# Opinion

> District Court, W.D. Pennsylvania · March 31, 2026

URL: https://www.frixlaw.com/law-library/cases/11310391

## Case

- **Full name:** Coyle Properties Limited II, LLC and Coyle Management, Inc. v. RSUI Indemnity Company, McGowan & Company, Inc., and Risk Placement Services, Inc.
- **Court:** District Court, W.D. Pennsylvania
- **Decided:** March 31, 2026
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA

COYLE PROPERTIES LIMITED II, LLC )
and COYLE MANAGEMENT, INC., ) No. 3:24-00098
)
Plaintiffs, )
) Judge Robert J. Colville
v. )
)
RSUI INDEMNITY COMPANY, )
MCGOWAN & COMPANY, INC., and )
RISK PLACEMENT SERVICES, INC., )
)
Defendants. )

MEMORANDUM OPINION
Robert J. Colville, United States District Judge
Before the Court is a Motion to Dismiss (ECF No. 51) filed by Defendant Risk Placement
Services, Inc. (“Defendant Risk Placement”), a Motion to Dismiss (ECF No. 56) filed by
Defendant McGowan & Company, Inc. (“Defendant McGowan,” and, together with Defendant
Risk Placement, “Broker Defendants”), a Motion for Partial Judgment on the Pleadings (ECF No.
53) filed by Plaintiffs Coyle Properties Limited II, LLC and Coyle Management, Inc. (each or both
referred to as “Plaintiffs”), and a Cross Motion for Judgment on the Pleadings (ECF No. 64) filed
by Defendant RSUI Indemnity Company (“Defendant RSUI,” and, along with Broker Defendants,
“Defendants”). The Court has subject matter jurisdiction to rule on this matter pursuant to 28
U.S.C. § 1332(a). The Motions have been fully briefed and are ripe for disposition.
I. Factual Background & Procedural History
In the Complaint, Plaintiffs set forth the following factual allegations relevant to the
Court’s consideration of the Motions at issue:
Plaintiffs own and operate a McDonald’s restaurant franchise. ECF No. 28 ¶ 10. In
December 2023, T.M., a minor and former employee of Plaintiffs, through her guardian, filed a
lawsuit against Plaintiffs, alleging that throughout her employment with Plaintiffs, another
employee, Taylor English (“Mr. English”), groomed, sexually harassed, exposed his genitals to,
sexually assaulted, and statutorily raped T.M., and threatened her if she exposed this behavior to

others. Id. ¶ 14–23. The complaint against Plaintiffs alleges that T.M. reported Mr. English’s
behavior to her superiors, who did not adequately address them. Id. ¶ 24–30. The suit brought
various claims against Plaintiffs related to their handling of Mr. English’s alleged conduct. Id. ¶
33.
In January 2024, Madison Gordon, at the time of her alleged abuse a 17-year-old employee
of Plaintiffs, filed a lawsuit against Plaintiffs, alleging that throughout her employment with
Plaintiffs, Mr. English, sexually harassed and sexually assaulted her, and threatened her if she
exposed this behavior to others. Id. ¶ 34–43. The complaint against Plaintiffs alleges that Ms.
Gordon reported Mr. English’s behavior to her superiors, and they did not adequately address

them. Id. ¶ 44–49. The suit brought various claims against Plaintiffs related to their handling of
Mr. English’s alleged conduct. Id. ¶ 54.
During the time of the alleged sexual harassment, sexual assaults, and rape, Plaintiffs had
insurance. Id. ¶ 61. Plaintiff’s directors and officers liability insurance and employment practices
liability insurance policies were provided by Defendant RSUI. Id. ¶ 57. Arthur J Gallagher & Co.
was Plaintiffs’ insurance broker. Id. ¶ 56. Each year, on March 1, Defendant RSUI would issue
a renewal policy. Id. ¶ 59. Defendant Risk Management and Defendant McGowan “had a role”
is the procurement of the insurance policies provided by Defendant RSUI. Id. ¶ 60.
T.M. and Madison Gordon both initiated proceedings, and although there are minor
differences, the Court will describe the events together, as a full breakdown of these differences is
not material to the Court’s subsequent analysis of the case at bar or the present Motions. In the
summer of 2023, T.M. and Madison Gordon filed separate charges against Plaintiffs with the Equal
Employment Opportunity Commission (the “EEOC”) related to the events involving Mr. English.

Id. ¶ 62; 89. When Defendant RSUI learned of the charges, it sent denial of coverage letters to
Plaintiffs, referring them to an exclusion clause (the “Exclusion Clause”) that indicated that the
policies do not provide coverage for claims related to sexual harassment or sexual assault:
Although this matter is a Claim for Wrongful Acts, we next direct you to the
Policy’s exclusion at Section IV.15., which provides:

The Insurer shall not be liable to make any payment for Loss in connection
with any Claim made against any Insured:

15. For that portion of any Claim (including but not limited to any derivative
or representative class actions) made against any Insured alleging, arising
out of, based upon or attributable to, or in any way involving, in whole or
in part, any forcible physical or sexual assault, battery or molestation,
including rape, statutory rape or any sexual assault or rape claim that in any
way involves any sexual harassment claim or allegations of sexual
harassment (“Matters Excluded”); provided that, regardless of any other
terms or conditions in this Policy, including any endorsements, the covered
and uncovered portions of Loss arising from any such Claim shall be
allocated in accordance with this Policy’s allocation provision. It is
understood and agreed that Claims including both Employment Practices
Wrongful Acts and Matters Excluded shall be allocated Claims (partially
covered) and that Matters Excluded go beyond, and are not considered to
be Employment Practices Wrongful Acts or acts that trigger coverage under
the Policy.

With respect to Section IV.15., coverage is excluded for the “portion of any claim
… made against any insured alleging, arising out of, based upon or attributable to,
or in any way involving, in whole or in part, any forcible physical or sexual assault,
battery or molestation, including rape, statutory rape or any sexual assault or rape
claim that in any way involves any sexual harassment claim or allegation of sexual
harassment[.]” As every portion of the [victim’s] Claim alleges, arises out of, is
based upon or attributable to, or in any way involves, in whole or in part, English’s
alleged sexual assault [and statutory rapes] of [victim], Exclusion 15 excluded
coverage for the [victim] claim in its entirety.

ECF No. 28-2; 28-3.

Following receipt of settlement demand letters from T.M.’s and Madison Gordon’s
counsel, Defendant RSUI sent additional denial letters. ECF No. 28 ¶ 67; 92.
T.M. and Madison Gordon filed their lawsuits. ECF No. 28 ¶ 69; 95. Plaintiffs’ counsel
then sent letters to Defendant RSUI’s counsel, essentially demanding coverage. In the letter,
Plaintiffs’ counsel points to a severability clause that provides for non-imputation (the “Non-
Imputation Clause”):
We have reviewed the applicable Policy, [policy numbers], issued to [Plaintiffs]
(hereafter “the Policy”) and we respectfully disagree with the coverage denial that
you issued in connection with those administrative charges, since it is apparent that
Exclusion 15 that is cited and quoted therein was not a valid basis upon which to
refuse to defend Coyle for those charges. Coyle incurred significant legal fees in
connection with the defense of those actions, for which it now demands immediate
reimbursement from RSUI for breach of its duty to defend. Among other things, it
is apparent from a review of the Policy that the language in the Exclusions section
states that: “The Wrongful Act of an Insured shall not be imputed to any other
Insured for the purpose of determining the applicability of the EXCLUSIONS set
forth in SECTION IV.” That qualifying language undercuts RSUI’s coverage
denial and warrants an immediate reversal of RSUI’s coverage position.
Furthermore, the language in Exclusion 15 and in the Policy section regarding
Allocation requires RSUI to defend the administrative actions, since portions of the
administrative claims were potentially covered under the Policy. Please confirm
that RSUI will reimburse [Plaintiffs] for [their] legal fees incurred in the defense of
the administrative actions.

ECF No. 28-3.
Defendant RSUI sent Plaintiffs’ counsel response letters stating that Defendant RSUI was
maintaining denial of coverage for the EEOC claims and would not provide coverage for the
lawsuits. ECF No. 28 ¶ 73; 96. The letter went on the explain Defendant RSUI’s position with
respect to the Non-Imputation Clause:
RSUI need not (and did not) impute the Wrongful Act of English to [Plaintiffs] and
[their] affiliates in order to determine the applicability of Exclusion 15 as it pertains
to the Insured entities in question. . . . The [T.M. and Madison Gordon] Matters,
including the currently pending Lawsuit, is a pursuit of [Plaintiffs’] own liability in
connection with the alleged sexual assaults of [victims and its] alleged failure to
take corrective action.
ECF No. 28-3.
This exchange of demands and denials went on for some time, but at the end, Defendant
RSUI did not agree to cover Plaintiffs for any claims, charges, or lawsuits related to Mr. English’s
alleged assaults of T.M. and Madison Gordon. ECF No. 28 ¶ 85; 108.
On May 10, 2024, Plaintiffs initiated this lawsuit. ECF No. 1. On November 5, 2024,
Plaintiffs filed an Amended Complaint, bringing claims for breach of contract, bad faith,
negligence, and breach of fiduciary duty, and seeking a declaratory judgment that Defendant RSUI
has a duty to defend Plaintiffs in the lawsuit brought by T.M. and Madison Gordon. On January
21, 2025, Defendant Risk Placement filed a Motion to Dismiss, along with a Brief in Support (ECF
No. 52). On February 11, 2025, Plaintiffs filed a Response in Opposition (ECF No. 60). On
February 18, 2025, Defendant Risk Management filed a Reply (ECF No. 66) to Plaintiffs’
Response. On January 24, 2025, Defendant McGowan filed a Motion to Dismiss, along with a
Brief in Support (ECF No. 57). On February 14, 2025, Plaintiff filed a Response in Opposition
(ECF No. 61).
On January 24, 2025, Plaintiffs filed a Motion for Partial Judgment on the Pleadings, along
with a Brief in Support (ECF No. 54). On February 14, 2025, Defendant RSUI filed a Cross
Motion for Judgment on the Pleadings, along with a Brief in Support (ECF No. 63). Parties
exchanged briefing (ECF Nos. 67; 68; 69) respecting the Motions of Judgment on the Pleadings.
Plaintiffs and Defendant RSUI filed a Joint Motion for Oral Argument (ECF No. 70) respecting
the Motions for Judgment on the Pleadings, which the Honorable Stephanie L. Haines granted.
ECF No. 71. On April 23, 2025, Judge Haines held a hearing on the Motions (the “Hearing”). On
January 2, 2025, this matter was transferred to this Court.
II. Legal Standard
A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests the legal
sufficiency of the complaint. Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993). In deciding a

motion to dismiss, the court is not opining on whether the plaintiff will likely prevail on the merits,
but simply accepts as true all well-pled factual allegations in the complaint and views them in a
light most favorable to the plaintiff. U.S. Express Lines Ltd. v. Higgins, 281 F.3d 383, 388 (3d
Cir. 2002). While a complaint does not need detailed factual allegations to survive a Rule 12(b)(6)
motion to dismiss, a complaint must provide more than labels and conclusions. Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007). A “formulaic recitation of the elements of a cause of action
will not do.” Id. (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)).
“To survive a motion to dismiss, a complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556

U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 554). “A claim has facial plausibility when
the plaintiff pleads factual content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S.
at 556). The Supreme Court of the United States has explained:
The plausibility standard is not akin to a “probability requirement,” but it asks for
more than a sheer possibility that a defendant has acted unlawfully. Where a
complaint pleads facts that are “merely consistent with” a defendant’s liability, it
“stops short of the line between possibility and plausibility of ‘entitlement to
relief.’”

Id. (quoting Twombly, 550 U.S. at 556) (internal citations omitted).
The United States Court of Appeals for the Third Circuit instructs that “a court reviewing
the sufficiency of a complaint must take three steps.” Connelly v. Lane Constr. Corp., 809 F.3d
780, 787 (3d Cir. 2016). The court explained:
First, it must “tak[e] note of the elements [the] plaintiff must plead to state a claim.”
Iqbal, 556 U.S. at 675. Second, it should identify allegations that, “because they
are no more than conclusions, are not entitled to the assumption of truth.” Id. at
679; see also Burtch v. Milberg Factors, Inc., 662 F.3d 212, 224 (3d Cir. 2011)
(“Mere restatements of the elements of a claim are not entitled to the assumption of
truth.” (citation and editorial marks omitted)). Finally, “[w]hen there are well-
pleaded factual allegations, [the] court should assume their veracity and then
determine whether they plausibly give rise to an entitlement to relief.” Iqbal, 556
U.S. at 679.

Connelly, 809 F.3d at 787. “Determining whether a complaint states a plausible claim for relief
will . . . be a context-specific task that requires the reviewing court to draw on its judicial
experience and common sense.” Iqbal, 556 U.S. at 679 (internal citations omitted).
In addition to reviewing the facts contained in the complaint, a court may consider “matters
of public record, orders, exhibits attached to the complaint and items appearing in the record of
the case.” Oshiver v. Levin, Fishbein, Sedran & Berman, 38 F.3d 1380, 1384 n.2 (3d Cir. 1994).
When a document integral to or relied upon in the complaint is included, the court may also
consider that document. In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir.
1997).
Although a district court is not obligated to permit leave to amend before dismissing a
complaint in a non-civil rights case, Wolfington v. Reconstructive Orthopaedic Assocs. II P.C.,
935 F.3d 187, 210 (3d Cir. 2019), courts generally grant leave to amend unless amendment of the
complaint would be inequitable or futile. See, e.g., Bachtell v. Gen. Mills, Inc., 422 F. Supp. 3d
900, 915 (M.D. Pa. Oct. 1, 2019) (citing Phillips v. Allegheny Cty., 515 F.3d 224, 245 (3d Cir.
2008)).
“The standard for deciding a motion for judgment on the pleadings filed pursuant to Federal
Rule of Civil Procedure 12(c) is not materially different from the standard for deciding a motion
to dismiss filed pursuant to Federal Rule of Civil Procedure 12(b)(6).” Zion v. Nassan, 283 F.R.D.
247, 254 (W.D. Pa. 2012); see Harleysville INS. Co. of New York v. Cerciello, No. 3:08-CV-2060,
2010 WL 11534317, at *2 (M.D. Pa. 2010) (“The standard of review used for a motion for

judgment on the pleadings is substantively identical to that of a motion to dismiss.”); see also
Minnesota Lawyers Mut. Ins. Co. v. Ahrens, 432 F. App’x. 143, 147 (3d Cir. 2011). Either motion
may be used to seek the dismissal of a complaint based on a plaintiff’s “failure to state a claim
upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6); Fed. R. Civ. P. 12(h)(2)(B). The only
difference between the two motions is that a Rule 12(b) motion must be made before a “responsive
pleading” is filed, whereas a Rule 12(c) motion can be made “[a]fter the pleadings are closed.”
Fed. R. Civ. P. 12(b); Fed. R. Civ. P. 12(c); Cerciello, 2010 WL 11534317, at *2. “A court
presented with a motion for judgment on the pleadings must consider the plaintiff’s complaint, the
defendant’s answer, and any written instruments or exhibits attached to the pleadings.” Anthony

v. Torrance State Hosp., No. CV 3:16-29, 2016 WL 4581350, at *1 (W.D. Pa. 2016) (citing
Perelman v. Perelman, 919 F. Supp. 2d 512, 521 (E.D. Pa. 2013)).
III. Discussion
A. Broker Defendants’ Duty
Counts IV, V, VI, and VII are claims for Negligence and Breach of Fiduciary Duty against
Defendant McGowan and for Negligence and Breach of Fiduciary Duty against Defendant Risk
Placement, respectively. Both Defendant McGowan and Defendant Risk Placement move
separately to dismiss these claims, both arguing, inter alia, that Plaintiffs do not allege facts to
establish that Broker Defendants owed a duty to Plaintiffs to establish these causes of action.
1. Negligence
Under Pennsylvania law, to state a claim for Negligence, a plaintiff must allege: “(1) a duty
or obligation recognized by the law requiring the defendant to conform to a certain standard of
conduct for the protection of others against unreasonable risks; (2) defendant’s failure to conform
to the standard required; (3) a causal connection between the conduct and the resulting injury;

[and] (4) actual loss or damage resulting to the plaintiff.” Pusateri v. Wal-Mart Stores E., L.P.,
646 F. Supp. 3d 650, 653 (W.D. Pa. 2022) (quoting R.W. v. Manzek, 585 Pa. 335, 888 A.2d 740,
746 (2005)) (internal citations omitted in original).
“[F]or ordinary negligence purposes, the relationship between an insurance broker and
client is an arm’s length relationship.” Wisniski v. Brown & Brown Ins. Co. of PA, 906 A.2d 571,
579 (Pa.Super.Ct.2006). “An insurance broker is not under an affirmative duty . . . to advise a
client regarding the extent of coverage.” Allegrino v. Conway E & S, Inc., No. CIV.A. 09-1507,
2010 WL 3943939, at *8 (W.D. Pa. Oct. 6, 2010). The relationship between the insured and a
wholesale broker, as Broker Defendants appear to be, is even more removed. Id. at *10.

As Broker Defendants point out, Plaintiffs have failed to allege facts showing how an
agency relationship might have formed between Plaintiffs and Broker Defendants or between
Defendant RSUI and Broker Defendants. Plaintiffs allege nothing to suggest that Broker
Defendants ever took a role in explaining the nature of its policies to Plaintiffs, either at the outset
of coverage or during policy renewal. In fact, Plaintiffs were completely unaware of Broker
Defendants until the litigation emerged. ECF No. 28 ¶ 60 (“[U]nbeknownst to John Coyle at the
time [that Arthur J Gallagher & Co. procured the insurance on Plaintiff’s behalf], [Defendant Risk
Placement] and [Defendant McGowan] purportedly had a role in the process of procurement of
the . . . insurance policies that were issued to [Plaintiff].”). Plaintiffs have not alleged any reason
for the Court to conclude that Broker Defendants undertook any duty to apprise Plaintiffs of
anything respecting their insurance policies, and as such, no duty formed. See generally Allegrino,
2010 WL 3943939, at *8–10; see also Hess v. Allstate Ins. Co., 614 F. Supp. 481, 488 (W.D. Pa.
1985), aff’d, 804 F.2d 1248 (3d Cir. 1986) (finding that an insurance broker does not have to
explain conspicuous and unambiguous policies to an insured); see also BSD-360, LLC v.

Philadelphia Indem. Ins. Co., 580 F. Supp. 3d 92, 112 (E.D. Pa. 2022) (“[B]rokers are [not]
obligated to explain clearly worded and unambiguous policy language to the insured.”); see also
White Pine Ins. Co. v. Chase’s Auto Salvage LLC, No. 2:23-CV-01707-CB, 2025 WL 2662844, at
*1 (W.D. Pa. Sept. 17, 2025) (finding that although “[i]f anyone had a duty to alert [regarding] the
change in policy, it would have been the broker . . . [that] duty relates to ‘coverage provisions . . .
requested by the insured.’” The plaintiff had provided no evidence that the change was material
to something known to be important or requested.).
Accordingly, the Court finds that Plaintiffs have failed to state a claim for Negligence. As
such, as to the Negligence claims in Counts IV and VI, the Court will grant the Motions to Dismiss.

2. Breach of Fiduciary Duty
To state a claim for Breach of Fiduciary Duty, a plaintiff must allege: “(1) the existence of
a fiduciary relationship; (2) that the defendant negligently or intentionally failed to act in good
faith and solely for the benefit of the plaintiff in all matters or which he or she was employed; (3)
that the plaintiff suffered injury; and (4) that the agent’s failure to act solely for the plaintiff’s
benefit . . . was a real factor in bringing about plaintiff’s injuries.” Boyer v. Clearfield Cnty. Indus.
Dev. Auth., No. CV 3:19-152, 2021 WL 2402005, at *3 (W.D. Pa. June 11, 2021) (citing Truefit
Sols., Inc. v. Bodies Done Right, LLC, No. CV 19-145, 2019 WL 7187406, at *6 (W.D. Pa. Dec.
26, 2019)).
At the outset, it should be clear that if Broker Defendants did not owe a cognizable duty to
Plaintiffs in a Negligence claim, a fortiori they do not owe Plaintiffs a fiduciary duty. “A fiduciary
duty is the highest duty implied by law.” Baum v. Schlesinger, No. 2:21-CV-944, 2022 WL
3716682, at *15 (W.D. Pa. May 26, 2022) (quoting Yenchi v. Ameriprise Fin., Inc., 639 Pa. 618,
632 (2017)). Furthermore, “an agent typically does not incur a fiduciary duty by selling a policy

to an insured.” Durkey v. Pac. Life Ins. Co., No. CV 17-317, 2017 WL 8941225 (W.D. Pa. Aug.
4, 2017), report and recommendation adopted, No. 2:17CV317, 2017 WL 4155423 (W.D. Pa.
Sept. 19, 2017) (quoting Dixon v. Nw. Mut., 146 A.3d 780, 787 (Pa. Super. 2016)). In Yenchi, the
Supreme Court of Pennsylvania determined that a fiduciary duty does not form between the agent
and the insured when “the consumer purchasing the policy does not cede decision-making control
over the purchase to the” agent. Yenchi, 639 Pa. at 623. Plaintiffs have not alleged facts suggesting
that it ceded decision-making to Broker Defendants. In fact, the record suggests the contrary. As
discussed, Plaintiffs were not even aware that Broker Defendants took any part in selecting or
administering Plaintiffs’ policies, let alone purchasing them on Plaintiffs’ behalf.

Accordingly, Plaintiffs have not stated a claim for Breach of Fiduciary Duty against Broker
Defendants. As such, as to the claims for Breach of Fiduciary Duty in Counts V and VII, the Court
will grant the Motions to Dismiss.
B. The Motions for Judgment on the Pleadings
Plaintiffs move for partial Judgment on the Pleadings, arguing that, given the Non-
Imputation Clauses, the Policies must cover the claims brought by T.M. and Mellisa Gordon, and
Defendant RSUI should have to defend Plaintiffs in the English Lawsuits. Defendant RSUI cross
moves for Judgment on the Pleadings, arguing that the Exclusion Clause clearly demonstrates that
the claims brought by T.M. and Madison Gordon are not covered under the Policies. Defendant
RSUI also moves for Judgment on the Pleadings as to Plaintiffs’ claim that Defendant RSUI made
a material change to Plaintiffs’ Policies without notice.
1. The Contractual Dispute
“‘Under Pennsylvania law, which the parties agree is applicable here, the ‘interpretation of
an insurance contract regarding the existence or non-existence of coverage is generally performed

by the court.’” Gardner v. State Farm Fire & Cas. Co., 544 F.3d 553, 558 (3d Cir. 2008) (quoting
Donegal Mut. Ins. Co. v. Baumhammers, 595 Pa. 147, 938 A.2d 286, 290 (2007). “The insured
has the initial burden of establishing coverage under an insurance policy.” Nationwide Mut. Fire
Ins. Co. v. Black, No. 2:04CV1644, 2007 WL 9780522 (W.D. Pa. Mar. 30, 2007) (citing
Butterfield v. Giuntoli, 670 A.2d 646, 651-52 (Pa. Super. 1995)). “An insurer that denies coverage
based upon a policy exclusion, however, bears the burden of proving such exclusion applies.” Id.
(citing Cont’l Cas. Co. v. County of Chester, 244 F. Supp. 2d 403, 407 (E.D. Pa. 2003); Mistick
Inc. v. Nw. Nat. Cas. Co., 806 A.2d 39, 42 (Pa. Super. 2002)). Resolution of the meaning of the
disputed contract clauses should resolve both Motions for Judgment on the Pleadings.

It appears to be uncontested that Plaintiffs have established that the Policies broadly cover
Plaintiffs for workplace liabilities. The Court notes further that the Policies read that “if a Claim
for a Wrongful Act is first made against the Insured Organization during the Policy Period and
reported in accordance with SECTION V. – CONDITIONS, C. Notice of Claim or Circumstances
of this policy, the Insurer will pay on behalf of the Insured Organization all Loss the Insured
Organization is legally obligated to pay.” ECF No. 54 at 12. As such, the Court will consider it
settled that Plaintiffs have met their initial burden. The Court turns, then, to the question of
whether Defendant RSUI has met its burden of demonstrating that the Exclusion Clause applies,
thereby excluding the claims brought by T.M. and Madison Gordon.
The Exclusion Clause in both Policies reads:
The Insurer shall not be liable to make any payment for Loss in connection
with any Claim made against any Insured:

15. For that portion of any Claim (including but not limited to any derivative
or representative class actions) made against any Insured alleging, arising
out of, based upon or attributable to, or in any way involving, in whole or
in part, any forcible physical or sexual assault, battery or molestation,
including rape, statutory rape or any sexual assault or rape claim that in any
way involves any sexual harassment claim or allegations of sexual
harassment (“Matters Excluded”); provided that, regardless of any other
terms or conditions in this Policy, including any endorsements, the covered
and uncovered portions of Loss arising from any such Claim shall be
allocated in accordance with this Policy’s allocation provision. It is
understood and agreed that Claims including both Employment Practices
Wrongful Acts and Matters Excluded shall be allocated Claims (partially
covered) and that Matters Excluded go beyond, and are not considered to
be Employment Practices Wrongful Acts or acts that trigger coverage under
the Policy.

ECF No. 28 ¶ 65.
By the Court’s reading, this clause means that Defendant RSUI is not liable to pay for any
losses related in any way to any legal claim against the insured to the extent that the claim involves
any form of physical or sexual assault, battery, or molestation, including rape, statutory rape, or
sexual assault, or any allegations thereof, and this includes any sexual assault claims that involve
allegations of sexual harassment. This clearly includes the claims brought by T.M. and Madison
Gordon, as they involve allegations of sexual assault and harassment.
The question then becomes whether the Non-Imputation Clause carves back Defendant
RSUI’s coverage to the claims brought by T.M. and Madison Gordon. The Non-Imputation Clause
in both policies reads: “The Wrongful Act of an Insured shall not be imputed to any other Insured
for the purpose of determining the applicability of the EXCLUSIONS set forth in SECTION IV.”
Id. ¶ 71.
By the Court’s reading, this clause means that, in deciding whether the Policy’s exclusion
clauses apply, if one insured person or entity does something wrongful, that wrongdoing is not
attributable to other insured persons or entities. As the Court sees it, this does not function as a
carve-back of the Exclusion Clause for purposes of the instant matter. The claims against Plaintiffs
do not require that Mr. English’s acts be imputed to Plaintiffs. Rather, the claims assert separate

wrongful acts that arise out of, are based upon, or are attributable to, or in some way involve, in
whole or in part, a forcible physical or sexual assault, battery or molestation, including rape,
statutory rape, or sexual assault or rape claim that in some way involves a sexual harassment claim
or allegations of sexual harassment. In short, the Exclusion Clause applies.
Accordingly, Defendant RSUI has shown that the Exclusion Clause applies, and therefore
Plaintiffs lacked coverage for the claims brought by T.M. and Madison Gordon. As such, the
Court will deny Plaintiffs’ Motion for Judgment on the Pleadings and, as to the contract dispute,
grant Defendant RSUI’s Motion for Judgment on the Pleadings.
2. Material Change Without Notice

Defendant RSUI moves for Judgment on the Pleadings as to Plaintiffs’ claim that the
Exclusion Clause is invalid because Defendant RSUI failed to provide notice of a change to the
Exclusion Clause language. Defendant RSUI argues that it did provide notice, in the form of its
notice to Defendant McGowan. This dispute does not arise out of the pleadings, but rather
evidence attached to the present Motion, and is therefore not appropriate for disposition of
judgment on the pleadings.
Defendant RSUI also argues that the claims brought by T.M. and Madison Gordon would
not have been covered even prior to the change to the Exclusion Clause. Under the prior language
of the Exclusion Clause, Defendant RSUI would not be liable for “that portion of any Claim
(including but not limited to any derivative or representative class actions) made against any
Insured alleging, arising out of, based upon or attributable to, or in any way involving, in whole or
in part, any forcible physical or sexual assault, battery or molestation, including rape (“Matters
Excluded”).” The addition to the Exclusion Clause was the language respecting “statutory rape or
any sexual assault or rape claim that in any way involves any sexual harassment claim or

allegations of sexual harassment.” The old language still excludes the claims against Plaintiffs.
The Court agrees. “Pennsylvania case law . . . dictates that the proper focus for determining
issues of insurance coverage is the reasonable expectations of the insured.” Horace Mann Ins. Co.
v. Alben, No. 08CV0353, 2008 WL 4238940, at *6 (W.D. Pa. Sept. 10, 2008) (quoting Tonkovic
v. State Farm Mut. Auto. Ins. Co., 513 Pa. 445, 454 (1987)). Although “the language of the
insurance policy will provide the best indication of the content of the parties’ reasonable
expectations,” Bensalem Twp. v. Int’l Surplus Lines Ins. Co., 38 F.3d 1303, 1309 (3d Cir. 1994),
if the language were invalid, the Court would simply revert to what Plaintiffs claim to have
expected, the previous version of the Policy. Even looking just at the old policy, the claims against

Plaintiffs still are “arising out of” someone “alleging” that Mr. English engaged in acts of “sexual
assault,” “molestation,” and “rape.”
As the Third Circuit Court of Appeals has explained, “[t]he phrase ‘arising out of,’ when
used in a Pennsylvania insurance exclusion, unambiguously requires ‘but for’ causation.” Gen.
Refractories Co. v. First State Ins. Co., 855 F.3d 152, 155 (3d Cir. 2017). The previous iteration
of the Exclusion Clause denies coverage for a claim that arises out of sexual assault, battery,
molestation, or rape, or allegation thereof. But for the allegations against Mr. English for acts of
sexual violence, these claims would not exist. Therefore, the claims arise from allegations of
sexual violence.
Accordingly, even if the current iteration of the Exclusion Clause is invalid, under the
previous version Defendant RSUI was not liable to cover the claims against Plaintiffs. As such,
as to the claim for lack of notice, the Court will grant Defendant RSUI’s Motion for Judgment on
the Pleadings.
3. Bad Faith

Plaintiffs allege that Defendant RSUI knew it had no reasonable basis to deny coverage,
and therefore the denial was in bad faith. Defendant RSUI failed to raise this matter in its Motion
for Judgment on the Pleadings, and only brought it up for the first time in its Reply Brief.
Ordinarily, the Court would not consider entering judgment on the pleadings if the issue is not
raised in the motion. However, it is clear that the Bad Faith claim cannot survive if the claim was
not covered by the policy, and Plaintiffs have had adequate notice that this issue was raised and
had the opportunity at the Hearing to address it (and did in fact address it briefly). ECF No. 74 at
22. Because the Court has determined that Defendant RSUI had a reasonable basis to deny
coverage, it is also entitled to judgment on the pleadings as to the claim that it denied coverage in

bad faith. As such, the Court will grant Defendant RSUI’s Motion for Judgment on the Pleadings
in full, and enter final judgment in favor of Defendant RSUI.
IV. Conclusion
For the reasons discussed above, the Court will grant Defendant Risk Management’s
Motion to Dismiss, grant Defendant McGowan’s Motion to Dismiss, grant Defendant RSUI’s
Motion for Judgment on the Pleadings, and deny Plaintiffs’ Motion for Partial Judgment on the
Pleadings. Plaintiffs will be given leave to amend their Complaint within 21 days of this

Memorandum Opinion as to the remaining Defendants. An appropriate Order of Court follows.

BY THE COURT:

/s/Robert J. Colville
Robert J. Colville
United States District Judge

DATED: March 31, 2026

cc: All counsel of record,

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/11310391. Public record. Not legal advice.