Opinion ID: 2313119
Heading Depth: 2
Heading Rank: 2

Heading: The Pacific Force Account Policy requires Pacific to defend Conrail

Text: Pacific also argues that the Superior Court erred in holding that Pacific owes Conrail a duty to defend the wrongful death actions under the Pacific Force Account Policy. The parties agree that Pennsylvania law governs the interpretation of the Pacific Force Account Policy. Under Pennsylvania law, an insurer is obligated to defend if the factual allegations of the complaint comprehend an injury that is actually or potentially within the scope of the policy. [54] As the Pennsylvania Supreme Court has explained, its cases consistently hold that an insurer's obligation to defend arises whenever the complaint filed by the injured party may potentially come within the coverage of the policy. [55] When deciding whether a duty to defend exists, the court must compare the allegations in the complaint with the language of the insured's policy, construing them together to determine the insurer's obligations to the insured. [56] The factual allegations of the complaint are taken as true and the complaint should be liberally construed with all doubts as to whether the claims may fall within the coverage of the policy to be resolved in favor of the insured. [57] Thus, an insured's duty to defend and indemnify an insured in a suit brought by a third party depends upon a determination of whether the third party's complaint triggers coverage. [58] [W]e must look to two sources to decide whether a duty to defend exists. We must interpret the insurance policy to determine the scope of coverage. Then, we must analyze the complaint filed against the insured to determine whether the claims asserted potentially [fall] within that coverage. [59] The Flowers and Fydenkevez Complaints alleged, among other things, that Conrail was negligent for having improperly placed flashing lights, warning signs and other warning signals at the railroad-highway grade crossing. [60] Pacific conceded before the Superior Court that DelDOT's requirement that Conrail relocate or re-install new flashing lights[] constituted `force account' work within the meaning of the policy. [61] We agree with the Superior Court that these activities were work or operations for the State of Delaware within the meaning of the Pacific Force Account Policy. As the Superior Court correctly noted, it having been found that Conrail was performing force account work as defined under the Pacific Force Account Policy, the inquiry then becomes whether the allegations in the Complaints potentially come within the policy coverage. [62] We agree with the Superior Court that the allegations against Conrail pertain to precautions which, as alleged in the Flowers and Fydenkevez Complaints, should have been taken during the construction at the Mt. Pleasant Crossing. [63] Because the allegations in the Flowers and Fydenkevez Complaints are causally connected to the force account work being performed by Conrail, the Superior Court correctly determined that Pacific had an obligation to defend Conrail. We therefore affirm the Superior Court's grant of summary judgment for Conrail on this issue. [64]