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Kramer v. Nationwide Prop. & Cas. Ins. Co., 2024 Pa. LEXIS 609, 2024 WL 1776575 (S. Ct. April 25, 2024) (Donohue, J.).

The Court of Common Pleas of Montgomery County (“trial court”) granted summary judgment in favor of Stewart Kramer and Valerie Conicello (“Parents”), ordering Nationwide Property and Casualty Insurance Company (“Nationwide”) to defend Parents under their homeowners insurance policy (“the Policy”) against wrongful death and survival actions (together “Underlying Lawsuit”) involving the fatal drug overdose of Michael T. Murray, Jr. (“Decedent”) at Parents’ home. The Superior Court affirmed based on an interpretation of the Policy that was not espoused by the trial court. Because we conclude that its interpretation was erroneous as a matter of law, we reverse the decision of the Superior Court.

“An insurer’s duty to defend is broader than its duty to indemnify[.]” Babcock & Wilcox Co. v. Am. Nuclear Insurers, 635 Pa. 1, 131 A.3d 445, 456 (Pa. 2015). The duty to defend arises when a complaint, on its face, alleges an injury that is at least potentially within an insurance policy’s scope of coverage. Am. & Foreign Ins. Co. v. Jerry’s Sport Ctr., Inc., 606 Pa. 584, 2 A.3d 526, 541 (Pa. 2010). When “an insurer relies on a policy exclusion as the basis for its denial of coverage and refusal to defend, the insurer has asserted an affirmative defense and, accordingly, bears the burden of proving such defense.” Madison Constr. Co. v. Harleysville Mut. Ins. Co., 557 Pa. 595, 735 A.2d 100, 106 (Pa. 1999).

In this case of first impression dealing with the controlled substances exclusion, the Superior Court did not address the trial court’s reasoning that bodily injuries resulting from the negligent entrustment were distinct from injuries resulting from the use of controlled substances, thereby triggering coverage. However, it did hold, albeit without explanation, that the controlled substances exclusion applied to the survival action in its entirety and to the wrongful death action except, as discussed, to damages for emotional and mental distress. Kramer, 271 A.3d at 436. The Superior Court based its conclusion that Nationwide had a duty to defend Parents in the Underlying Lawsuit on the claim for emotional and mental distress it found embedded in the wrongful death action. Thus, it affirmed the trial court’s summary judgment order granting Parents a declaratory judgment as to Nationwide’s duty to defend, but on alternative grounds. Id. at 437. Nevertheless, the Superior Court’s erroneous theory was contingent upon its preliminary holding that the controlled substances exclusion applied to the damages sought in the Underlying Lawsuit for Decedent’s overdose death.

Here, by electing not to file a cross-petition for allowance of appeal, Parents find themselves procedurally in the same position as the appellees in Meyer Darragh. That case highlighted the danger of failing to file a cross-petition for allowance of appeal. Despite the Superior Court’s holding that Nationwide had no duty to defend claims premised on Decedent’s bodily injury damages by application of the controlled substances exclusion, Parents failed to challenge that aspect of the panel’s decision by filing a cross-petition for allowance of appeal. Parents’ creative attempt at relief is unavailing. A remand to the Superior Court for entry of judgment in favor of Nationwide does not rectify the failure to file a timely cross-petition for allowance of appeal pursuant to Pa.R.A.P. 1113(b). Parents’ recourse is to file a nunc pro tunc cross-petition for allowance of appeal in light of our holding.

For the reasons stated in our analysis, we reverse the judgment of the Superior Court insofar as it held that Nationwide owed a duty to defend the Underlying Lawsuit because emotional and mental distress damages in the wrongful death claims were not bodily injuries.

We reverse the judgment of the Superior Court that affirmed the trial courts’ order granting Parents’ motion for summary judgment and denying Nationwide’s motion for summary judgment.

Chief Justice Todd and Justices Wecht and Brobson join the opinion.

Justice Dougherty files a concurring opinion.

Justice Mundy files a concurring opinion.