Phila. judge: insurer need not defend and indemnify construction company in workplace injury case

By Jon Campisi | Feb 21, 2013

A state judge has ruled that an insurance company has no duty to defend or indemnify a

construction company in an underlying civil case the company is embroiled in with a carpenter who allegedly became injured after falling from a scaffold at a construction site.

Philadelphia Common Pleas Court Judge Patricia McInerney ruled in a Feb. 14 order that Atlantic Casualty Insurance Company is not on the hook for indemnifying Adler Construction Inc. for defense costs arising out of a personal injury case Jose Cevallos initiated against Adler, and which is currently pending in Common Pleas Court.

In the underlying case, Cevallos, a carpenter, alleges he was injured after falling from a scaffold on Nov. 9, 2011, while working at a construction site on South Howard Street in Philadelphia.

Cevallos was an employee of Lasso Carpentry at the time, a subcontracting firm which is a non-party to the litigation.

International Marine Services Inc., which is also known as Coast to Coast International Marine Services Ltd., and owned the project site at the time, was also named as a defendant in the case initiated against Adler Construction by the insurer.

Cevallos himself as well as Luigi Adamo, identified as a property owner, were also named as defendants in the insurance action.

Cevallos had filed his complaint on March 2 of last year in which he alleged that he suffered physical injuries because of his fall from the scaffold.

The carpenter avers that Adler should have known of the hazardous and unsafe condition at the project site.

Atlantic Casualty filed its declaratory judgment action against Adler, Cevallos, Coast-to-Coast, Adamo and Bil-Jax, which is the scaffold manufacturer, about two months later in which the insurer asked the court to declare that it has no duty to defend or indemnify Adler in the underlying case, the record shows.

The record further shows that while the other defendants in the declaratory judgment action timely filed answers to Atlantic Casualty’s complaint, Adler filed no such pleading, and the insurer ended up securing judgment by default against Adler.

Atlantic Casualty then filed a motion for entry of order upon default judgment on Oct. 4, 2012, asking the court to declare that the insurer has no duty to indemnify Adler.

In her memorandum opinion, McInerney wrote that the insurance policy issued by Atlantic Casualty to Adler specifically excludes coverage for injuries suffered by contractors, subcontractors and employees.

“The language in this insurance policy clearly and unambiguously excludes from coverage any personal injury suffered by a contractor, a subcontractor, and any and all persons working for a contractor or subcontractor,” the judge wrote.

Adler had also argued that the insurance company’s motion was procedurally improper because even though the insurer obtained a default judgment against Adler, “disposition of the case on the merits is not appropriate where other parties to this litigation have filed an answer” to the complaint.

McInerney, however, disagreed, writing that although the other defendants in the declaratory action filed responsive pleadings to the insurance company’s complaint, the defendants cannot rely on mere dicta to prevent entry of an order on default judgment against the non-responsive defendant.

“Plaintiff’s Motion for Entry of an Order Upon Default Judgment is procedurally proper,” the judge wrote. “ACIC has no duty to defend or indemnify Adler in the Underlying Action because the policy covering Adler, together with the allegations contained in the underlying complaint, operate to exclude from coverage any bodily injury suffered by Cevallos as an employee of subcontractor Lasso Carpentry."

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