Court Opinion

ID: 9753744
Source: CourtListenerOpinion
Date Created: 2023-08-28 19:25:27.814435+00
Date Added: 2024-06-11T07:27:41.087605
License: Public Domain

DEL SOLE, Judge,
dissenting:
I must respectfully dissent from the Opinion of the majority in this case. I would reverse the judgment entered on the pleadings on the basis of the unpublished Panel Opinion authored by the Honorable Harry M. Montgomery which follows:
“The instant appeal arises from a lower court order granting a motion for judgment on the pleadings and a declaratory judgment action. This case was instituted in a lower court to resolve questions of insurance coverage and the duty to defend a tort claim and indemnify an insured arising out of the tort claim.
“The events leading to the instant appeal were triggered by a motor vehicle accident which took place on July 30, 1979.1 In that incident, a vehicle operated by one Steven James Kirk collided with an oncoming vehicle, and the accident produced the deaths of two persons and serious bodily injuries to others. At the time, Kirk was operating the vehicle in the course of his employment with Richard Pulleyn and Rodger Sadlak t/d/b/a Butler Custom Builders (hereinafter collectively referred to as ‘Custom Builders’).
“A suit was filed by Charles W. Davis, Jr., on his own behalf and on behalf of the estates of his wife and daughter, who were killed in the accident, as well as on behalf of two of his children who survived the collision. Damages for the deaths and injuries were sought in that action against Kirk and also against Custom Builders.2 In the case, the Plaintiff sought, inter alia, to recover from Custom Builders on two distinct theories of negligence. First, *356as would be expected, Custom Builders was asserted to be vicariously liable for the negligence of the employee, Kirk, in his operation of the vehicle involved in the accident. Second, and most significant to the instant litigation, the Plaintiff maintained that Custom Builders was negligent ‘... in assigning Steven James Kirk the task of delivering a certain piece of equipment ... in that [Custom Builders] had actual knowledge of the Defendant Steven James Kirk’s physical illness or incapacity before assigning him the said task.’3
“Following the institution of the damage action, Custom Builders filed the instant action seeking, among other relief, a declaration that an insurance policy issued to them by the Defendant-Appellee Westmoreland Casualty Corporation (hereinafter referred to as “Westmoreland”) afforded coverage against claims asserted in the above-described damage action. The Plaintiff in the damage action was granted the right to participate in the instant declaratory judgment litigation as an Intervenor. Each of the parties filed motions for judgment on the pleadings and the lower court granted the motion of Westmoreland, and denied the cross motion of Custom Builders and of the Intervenor. The instant appeal is filed by Charles W. Davis, Jr., the Intervenor, in his personal and representative capacities.
“The crux of this case is whether Westmoreland policy of insurance covers the insured, Custom Builders, with regard to the claim by the Intervenor that- Custom Builders is liable, on the theory that it was negligent in assigning an ill or physically incapacitated employee to the task which resulted in the accident. Westmoreland, in its defense, relies upon the following exclusion language set forth in the liability policy it issued to Custom Builders:
“This insurance does not apply: ... .
“(b) to bodily injury or property damage arising out of the ownership, maintenance, operation, use, loading or unloading of:
*357“(1) any automobile or aircraft owned or operated by or rented or loaned to any insured, or
“(2) any other automobile or aircraft operated by any person in the course of his employment by an insured.
“Westmoreland maintains that the aforesaid policy language excuses it from any defense or indemnity obligations with respect to the Intervenor’s damage claims against Custom Builders, the insured, because the underlying tort claim requires proof of negligent operation or use of an automobile. The lower court agreed with this argument, and also rejected the arguments of Custom Builders and the Appellant that the policy language was ambiguous.
“The Appellant has contended in the lower court, and again on his appeal, that the distinct allegation of a delegation of a task to an employee unfit for the task constituted an independent basis for coverage by the Westmoreland policy. It is argued that while the damage cause of action for negligent operation of the vehicle, based upon a respondeat superior theory, is not within the ambit of the policy, the separate negligent entrustment theory of recovery is not covered by the exclusion language in issue.
“Prior to addressing the merits of this appeal, it is appropriate that we make note of the well-established policies which guide our deliberations in cases such as the instant one. Because an insurance policy is a contract, we must determine the intent of the parties as manifested by the language of the written agreement. Adelman v. State Farm Mutual Automobile Insurance Co., 255 Pa.Super. 116, 386 A.2d 535 (1978). When the language in question is clear and unambiguous, its terms are to be given their plain and ordinary meaning. Blocker v. Aetna Casualty & Surety Company, 232 Pa.Super. 111, 332 A.2d 476 (1975). However, insurance contracts are considered contracts of adhesion, and genuine ambiguities, if they exist, must be resolved in favor of coverage and against the insurer. Mohn v. American Casualty Co. of Reading, 458 Pa. 576, 326 A.2d 346 (1974). It is also held that clauses providing exceptions to an insurer’s general liability are to be inter*358preted narrowly and against the insurer. Miller v. Prudential Insurance Co. of North America, 239 Pa.Super. 467, 362 A.2d 1017 (1976); Celley v. Mutual Benefit Health and Accident Association, 229 Pa.Super. 475, 324 A.2d 430 (1974).
“It is with these precepts in mind that we have examined the question presented in this appeal, and now hold that the lower court erred in entering a declaratory judgment in favor of the Appellee insurer, Westmoreland. We conclude that the legal principles applicable to this case, the fact situation presented, and the insurance contract language in issue mandate a finding that the Westmoreland policy exclusions do not insulate the insurer from its obligation to defend and indemnify Custom Builders with regard to the negligent entrustment claims of the Intervenor-Appellant.
“The case of Eichelberger v. Warner, 290 Pa.Super. 269, 434 A.2d 747 (1981) provides highly relevant guidance as well as instructive precedent. In that case, our Court found, inter alia, that a homeowners insurance policy as well as an automobile insurance policy provided coverage to an insured in the case of injuries arising from an auto accident. The homeowners policy in issue in the case contained an exclusion quite similar to the one involved in the instant appeal:
“This policy does not apply
“(1) under coverage E — personal liability
“a) to bodily injury or property damage arising out of the ownership, maintenance, operation, use, loading or unloading of
“b) any motor vehicle owned or operated by or rented or loaned to any insured ...
“The accident in Eichelberger occurred when the insured, standing behind her disabled car at the side of a highway, stepped backwards into the path of the Defendant’s car. The Defendant struck the insured, lost control of her vehicle, which then collided with other parked vehicles and caused injuries to other individuals at the scene. The *359Defendant, when found liable for damages to those individuals, sought a contribution from the insured’s auto and homeowner’s policies.
“Despite the above-quoted language in the policy, our Court determined that the homeowner’s policy provided coverage under the facts presented. Clear merit was found in the Defendant’s contention that a proximate cause of the accident was the insured’s non-auto related negligent conduct as a pedestrian. The insured’s negligence in stepping in front of the Defendant’s vehicle was determined to not fall within the ambit of the policy clause excluding coverage for injury or damage ‘arising out of the use’ of a vehicle.
“In Eichelberger, our Court relied upon a similar holding and the reasoning of the California Supreme Court in State Farm Mutual Automobile Insurance Company v. Partridge, 10 Cal.3d 94, 109 Cal.Rptr. 811, 514 P.2d 123 (1973). Similar holdings have issued in cases involving motor vehicle tort claims, and questions of coverage under homeowners policies featuring comparable exclusion provisions, in other jurisdictions. See Upland Mutual Insurance, Inc. v. Noel, 214 Kan. 145, 519 P.2d 737 (1974); Republic Vanguard Insurance Co. v. Buehl, 295 Minn. 327, 204 N.W.2d 426 (1973); Travelers Insurance Co. v. Beschel, 71 Misc.2d 420, 336 N.Y.S.2d 370 (1972); McDonald v. Home Insurance Co., 97 N.J.Super. 501, 235 A.2d 480 (1967).
“We find the analysis and reasoning in Eichelberger and the other cases cited to be persuasive in the instant case. The negligent conduct ascribed to Custom Builders by the Appellant, in the negligent entrustment allegations in the damage action, was separate and distinct from the allegations concerning the operation of the motor vehicle by the employee Kirk. The entrustment took place when Kirk was designated by his employers to perform the task, before he ever took the first step to carry out his assignment. It was a departure from due care which had been completed before the employee even entered the vehicle or moved it from its parking place to begin his job. Because the negligent entrustment claim is a separate one in the damage action, we cannot conclude, with the certainty legally required in *360the analysis of such exclusion clauses in insurance policies, that Westmoreland may be excused from providing coverage in such cases.4
“Stated another way, we do not find it possible to hold that the policy in question positively and clearly excludes from coverage any claim against an insured that it was guilty of negligently assigning an employee a particular job or task, which when performed incompletely or incorrectly, proximately caused harm to another. One could reasonably conceive numerous other situations in which an employer could be accused of negligently assigning or entrusting an employee to a task which, because of subjective problems particular to the employee chosen, might foreseeably create a risk of damage to property or harm to others. We would find coverage for the insured in such circumstances under the general contractor’s liability policy in issue in this case. We do not feel that the exclusion clause in the policy in this case has any effect upon the insurer’s duty to provide coverage against claims of negligent entrustment. Of course, the later and separate act of negligence in driving by the employee, for which any employer may be held responsible under a respondeat superior theory, is unambiguously covered by the language of exclusion, and the insurer may properly rely upon it to avoid coverage.
“We therefore reverse and vacate the judgment on the pleadings entered for the Defendant-Appellee Westmoreland Casualty Company. The case is remanded to the lower court with directions that it enter judgment for the Plaintiffs, t/d/b/a Butler Custom Builders, and against the Defendant-Appellee Westmoreland Casualty Company, ordering that it provide a defense to the insureds on the entrustment aspects of the Intervenor’s damage claims, and thereafter indemnify the said Plaintiffs for any liability *361imposed as a result of such claims, with the financial limitations of the policy in questions.
“Reversed and remanded with directions. Jurisdiction is relinquished.”
I would add that I believe that the majority incorrectly analyzes the matter by making a determination that the motor vehicle must be used in a negligent manner resulting in injury as part of the claim. There can, in fact, be no negligence on the part of the operator of the vehicle at the time of the accident, but negligence on the part of the entrustor which is a substantial factor in bringing about the harm. It is in these situations where the issue is clearly drawn.
However, if the operator is negligent in causing an accident when the entrustor is negligent in providing the vehicle to the operator, both of these elements are separate and distinct and if they are both substantial factors in bringing about the harm, each would be liable on different theories.
Therefore, I would reverse the judgment on the pleadings entered by the trial court and direct that the carrier provide coverage on the negligent entrustment claim.
BECK, J., joins in this dissenting opinion.

. Because this case involves a judgment on the pleadings, our recitation of facts will rely on all of the well-pleaded allegations of the Intervenor-Appellant. See Wade v. Heisey, 243 Pa.Super. 8, 364 A.2d 423 (1976).

. The status of the damage action is not a matter of record in the instant case.

. See Restatement 2nd of Torts, Section 308, which sets forth this theory of recovery, which other courts have called “negligent entrustment”.

. The Westmoreland policy provides, in pertinent part: “The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of A. bodily injury of B. property damage to which this insurance applies, caused by an occurrence, and the company shall have the right and duty to defend any suit against the insured seeking damages on account of such bodily injury or property damage ...”