Court Opinion

ID: 2760745
Source: CourtListenerOpinion
Date Created: 2014-12-15 19:04:42.937092+00
Date Added: 2024-06-11T10:38:48.389673
License: Public Domain

J-E03005-14

                             2014 Pa. Super. 275

MODERN EQUIPMENT SALES & RENTAL                IN THE SUPERIOR COURT OF
CO.,                                                 PENNSYLVANIA

                        Appellant

                   v.

MAIN STREET AMERICA ASSURANCE
COMPANY, UNITED CONSTRUCTION
SERVICES, INC., AND RUICK AND HOLLY
ROLLAND, H/W

                        Appellees                  No. 3494 EDA 2012

              Appeal from the Order Dated November 29, 2012
              In the Court of Common Pleas of Chester County
                    Civil Division at No(s): 11-11713-CT

BEFORE: BENDER, P.J.E., BOWES, J., PANELLA, J., DONOHUE, J.,
        SHOGAN, J., ALLEN, J., LAZARUS, J., WECHT, J., and STABILE, J.

OPINION BY BENDER, P.J.E.:                     FILED DECEMBER 15, 2014

     Modern Equipment Sales & Rental Co. (Modern) appeals from the

order dated November 29, 2012, denying partial summary judgment to

Modern and granting summary judgment to Main Street America Assurance

Company (Main Street) in this declaratory judgment action. Following our

review of the record, it is apparent that the order issued by the trial court

does not dispose of all relevant claims in this matter.   Therefore, relying

upon precedent set forth in U.S. Orgs. for Bankr. Alts., Inc. v. Dep’t of

Banking, 26 A.3d 474 (Pa. 2011) (Bankruptcy Alternatives), and Pa.
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Bankers Ass'n v. Pa. Dep't of Banking, 948 A.2d 790 (Pa. 2008) (Pa.

Bankers), we quash.

      In August 2009, United Construction Services, Inc. (UCS) leased a

track loader from Modern. Through its agent, Bruce Irrgang, UCS permitted

and/or directed Senn Landscaping, Inc. (Senn Landscaping) to use the track

loader to remove silt from a pond located on the Irrgang property. Stephen

Senn, Jr., a ten-year-old child, operated the track loader. During the course

of his operation, the child lost control of the track loader, which struck and

injured Ruick Rolland. As a result, Mr. Rolland’s left leg was amputated.

      A complaint filed on behalf of Mr. Rolland and his wife, Holly Rolland,

alleged numerous acts and omissions of negligence, recklessness, and strict

liability. The complaint named, inter alia, Modern and UCS as defendants.

      The lease for the track loader was governed by an agreement, which

required UCS “to defend, indemnify and hold harmless Modern” for claims of

personal injury for which Modern may be held liable “even if caused in whole

or in part by any act, omission or negligence of Modern or any third parties.”

See   Modern    First   Amended    Complaint,   Exhibit   B   (Lease),   at   2

(unnumbered). Further, the agreement required UCS “to add [Modern] as

[an] additional insured on its commercial general liability insurance policy.”

Id.

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      UCS maintained an insurance policy issued by Main Street.              See

Modern First Amended Complaint, Exhibit A (Main Street Policy). The policy

afforded coverage to additional insureds, defined as follows:

      Any person(s) or organization(s) who is the lessor of leased
      equipment leased to you, and required by the lease to be
      included as an additional insured but only with respect to liability
      for “bodily injury”, “property damage” or “personal use or
      advertising injury” caused in whole or in part, by your
      maintenance, operation or use by you of equipment leased to
      you by such person(s) or organization(s).

Main Street Policy, “Contractors Extension Endorsement,” at 1. The terms,

“you” and “your,” as set forth above, are defined in the policy to mean UCS

and Spackle Drywall, LLC (not a party to this or the underlying case). See

Main Street Policy, “Business Owners Coverage Form, Section II – Liability,”

at 1; Main Street Policy, “Schedule of Named Insured(s),” at 1 (modifying

the   named       insured   identified    in   the   “Businessowners   Common

Declarations”).

      In May 2011, Modern tendered its defense to UCS, citing the Lease,

and Main Street, premised upon its claimed status as an additional insured

under the Main Street Policy. UCS and Main Street declined to contribute to

Modern’s defense in the Rolland action under either the Lease or the Main

Street Policy.    See Modern First Amended Complaint, Exhibit G (Letter,

dated October 27, 2011), at 1-4; Modern First Amended Complaint, Exhibit

D (Letter, dated June 23, 2011), at 1.

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       Thereafter, Modern commenced this action by writ of summons in

October 2011. In June 2012, Modern filed a first amended complaint in four

counts, seeking declaratory relief on the grounds that (1) UCS breached its

contractual obligation to defend and indemnify Modern per the terms of the

Lease; (2) Main Street violated its duty to defend and (3) indemnify Modern

Equipment as an additional insured per the Main Street policy; and (4) Main

Street engaged in bad faith.         See Modern First Amended Complaint, at 9-

14.1

____________________________________________

1
  Specifically, in Count I, Modern pleaded that “to the extent that” Main
Street declined to defend it, Modern sought the following relief:

    1. This [trial court] declare that UCS has a duty to provide insurance
    coverage to Modern with respect to the Rolland Action;

    2. This [trial court] declare that UCS has breached its Lease with
    Modern; and

    3. This [trial court] declare that Modern is entitled to be paid for its
    defense costs to date and all future costs incurred.

Modern First Amended Complaint, at 10 (emphasis in original). In Count II,
Modern pleaded its right to a defense as an additional insured under the
Main Street Policy and requested:

    1. This [trial court] declare Modern to be an additional insured under
    the [Main Street] Policy;

    2. This [trial court] declare that [Main Street] has a duty to defend
    Modern with respect to the Rolland Action;

    3. This [trial court] declare that UCS has a duty to defend Modern as
    a self-insurer of Modern, having failed to secure contractually required
    insurance;
(Footnote Continued Next Page)

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      The parties filed cross-motions for summary judgment.             Modern

sought partial summary judgment on its claim that Main Street violated its

duty to defend Modern with respect to the Rolland action.          See Modern

Second Motion for Partial Summary Judgment, 08/31/2012, at 10-11

(unnumbered). For its part, Main Street sought summary judgment relative

to Counts II, III, and IV of Modern’s complaint, requesting a declaration that

Main Street had no duty to defend or indemnify Modern as an additional

insured under its policy, and, therefore, it was not liable for bad faith. See

Main Street Second Motion for Summary Judgment, 09/13/2012, at 3-6

(unnumbered).

      Neither party sought summary relief on Modern’s breach of contract

claim directed against UCS. Id.; see also Modern Second Motion for Partial

Summary Judgment. To the contrary, Main Street, in its motion, specifically

acknowledged the claim, then pleaded that Count I was “not the subject of

this motion.”     Id. at 2 (unnumbered).          In its answer, Modern did not

challenge this averment.            See Modern Answer to Second Motion for

Summary Judgment, 09/28/2012, at 2 (unnumbered).
                       _______________________
(Footnote Continued)

   4. This [trial court] declare that Modern is entitled to be paid for its
   defense costs to date and all future costs incurred; and

   5. Such other and further relief as the [trial court] deems just and
   proper.

Id. at 11-12.

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      The trial court denied Modern’s motion for partial summary judgment

and granted Main Street’s motion for summary judgment.          Modern timely

appealed and filed a court-ordered Pa.R.A.P. 1925(b) statement; the trial

court filed a responsive opinion.

      The questions presented in this appeal involve an insurer’s duty to

defend its insured and the proper interpretation of a contract for insurance.

However, Modern’s claims, as set forth in its complaint, pose questions

broader in scope, unaddressed by the parties, and unanswered by the trial

court. Therefore, preliminarily, we must address our jurisdiction to entertain

this appeal. See Riley v. Farmers Fire Ins. Co., 735 A.2d 124, 127 (Pa.

Super. 1999) (“[T]he appealability of an order is a question of jurisdiction

and may be raised sua sponte.”).

      The Superior Court has “exclusive appellate jurisdiction of appeals

from final orders of the courts of common pleas,” notwithstanding certain

exceptions. 42 Pa.C.S. § 742. Generally, a final order is one that “disposes

of all claims and all parties.” Pa.R.A.P. 341(b)(1). However, a final order

may also be defined as such by statute or designated final under

circumstances in which an immediate appeal would facilitate resolution of

the case. See Pa.R.A.P. 341(b)(2), (3).

      Section 7532 of the Pennsylvania Declaratory Judgment Act (DJA), 42

Pa.C.S. § 7531 et seq., provides:

      Courts of record, within their respective jurisdictions, shall have
      power to declare rights, status, and other legal relations whether

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       or not further relief is or could be claimed. No action or
       proceeding shall be open to objection on the ground that a
       declaratory judgment or decree is prayed for. The declaration
       may be either affirmative or negative in form and effect, and
       such declarations shall have the force and effect of a final
       judgment or decree.

Interpreting this provision, the Supreme Court of Pennsylvania has held that

an order in a declaratory judgment action that affirmatively or negatively

declares the rights of parties is final and appealable, even if other claims in

the case remain pending. See Nationwide Mut. Ins. Co. v. Wickett, 763
A.2d 813, 818 (Pa. 2000) (Wickett).2

       However, in Pa. Bankers, the Supreme Court narrowed the holding of

Wickett, quashing an appeal where some, but not all, of the alternative

claims for declaratory relief were resolved. Pa. Bankers, 948 A.2d at 798.

In that case, various members of the banking industry challenged Section

517 of the Credit Union Code, 17 Pa.C.S. § 517, exempting credit unions

from taxation, on constitutional grounds and sought declaratory relief. Id.
____________________________________________

2
  In Wickett, there is no discussion concerning the nature of the remaining
claims. Nevertheless, in at least one case, this Court has distinguished
implicitly claims seeking declaratory relief from those which seek monetary
or injunctive relief. See Pa. Servs. Corp. v. Tex. E. Transmission, LP, 98
A.3d 624, 626 n.1 (Pa. Super. 2014) (denying a motion to quash an appeal
where the order appealed from declared the rights of the parties pursuant to
Section 7532, but where several claims seeking injunctive relief remained
unresolved); but see Pa. Servs. Corp., 98 A.3d at 636 (Ott, J., concurring)
(agreeing with the majority’s denial, but expressly concluding that Wickett
should control because the order “fully resolved the parties’ competing
declaratory judgment claims, and the claims that remain pending are non-
declaratory judgment claims”).

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at 791-92.     The Commonwealth Court denied relief on two of several

grounds raised, and the banks appealed. Id. Distinguishing Wickett, the

Supreme Court noted that the Commonwealth Court had not dismissed all of

the banks’ claims seeking declaratory relief but, rather, “merely narrowed

the scope of the [b]anks’ broader declaratory judgment action, which raised

alternative theories of relief.” Id. at 798.

      Several years later, the Supreme Court once again revisited the

Wickett holding.      In Bankruptcy Alternatives, a trade organization

(USOBA) challenged certain regulations affecting debt settlement services

(DSS)   providers    on   several   constitutional   grounds.   Bankruptcy

Alternatives, 26 A.3d at 475-76.          The Commonwealth Court granted

declaratory relief in part, and the Department of Banking appealed. Id. at

476. The Department relied on Wickett to argue that the decision of the

Commonwealth Court was a final order, appealable as of right under

Pa.R.A.P. 341(b)(2). Id. at 478.

      As in Pa. Bankers, however, the Supreme Court quashed the appeal.

Id. at 480. The Court explained its decision as follows:

      In the lower court, USOBA requested relief in the form of a
      declaration that Act 117 in its entirety, as applied to DSS
      providers, is unconstitutional. But, when USOBA requested a
      summary adjudication, the Commonwealth Court granted relief
      in part, striking only two provisions of Act 117. The lower court
      did not address several of USOBA's arguments and did not
      ultimately decide whether USOBA was entitled to the full relief
      originally requested, which remains available via USOBA's
      alternate arguments.       Essentially, the lower court simply
      narrowed the scope of USOBA's declaratory judgment action,

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     without ultimately deciding the case. Under the rule announced
     in [Pa.] Bankers, the Commonwealth Court's order is
     interlocutory and not appealable. The Department appealed an
     order which, in light of USOBA's original challenge to Act 117,
     granted USOBA only a partial declaration of the parties' rights,
     status, or legal relations.

Id. at 479.

     Recent precedent of this Court suggests the continued vitality of

Wickett in certain circumstances. See, e.g., Titeflex Corp. v. Nat’l Union

Fire Ins. Co. of Pittsburgh, Pa, 88 A.3d 970, 975-76 (Pa. Super. 2014)

(citing Wickett favorably and denying a motion to quash an appeal

challenging declaratory judgment, in which the trial court had concluded an

insurance company incurred a duty to defend its insured and the only

remaining     issue   involved   a   determination   as   to   the   amount   of

indemnification); see also Nat’l Cas. Co. v. Kinney, 90 A.3d 747, 753-55

(Pa. Super. 2014) (citing Wickett favorably and concluding that by denying

appellant’s motion for summary judgment, the trial court had effectively

resolved all issues presented in appellant’s declaratory judgment action).

Nevertheless, this Court has previously recognized the import of Pa.

Bankers and Bankruptcy Alternatives.

     [O]ur Supreme Court made clear that its holding in Wickett did
     not render an order, that did not fully release a party or
     completely resolve the dispute, a final order. Rather such an
     order would be deemed a partial declaration of the parties' rights
     and would not be immediately appealable.

Sw. Energy Prod. Co. Forest Res., LLC, 83 A.3d 177, 184 (Pa. Super.

2013) (citing Pa. Bankers) (emphasis added).

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      In this matter, the trial court did not address all of Modern’s claims for

declaratory relief. Thus, it did not completely resolve the dispute. Modern

sought a declaration that either UCS or Main Street was required to provide

it with a defense in the Rolland action. In the event the trial court declined

to recognize that Main Street incurred a duty to defend Modern as an

additional insured under the Main Street Policy, Modern pursued an

alternative theory of relief, requesting that “to the extent” Main Street

declined to defend Modern, UCS was obligated to pay for Modern’s defense.

See Modern First Amended Complaint, at 10, 11-12.             Thus, as in Pa.

Bankers and Bankruptcy Alternatives, in disposing of the parties’

motions for summary judgment, the trial court merely narrowed the scope of

Modern’s claims and granted Modern only a partial declaration of its rights.

      Finally, we recognize our Supreme Court’s “well-documented efforts of

avoiding piecemeal litigation.” Pa. Bankers, 948 A.2d at 798.

      [A]voiding piecemeal litigation conserves scarce judicial
      manpower as well as the time of witnesses, jurors, and the use
      of public resources. Moreover, this Court has noted that a policy
      that allows for piecemeal appeals serves only to increase the
      cost of litigation, and favors the party with the greater
      resources, who can strategically delay the action at the expense
      of the indigent party. Finally, we note that piecemeal litigation,
      in addition to being inefficient and costly, can often lead to
      inconsistent results.

Id. at 798-99 (citations and quotation marks omitted). Were this Court to

address Modern’s arguments on appeal, we would risk undermining those

efforts.

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       In summary, Modern sought to secure a defense in the Rolland Action.

In its complaint, Modern presented alternative theories of relief, seeking a

declaration that either UCS or Main Street incurred the duty to defend it.

The trial court afforded Modern a partial declaration of its rights, concluding

that Modern was not entitled to coverage as an additional insured under the

Main Street Policy. Although the trial court disposed of the issues raised by

the parties in their cross-motions for summary judgment, the court did not

address Modern’s alternative request for relief that UCS incurred a duty to

defend Modern per the terms of the Lease.3         Accordingly, Modern has not

appealed from a final order.

       Appeal quashed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 12/15/2014

____________________________________________

3
 We express no opinion regarding the trial court’s disposition of the parties’
motions for summary judgment.

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