Liberty Mutual Fire Insurance Co. v. Michael Baker International, Inc.

2022 WL 3212253 (2022)

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Nature of the Case

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Facts

A dispute arose between P and its insured, D. P sought a declaratory judgment that it need not provide coverage for or defend two lawsuits brought against D for injuries suffered in a construction zone where D performed work. D filed several counterclaims seeking to recover expenses incurred as a result of one of the underlying lawsuits, as well as expenses incurred in the present declaratory judgment action. P filed its second motion for summary judgment claiming D suffered no damages. D raised the application of the collateral source rule to this case in response to P's second motion for summary judgment. D argued that 'the collateral source rule prohibits P from using D's other insurance recoveries to avoid liability for P's own misconduct.' P claimed that D was attempting to use the collateral source rule to recover a double indemnification, that the collateral source rule does not apply to contracts, and that the collateral source rule is a rule of evidence to be applied at trial, not on a motion for summary judgment. It was denied. The court went on to specifically rule that D could establish damages irrespective of the collateral source rule. The court first held that 'an insurer is not released from breach of contract damages simply because a third party covered the resultant loss.' The court further held that Pennsylvania law permits recovery of nominal damages where a plaintiff can prove a breach of contract but can show no damages flowing from the breach. P then filed a motion for reconsideration or in the alternative to join additional parties and take additional discovery.