A federal judge has dismissed a lawsuit brought by American National Lloyds Insurance Company, owned by Brookfield Re, ruling that the insurer must defend two Pennsylvania property owners in a personal injury case stemming from a construction site accident.
In American National Lloyds Ins. Co. v. Alexis, Civil Action No. 23-130, the insurer sought a declaratory judgment that it had no obligation to defend or indemnify Michelange Alexis and Real Estate Brothers, L.L.C., in a lawsuit filed in Berks County Court by Ernesto and Ana Rosa. The plaintiffs allege that Mr. Rosa suffered serious injuries after falling from a roof on April 28, 2021, while working on a property in Reading, Pa.
According to the complaint, Mr. Rosa was “working as a roofer in the scope of his employment” at the time of the fall. The Rosas contend that Mr. Alexis and Real Estate Brothers owned, maintained or controlled the site and failed to provide a safe workplace or inspect the premises for hazards.
American National Lloyds Insurance Company (ANLIC) argued that its policy did not require it to defend or indemnify the defendants. The policy, issued to Connected Investors Real Estate Insurance Services, L.L.C., extended coverage to property owners of reported properties as Additional Named Insureds. ANLIC claimed that if the property was owned by the defendants and had been properly reported, coverage would apply—subject to exclusions.
The insurer relied on its Independent Contractor Exclusion Endorsement, which bars coverage for injuries to any “employee, temporary worker or leased worker of independent contractors” arising from operations performed for the insureds or from the insureds’ supervision of such work. ANLIC maintained that Mr. Rosa was employed by E.N.T. Roofing, an independent contractor allegedly hired by Real Estate Brothers, and that the exclusion applied.
But Judge Kelley B. Hodge rejected that argument in a memorandum opinion issued March 24. She held that the duty to defend must be evaluated strictly on the allegations in the underlying complaint and the language of the policy—not on extrinsic evidence.
“The Court is not persuaded by Plaintiff’s logic that it is therefore inevitable that Rosa was employed by an independent contractor,” Judge Hodge wrote. She noted that the complaint did not specify who employed Mr. Rosa, nor did it establish that the defendants supervised his work or that of his employer.
At this stage, she concluded, the court lacked sufficient information to determine that the exclusion applied. As such, ANLIC must provide a defense.
Judge Hodge also declined to address the insurer’s duty to indemnify, noting that such a determination would be premature. Under Third Circuit precedent, indemnification obligations arise only after an insured is found liable for damages that fall within the scope of coverage.
The ruling reinforces a long-standing principle in insurance law: an insurer bears the burden of proving an exclusion and may not rely on materials outside the complaint—such as claim forms or investigative documents—to defeat its duty to defend at the pleading stage.
ANLIC may refile its declaratory judgment action on the question of indemnification once the underlying personal injury litigation has been resolved.
