Penn Outdoor Servs. v. Harleysville Ins. Co. of N.J.

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PENN OUTDOOR SERVICES, LLC v. HARLEYSVILLE INSURANCE COMPANY OF NEW JERSEY AND WHARTON, LYON & LYONAPPEAL OF: WHARTON, LYON & LYON D/B/A WHARTON ATLANTIC A/K/A WHARTON INSURANCE A/K/A WHARTON GROUP

No. 2921 EDA 2022

Superior Court of Pennsylvania

June 27, 2024

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT O.P. 65.37

Appeal from the Judgment Entered October 12, 2022 In the Court of Common Pleas of Philadelphia County Civil Division at No 191003027

Benjamin D, Kohler, Esq.

BEFORE: STABILE, J., DUBOW, J., and SULLIVAN, J.

MEMORANDUM

STABILE, J.

Appellant, Wharton, Lyon & Lyon d/b/a/ Wharton Atlantic a/k/a Wharton Insurance a/k/a Wharton Group ("Wharton"), appeals from the October 12, 2022 judgment entered against it and in favor of Appellee Penn Outdoor Services ("Penn").^[1] We affirm.

The record reveals that Penn agreed by contract to provide snow removal services for an apartment complex located in Princeton, New Jersey. Penn subcontracted that job to Longford Landscape and Excavation ("Longford"). The contract between Penn and Longford included a hold harmless clause in Penn's favor with regard to the work to be performed by Longford pursuant to the contract. Therefore, the Penn/Longford contract required from Longford a certificate of insurance ("COI") naming Penn as an additional insured under Longford's applicable liability insurance policy. Wharton is Longford's insurance broker, and Harleysville Insurance Company ("Harleysville") is Longford's liability insurer. Wharton provided the COI to Penn.

The instant action was precipitated by a slip and fall at the Princeton, New Jersey apartment complex. Asya Ghant was injured there on February 10, 2017, and filed suit in Mercer County, New Jersey, against Penn and other parties. Penn sought defense and indemnity from Longford and Harleysville, but Harleysville denied coverage, claiming that the Ghant litigation discovery process revealed that Ghant's injuries were due to Penn's independent negligence. Harleysville also claimed that Penn's insurance under its policy was not primary, but excess coverage to Penn's own insurance because the Penn/Longford contract did not specify otherwise. Harleysville contended that Longford was compliant with its contractual obligations to Penn by procuring excess coverage.

Penn eventually settled Ghant's suit for $650,000.00 after having incurred more than $200,000.00 in legal fees. On October 25, 2019, Penn filed the instant lawsuit against Harleysville and Wharton alleging breach of contract, equitable reformation of contract, negligence, and bad faith (42 Pa.C.S.A. § 8371). A jury verdict of $713,600.00 in Penn's favor was entered on April 6, 2022. On April 13, 2022, Wharton filed a motion for j.n.o.v. and/or a new trial. The trial court heard oral argument on Wharton's motion on September 21, 2022, and denied relief at the conclusion of argument. The verdict was reduced to judgment on October 12, 2022. This timely appeal followed.

Wharton presents five questions:

1. Whether the trial court erred and/or abused its discretion in finding that judgment n.o.v., or else a new trial, was not required despite the material variance between the pending complaint and the substance of the comes on which the case was tried to verdict?

2. Whether the trial court erred and/or abused its discretion in finding that judgment n.o.v., or else a new trial, was not required despite the evidence wholly establishing that [Penn] was an additional insured under the Harleysville policy, and wholly disproving the assertion that any other type of additional insured endorsement would have provided coverage to [Penn] for the underlying claim.

3. Whether the trial court erred and/or abused its discretion in finding judgment n.o.v., or else a new trial, was not required despite the overwhelming proof that Wharton did not misrepresent-negligently or otherwise-any fact on the [COI], but that it rather stated the facts-of-coverage clearly and accurately, as admitted by [Penn's] own expert at trial.

4. Whether the trial court erred and/or abused its discretion in allowing [Penn's] expert, over objection, to testify as to his interpretation of an insurance contract, and in thereafter denying Wharton's request for a new trial.

5. Whether the trial court erred and/or abused its discretion in denying a new trial and rejecting Wharton's contention that the jury's verdict was against the weight of the evidence.

Wharton's Brief at 4-5.

We begin by setting forth the strictures governing our review. We reverse an order denying a j.n.o.v. motion only if we conclude that the trial court committed an error of law or abuse of discretion that controlled the outcome of the case. Greco v. Myers Coach Lines, Inc., 199 A.3d 426, 430 (Pa. Super. 2018).

There are two bases upon which a [JNOV] can be entered; one, the movant is entitled to judgment as a matter of law and/or two, the evidence is such that no two reasonable minds could disagree that the outcome should have been rendered in favor of the movant. With the first, the court reviews the record and concludes that, even with all factual inferences decided adverse to the movant, the law nonetheless requires a verdict in his favor. Whereas with the second, the court reviews the evidentiary record and concludes that the evidence was such that a verdict for the movant was beyond peradventure.

[…]

The proper standard of review for an appellate court when examining the lower court's refusal to grant a [JNOV] is whether, when reading the record in the light most favorable to the verdict winner and granting that party every favorable inference therefrom, there was sufficient competent evidence to sustain the verdict. Questions of credibility and conflicts in the evidence are for the trial court to resolve and the reviewing court should not reweigh the evidence.

Id.

Wharton's first assertion of error is that j.n.o.v. was warranted because of a material variance between Penn's complaint and the substance of the case it presented to the jury. Wharton claims that Penn pled that Wharton failed to make Penn an additional insured on Longford's Harleysville policy but then tried the case on an entirely different theory-that Penn was an additional insured, but that Penn's coverage was improperly subject to limitations that excluded coverage of Ghant's alleged injuries. Wharton's Brief at 16.

A variance denotes difference and in reference to legal proceedings[,] it refers to a disagreement or difference between the allegations made and the proof shown, not in the sense that there is a failure of proof, but that, contrary to the fundamental principle of good pleading and practice, the proof fails to materially correspond to the allegations. A material variance consists of a departure in the evidence from the issues on which the cause of action must depend.

For purposes of determining whether a claimed or apparent discrepancy between pleadings and proof constitutes a variance, the entire pleadings and evidence should be considered. Generally, in order to constitute a variance, the discrepancy must exist between the allegations and proofs of the particular party, with the result that a party is not permitted to introduce evidence that is inconsistent with or fails to correspond to the allegations made by that party.

The modern rules of pleading and practice are relatively liberal. Consequently, the impact of variance may be diminished by the preference for a liberal[,] if not informal[,] evaluation of pleadings emphasizing the determination of cases based upon their merits rather than based on mere technicalities, which policy, for example, may allow a party to cure a variance by offering, during or after trial, to amend the pleadings to conform to the proof.

General pleading allegations which are not objected to because of their generality, may have the effect of extending the available scope of a party's proof, such that the proof would not constitute a variance, beyond that which the party might have been permitted to give under a more specific statement.

Young v. Lippl, 251 A.3d 405, 418 (Pa. Super. 2021) (quoting Graham v. Campo, 990 A.2d 9, 13-14 (Pa. Super. 2010), appeal denied, 16 A.3d 504 (Pa. 2011)). A variance between pleadings and proof will be considered material if the defendant has been misled; that is, if the proof imposes a different burden on the defendant and/or sets up a different cause of action than the one alleged. Id.

We begin with a review of Penn's amended complaint. Penn alleged that its contract with Longford, wherein Longford promised to hold Penn harmless from claims arising out of Longford's duties under the contract, was an "insured contract" under Longford's Harleysville policy. Amended Complaint, 11/25/20, at ¶¶ 9-10. Penn also alleged that its contract with Longford required Longford to name Penn as an additional insured on the Harleysville policy. Id. at ¶ 11. Penn alleged that it "reasonably expected […] that Longford's Harleysville Policy would afford it primary, non-contributory coverage as an additional insured for claims arising out of Longford's work." Id. at ¶ 12.

Penn attached the pertinent documents to its amended complaint. The contract between Penn and Longford is attached as Exhibit B to Penn's amended complaint and provides:

Subcontractor agrees to indemnify and save and hold harmless Penn and Penn's clients/customers from and against all claims for damages arising out of the performance of Subcontractor's duties under this Agreement and agrees to, at Subcontractor's expense, defend any suit or action brought against Penn or Penn's clients/customers on account of such claim or damage.

Id. at Exhibit B, ¶ 7(a). Penn's coverage as an additional insured under Longford's Harleysville...