IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

LEE ARTERS t/a GREENDALE BUILDERS : CIVIL ACTION

:

v. :

:

ZURICH AMERICAN INSURANCE CO., t/a :

ZURICH NORTH AMERICA as successor :

in interest to ASSURANCE CO. OF :

AMERICA, et al. : NO. 02-4388

MEMORANDUM AND ORDER

Fullam, Sr. J. November , 2003

Cross-motions for summary judgment in this insurancecoverage dispute. The issue is whether the defendant insurers

are obliged to provide a defense to plaintiff Lee Arters t/a

Greendale Builders with respect to a state-court personal-injury

action brought against plaintiff and others by one Thomas Gorman. 

The applicable policy does not provide coverage for any claims

brought by an employee of the plaintiff, hence the decisive

question is whether Mr. Gorman was an employee of plaintiff at

the time of his injury. 

Plaintiff Lee Arters t/a Greendale Builders is a small

construction firm. At the time of the accident, plaintiff was a

subcontractor on a house construction project. The injured

party, Mr. Gorman, was a 17-year old high school student who was

performing carpentry services for plaintiff. In the underlying

state-court action, Mr. Gorman is suing plaintiff, the general

contractor on the project, and the owners of the house which was

Case 2:02-cv-04388-JF Document 24 Filed 11/20/2003 Page 1 of 5
2

being constructed. 

The defendant insurers contend that Mr. Gorman was an

employee of plaintiff. Plaintiff contends that Mr. Gorman’s

state-court complaint does not allege that he was an employee, he

is not asserting a worker’s compensation claim, and the issue of

his employment status is yet to be determined. Accordingly,

plaintiff argues that the defendants must at least provide a

defense in the underlying state-court action.

Plaintiff correctly argues that the insurers’

obligation to provide a defense must be ascertained by the

allegations of the state-court complaint, and that a defense must

be provided unless it is clear from those allegations that there

is no coverage under the insurance policy. Stated otherwise, if

the state-court complaint asserts claims which might be covered

by the insurance policy, the insurer is obliged to defend until

such time as it becomes clear that there is no coverage. 

The state-court complaint brought by Mr. Gorman against

the plaintiff includes the following allegations: that plaintiff

“contacted Thomas Gorman, who was a student at Springfield High

School, Springfield, Delaware County, Pennsylvania for the

purpose of having the minor child, Thomas Gorman, perform certain

manual labor services for him in the construction of the real

estate located on the subject premises.” (¶ 11). “The defendant

obtained the services of the plaintiff and other young boys at

Case 2:02-cv-04388-JF Document 24 Filed 11/20/2003 Page 2 of 5
3

the high school to perform these carpentry services at an hourly

rate substantially less than a professional adult carpenter would

charge”; that plaintiff provided the power tools which Gorman was

using at the time of his injury; and that Mr. Gorman “was

operating a saw while performing manual labor on behalf of the

defendant Greendale Builders, Inc.” (¶ 31), and that plaintiff

was negligent for “hiring minors to operate dangerous and

defective power tools and/or machinery;” failure to properly

supervise the minor; and “violation of applicable federal, state

and local statutes, laws and regulations governing the use and/or

employment of minors when utilizing dangerous power tools and

machinery.” (¶ 33(g)).

Thus, all of the allegations of the state court

complaint are certainly consistent with the notion that Gorman

was an employee of plaintiff. And the undisputed facts bear this

out: plaintiff told Gorman what to do and, in general, how to do

it, and paid Gorman an hourly wage.

The fact that Gorman is suing plaintiff for negligence

rather than asserting a worker’s compensation claim is of no

consequence in the present case, since Mr. Gorman was,

undoubtedly, an employee-in-fact and plaintiff is charged with

negligence in hiring him, and in failing to supervise him

adequately –- allegations which plainly rule out coverage for Mr.

Gorman’s injuries. 

Case 2:02-cv-04388-JF Document 24 Filed 11/20/2003 Page 3 of 5
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Plaintiff’s motion for summary judgment will therefore

be denied, and defendants’ will be granted.

An Order follows.

Case 2:02-cv-04388-JF Document 24 Filed 11/20/2003 Page 4 of 5
5

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

LEE ARTERS t/a GREENDALE BUILDERS : CIVIL ACTION

:

v. :

:

ZURICH AMERICAN INSURANCE CO., t/a :

ZURICH NORTH AMERICA as successor :

in interest to ASSURANCE CO. OF :

AMERICA, et al. : NO. 02-4388

ORDER

AND NOW, this day of November 2003, upon

consideration of the cross-motions for summary judgment, IT IS

ORDERED:

1. Plaintiff’s motion for partial summary judgment

is DENIED.

2. Defendants’ motion for summary judgment is 

GRANTED. 

IT IS ORDERED, ADJUDGED AND DECLARED that the 

defendants have no obligation to provide a defense or indemnity

with respect to the state-court action brought against plaintiff

by Thomas Gorman.

 

John P. Fullam, Sr. J.

Case 2:02-cv-04388-JF Document 24 Filed 11/20/2003 Page 5 of 5