Partner Robert J. Cosgrove and associate Colleen E. Hayes were awarded summary judgment in a Berks County, PA coverage dispute. In the case of Kelly v. Nautilus Insurance Company, et al., the plaintiff, the administratrix of the estate of Justin Kelly, initiated a coverage and error and omissions lawsuit arising out of Justin Kelly’s fatal on-the-job accident. At the time of the accident, Kelly was working as an independent contractor for the insured of our client, Nautilus Insurance Company (“Nautilus”). When confronted with the claim, Nautilus disclaimed coverage on the basis of its broad employee exclusion that defined as “employees” individuals who were not on the direct payroll of the insured. In light of the absence of coverage, to settle the underlying wrongful death action, the insured agreed to a $1,000,000 consent judgment (which was approved by the court) and assigned his rights against Nautilus and the insurance broker to Kelly’s estate. Thereafter, Kelly’s estate initiated a declaratory judgment and errors and omissions lawsuit against Nautilus and claimed that the employee exclusion was overbroad and illusory and thus unenforceable as a matter of law.
At the close of discovery, we moved for summary judgment and argued that Nautilus’s broad employee exclusion was clear and unambiguous and thus should be applied to the facts of the case. The trial court agreed with our analysis and dismissed all claims against Nautilus. The case against the broker continues.