Continental Casualty Company v. Pro Machine, Randy Egbert and Paul Massey T/A and Paul Massey, Individually

1 Paul Massey (Massey), a partner in Pro Machine (Pro Machine or the
Partnership), appeals from an order granting summary judgment to
Continental Casualty Company (Continental) in the latter's declaratory judgment action. In this case of first impression, we are asked to determine
whether Massey is entitled to underinsured motorist (UIM) benefits under a
business automobile policy issued by Continental to Pro Machine. Upon
careful review, we reverse and remand for further proceedings.

2 Pro Machine is a Pennsylvania partnership, registered as a fictitious
name, under which Massey and Randy Egbert (Egbert) trade as a machine
shop. In 2001, Massey owned a Harley Davidson motorcycle (the
motorcycle) and a Grand Prix, both of which were titled in his name; he used
these vehicles to make customer calls on behalf of Pro Machine. Massey
Deposition, 5/25/02, at 8, 23-24; Egbert Deposition, 11/22/04, at 32. In
May 2001, Massey and Egbert filled out an application on behalf of Pro
Machine with the Burns & Burns agency for a commercial insurance package,
including automobile insurance. Thereafter, Continental issued Policy No.
B2050146716 (effective June 26, 2001, through June 25, 2002) (the Policy).
Declaratory Judgment Complaint, Exhibit A.

3 On August 15, 2001, Massey was seriously injured while operating the
motorcycle in an automobile accident caused by the negligence of Angela M.
Flaisman. Massey recovered $15,000.00 in policy limits from Ms. Flaisman's
insurer, Allstate Insurance Company. Massey also recovered $15,000.00 in
UIM benefits under a policy he purchased from Dairyland Insurance
Company for coverage on the motorcycle. In search of additional UIM coverage, Massey filed a claim with Continental for the $100,000.00 UIM
coverage limits of the Policy.

4 Continental denied UIM coverage, claiming that Massey was not a
"Named Insured" under the Policy and that the motorcycle was not a
"covered motor vehicle" pursuant to the UIM "household" exclusion.
Consequently, Massey initiated a law suit against Continental at No. 10528-
02 by writ of summons on May 14, 2002. On June 26, 2002, Continental
filed a declaratory judgment action at No. 10699-02. Massey filed his
complaint on July 23, 2003, alleging bad faith, negligence, and breach of
contract against Continental for failing to pay Massey UIM benefits (the bad
faith action). On November 25, 2003, the two lawsuits were consolidated
for discovery purposes only.

5 On January 11, 2005, Continental filed a motion for summary
judgment in its declaratory judgment action, to which Massey filed a reply
and a cross-motion for summary judgment. All of these post-discovery
pleadings were filed under both docket numbers. On August 11, 2005, the
trial court disposed of the cross-motions for summary judgment in the
declaratory judgment action in favor of Continental. Again, that order was
filed under both dockets. Massey filed a timely notice of appeal from the
order granting Continental summary judgment in the declaratory judgment
action (No. 730 WDA 2006). Out of extreme caution, Massey simultaneously
filed a notice of appeal in the bad faith case (No. 731 WDA 2006).

6 Initially, we must determine if the appeal at No. 731 WDA 2006 is
properly before us. "[A]n appeal may be taken as of right from any final
order of an administrative agency or lower court." Pa.R.A.P. 341. An order
is final if (1) it disposes of all claims and all parties in an action, Pa.R.A.P.
341(b)(1); (2) it is expressly defined as a final order by statute, Pa.R.A.P.
341(b)(2); or (3) the trial court files a determination of finality with regard
to that order, Pa.R.A.P. 341(b)(3) and (c)(1). Recall that the bad faith and
declaratory judgment actions were consolidated for discovery purposes only,
a fact conceded by both parties. Although included on the bad faith docket,
cross-motions for summary judgment were filed only in the declaratory
judgment action. No motion for summary judgment was filed in the bad
faith case; consequently, there is no corresponding order of court in that
case. Although included on the bad faith docket, the order granting
summary judgment to Continental was entered only in the declaratory
judgment action. That was a final order in the declaratory judgment action
because it formally disposed of all the claims and parties therein. Pa.R.A.P.
341(b)(1). However, the final order in the declaratory judgment action does
not qualify under any of the above definitions as a final order in the bad faith
action. Accordingly, the appeal at No. 731 WDA 2006 is quashed because
no final order of court has been entered in the bad faith case from which an
appeal could be taken.

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¶ 32 Appeal at No. 731 WDA 2006 quashed. Order at 730 WDA 2006
reversed and case remanded for further proceedings. Jurisdiction
relinquished.