St. Paul Fire & Marine Ins. Co. v. Pa. Nat'l Mut. Cas. Ins. Co.
| Decision Date | 08 March 2021 |
| Docket Number | Case No. 2:19-cv-05471-JDW |
| Citation | 524 F.Supp.3d 410 |
| Parties | ST. PAUL FIRE AND MARINE INSURANCE COMPANY, Plaintiff v. PENNSYLVANIA NATIONAL MUTUAL CASUALTY INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
Brent S. Usery, Keane & Associates, New York, NY, Paola Tripodi Kaczynski, Law Offices William J. Ferren & Assoc., Philadelphia, PA, for Plaintiff.
Bradley A. Baldwin, Denise M. Depekary, Weber Gallagher Simpson Stapleton Fire & Newby LLP, Bedminster, NJ, Peter Cardwell, Timothy W. Stalker, Weber Gallagher Simpson Stapleton Fires & Newby LLP, Philadelphia, PA, for Defendant.
This insurance coverage dispute presents a tangle of contracts, including a commercial lease and four separate insurance policies, that could determine the outcome. The roadmap to sort out that tangle is, as is so often the case, the words of those contracts. Read carefully, the words that the parties used when they entered into those various contracts clear away the tangle and reveal a single path forward. As explained below, the end of that journey is that Pennsylvania National Mutual Casualty Insurance Company ("Penn National") must reimburse St. Paul Fire and Marine Insurance Company $2.5 million, the amount that St. Paul contributed towards a settlement of an underlying lawsuit against a company that St. Paul and Penn National both insured.
On November 7, 2014, Michael Darnell Wise suffered injuries while operating a forklift at work. While Mr. Wise was moving auto parts, the forklift fishtailed and fell from a loading dock or the ramp leading up to it, leaving Mr. Wise pinned beneath the forklift. At the time of the accident, Mr. Wise was working for Central Coast Distribution, LLC d/b/a Mighty Auto Parts.
Pursuant to a Standard Form Industrial Building Lease (the "Lease"), Central Coast leased a warehouse from First Industrial, L.P. to conduct its business, in Harrisburg, Pennsylvania. The Lease gave Central Coast a leasehold over a specific portion of the warehouse and gave it access to common areas of the property, including "loading areas." (ECF No. 32-9 at § 4.2.) The Lease required both Central Coast and First Industrial to maintain insurance and included a waiver of subrogation provision, which provided:
Notwithstanding anything to the contrary in this Lease, Landlord and Tenant mutually waive their respective rights of recovery against each other and each other's officers, directors, constituent partners, members, agents and employees.... This provision is intended to waive, fully and for the benefit of each party to this Lease, any and all rights and claims that might give rise to a right of subrogation by any insurance carrier. Each party shall cause its respective insurance policy(ies) to be endorsed to evidence compliance with such waiver.
Central Coast purchased two insurance policies from Penn National that are at issue. The first is a businessowner's liability coverage policy, policy no. BP9 0689007, that has a liability limit of $1,000,000 per occurrence (the "Penn National Primary Policy"). (ECF No. 32-11.) The policy covers damages as a result of bodily injury. (Id. at STPAUL001374.) The Penn National Primary Policy includes an endorsement that identifies First Industrial as an additional insured on a schedule of additional insureds and provides:
The person or organization shown in the Schedule is also an insured, but only with respect to liability arising out of the ownership, maintenance or use of that part of the land leased to you and shown in the Schedule and subject to the following additional exclusions: ....
(Id. at STPAUL001403.)
Central Coast also purchased a commercial umbrella liability policy from Penn National, policy no. UL90689007, with a liability limit of $2,000,000 per occurrence (the "Penn National Umbrella Policy"). (ECF No. 1, Ex. D.) That policy lists Central Coast as the named insured but provides that "[a]ny additional insured under any policy of ‘underlying insurance’ will automatically be an insured under this insurance." (Id. at Section II ¶ 3.) Penn National agreed to "pay on behalf of the insured the ‘ultimate net loss’ in excess of the ‘retained limit’ because of ‘bodily injury’ or ‘property damage’ to which this insurance applies." (Id. at Section I ¶ 1.a.) The "ultimate net loss" is "the total sum, after reduction for recoveries or salvages collectible, that the insured becomes legally obligated to pay as damages by reason of settlement or judgments or any arbitration or other alternate dispute method entered into with our consent or the ‘underlying insurer's’ consent." (Id. at Section V ¶ 25.) The "retained limit" is "the available limits of ‘underlying insurance’ scheduled in the Declarations ...." (Id. at Section V ¶ 22.) The Schedule of Underlying Insurance lists the Penn National Primary Policy, as well as two other policies not relevant here. (Id. at Schedule of Underlying Insurance.)
The Penn National Umbrella Policy also has an "Other Insurance" provision that provides:
a. This insurance is excess over, and shall not contribute with any of the other insurance, whether primary, excess, contingent or on any other basis. This condition will not apply to insurance specifically written as excess over this Coverage Part.
(Id. at Section III ¶ 5.)
First Industrial also purchased two insurance policies that relate to the present dispute. It purchased a general liability policy from Federal Insurance Company ("FIC"), policy no. 9947-59-56 REU (the "FIC Policy"), with a liability limit of $1,000,000 per occurrence. It also purchased a special commercial umbrella liability policy from St. Paul, policy no. ZUP-14N95053-14-NF (the "St. Paul Policy"). St. Paul agreed to pay on behalf of First Industrial "all sums in excess of the Retained Limit that [First Industrial] becomes legally obligated to pay as damages by reason of liability imposed by law ... because of: Bodily Injury ... that occurs during the Policy Period and is caused by an Occurrence[.]" (ECF No. 32-13 at Section I.A.1.) The policy defines "Retained Limit" as "the total of the applicable limits of all Scheduled Underlying Insurance, and the applicable limits of any Other Insurance, for Bodily Injury ... covered by such ... Other Insurance[.]" (Id. ) "Other Insurance" is "any insurance providing coverage for damages covered in whole or in part by this policy." (Id. at Section IV.P.) The FIC Policy is listed as Scheduled Underlying Insurance. (Id. at Scheduled Underlying Insurance.)
Like the Penn National Umbrella Policy, the St. Paul Policy has an "Other Insurance" provision that provides:
If Other Insurance applies to damages that are also covered by this policy, this policy will apply excess of, and shall not contribute with, that Other Insurance, whether it is primary, excess, contingent or on any other basis. However, this provision will not apply if the Other Insurance is specifically written to be excess of this policy.
(Id. at Section VII.L.)
After his accident, Mr. Wise filed suit against First Industrial and others. First Industrial and its insurer St. Paul tendered the defense and indemnity of First Industrial in the underlying action to Penn National on multiple occasions. On January 8, 2019, the parties attended a mediation to resolve Mr. Wise's claims. At the mediation, St. Paul and FIC reached a $3.5 million settlement of all of the claims that Mr. Wise asserted against First Industrial. St. Paul contributed $2.5 million towards that settlement, and FIC contributed $1 million. Penn National attended the mediation, but it is unclear to what extent, if any, it participated. However, it is undisputed that Penn National did not contribute any settlement funds on behalf First Industrial.
On November 21, 2019, St. Paul brought this case against Penn National, seeking a declaratory judgment that Penn National had to indemnify First Industrial pursuant to the Penn National Policies and an award of all sums that St. Paul had paid to settle Mr. Wise's claims against First Industrial. The parties filed cross-motions for summary judgment, which are ripe for disposition.
Federal Rule of Civil Procedure 56(a) permits a party to seek, and a court to enter, summary judgment "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). "[T]he plain language of Rule 56 [(a)] mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (quotations omitted). In ruling on a summary judgment motion, a court must "view the facts and draw reasonable inferences ‘in the light most favorable to the party opposing the [summary judgment] motion.’ " Scott v. Harris , 550 U.S. 372, 378, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007) (quotation omitted). However, "[t]he non-moving party may not merely deny the allegations in the moving party's pleadings; instead he must show where in the record there exists a genuine dispute over a material fact." Doe v. Abington Friends Sch. , 480 F.3d 252, 256 (3d Cir. 2007) (citation omitted).
The filing of cross-motions does not change this analysis. See Transportes Ferreos de Venezuela II CA v. NKK Corp. , 239 F.3d 555, 560 (3d Cir. 2001). It "does not constitute an agreement that if one is rejected the other is necessarily justified or that the losing party waives judicial consideration and determination whether genuine issues of material fact exist." Id. at 560 (...
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