The insurers went to court, seeking a determination regarding insurance coverage. The insurers moved for summary judgment, asserting that the policies unambiguously excluded coverage of the Bremers' suit against Burns & Scalo.

The Policies

The policies provided for a defense and indemnification for a lawsuit seeking damages for:

bodily injury

that occurred during the policy coverage period.

They defined:

bodily injury

as:

bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time.

An exclusion (the “Exclusion”) in the policies provided:

This insurance does not apply to:

e. “Bodily injury” to:

(1) An employee of the insured arising out of and in the course of employment by the insured; or

(2) The spouse, child, parent, brother or sister of that employee as a consequence of (1) above.

This exclusion applies:

(1) Whether the insured may be liable as an employer or in any other capacity; and

(2) To any obligation to share damages with or repay someone else who must pay damages because of the injury. 

The Bremers alleged in their complaint that their claim was against:

Defendant-Employer Burns and Scalo, for whom Plaintiff was last employed between 1973 and 1976….

(Emphasis added.)

Their complaint further alleged that Burns & Scalo was liable as a:

defendant employer

for, among other things:

a) failing to advise plaintiffs of the presence of asbestos … which they were working with in connection with their employment;

b) failing to provide plaintiffs with appropriate protective equipment and applicances [sic] necessary in order to protect them from … becoming injured or disabled by way of exposure to asbestos and asbestos related products;

c) failing to provide plaintiffs with a safe place to work;

d) failing to provide proper instruction and supervision to plaintiffs in the performance of their duties in handling asbestos or asbestos products;

e) failing to provide plaintiffs with necessary and proper safety equipment to use while performing their work duties in and around asbestos and asbestos products;

f) failing to take adequate precautions to prevent plaintiffs from suffering injuries as a result of their employment;

g) being otherwise negligent, reckless, and careless in failing to protect the health, safety and welfare of their employees;

h) failing to advise plaintiffs of the results of their x-rays, examinations and pulmonary function tests which were taken by or on behalf of defendant employer during the course of their employment and/or failing to advise plaintiffs to cease further asbestos exposure; and

i) failing to advise plaintiffs after plaintiffs' exposure to asbestos ceased, about the dangers of exposure to asbestos, about the dangers of past or present asbestos exposure in combination with smoking or exposure to other fumes and dust, and about the need for future medical surveillance.

(Emphasis added.).

The District Court's Decision

The district court, applying Pennsylvania law, granted summary judgment in favor of the insurers.

In its decision, the district court found that the factual allegations in the Bremers' complaint “clearly and unmistakably” indicated that the Bremers' causes of action arose out of the alleged exposure to asbestos during the course of Dr. Bremer's employment with Burns & Scalo.

As a result, the district court continued, it was “patently clear” that the Bremers' allegations fell within the exclusion for actions against an insured employer and, therefore, that they were outside the scope of any insurance coverage.

The district court concluded that the factual allegations in the Bremers' state court complaint “unequivocally” indicated that their alleged injuries “arose out of and in the course of Dr. Bremer's employment by [Burns & Scalo].”

Consequently, because the claims alleged in the state court complaint fell within the Exclusion, the insurers had no duty to defend or to indemnify Burns & Scalo in the Bremers' action, the district court ruled.

The case is National Fire Ins. Co. of Hartford v. Burns & Scalo Roofing Co., No. 15-6028 (E.D. Penn. Jan. 26, 2017).