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Insurers, Agents and Brokers Sophisticated Relationships Expensive\\n\\nThree sophisticated commercial parties in the insurance industry entered\\n into what appears, in hindsight, to be a somewhat unsophisticated \\nbusiness arrangement. That arrangement led to complex litigation, which \\ngenerally isn\'t a good thing for a business arrangement to lead to.\\n\\nIn American Builders Insurance Company v. Keystone Insurers Group and \\nEbensburg Insurance Agency, No. 4:19-CV-01497, United States District \\nCourt, M.D. Pennsylvania (August 4, 2023) plaintiff American Builders \\nInsurance Company (\\u201cABIC\\u201d) sued Defendant Ebensburg Insurance Company \\n(\\u201cEbensburg\\u201d) for its allegedly tortious misrepresentations in an \\napplication to ABIC for workers\' compensation insurance coverage on \\nbehalf of Ebensburg\'s customer, Custom Installations Contracting \\nServices, Inc. (\\u201cCustom\\u201d). \\n\\nOn Custom\'s application, Ebensburg indicated that Custom didn\'t engage \\nin roofing work and only operated at fifteen feet above the ground or \\nlower. On that basis, ABIC issued Custom a workers\' compensation \\ninsurance policy. Later, a Custom employee fell twenty-five feet from a \\nrooftop while working on a commercial roofing job. The employee filed \\nfor workers\' compensation benefits, which ABIC unsuccessfully opposed.\\n\\nBACKGROUND\\n\\nKeystone essentially operated as a sort of \\u201cmatchmaker,\\u201d connecting ABIC\\n to its network of Retail Agencies. Ebensburg is one of the Retail \\nAgencies that is part of the Keystone association. Its relationship with\\n Keystone is governed by a Franchise Agreement.\\n\\nCustom\'s Relationship with Ebensburg\\n\\nBecause Custom had never sought workers\' compensation insurance before, \\nit obtained a policy through the Commonwealth\'s State Workers\' Insurance\\n Fund (\\u201cSWIF\\u201d). The SWIF ACORD application indicated that:\\n\\nIn 2015, Custom approached Ebensburg again to inquire about switching to\\n a private workers\' compensation insurer for more favorable rates\\n\\nThe James Scott Injury\\n\\nIn September 2015, Custom was engaged in a commercial roofing job in New\\n Galilee, Pennsylvania. James Scott had just began working for Custom. \\nHe stepped through a skylight and fell from over twenty feet to the \\nground, incurring serious injuries.\\n\\nThe Western District Litigation and Workers\' Compensation Proceeding\\n\\nFollowing Judge Gibson\'s order dismissing ABIC\'s federal claims, the \\nworkers\' compensation litigation continued. Judge Gallishen ultimately \\ndenied ABIC\'s petitions. The Pennsylvania Workers\' Compensation Appeals \\nBoard later affirmed Judge Gallishen\'s decision.\\n\\nANALYSIS\\n\\nABIC argued that the limitations period on its claims should be tolled \\nunder either the fraudulent concealment or inherent fraud doctrine.\\n\\nOn the day Scott was injured ABIC was aware that Scott \\u201cfell through a \\nroof.\\u201d On September 14, 2015, ABIC became aware of the \\nmisrepresentations in Custom\'s application.\\n\\nThe Court concluded that those facts are sufficient to give ABIC inquiry\\n notice of its potential claims against Ebensburg because it knew that \\nEbensburg had sole access to the mechanism that caused its injury.\\n\\nThe common thread in these elements is that ABIC knew that the alleged \\nmisrepresentation negligently or fraudulently came from two potential \\nsources, Custom or Ebensburg (or both), and it knew that Ebensburg had \\naccess to eQuotes, the mechanism that caused its injury.\\n