Traub Lieberman Partners Brian C. Bassett and Jeremy S. Macklin Prevail In Coverage Dispute Before Pennsylvania Appellate Court

Traub Lieberman Straus & Shrewsberry LLP partners Brian C. Bassett and Jeremy S. Macklin recently prevailed on appeal in an insurance coverage dispute before the Superior Court of Pennsylvania, which is Pennsylvania’s intermediate appellate court.  The dispute involved the coverage owed by multiple insurers to their mutual insured for a series of underlying lawsuits filed by firefighters alleging noise-induced hearing loss resulting from the insured’s products.  Traub Lieberman’s insurer client and certain other insurers agreed to provide a defense to the insured, while one of the other insurers refused to participate in the defense.  The other insurer argued that its policy was rendered inapplicable to the underlying suits by virtue of an endorsement added to its policy that addressed continuous losses that incepted prior to its policy period.  Alternatively, that insurer argued that, based on a self-insured retention (“SIR”) endorsement to its policy, its obligations to the insured only commenced upon the satisfaction of the SIR through payment of defense costs.  The insurer argued that its duty to defend therefore was not triggered upon the filing of the underlying suits.

The trial court granted summary judgment in favor of Traub Lieberman’s client.  The trial court found that the continuous losses endorsement cited by the other insurer could only be interpreted to prioritize coverage between insurers, rather than to allow the other insurer to escape a defense obligation altogether.  As the continuous loss circumstances contemplated by the endorsement did not apply to the underlying lawsuits, the continuous losses endorsement could not impact the other insurer’s duty to defend. The trial court also found that because the SIR endorsement stated that the SIR only applied to “damages,” the SIR only applied to amounts owed by the insured to claimants for their injuries, rather than costs incurred on behalf of the insured in defending the underlying lawsuits.  Accordingly, the other insurer owed a duty to defend the insured along with Traub Lieberman’s client and the other defending insurers. 

The Superior Court’s decision largely tracked the reasoning of the trial court in affirming summary judgment.  The Superior Court also rejected the appellant’s argument that summary judgment should not have been granted to Traub Lieberman’s client until the appellant was permitted an opportunity to obtain discovery on the meaning of its own policy.  The court sided with Traub Lieberman’s client in finding that the language of the policy was clear and unambiguous, and therefore discovery on the proper interpretation of the policy would be improper.