.”), ¶¶ 10-12.) In 2002, the plaintiffs contacted BHC about water damage issues, and BHC, through its selected roofer, made inadequate repairs. (Id. ¶¶ 17-18.) Over the course of time, however, the plaintiffs lodged repeated requests related to the minor surface leakage of water into the home, but were not aware of the massive hidden damage occurring between the exterior stucco wall system and the external drywall. (Id. ¶ 19.) Ultimately, in March
C. The Initiation of the Present Litigation
Following BHC’s demands for defense and indemnification from Westfield under the Policies, Plaintiff Westfield initiated the present action on July 28, 2010. In its Complaint, it indicated that it had been providing a defense to BHC in the Underlying Actions subject to a reservation of rights in which Westfield reserved all rights to deny coverage for the Underlying Actions. (Compl. ¶ 53.) By virtue of the federal litigation, it now seeks a declaration from this Court that it has no duty to either defend or indemnify the Defendants in the Underlying Actions. (Id. ¶¶ 59-65.) Plaintiff moved for summary judgment on its Complaint in December 2011, and the parties continued to brief the Motion through January 26, 2012. Having considered the record and legal arguments presented by the parties, the Court now turns to the merits of the Motion.
II. STANDARD OF REVIEW
Summary judgment is proper “if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c)(2). A factual dispute is “material” only if it might affect the outcome of the case. Anderson v. Liberty Lobby, Inc.,
On summary judgment, the moving party has the initial burden of identifying evidence that it believes shows an absence of a genuine issue of material fact. Conoshenti v. Pub. Serv. Elec. & Gas Co.,
Although the moving party must establish an absence of a genuine issue of material fact, it need not “support its motion with affidavits or other similar materials negating the opponent’s claim.” Celotex Corp. v. Catrett,
III. DISCUSSION
Plaintiffs Motion is premised on the notion that, under the language of the West-field Policies, it has no obligation to either defend or indemnify. Because these legal duties have differing standards, the Court discusses each individually.
A. Duty to Defend
“Pennsylvania’s courts
Under these standards, a court must engage in two separate steps to determine whether Westfield has a duty to defend BHC in the Underlying Actions: (1) interpretation of the language of the Westfield Policies; and (2) analysis of whether the complaints in the Underlying Actions potentially fall within the bounds of coverage of the Policies. The Court takes each step individually.
1. Interpretation of the Insurance Policies
The interpretation of an insurance policy is a question of law. 401 Fourth Street v. Investors Ins. Group,
As set forth above, the Westfield Policies define “occurrence” as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” (PL’s Mot. Summ. J., Ex. B, CGL Part § V(13); Umbrella Part § V(16)(a).) The Supreme Court of Pennsylvania, in the case of Kvaerner Metals Div. of Kvaerner U.S., Inc. v. Commercial Union Ins.,
We hold that the definition of “accident” required to establish an “occurrence” under the policies cannot be satisfied by claims based upon faulty workmanship. Such claims simply do not present the degree of fortuity contemplated by the ordinary definition of “accident” or its common judicial construction in this context. To hold otherwise would be to convert a policy for insurance into a performance bond. We are unwilling to do so, especially since such protections are already readily available for the protection of contractors.
Id. at 899 (internal footnotes omitted). Likewise, the court rejected the argument
The Superior Court of Pennsylvania reached a similar conclusion in a case factually analogous to the one at bar. In Millers Capital Ins. Co. v. Gambone Bros. Dev. Co.,
The United States Court of Appeals for the Third Circuit has likewise adopted these principles as established Pennsylvania law. In Nationwide Mut. Ins. Co. v. CPB Int’l,
Finally, in Specialty Surfaces Int’l, Inc. v. Cont’l Cas. Co.,
Numerous district court cases have similarly adopted Kvaerner’s definition of “occurrence” to exclude faulty workmanship, even when cast as a negligence claim. See, e.g., Bomgardner v. State Farm Fire & Cas., No. Civ.A. 10-1287,
In light of the controlling jurisprudence from the Pennsylvania Supreme Court and the Third Circuit, together with the wealth of case law hailing from lower state and federal courts, this Court interprets the term “occurrence” in the Westfield Policies to exclude contractual claims for faulty workmanship. In addition, the Court finds that negligence claims based on and alleging foreseeable damages from faulty workmanship likewise fall outside the ambit of the Policies.
2. Whether the Underlying Actions Fall Within the Bounds of Coverage
“Once the policy’s coverage has been determined, the court must examine the underlying complaint to ascertain whether its factual allegations trigger coverage.” Bituminous Cas. Corp.,
As set forth above, Pennsylvania law holds that a general liability policy protects against “essentially accidental injury,” and not merely contract disputes. Nationwide Mut. Ins.,
Notably, in the context of faulty workmanship cases, there is “substantial case law in Pennsylvania and the Third Circuit stating that breach of contract, breach of warranty, and even negligence claims do not give rise to an ‘occurrence’ when it means ‘accident’ as it does here.” L.R. Costanzo Co. Inc. v. Am. Fire & Cas. Ins. Co., No. Civ.A. 10-774,
Along these same lines is the case of Bomgardner v. State Farm Fire and Cas., No. Civ.A. 10-1287,
Although [the insured] asserts that his claim is not one for faulty workmanship because the blame lay with [the concrete manufacturer], this argument is unavailing. Assuming, as we must, that the fault was entirely [the manufacturer’s], the underlying claim is nonetheless one based on improper workmanship. That [the manufacturer] was responsible for the defective concrete does not convert the claim into one based on an “accident.”
Id. at *4. Accordingly, the court granted the insurer’s motion to dismiss.
As a final example, Meridian Mut. Ins. Co. v. James Gilligan Builders, No. Civ.A. 08-1995,
On the opposite end of the spectrum, however, is a series of cases where claims of negligence in the context of faulty workmanship have been deemed to potentially rise to the level of an occurrence. Nonetheless, these eases have noticeable distinctions. For example, in Schuylkill Stone Corp. v. State Auto. Mut. Ins. Co.,
The plaintiffs did not contract with [the insured] for a specific product and installation procedure, and then allege that [the insured’s] failure to follow those specifications resulted in the foreseeable consequence of water infiltration. Instead, the [underlying plaintiffs] claim that they were subjected to [the insured’s] negligent work performance and negligently manufactured products in violation of industry standards. Such negligence, as opposed to contractual breaches or intentional conduct, is the definition of ‘accident’
Id. at 158. Moreover, the court noted that “[t]o further support the fortuitous nature of the [underlying] plaintiffs’ claims are them claims for not only property damage as a result of [the insured’s] negligence, but also for their personal injuries” due to their exposure to mold and mildew.”
Likewise, in Nat’l Fire Ins. Co. of Hartford v. Robinson Fans Holdings, Inc., a dispute arose out of the alleged failure of three industrial fans that the insured allegedly designed, manufactured, and sold to Archer-Daniel-Midlands Co. (“ADM”).
Here, the underlying complaint states a claim entitled, “negligence in design.” In so doing, it avers that the insured “agreed to provide” equipment that conformed with ADM’s performance specifications; “designed” the equipment, at some unspecified point in the case chronology; and “selected materials for and manufactured the equipment.” Further, the complaint states that the “negligence” and “design defects” caused “catastrophic failure” of the equipment. The complaint lacks any factual allegation that the insured undertook to design the equipment pursuant to mutual consensus or agreement, or instead, for example, supplied a fan designed long before Robinson and ADM contracted.... Therefore, there is no basis for decisively concluding either that the complaint alleges failure to exercise care in duties imposed by contract, or those imposed extra-contractually by law. One possibility is equally as likely as the other.
Id. at *5 (emphasis added). Ultimately, the court held that “[although it may ultimately prove otherwise, the four corners of the complaint — to which the relevant inquiry is bound — potentially point to a breach of duty imposed by law via social policy, and independent of the contract, which caused the catastrophic failure, I cannot rule out the possibility that something other than faulty workmanship is blamed for the equipment failure.” Id. (footnote omitted).
Faced with this plethora of jurisprudence, this Court is now left with the formidable task of examining the complaints in the Underlying Actions to deter
Defendants, however, argue that damages resulting from alleged negligence, breach of implied warranty, and negligent misrepresentation “arguably constitute damages caused by an ‘occurrence’, as defined by the policies at issue, as thus defense of such claims are covered.” (Defs.’ Resp. Opp’n Mot. Summ. J. 6.) In other words, Defendants assert that these allegations are necessarily “extra-contractual” in that they go to BHC’s negligence in concealing the full extent of the leaking problems long after construction, in failing to test products posUconstruction, in failing to properly advise the local municipality of certain events, and in making its subcontractor employment decisions. “Thus, on their face, each underlying complaint — at least potentially — avers an ‘occurrence.’ ” (Id. (emphasis in original).)
Upon independent review of the allegations of the Underlying Actions, however, the Court must disagree with Defendants and find that this ease is more akin to Specialty Surfaces, Bomgardner, and Meridian Mutual. First and foremost, each of the Underlying Actions has an explicit basis in contract. Each complaint specifically alleges that the defective nature of the work at the properties, together with the resultant water damage, are covered by an express warranty prepared by the Defendants. (Barto Compl. ¶ 35; Crowley Compl. ¶ 38; Eberle Compl. ¶¶ 71, 74, 79-81; Ench Compl. ¶ 45; Epstein Compl. ¶ 35; Francois Compl. ¶ 39; McCullough Compl. ¶ 36; Travers Compl. ¶ 39.) Undoubtedly, any claims arising out of this contractual duty cannot, pursuant to well-established Pennsylvania law, constitute “occurrences” for purposes of coverage under the Westfield Policies.
The more difficult inquiry is whether the negligence, breach of implied warranty, and negligent misrepresentation claims potentially aver an “occurrence” under the policy. Considering the factual allegations of the Underlying Actions, it is unquestionable that “[w]ithout an agreement, the work would not have been performed and thus the damages would not have occurred.” Transp. Ins. Co. v. C.F. Bordo, Inc., No. Civ.A. 06-2386,
In a last-ditch attempt to sidestep this finding, Defendants argue that the Travers, Epstein, Barto, and McCullough Actions involve parties who are not the original purchasers of the homes manufactured by BHC. Thus, in these instances, Defendants argue that there is no direct contract between the underlying plaintiffs and BHC, creating more than the mere potential that the alleged tort claims are actually based in tort rather than contract. (Defs.’ Resp. Opp’n Mot. Summ. J. 15.) This Court, however, must disagree on several grounds. As a primary matter, it is not the existence of the contract per se that causes the claims at issue to not be “occurrences,” but rather the fact that they all stem from faulty workmanship and allege damages solely to the work product of the insured. See Meridian Mut.,
Count I alleges that plaintiffs’ predecessors in interest entered into a contract with defendant BHC Venture, Inc. for the sale of a new home and that plaintiffs themselves had direct contact with defendants regarding repair work. Plaintiffs further allege that defendants failed, inter alia, to construct the home in a workmanlike manner. These claims arise, if at all, pursuant to contract. Plaintiffs’ rights arise by virtue of their acquisition of the property from their predecessors in title and their rights can rise no higher than those predecessors who[ ] could not breach of contract claims fashioned as tort claims.
(Pl.’s Reply Br., Ex. J (emphasis added).) The judge followed the same course in the Barto complaint, {id., Ex. K), and would presumably do so in Epstein and McCullough given the identical nature of the causes of actions.
In sum, the Court finds that all of the Underlying Actions are based entirely on claims of faulty workmanship. Under well-established Pennsylvania law, claims of and damage resulting from faulty workmanship do not have a sufficient degree of fortuity contemplated by the ordinary definition or common judicial construction of the term “accident.” Because the West-field Policies define the term “occurrence” as an “accident” and because the Policies require an “occurrence” to trigger coverage, nothing in the Underlying Actions potentially comes within the insurance coverage. Accordingly, the Court finds that Plaintiff has no duty to defend Defendants in the Underlying Action. In turn, Plaintiffs Motion for Summary Judgment on its defense count is granted.
B. Duty to Indemnify
Under Pennsylvania law, “[a]n insurer is required to indemnify only where the insured is held liable for a claim actually covered by the policy.” USX Corp. v. Adriatic Ins. Co.,
In the present matter, the Court has already found that Westfield has no duty to defend BHC in the Underlying Actions. In turn, Westfield can have no duty to indemnify BHC under the Westfield Policies. Accordingly, Westfield is entitled to a declaratory judgment on its indemnification count as well.
For all of the foregoing reasons, the Court must find in favor of Plaintiff and against Defendants on the entirety of the Complaint. Primarily, no potential exists that the Underlying Actions could fall within the ambit of the Westfield Policies. In turn, Plaintiff has no duty to defend Defendant in such Actions. Without such a duty to defend, the Court must find that Plaintiff could not be held liable for any claim actually covered by the Westfield Policies. Therefore, summary judgment is entered in favor of Plaintiff and against Defendant, a Declaratory Judgment shall be entered on Plaintiffs behalf, and this case shall be closed.
ORDER
AND NOW, this 23rd day of February, 2012, upon consideration of Plaintiff West-field Insurance Company’s Motion for Summary Judgment (Docket No. 19), the Response of Defendants Bellevue Holding Company, BHC Builders, Inc., BHC Venture, Inc., and BHC Developers LP (Docket No. 20), Plaintiffs Motion for Leave to File a Reply Brief (Docket No. 21), and Defendants’ Response in Opposition to Plaintiffs Motion for Leave to File a Reply Brief (Docket No. 22), it is hereby ORDERED as follows:
1. Plaintiffs Motion for Leave to File a Reply Brief (Docket No. 21) is GRANTED and the proposed Reply Brief attached to that Motion shall be deemed filed as of the date of that Motion;
2. Plaintiffs Motion for Summary Judgment is GRANTED in its entirety;
3. DECLARATORY JUDGMENT IS ENTERED in favor of Plaintiff and against Defendants on the entirety of the Complaint.
This case is CLOSED.
Notes
. The parties dispute the appropriate choice of law. Plaintiff contends that, despite the fact that all of the BHC entities are based in Delaware and that the policies at issue were purchased in Delaware, Pennsylvania law clearly applies because no "true conflict” of law exists. See Specialty Surfaces Int’l, Inc. v. Cont'l Cos. Co.,
. Although, not expressly raised by Defendants, the Court acknowledges that each of the underlying complaints makes a cursory reference to Defendants’ failure to comply with industry standards. (Barto Compl. ¶ 20(g); Crowley Compl. ¶ 23(f); Eberle Compl. ¶ 30; Ench Compl. ¶ 29(g); Epstein Compl. 120(f); Francois Compl. ¶ 23(g); McCullough Compl. ¶ 21(f); Travers Compl. ¶ 24(f).) These allegations, however, are couched within the context of Defendants’ contractual agreement to build a home in accordance with such standards. This interpretation is bolstered by the fact that the actual causes of action aver that the Defendants’ liability lies in their failure to construct a home as expressly warranted. Nothing in these complaints suggests that Defendants’ liability stems from a breach of duty imposed by social standards. See Peerless Ins. Co.,
. Defendants also cite to Wausau Underwriters Ins. Co. v. State Auto. Mut. Ins. Co.,
The present case, however, involves the construction of a home pursuant to certain agreed-upon contractual standards. Unlike in Wausau where the damage-causing workmanship was completed prior to and outside of any contractual relationship, the damage-
. "When a plaintiff alleges that the defendant committed a tort in the course of carrying out a contractual agreement, Pennsylvania courts examine the claim and determine whether the 'gist' or gravamen of it sounds in contract or tort; a tort claim is maintainable only if the contract is 'collateral' to conduct that is primarily tortious." Sunquest Info. Sys., Inc. v. Dean Witter Reynolds,
. These court orders were brought to this Court’s attention via Plaintiff's Reply Brief. Defendants vigorously object to Plaintiff's filing of a Reply Brief on the grounds that (a) it failed to follow the undersigned’s procedures, and (b) that there is no "new matter” raised by Defendants' Response that, in fairness, would require that Plaintiff be given further leave to respond.
The Court finds no merit to these objections. Although Chambers’ procedures suggest that counsel simply notify the Court by letter of its intention to file a reply brief, this procedure is simply to place the Court on notice that more briefing is forthcoming and it should refrain from ruling on the matter. Plaintiffs' filing of a timely motion seeking leave to file the reply — merely eight days after the response brief was docketed — accomplishes the same purpose. Moreover, the Court often finds reply briefs useful to address matters raised in the responsive brief. This case is no different. Defendants adamantly argued in their Response that the Underlying Actions raised the possibility of "occurrences” and that several of the underlying plaintiffs were not original owners and, thus, did not have a direct contract with Defendants. While Plaintiff touched on these issues in the original Motion for Summary Judgment, the Reply Brief was able to more directly address the precise arguments presented by Defendants. Accordingly, Plaintiff’s Motion for Leave to File a Reply Brief is granted, and the Reply Brief attached as an exhibit to that Motion is deemed filed as of the date the Motion for Leave was docketed.
. To the extent Plaintiff asks this Court to perform its own gist of the action analysis, (Pi's Reply Br. 6-8), the Court declines to do so. In Berg Chilling Sys. v. Hull Corp.,
In the present matter, to the extent the trial court has already decided that the gist of the action doctrine bars certain claims, this Court will apply that finding to the insurance coverage decision. Further, the Court will extrapolate that ruling to apply to identical complaints in other Underlying Actions where the gist of the action issue has not been raised.
. Defendants argue that the complaints in the Underlying Actions still have breach of implied warranty counts which could "potentially” give rise to tort liability. This argument again misunderstands applicable jurisprudence. The inquiry is not whether the claims are defined by the Plaintiffs as contract or tort, but rather whether the supporting factual allegations have a sufficient degree of fortuity to constitute an occurrence as defined in the Westfield Policies. Being that the trial court has expressly found that the entirety of the action is based on claims of faulty workmanship, and the Pennsylvania Supreme Court has explicitly held that claims of faulty workmanship cannot constitute an "occurrence” under a commercial general liability policy, the mere remainder of a breach of implied warranty claim does not convert the basis of the Underlying Actions into the type of accident required for insurance coverage.