Nicholas Malfitano Jun. 16, 2015, 8:16am


PHILADELPHIA – On June 9, a federal judge decided against staying an insurance dispute while an underlying personal injury action resolves itself.

Judge Cynthia M. Rufe declared the U.S. District Court for the Eastern District of Pennsylvania would continue determining whether Western World Insurance Company has a duty to indemnify Alarcon and Marrone, Inc., in an underlying lawsuit filed in the Philadelphia County Court of Common Pleas by Daily Anderson.

The Common Pleas lawsuit arises from a Sept. 25, 2012 accident, in which Anderson was injured at a construction renovation project the Alarcon defendants were contracted to perform at 1210-12 Chestnut Street in Philadelphia.

Anderson alleged he was hired by the Alarcon defendants to perform demolition services at that site, and was standing on a ladder cutting pipe when he was injured.

He alleged the Alarcon defendants were negligent or reckless with regard to the “adoption, promulgation, and enforcement of proper safety standards.”

“Western World filed this suit for the purpose of obtaining a declaratory judgment that, under the terms of the policy, it has no duty to defend or indemnify the Alarcon defendants,” Rufe said.

“Specifically, it argues that one or more specific policy exclusions apply (e.g. for temporary workers, contractors, or subcontractors, or for injury covered by worker’s compensation) to bar coverage. It also seeks reimbursement for the defense costs and expenses already incurred by Western World in the Common Pleas suit.”

Defendants Four Forty North Front and Philadelphia Residential Development Company petitioned the U.S. District Court for the Eastern District of Pennsylvania to decline to exercise jurisdiction on the instant litigation and dismiss the call for a declaratory judgment, or if not, stay moving on the case until the underlying Philadelphia County Court of Common Pleas litigation is resolved.

Rufe considered factors such as likelihood of a federal court decision resolving the matter, convenience to the parties involved and avoidance of duplicative litigation before rendering her decision.

“Upon consideration of these factors, the Court finds that a declaration in this case will resolve the uncertainty of Western World’s obligation, this forum is not inconvenient for the parties, and these issues will not be resolved through the Common Pleas suit (to which Western World is not a party),” Rufe said.

“Moreover, this conflict would not be diminished if the declaratory judgment action was litigated in state court rather than federal court. Accordingly, the Court holds that it is appropriate to exercise jurisdiction over this controversy.”

Rufe also ruled on the request to stay the instant case until the state court one is resolved.

“The Court holds that a stay of this case until the conclusion of the underlying tort case is not warranted. However, this ruling is without prejudice to the right of any party to file a renewed motion to stay in the interest of judicial economy, or for other good cause, at the conclusion of discovery,” Rufe said.

The plaintiff is represented by Joseph M. Oberlies of Connor Weber & Oberlies, in Philadelphia.

The defendants are represented by Brian A. Wall, Jr. of McCann Schaible & Wall and William T. Salzer of Swartz Campbell, also in Philadelphia.

U.S. District Court for the Eastern District of Pennsylvania case 2:14-cv-06617

From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nickpennrecord@gmail.com

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