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An insurance company is not obligated to cover the legal expenses of an insured person who was involved in a school bus scuffle because his actions were allegedly intentional, a federal court has ruled. With the decision, Judge James Knoll Gardner of the U.S. District Court for Eastern Pennsylvania granted Allstate Insurance’s motion for summary judgment in Allstate Insurance Co. v. Kenney, et al.Gardner also denied the policyholder’s counterclaims that Allstate had acted in bad faith by attempting to avoid providing legal aid and breach of contract. The underlying matter began when Chester County teens Zachary Kenney and Christopher Doggendorf became involved in an altercation on the bus home from high school, according to the opinion. The two are separated in age by a year, attorneys for their families said. According to the opinion, Doggendorf and his parents filed a suit against Kenney and his mother in Chester County Common Pleas Court in February 2002. The complaint alleged that Kenney had hit Doggendorf in the face, causing his nose and mouth to bleed, and then threw him to the floor of the vehicle. The complaint further stated that Kenney’s actions were the result of negligent supervision on the part of his mother, Maura. The Kenneys’ current counsel, Dolores Troiani of Troiani/Kivitz in Devon, said that the family held a homeowners’ policy with Allstate. According to the opinion, Allstate informed the Kenneys that it would provide Zachary with defense counsel for the Chester County action. But in April 2002, the opinion said, Allstate filed for declaratory judgment in the Eastern District, asking the court to declare that Allstate not be required to defend the Kenneys in the Chester County case. According to the opinion, the Chester County court granted a stay of the Doggendorfs’ action on Oct. 17, 2002, pending the outcome of Allstate’s declaratory judgment motion. The Doggendorfs’ attorney, John F. McKenna of MacElree Harvey in West Chester, said that he and the Kenneys’ counsel provided by Allstate had jointly filed to stay the Chester County action. Entered into evidence before Gardner was a letter to Maura Kenney from her Allstate-provided attorney, John Brown of Ryan Brown McDonnell Berger & Gibbons in Philadelphia, dated Oct. 17, 2002. In the letter, Brown told Kenney that he had been advised by McKenna that the Doggendorfs intended to drop the Chester County suit if the Eastern District court ruled that Allstate was not obligated to cover the Kenneys’ for expenses resulting from the fight. The Doggendorfs understood, Brown wrote, that Kenney lacked the personal assets to cover any judgment they might have sought. McKenna said yesterday that he had discussed the possibility of the Doggendorfs’ not pursuing their complaint with Brown in Oct. 2002, but that he had made no guarantees that his clients would definitely do so. Troiani said that as a result of Brown’s letter, the Kenneys did not participate in the Eastern District hearing on Allstate’s motion for declaratory judgment. According to the opinion, a default judgment was entered against the Kenneys as a result of their failure to appear, and Allstate was freed from its obligation to cover the Kenneys. Troiani said that Kenney retained as counsel her and her partner, Bebe Kivitz, soon after the default judgment. The entry of the default judgment was later lifted pursuant to the agreement of counsel, the opinion said. Gardner then issued two opinions, one dealing with Allstate’s request for a declaratory judgment, the other with the Kenneys’ counterclaims. In the latter opinion, Gardner wrote, “Because Allstate has provided counsel and no adverse judgment has been entered upon which Allstate has refused to indemnify the Kenneys, [they] cannot show under the facts pled in their counterclaims that Allstate denied benefits under the insurance contract. . . . We conclude the parties are not adverse. “This issue would be ripe for our review if Allstate had already failed to defend or indemnify the Kenneys in the state court action. . . . We determined [in the other opinion] that Allstate, as a matter of fact and law, is not under an obligation to do so. Therefore, Allstate has not breached any of the Kenneys’ legal or contractual rights.” In the second opinion, Gardner granted Allstate’s motion for summary judgment, noting that the Kenneys’ Allstate policy does not cover intentional acts of assault, and that numerous Pennsylvania rulings support that practice. Gardner pointed out that the complaint in the underlying state case alleged that the injuries inflicted on Doggendorf “resulted from intentional conduct by the insured . . . . Accordingly there can be no coverage under the Allstate policy.” Gardner also wrote, in response to the negligent supervision claim against Maura Kenney, that the Kenneys’ Allstate policy contained a clause imposing joint obligations upon all persons insured under a single policy. “We conclude that the language of the intentional acts exclusion,” Gardner wrote, “particularly when coupled with the joint obligation provision, indicates that the Allstate policy imposes a joint obligation on the Kenneys and that there can be no coverage for any insured arising out of damage caused by the intentional or criminal acts of another insured. Accordingly, Allstate has no duty to defend or indemnify Maura Kenney against the Doggendorfs’ claim of negligent supervision.” Gardner acknowledged that he was “unaware of any Pennsylvania cases dealing with this precise issue” of jointly obligated insureds being held accountable for the intentional acts of one of the insured. Allstate’s attorney, German Gallagher & Murtagh partner Kathryn A. Dux, said that she was pleased with the result and that Allstate is reviewing the decision to decide the appropriate next step. Troiani said that her clients are also reviewing the decision to decide whether they want to appeal. “This is not a wealthy woman,” Troiani said. “She has paid her premiums for a substantial number of years, and when she sought representation from Allstate” they didn’t defend her. (Copies of the 10-page opinion inAllstate Insurance Co. v. Kenney , dealing with the declaratory judgment, PICS No. 03-1614, and copies of the seven-page opinion inAllstate Insurance Co. v. Kenney , dealing with the counterclaims, PICS No. 03-1615, are available fromThe Legal Intelligencer . Please call the Pennsylvania Instant Case Serviceat 800-276-PICS to order or for information. Some cases are not available until 1 p.m.)

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