Judge Orders Insurer to Defend in Construction Accident Case
In a recent ruling, a federal judge has determined that American National Lloyds Insurance Company (ANLIC), a subsidiary of Brookfield Re, must defend two Pennsylvania property owners in a personal injury suit. The case stems from an accident at a construction site, with the judge finding that key policy exclusions were not clearly triggered.
The ruling, issued in American National Lloyds Ins. Co. v. Alexis, Civil Action No. 23-130, involves a claim filed by Ernesto and Ana Rosa in Berks County Court. The Rosas allege that Mr. Rosa sustained serious injuries after falling from a roof on April 28, 2021, while working at a property in Reading, Pennsylvania.
According to court documents, Mr. Alexis and Real Estate Brothers, L.L.C., owned or controlled the site where the accident occurred. The Rosas contend that the defendants failed to provide a safe workplace and did not adequately inspect the premises for hazards.
ANLIC had sought a declaratory judgment, arguing it had no obligation to defend or indemnify the property owners, Michelange Alexis and Real Estate Brothers, L.L.C. ANLIC’s policy, issued to Connected Investors Real Estate Insurance Services, L.L.C., extended coverage to reported property owners as Additional Named Insureds, subject to specific exclusions.
The insurer pointed to its Independent Contractor Exclusion Endorsement, which bars coverage for injuries to independent contractors’ employees. ANLIC contended that because Mr. Rosa was allegedly employed by E.N.T. Roofing, an independent contractor, the exclusion applied.
However, Judge Kelley B. Hodge rejected ANLIC’s argument in a memorandum opinion issued March 24. Judge Hodge held that the duty to defend must be determined based solely on the allegations in the underlying complaint and the language of the insurance policy, not on external evidence. “The Court is not persuaded by Plaintiff’s logic that it is therefore inevitable that Rosa was employed by an independent contractor,” Judge Hodge wrote.
The judge noted that the complaint did not specify who employed Mr. Rosa, nor did it definitively establish that the defendants supervised Mr. Rosa’s work. Consequently, the court lacked sufficient information to conclude that the exclusion applied, thus obligating ANLIC to provide a defense.
Judge Hodge also declined to address the insurer’s duty to indemnify at this stage, citing Third Circuit precedent. Indemnification obligations typically arise only after a determination of liability and damages within the scope of coverage.
The decision underscores the insurance law principle that the insurer bears the burden of proving an exclusion and cannot rely on materials outside the complaint to avoid its duty to defend at the initial pleading stage. ANLIC retains the option to refile its declaratory judgment action on the matter of indemnification once the underlying personal injury litigation is resolved.
