J-A02045-16 

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

CARRIE KELLY, ADMINISTRATRIX OF : IN THE SUPERIOR COURT OF

ESTATE OF JUSTIN KELLY, DECEASED, : PENNSYLVANIA

AS ASSIGNEE OF DALLAS MATTHIAS, :

D/B/A DALLAS MATTHIAS TREE :

SERVICE :

:

:

v. :

:

H.C. KERSTETTER CO., CENTRAL :

INSURERS GROUP, INC. AND THOMAS :

BERICH :

: No. 696 MDA 2015

Appeal from the Order Entered March 20, 2015

in the Court of Common Pleas of Berks County Civil Division

at No(s): 09-7399

BEFORE: PANELLA, STABILE, and FITZGERALD,*JJ.

MEMORANDUM BY FITZGERALD, J.: FILED APRIL 27, 2016

Appellant, Carrie Kelly, Administratrix of Estate of Justin Kelly, 

Deceased, as Assignee of Dallas Matthias,1 d/b/a Dallas Matthias Tree 

Service, appeals from the order entered in the Berks County Court of 

Common Pleas granting the motion for summary judgment of Appellees, 

H.C. Kerstetter Co., Central Insurers Group, Inc., and Thomas Berich. 

Appellant contends the trial court erred in finding that the claims against 

Appellees were barred by the statute of limitations. We affirm.

 

*

Former Justice specially assigned to the Superior Court.

1 We note that there is a discrepancy in the spelling of Matthias. In certain 

documents in the record, Matthias is spelled with one “t”.
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The trial court summarized the facts of this case as follows: 

Dallas Mathias (hereinafter, Assignor) started a tree 

service business in 2004. The business was organized as a 

sole proprietorship with no employees. Justin Kelly 

(hereinafter, Decedent) was one of several independent 

contractors with his business.

 

Assignor obtained insurance for his business from 

[Appellees]. [Appellee,] Tom Berich, was Assignor’s 

insurance contact. Assignor never met [Appellee] or 

anyone else from [Appellees’] companies. All business was 

accomplished through telephone conversations or the 

exchange of documents. Assignor obtained a commercial 

auto insurance policy from United Financial Casualty 

Company and a commercial general liability policy from 

Nautilus Insurance Company through [Appellees]. 

Assignor did not purchase an umbrella policy for his 

business. [Appellees] needed Assignor’s permission to 

change or bind insurance on his behalf.

Assignor required the independent contractors to 

maintain their own commercial general liability insurance 

which was procured through [Appellees]. Assignor also 

made his workers, including Decedent, sign a document 

entitled “Sub-Contractor Agreement and Insurance Waiver 

Acknowledgment” (Agreement). The purpose of 

Agreement was to relieve Assignor from liability and to 

make it clear to the workers for which insurance coverage 

they were responsible and which he was. The workers 

were responsible for liability, health, and worker’s 

compensation insurance for their injuries. Assignor was 

responsible for liability insurance for the work that was 

performed on the jobs. Agreement included a provision 

that Assignor would be held harmless if the worker 

suffered bodily injury while performing his duties. 

Assignor knew that the Nautilus policy did not provide 

coverage to him for the workers’ injuries.

On November 2, 2006, Decedent sustained fatal injuries 

after falling out of a bucket truck while working for 

Assignor. A co-worker confirmed that Decedent had 

smoked marijuana with him prior to their arrival on the 

jobsite.
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[On March 14, 2007,] Nautilus denied coverage for 

Decedent’s injuries. [On June 14, 2007,] Decedent’s 

estate sued Assignor.[2] United provided a defense for 

Assignor under a reservation of rights. [Appellant] and 

Assignor entered into a Release and Assignment 

Agreement on April 17, 2008. Pursuant to the settlement, 

United paid $125,000.00 to [Appellant3]. Assignor agreed 

to the entry of a consent judgment against himself[4] and 

 

2 See Complaint, Carrie Kelly, Administratrix of the Estate of Justin D. Kelly, 

Deceased v. Dallas Mathias, Jr., individually and t/a Dallas Mathias Jr. Tree 

Service, 6/14/07, at R.R. 188a. For convenience, we refer to the reproduced 

record where applicable.

3 The terms of the release were as follows:

II. RELEASE OF UNITED FINANCIAL CASUALTY 

COMPANY

For and in consideration of its payment of $125,000 on 

behalf of its insured, Dallas Mathias, Jr. t/a Dallas Mathias, 

Jr. Tree Service, Carrie Kelly, as Administratrix of the 

Estate of Justin D. Kelly, Deceased, hereby releases and 

discharges United Financial Casualty Company from any 

and all further claims, rights or causes of action based on 

statutory law, common law or its policy of insurance which 

were alleged or which may have been alleged in the Berks 

County action titled Carrie Kelly, Administratrix of the 

Estate of Justin D. Kelly, Deceased v. Dallas Mathias, 

Jr., Individually and t/a Dallas Mathias, Jr. Tree 

Service. The United Financial Casualty Company’s 

declaratory judgment action will be marked settled, 

discontinued and ended.

R.R. at 379a.

4 The agreement provided as follows:

III. JUDGMENT BY CONSENT

Dallas Mathias, Jr. hereby agrees that a judgment by 

consent against him can be entered by Carrie Kelly as 
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assigned to [Appellant] the right to pursue claims for one 

million dollars from Nautilus and [Appellees5].

 

Administratrix of the Estate of Justin D. Kelly, Deceased, 

for the total amount of $1,125,000 with an indication that, 

upon payment of the $125,000 on his behalf from United 

Financial Casualty Company, that $125,000 portion of the 

judgment can be marked as satisfied.

Id. 

5

Instantly, the assignment agreement provided as follows:

IV. ASSIGNMENT AGREEMENT

[Appellant], Carrie Kelly, as Administratrix of the Estate 

of Justin D. Kelly, Deceased (“Assignee”), agrees and 

covenants to postpone collection, enforcement, 

garnishment and/or execution proceedings against 

[Appellee] Dallas Mathias, Jr., his heirs, executors, 

administrators, successors and assigns (“Assignor”) for 

Assignor’s $1,000,000 portion of the $1,125,000 judgment 

by consent.

Assignee’s agreement to postpone collection, 

enforcement, garnishment and/or execution proceedings 

against Assignor for the amount due and owing, is for, and 

in consideration of Assignor’s assignment of any and all 

rights, interests, claims, causes of action and/or potential 

causes of action including, but not limited to, all 

contractual and extra contractual claims, actions for 

common law and statutory bad faith, actions for 

declaratory judgment, breach of fiduciary duty, negligence, 

breach of contract and misrepresentation and any other 

claims or causes of action of any nature whatsoever, in law 

or in equity, which Assignor has and/or may have against 

H.C. Kerstetter Co. and any insurer other than United 

Financial Casualty Company, as well as any parent 

company or companies, affiliates, subsidiaries, or any 

other entity or insurer other than United Financial Casualty

Company that may be required to provide coverage to, 

and/or indemnify Assignor with regard to the Berks County 
J-A02045-16 

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Trial Ct. Op., 6/16/15, at 1-3. 

Appellant filed a writ on June 15, 2009 and subsequently a complaint 

on July 17, 2009. R.R. at 1a, 58a. Appellees filed a motion for summary 

judgment. The trial court granted the motion. This timely appeal followed. 

Appellant filed a court-ordered Pa.R.A.P. 1925(b) statement of errors 

complained of on appeal. The trial court filed a responsive opinion.

Appellant raises the following issues for our review:

A. Where [Appellees] insurance brokers admit that the 

insured tree trimming business was relying on them to 

advise, procure and maintain proper coverage; where such 

brokers failed to advise the insured that important 

coverage was excluded; and insured’s expert has shown 

that [Appellees] breached their duty of care; did the trial 

court err in granting summary judgment where the record 

raises genuine issues of material fact showing negligence 

 

action of Carrie Kelly, as Administratrix of the Estate of 

Justin D. Kelly, Deceased v. Dallas Mathias, Jr.

Id. at 380a.

We note that in Barr v. Gen. Accident Grp. Ins. Co. of N. Am., 520 

A.2d 485 (Pa. Super. 1987), this Court held that

a plaintiff can agree to enter judgment against an insured 

and also agree not to enforce the judgment directly 

against the insured in exchange for the assignment of the 

insured’s rights against his insurance company and their 

agents. . . . [T]he assignee can seek recovery of the 

judgment amount in an action against the insurance 

company and their agents for failure to provide adequate 

coverage and failure to defend.

Id. at 487. 
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of [Appellees], insurance brokers, in failing to advise, 

maintain, and procure adequate liability coverage for 

assignor, contractor, Matthias, with respect to the lawsuit 

on behalf of subcontractor, decedent, Justin Kelly?

B. Did the trial court err in giving effect to certain 

purported exculpatory language in a sub-contractor 

agreement?

C. Did the trial court erred [sic] in granting summary 

judgment with respect to statute of limitations issues 

where this action against insurance agents or brokers, for 

failure to procure liability insurance coverage was filed 

within two years of its accrual date, namely within two 

years of the date of the filing of the Complaint in the 

underlying action?

Appellant’s Brief at 3-4.

Appellant contends the trial court erred in granting summary judgment 

because there are “material issues of fact that [Appellees] breached duties 

of care with respect to advising, maintaining, and procuring adequate 

liability coverage for the insured, assignor, Matthias, resulting in his lacking 

adequate liability coverage with regard to the subject fatal accident to one of 

his subcontractors, Justin Kelly . . . .” Id. at 15. Appellant argues that the 

exculpatory language of the subcontractor agreement was unenforceable. 

Id. 

Appellant claims the statute of limitations “for a cause of action 

against a broker for failure to procure adequate liability insurance is at 

earliest the date the Complaint to be covered is filed against the insured.” 

Id. at 20. Appellant avers that “[t]he date of the earlier pre-lawsuit denial 

letter, relied upon by the lower court, does not change the fact this lawsuit 
J-A02045-16 

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was timely.” Id. Appellant argues that “the underlying Complaint whose 

coverage was in issue was filed on June 14, 2007. This action regarding the 

brokers’ failure to procure adequate liability insurance to cover that 

complaint was timely filed within two years of that date in accord with 

applicable procedural rules, on Monday, June 15, 2009.”6 Id. at 20. 

Appellant concludes that the action was timely filed. Id. 

We address Appellant’s third issue first because it is dispositive. Our 

review is governed by the following principles:

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 non-moving 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. . . .

 

6 Appellant cites M & M High, Inc. v. Essex Ins. Co., 2002 WL 31681995 

(Pa. Com. Pl. 2002), in support of his argument that the filing of the 

complaint triggers the running of the statute of limitations against the 

insurer. Appellant’s Brief at 17. However, Court of Common Pleas decisions 

“are not binding precedent for this Court.” Discover Bank v. Stucka, 33 

A.3d 82, 87–88 (Pa. Super. 2011). 

 
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Varner-Mort v. Kapfhammer, 109 A.3d 244, 246-47 (Pa. Super. 2015) 

(citation omitted).

In Adamski v. Allstate Ins. Co., 738 A.2d 1033 (Pa. Super. 1999), 

the appellant, David Adamski, was driving a motorcycle and was involved in 

an accident with an automobile driven by Ronald Miller, the insured. Id. at 

1034. The appellant brought an action against the appellee, Allstate 

Insurance Company, the insured’s assignee, for breach of duty to defend 

and indemnify. Id. at 1035. The appellee filed a motion for summary 

judgment based upon the statute of limitations. Id. The court entered 

summary judgment in favor of the insurer. 

On appeal in Adamski, this Court addressed the issue of when the 

statute of limitations was triggered. The Court opined:

The . . . action was commenced on November 9, 1993, 

when appellants filed a writ of summons. On January 17, 

1997, appellants filed a complaint alleging that appellee 

committed common law and statutory bad faith[7] by failing 

to defend, indemnify or otherwise protect the interests of 

Ronald Miller. On June 23, 1998, appellee filed a motion 

for summary judgment. In its motion, appellee argued 

that appellants’ claims for bad faith were barred by the 

statute of limitations and should be dismissed for failure to 

state a cause of action.

 * * *

Although appellants did not receive an assignment from 

Miller until August 19, 1992, more than two years after the 

effective date of section 8371, they did not acquire greater 

 

7 42 Pa.C.S. § 8371.
J-A02045-16 

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rights than Miller possessed to pursue a bad faith action. 

See Smith v. Cumberland Group, [ ] 687 A.2d 1167[, 

1172] ([Pa. Super.] 1997) (“Where an assignment is 

effective, the assignee stands in the shoes of the 

assignor[.]”). Since all of the acts alleged by appellants 

“[arose] from the original . . . denial of benefits” and were 

not “independent of [the] initial denial of coverage,” they 

do not constitute separate acts of bad faith. Accordingly, 

since appellants do not allege any separate acts of bad 

faith that occurred on or after the effective date of section 

8731, their statutory bad faith claim is barred. 

 * * *

Initially, as noted, appellants misconstrue appellee’s letter 

of April 2, 1986. It was not merely an initial “refusal to 

pay benefits.” Instead, appellee clearly disclaimed any 

and all obligations and refused all further actions 

with regard to existing or future claims against 

Miller. Thus, reasonably construed, the letter was a 

refusal to cover, defend, indemnify or otherwise protect 

Miller. Moreover, we reject appellants’ claim that they 

were required to file suit only when “the full extent of 

litigation damages” was known and “the need for 

indemnification” arose. To the contrary, our Court has 

repeatedly held that, for purposes of the statute of 

limitations, a claim accrues when a plaintiff is harmed and 

not when the precise amount or extent of damages is 

determined. Instantly, the alleged harm to Miller (and 

thus appellants as assignees) occurred when 

appellee’s position was made clear by the 1986 

letter and appellee maintained that position by 

subsequently refusing to defend or indemnify Miller. 

 * * *

It is hornbook law that a statute of limitations begins to 

run as soon as the right to institute suit arises. 
J-A02045-16 

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Id. at 1035, 1039, 1041-42 (some citations and footnotes omitted and 

emphases added).8 

 

8 Appellant’s reliance upon Selective Way Ins. Co. v. Hosp. Grp. Servs., 

Inc., 119 A.3d 1035 (Pa. Super. 2015) (en banc) is unavailing. See

Appellant’s Brief at 18. This Court in Selective addressed the issue of when 

a cause of action for a declaratory judgment action filed by an insurance 

company accrues, and rejected the denial of coverage as the triggering point 

for the statute of limitations.

A cause of action for a declaratory judgment accrues when 

an actual controversy exists between the parties. Our 

Supreme Court has stated that “[t]he court’s role in the

declaratory judgment action is to resolve the question of 

coverage to eliminate uncertainty. If the insurer is 

successful in the declaratory judgment action, it is relieved 

of the continuing obligation to defend.” Thus, according to 

our Supreme Court, if an insurance company is 

uncertain about its duty to defend an insured in a 

third party’s action, it is expected and anticipated 

that the insurance company will bring a declaratory 

judgment action concerning its duty to defend prior 

to denying coverage to an insured. The denial of 

coverage certainly could be when an actual controversy 

arises between an insurance company and an insured, 

warranting the filing of a declaratory judgment action. 

See, e.g., Zourelias [v. Erie Ins. Grp.], 691 A.2d [963,] 

964 [Pa. Super. 1997]; see also 42 Pa.C.S.A. § 7534 (“A 

contract may be construed [under the Declaratory 

Judgments Act] either before or after there has been a 

breach thereof.”). It cannot, however, be the only basis 

for finding an actual controversy exists as Selective 

advocates. Such a holding (that the denial of coverage is 

the point in time when an actual controversy arises) would 

eliminate an insurance company’s ability to bring a 

declaratory judgment action prior to denying or 

terminating the provision of a defense for an insured, 

which is in direct contravention to the above-quoted 

statement by our Supreme Court.
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In Rancosky v. Washington Nat. Ins. Co., 130 A.3d 79 (Pa. Super. 

2015), citing Adamski, this Court opined:

Generally, for purposes of applying the statute of 

limitations, a claim accrues when the plaintiff is 

injured. See Adamski v. Allstate Ins. Co., 738 A.2d 

1033, 1042 (Pa. Super. 1999). In the context of an 

insurance claim, a continuing or repeated denial of 

coverage is merely a continuation of the injury caused 

by the initial denial, and does not constitute a new 

injury that triggers the beginning of a new limitations 

 

Selective’s argument that the statute of limitations for it 

to file a declaratory judgment action regarding its duty to 

indemnify an insured in a third party’s action should not 

commence until it denies coverage fails for the same 

reason. We agree with Selective that an insurance 

company’s substantive duty to indemnify an insured in a 

third party’s action does not arise until there is a verdict. 

A declaration regarding an insurance company’s duty to 

defend, however, is inextricably intertwined with its duty 

to indemnify because both are based upon a determination 

of whether the insurance policy in question provides 

coverage for the claims made. See Gen. Acc. Ins. Co. of 

Am. [v. Allen], 692 A.2d [1089,] 1095 [Pa. 1997] 

(“Although the duty to defend is separate from and 

broader than the duty to indemnify, both duties flow from 

a determination that the complaint triggers coverage.”); 

Mut. Ben. Ins. Co. v. Haver, [ ] 725 A.2d 743, 747 

([Pa.] 1999) (“[I]n determining whether a carrier has a 

duty to defend or indemnify an insured we look to the 

complaint filed against the insured.”). If an insurance 

company does not have a duty to defend an insured in a 

third party’s action, it cannot have a duty to indemnify. 

Am. Nat. Prop. & Cas. Companies v. Hearn, 93 A.3d 

880, 884 (Pa. Super. 2014).

Id. at 1048-49 (emphasis in original and some citations omitted and 

emphasis added). In the case sub judice, Appellee denied coverage prior to 

the filing of the underlying complaint. Appellant, as assignee of the insured, 

instituted the action against Appellee. See Barr, 520 A.2d at 487.
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period. See id. at 1042 (holding that the insured may not 

separate initial and continuing refusals to provide coverage 

into distinct acts of bad faith).

Id. at 99 (emphases added); see also Jones v. Harleysville Mut. Ins. 

Co., 900 A.2d 855, 858 (Pa. Super. 2006) (“trial court correctly recognized 

that the applicable limitations period for [the a]ppellants’ bad faith claim is 

two years from the date of the first claim denial. See Ash v. Cont'l Ins. 

Co., 861 A.2d 979, 984 (Pa. Super. 2004). Adamski v. Allstate Ins. Co., 

738 A.2d 1033, 1040 (Pa. Super. 1999).” 

Instantly, the trial court opined:

[Appellant] submits that this court erred with respect to 

statute of limitation issues because this case was filed 

within two years of its accrual date, which is within two 

years of the date of the underlying action. This issue is 

without merit.

The statute of limitations for a claim of professional 

liability is two years. The statute begins to run when the 

professional breaches a duty, and is tolled only when the 

client, despite the exercise of due diligence, does not 

discover the injury or its cause. Assignor knew by letter 

dated March 14, 2007, that [Appellee] Nautilus disclaimed 

coverage. Assignor assigned his rights for all claims 

against [Appellees] to [Appellant], but the assignment did 

not affect the statute of limitations. [Appellant] did not file 

a writ until June 15, 2009, which was three months after 

the statute of limitations ran on March 14, 2009.[9]

 

9 We note that March 14th fell on a Saturday. See 1 Pa.C.S. § 1908 

(providing that when last day of any period of time referred to in any statute 

falls on Saturday, Sunday, or legal holiday, such day shall be omitted from 

computation); In re Nomination Papers of Lahr, 842 A.2d 327, 333 n.6 

(Pa. 2004) (“The courts have generally employed section 1908 in 

circumstances that require counting forward”)”
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Trial Ct. Op. at 4-5. We agree no relief is due.

In the case sub judice, the March 14th denial of coverage letter 

provided, inter alia, as follows:

Re: Company: Nautilus Insurance Company

 Claim Number: 10028900

 Insured: DALLAS MATHIAS JR

 Claimant: Justin Kelly, deceased

 Policy Number: C NC 0000549482

 Date of Loss: 11/02/06

 Policy Period: 05/03/2006 to 05/03/2007

Dear Mr. Mathias,

Nautilus Insurance Company is in receipt of the above 

captioned claim . . . on behalf of the estate of Justin Kelly. 

. . . [A]lso included [is] a copy of a draft Complaint that . . 

. may [be] file[d] against you with regards to this incident. 

It is alleged that Justin Kelly, while an employee of Dallas 

Mathias Jr. Tree Service, fell from a bucket truck and 

suffered fatal injuries. This letter will also confirm our 

conversation of March 7, 2007 regarding this incident. For 

reasons listed below, there is no coverage for this 

claim.

 * * *

It must be stated immediately that after reviewing the 

policy relative to this loss, it is the position of Nautilus 

Insurance Company that the Commercial General 

Liability policy issued to you does not provide 

coverage for the indemnification or defense of any 

claims being made as a result of this loss. Therefore, 

it is recommended that without delay you notify any and 

all other insurance companies that insure you for the tree 

service.
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R.R. at 281a.10

Appellant, as assignee, stands in the shoes of the Assignor. See

Adamski, 738 A.2d at 1039. Appellee clearly denied coverage for the claim 

in its March 14, 2007 letter. Thus, the alleged harm to Assignor and thus 

Appellant as assignee occurred when Appellee made its position clear in the 

March 14th denial of coverage letter. See id. at 1041-42; accord

Rancosky, 130 A.3d at 99. The statute of limitations began to run on that 

date. See Adamski, 738 A.2d at 1042. Appellant filed the writ on June 15, 

2009, more than two years after the denial-of-coverage letter. Therefore, 

the claim was barred by the statute of limitations. See id. Accordingly, we 

discern no error of law or abuse of discretion by the trial court in finding that 

Appellant’s claim was barred by the statute of limitations. See

Kapfhammer, 109 A.3d at 246-47. Accordingly, we affirm the order of the 

trial court granting Appellees’ motion for summary judgment.

Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.

Prothonotary

Date: 4/27/2016

 

10 We note that the denial of coverage letter included a detailed recitation of 

the terms of the policy. See R.R. at 281a-87a.