J-A04037-15

* Retired Senior Judge assigned to the Superior Court.

NON-PRECEDENTIAL DECISION – SEE SUPERIOR COURT I.O.P. 65.37

PEERLESS INDEMNITY INSURANCE 

COMPANY,

 Appellee

v.

CINCINNATI INSURANCE COMPANY 

AND WYATT, INC.,

 Appellants

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IN THE SUPERIOR COURT OF

PENNSYLVANIA

 

 

 No. 1057 WDA 2014

Appeal from the Order Entered June 16, 2014,

in the Court of Common Pleas of Allegheny County, 

Civil Division at No(s): GD13-01706

BEFORE: BOWES, OLSON, and STRASSBURGER,* JJ.

MEMORANDUM BY STRASSBURGER, J.: FILED APRIL 06, 2015

Cincinnati Insurance Company (CIC) and Wyatt, Inc. (Wyatt) 

(collectively Appellants) appeal from an order that, in effect, denied their 

cross motion for summary judgment and granted the motion for summary 

judgment filed by Peerless Indemnity Insurance Company (Peerless). We 

reverse.

The trial court summarized the background of this matter as follows.

The underlying lawsuit in this case stems from a 

construction project involving the renovation of several floors of 

a building in Downtown Pittsburgh. Wyatt was the general 

contractor for the renovation project. One subcontract 

agreement that Wyatt entered into was with Franklin Electric 

(the original defendant in the underlying action, “Franklin”). 

Franklin purchased a commercial general liability policy from 

Peerless for the renovation project. On March 10, 2009[,] Paul 

Zern (plaintiff in the underlying action, “Zern”) was painting an 
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area where Franklin had [done some] electrical work. Zern 

came into contact with a live electrical wire and was injured. 

On February 28, 2011[,] Zern filed suit against Franklin. 

Franklin then joined Wyatt as an additional defendant in the 

underlying action. After being joined in the underlying action, 

Wyatt sought defense and indemnification from Peerless, 

asserting that it was an additional insured pursuant to the 

commercial general liability policy issued to Franklin by Peerless. 

Peerless determined that Wyatt did not qualify for coverage as 

an additional insured[,] and on September 18, 2013[,] Peerless 

filed a complaint for declaratory judgment seeking a declaration 

that it did not owe any duty of coverage to Wyatt. 

On May 1, 2014[,] Peerless filed a motion for summary 

judgment. On May 20, 2014[, CIC, the company that insures 

Wyatt,] and Wyatt filed a cross-motion for summary judgment. 

On June 3, 2014, argument was held ... on the motion and crossmotion for summary judgment. On June [16, 2014, the trial 

court] issued an order of court that granted Peerless[’] motion 

for summary judgment, thus relieving Peerless from any duty to 

provide coverage to Wyatt in the underlying action. 

On July 3, 2014[, Appellants] filed a notice of appeal. On 

July 24, 2014[, Appellants] timely filed a concise statement of 

the errors complained of on appeal[. The trial court 

subsequently issued an opinion pursuant to Pa.R.A.P. 1925(a).] 

Trial Court Opinion, 9/2/2014, at 1-2 (unnecessary capitalization omitted).1

In their brief to this Court, Appellants ask us to consider these 

questions:

1. Is Wyatt an additional insured under the Peerless policy by 

operation of the “Additional Insured — Owners, Lessees Or 

Contractors — Automatic Status When Required In A 

Construction Agreement With You 22-132 (01/08)” 

endorsement[]? 

 

1 We reorganized the trial court’s opinion from one paragraph to four 

paragraphs.
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2. Is Wyatt an additional insured under the Peerless policy by 

operation of the “Additional Insured — Automatic Status When 

Required In A Construction Agreement With You — Contractors 

— Completed Operations 22-135 (01/08)” endorsement[]?

Appellants’ Brief at 2-3 (trial court’s answers omitted).

We review orders granting summary judgment as follows.

The standards which govern summary judgment are well 

settled. When a party seeks summary judgment, a court shall 

enter judgment whenever there is no genuine issue of any 

material fact as to a necessary element of the cause of action or 

defense that could be established by additional discovery. A 

motion for summary judgment is based on an evidentiary record 

that entitles the moving party to a judgment as a matter of law. 

In considering the merits of a motion for summary judgment, a 

court views the record in the light most favorable to the nonmoving party, and all doubts as to the existence of a genuine 

issue of material fact must be resolved against the moving party. 

Finally, the court may grant summary judgment only when the 

right to such a judgment is clear and free from doubt. An 

appellate court may reverse the granting of a motion for 

summary judgment if there has been an error of law or an abuse 

of discretion....

Swords v. Harleysville Ins. Companies, 883 A.2d 562, 566-67 (Pa. 

2005) (citations omitted). 

This Court has summarized the law regarding insurance contract 

interpretation and an insurer’s duty to defend and indemnify an insured as 

follows.

The interpretation of an insurance contract regarding the 

existence or non-existence of coverage is generally performed by 

the court.

Insurance policies are contracts, and the rules of contract 

interpretation provide that the mutual intention of the 

parties at the time they formed the contract governs its 

interpretation. Such intent is to be inferred from the 
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written provisions of the contract. If doubt or ambiguity 

exists it should be resolved in insured’s favor.

An insurer’s duty to defend and indemnify the insured may 

be resolved via declaratory judgment actions. In such 

actions, the allegations raised in the underlying complaint 

alone fix the insurer’s duty to defend. As this Court has 

summarized:

The duty to defend is a distinct obligation, separate and 

apart from the insurer’s duty to provide coverage. 

Moreover, the insurer agrees to defend the insured 

against any suit arising under the policy even if such 

suit is groundless, false, or fraudulent. Since the 

insurer agrees to relieve the insured of the burden of 

defending even those suits which have no basis in fact, 

the obligation to defend arises whenever the complaint 

filed by the injured party may potentially come within 

the coverage of the policy.

Pennsylvania recognizes that a duty to defend is broader 

than the duty to indemnify. Accordingly, even if there are 

multiple causes of action and one would potentially constitute a 

claim within the scope of the policy’s coverage, the insurer would 

have a duty to defend until it could confine the claim to a 

recovery excluded from the policy.

The question of whether a claim against an insured is 

potentially covered is answered by comparing the four 

corners of the insurance contract to the four corners of the 

complaint. An insurer may not justifiably refuse to defend 

a claim against its insured unless it is clear from an 

examination of the allegations in the complaint and the 

language of the policy that the claim does not potentially 

come within the coverage of the policy.

Significantly, [i]t is not the actual details of the injury, but the 

nature of the claim which determines whether the insurer is 

required to defend. In making this determination, the factual 

allegations of the underlying complaint against the insured are to 

be taken as true and liberally construed in favor of the insured.
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Penn-America Ins. Co. v. Peccadillos, Inc., 27 A.3d 259, 264-66 (Pa. 

Super. 2011) (en banc) (citations and quotation marks omitted).

Appellants contend that, when two endorsements in the Peerless policy 

are compared to Zern’s complaint and the complaint to join Wyatt as an 

additional defendant, it becomes clear that, for purposes of the underlying 

action, Wyatt qualifies as an additional insured. According to Appellants, 

because of their status as an additional insured under the relevant policy, 

Peerless is required to defend and, if necessary, indemnify Wyatt in the 

underlying action. 

One of the endorsements Appellants rely upon in support of their 

position is entitled “ADDITIONAL INSURED - AUTOMATIC STATUS WHEN 

REQUIRED IN A CONSTRUCTION AGREEMENT WITH YOU - CONTRACTORS -

COMPLETED OPERATIONS [(Endorsement 22-135)].” This endorsement 

provides, in pertinent part, as follows:

A. Paragraph 2. under SECTION II - WHO IS AN INSURED is 

amended to include any person or organization, when you and 

such person or organization have agreed in writing in a contract 

or agreement that such person or organization be added as an 

additional insured on your policy, but only with respect to 

liability for “bodily injury” or “property damage”:

1. Caused by “your work” performed for that additional 

insured that is the subject of the written contract or 

agreement.

2. Included in the “products-completed operations 

hazard.”

***
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B. With respect to the insurance provided by this endorsement, 

the following are added to paragraph 2. Exclusions under 

COVERAGE A. BODILY INJURY AND PROPERTY DAMAGE 

LIABILITY (SECTION I - COVERAGES):

This insurance does not apply

1. To “bodily injury” or “property damage” arising out of 

any act or omission of the additional insured or the 

additional insured’s employees.

***

3. To “bodily injury” or “property damage” arising out of 

the rendering of, or the failure to render, any professional 

architectural, engineering or surveying services including ... 

[s]upervisory, inspection, architectural or engineering 

activities[.]

Peerless’ Motion for Summary Judgment, 5/1/2014, at Exhibit D.

The other endorsement Appellants rely upon in support of their 

position is entitled “ADDITIONAL INSURED - OWNERS, LESSEES OR 

CONTRACTORS - AUTOMATIC STATUS WHEN REQUIRED IN CONSTRUCTION 

AGREEMENT WITH YOU [(Endorsement 22-132)].” This endorsement 

provides, in pertinent part, as follows:

A. Paragraph 2. under SECTION II - WHO IS AN INSURED is 

amended to include as an additional insured any person or 

organization when you and such person or organization have 

agreed in writing in a contract or agreement that such person or 

organization be added as an additional insured on your policy. 

Such person or organization is an additional insured only with 

respect to liability for “bodily injury”, “property damage” or 

“personal and advertising injury” caused, in whole or in part, by:

1. Your acts or omissions; or

2. The acts or omissions of those acting on your behalf;
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in the performance of your ongoing operations for the 

additional insured that are the subject of the written 

contract or agreement ....

***

B. With respect to the insurance afforded to these additional 

insureds, the following additional exclusions apply:

This insurance does not apply to:

1. “Bodily injury” or “property damage” arising from the 

sole negligence of the additional insured.

***

3. “Bodily injury”, “property damage,” or “personal and 

advertising injury” arising out of the rendering of, or the 

failure to render, any professional architectural, 

engineering or surveying services, including ... 

[s]upervisory, inspection, architectural or engineering 

activities.

Peerless’ Motion for Summary Judgment, 5/1/2014, at Exhibit E.

There is no dispute that Franklin and Wyatt agreed in writing that 

Wyatt would be added to Franklin’s insurance policy as an additional insured 

through Endorsements 22-135 and 22-132. However, these endorsements 

clearly and unambiguously limit Wyatt’s status as an additional insured to 

scenarios when Wyatt faces liability for, inter alia, bodily injury caused by 

the work, acts, or omissions of Franklin or those acting on behalf of Franklin. 

The plain language of these endorsements also excludes from coverage 

bodily injury caused by the negligence of Wyatt or bodily injury arising out of 

the rendering or failure to render, inter alia, supervisory activities. Stated 
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succinctly, Wyatt is an additional insured under the Peerless policy only 

when it is liable for bodily injury caused by Franklin.

The complaint to join Wyatt as an additional defendant incorporated 

the Zern complaint. To the extent that the Zern complaint is relevant to a 

determination of whether Wyatt qualifies as an additional insured under the 

Peerless policy, a comparison of that complaint to the Peerless policy clearly 

indicates that the allegations raised therein do not qualify Wyatt as an 

additional insured. 

The Zern complaint did not name Wyatt as a defendant and 

indisputably claimed that Franklin’s negligence was the sole cause of Zern’s 

injuries. Appellants acknowledge this fact. Appellants’ Brief in Opposition to 

Peerless’ Motion for Summary Judgment and in Support of Appellants’ Cross 

Motion for Summary Judgment, 5/20/2014, at 4 (“The Zerns sought to hold 

Franklin solely liable for the March 10, 2009 incident.”).

However, a comparison of the complaint to join Wyatt as an additional 

defendant to the Peerless policy reveals that at least one allegation raised in 

that document potentially constitutes a claim within the scope of the policy’s 

coverage. While Franklin dedicated a majority of the complaint to join to 

outlining why Wyatt’s negligence caused Zern’s injuries,2the complaint to 

join also contained the following averment.

 

2 See, e.g., Peerless’ Motion for Summary Judgment, 5/1/2014, Exhibit A, 

at ¶17 (“If the plaintiff has sustained alleged injuries and damages as 

alleged, which are again denied, then said injuries and damages were 
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19. In the alternative, if [Franklin] is found to be negligent and 

liable to the plaintiff for his alleged injuries and damages, which 

is again denied, then [Wyatt] is also liable to the plaintiff for his 

alleged injuries to [(sic)] the negligence of [Wyatt] as set forth 

above, or liable over to [Franklin] for contribution and 

indemnification.

Peerless’ Motion for Summary Judgment, 5/1/2014, Exhibit A, at ¶19 

(emphasis added).

This averment leaves open the possibility that Wyatt could be found 

liable for Zern’s bodily injury, even if Franklin caused the injury. Because 

the averment could potentially constitute a claim within the scope of the 

policy’s coverage, Peerless has a duty to defend Wyatt unless and until the 

parties have confined the action to a claim to recovery which is excluded 

from the policy. Consequently, the trial court erred by granting Peerless’ 

motion for summary judgment and, effectively, denying Appellants’ cross 

motion for summary judgment. For these reasons, we reverse the trial 

court’s order.

Order reversed. Case remanded. Jurisdiction relinquished.

Judgment Entered.

Joseph D. Seletyn, Esq.

Prothonotary

Date: 4/6/2015

 

directly and proximately caused by the negligence, carelessness, gross 

negligence and recklessness of [] Wyatt ....”).