An insurer has to defend a former Temple Law student in a civil trial against him over his shooting of the son of a Fox Rothschild partner, a federal judge has ruled.
But that judge left for later the question of whether the insurer would have to indemnify the shooter if he was hit with any damages.
In Citizens Insurance Co. of America v. Ung, Citizens filed a declaratory judgment action in the Eastern District of Pennsylvania seeking a finding that it did not have to cover Gerald V. Ung in an underlying civil trial filed in Philadelphia state court by Edward W. DiDonato, the son of Fox Rothschild partner Edward J. DiDonato.
The junior DiDonato was shot multiple times in the early morning hours of Jan. 17, 2010, while walking in the Old City section of Philadelphia. According to his complaint filed in the Philadelphia Court of Common Pleas, Ung shot DiDonato several times in the stomach, hand, shoulder and back. DiDonato was unarmed, according to the complaint.
In his 2011 criminal trial, Ung was found not guilty of attempted murder and aggravated assault, according to media reports that stated Ung claimed self-defense. The civil case was filed Dec. 30, 2011, by DiDonato against Ung and several bars that allegedly served Ung alcohol in the hours before the shooting.
Citizens had issued a homeowners insurance policy to Ung’s parents, who lived in Virginia at the time of the 2010 shooting. It wasn’t until the Jan. 24, 2013, deposition of Ung in the civil trial that he realized he may be eligible for coverage under the policy. Ung and his parents argued they didn’t think that Ung, who was over 18 at the time and living in Pennsylvania, would be eligible for coverage under the parents’ policy, according to the opinion by U.S. District Judge L. Felipe Restrepo.
When Ung was informed during his deposition that he would be eligible for coverage, his parents quickly submitted a claim to Citizens. The insurer argued it was not obligated to defend or indemnify Ung in the underlying state action because Ung breached the policy’s notice provisions, Restrepo said. The insurer further argued that the state action does not allege an “occurrence” for purposes of the policy and that the “expected or intended” exclusion would apply to bar coverage, the judge said.
Under the policy, an occurrence is an accident that results during the policy period in bodily injury or property damage. Personal liability coverage does not apply to bodily injury that is “‘expected or intended by the insured,’” Restrepo said, citing the policy.
Citizens’ suit was filed against both Ung and DiDonato. DiDonato argued Citizens’ claims regarding the notice provision fail in that Ung reasonably was delayed in reporting a claim and that the delay was not “substantial and material,” Restrepo said. DiDonato acknowledged that Citizens’ duty to indemnify Ung wasn’t yet triggered given there has not been a verdict in the state action. Ung, who filed his own motion for summary judgment, adopted the reasoning set forth in DiDonato’s motion as his own, Restrepo said.
According to the docket in the state action, several summary judgment motions from some of the defendants were denied in October 2013. The case is currently slated for trial April 28.
Restrepo noted that the insurer had to prove the delay in notice was substantial and material in order to be released from a duty to defend Ung. He looked at the reasonableness of the delayed notice, the amount of prejudice the insurer suffered as a result of the delay and the length of time that elapsed before notice was given.
Restrepo found the time it took Ung to notify the insurer was reasonable.
“In particular, with regard to the underlying incident involving a student in Philadelphia shooting another individual multiple times in Center City Philadelphia, it was objectively reasonable for it not to have appeared to a person in the Ungs’ situation that the policy may be implicated until the time when the Ungs actually gave notice,” Restrepo said.
The judge further noted that even Ung’s counsel in the state action, who was hired by Citizens, didn’t realize the insurance policy was implicated.
As to whether Citizens was prejudiced by the delay in notice, Restrepo said Citizens failed to show how it was prejudiced by the late notice given that when the insurer did find out about the litigation, it elected to retain the same lawyer who had been representing Ung since the start of the underlying litigation. Restrepo said Citizens hasn’t claimed that counsel has failed to conduct a thorough defense of Ung or that it would have hired someone else had it known about the case earlier.
Citizens further argued that it did not have a duty to defend Ung under the policy because his actions were intentional and did not qualify as negligent acts.
Restrepo said DiDonato’s amended complaint in the state action alleges negligent conduct on the part of Ung, including his decision to bring a gun to a bar and then become intoxicated. After leaving the bars, Restrepo said, Ung then allegedly became involved in a drunken confrontation with two of DiDonato’s friends, none of whom were armed. DiDonato argues in the state action that, given Ung’s intoxication, Ung misjudged the situation and negligently perceived a threat that didn’t exist.
Restrepo applied the “eight corners” rule, looking at the policy language and the allegations of the underlying complaint. He noted that an insurer avoids a duty to defend only when there is no basis upon which the insurer could be required to indemnify the insured.
“Here, the allegations in the amended complaint included allegations that sound in negligence,” Restrepo said.
While a duty to defend is implicated when the claims potentially come within the policy’s coverage, the duty to indemnify is only triggered when damages are assessed within the policy’s coverage, Restrepo said.
Because a ruling on the duty to indemnify would require the court to resolve the merits of the underlying litigation, Restrepo said the summary judgment motions on that issue are premature. He dismissed the motions without prejudice to Citizens to refile on that issue.
Robert Mongeluzzi, Andrew R. Duffy and Jeffrey P. Goodman of Saltz Mongeluzzi Barrett & Bendesky represent DiDonato. Elizabeth R. Leong and John P. Malloy of Robinson & Cole in Hartford represent Citizens. Calls to Mongeluzzi and Leong weren’t returned by press time.
Ung’s attorney, David V. Bogdan of Philadelphia, declined to comment.
(Copies of the 19-page opinion in Citizens Insurance Co. of America v. Ung, PICS No. 14-0281, are available from The Legal Intelligencer. Please call the Pennsylvania Instant Case Service at 800-276-PICS to order or for information.) •