Buczek v. Continental Cas. Ins. Co., 02-2847.
| Decision Date | 06 August 2004 |
| Docket Number | No. 02-2847.,No. 02-4063.,02-2847.,02-4063. |
| Citation | 378 F.3d 284 |
| Parties | Jack BUCZEK; Marie Buczek; Michael Neill; Sandy Neill, an Unincorporated Association t/a Meadows Condominium Association; Meadows Condominium Association v. CONTINENTAL CASUALTY INSURANCE COMPANY; Transportation Insurance Company, Appellant. |
| Court | U.S. Court of Appeals — Third Circuit |
Appeal from the United States District Court for the District of New Jersey, Joseph E. Irenas, J.
COPYRIGHT MATERIAL OMITTED
Gerard J. Jackson, (Argued), Cherry Hill, for Appellees.
Sheila A. Haren, (Argued), Monica E. O'Neill, Post & Schell, P.C., Philadelphia, for Appellant.
Before AMBRO, FUENTES, and CHERTOFF, Circuit Judges.
Appellees Jack and Marie Buczek and Michael and Sandy Neill are the sole and exclusive members of an unincorporated condominium association known as "Meadows Condominium Association" ("Owners"). The Owners commenced the underlying contract action against Transportation Insurance Company ("Transportation") and Continental Casualty Insurance Company ("Continental")1 in the United States District Court for the District of New Jersey on August 31, 2000. The Owners sued the two insurance companies following the denial of their condominium insurance claim, and they asserted claims for breach of contract and breach of the duty of good faith dealing. At the conclusion of the proceedings, the District Court entered a judgment in favor of the Owners and against Transportation in the amount of S103,634.00. Over a series of amended orders, the District Court also granted costs and prejudgment interest to the Owners. For the reasons set out below, we will reverse the orders of the District Court and vacate the judgment entered in favor of the Owners.
The Buczeks, citizens of the Commonwealth of Pennsylvania, and the Neills citizens of the State of New Jersey; purchased in 1986 a three-story, two-unit structure known as Meadows Condominium located in Wildwood, New Jersey. At the time of their condominium purchase, the Owners obtained from Transportation, an Illinois corporation, an all-risk policy of insurance ("the Policy") to cover the Condominium Association. "All-risks insurance is a special type of insurance extending to risks not usually contemplated, and generally allows recovery for all fortuitous losses, unless the policy contains a specific exclusion expressly excluding the loss from coverage." Jane Massey Draper, Annotation, Coverage Under All-Risk Insurance, 30 A.L.R. 5th 170, 1995 WL 900253 (1995).
Built on filled marshland, the condominium building is located on an inlet and was supported by thirty-four wooden pilings, which extended from approximately three to four feet above grade to approximately forty feet into the ground. As the District Court established and the record clearly reflects, the pilings served as the foundation for the house. About November 1, 1998, the Owners noticed that their structure was swaying in high winds. They investigated the problem in the Spring of 1999 and found visible discoloration on the surface level of the pilings that supported the building. A general contractor, exterminator, and engineer were retained to investigate the situation further.
On April 5, 1999, the structure was jacked up approximately one foot, and two longitudinal steel beams were inserted under the building for support. Local code enforcement officials deemed the temporary foundation to be unsatisfactory and dangerous and required that the building be secured and anchored to another temporary or permanent foundation.
The Owners decided to replace the rotted portions of the existing pilings with concrete beams over the piles, building up a foundation wall from the concrete beams to the house. The Owners claim that the replacement costs were approximately $103,634.00. On April 22, 1999, the Owners submitted a Notice of Loss to Transportation. The Owners described the loss as follows: "supports [of] building rotted and wood boring beetles took over" and that the loss occurred on or about November 1, 1998. App. 254a.
On May 22, 1999, Irving Fruchtman, an engineer retained by the Owners, inspected the property and discovered that the pilings had rotted from just below the water surface level to approximately one foot below grade. Wood samples from the pilings were analyzed, and it was determined that wood-destroying fungi and anaerobic bacteria were present in the pilings in addition to brown rot or decay. Transportation's own investigation yielded similar findings. Transportation issued a written denial of the Owners' claim on October 6, 1999, noting, "[s]ince the pilings are the cause of the loss, and not covered property under the policy, [the company] must respectfully deny any voluntary assistance or payment for this loss." App. 257a.
On August 31, 2000, the Owners filed the underlying contract action in District Court. Following a three-day jury trial, the District Court decided the matter on motions pursuant to Rules 50(a)(1) and 50(a)(2) of the Federal Rules of Civil Procedure. On March 1, 2002, the Court entered judgment against Transportation in the amount of $103,634.00. The Court subsequently granted the Owners' request for pre-judgment interest on the contract obligation and amended the judgment to $117,197.49, reflecting interest in the amount of $13,563.49. On June 17, 2002, the District Court entered an order denying Transportation's post-trial motions. On October 15, 2002, the District Court awarded costs of $1,778.71 to the Owners.
This appeal consolidates four appeals timely filed by Transportation contesting the District Court's March 1, 2002 judgment; the May 31, 2002 amended judgment; the June 17, 2002 order denying Appellant's post-trial motions; and the October 16, 2002 order awarding costs. This Court has appellate jurisdiction pursuant to 28 U.S.C. § 1291.
Transportation appeals the District Court's conclusion that the Owners were entitled to coverage under the Policy and argues that this Court should rule that it is entitled to judgment as a matter of law. In the alternative, Transportation argues that it is entitled to a new trial because the District Court "remov[ed] numerous critical factual issues from the jury" and improperly took judicial notice of an issue of importance in this case. Appellant's Br. at 9. Finally, Transportation claims that it is entitled to a remittitur because the District Court granted damages not recoverable under the Policy.
We exercise plenary review over the District Court's decision to grant the Owners' motions for judgment as a matter of law. Goodman v. Penn. Tpk. Comm'n, 293 F.3d 655, 664-65 (3d Cir.2002). "In reviewing the grant of a judgment as a matter of law under Fed.R.Civ.P. 50 following a jury verdict, we must view the evidence in the light most favorable to the non-moving party, and determine whether the record contains the `minimum quantum of evidence from which a jury might reasonably afford relief.'" Glenn Distribs. Corp. v. Carlisle Plastics, Inc., 297 F.3d 294, 299 (3d Cir.2002) (quoting Parkway Garage, Inc. v. City of Philadelphia, 5 F.3d 685, 691 (3d Cir.1993)).
The parties agree that New Jersey law applies to this case, as do we. Determination of the proper coverage of an insurance contract is a question of law. Atlantic Mut. Ins. Co. v. Palisades Safety and Ins. Ass'n., 364 N.J.Super. 599, 837 A.2d 1096, 1098 (2003).2 An insurance policy should be interpreted according to its plain meaning. Benjamin Moore & Co. v. Aetna Cas. & Sur. Co., 179 N.J. 87, 843 A.2d 1094, 1103 (2004) (internal citations omitted). Where the express language of the policy is clear and unambiguous, "the court is bound to enforce the policy as it is written." Royal Ins. Co. v. Rutgers Cas. Ins. Co., 271 N.J.Super. 409, 638 A.2d 924, 927 (1994) (quoting Flynn v. Hartford Fire Ins. Co., 146 N.J.Super. 484, 370 A.2d 61, 63 (1977)). However, in the absence of any ambiguity, courts should not write for the insured a better policy of insurance than the one purchased. Vassiliu v. Daimler Chrysler Corp., 178 N.J. 286, 839 A.2d 863, 867 (2004). A genuine ambiguity exists "where the phrasing of the policy is so confusing that the average policyholder cannot make out the boundaries of coverage." Lee v. Gen. Accident Ins. Co., 337 N.J.Super. 509, 767 A.2d 985, 987 (2001). When the terms of coverage are ambiguous, " that doubt is ordinarily resolved in favor of the insured." Moore, 843 A.2d at 1103.
The "Condominium Association Coverage Form" sets out the terms of coverage for "Covered Property." In pertinent part, the Policy provides:
A. COVERAGE
We will pay for direct physical loss of or damage to Covered Property at the premises described in the Declarations caused by or resulting from any Covered Cause of Loss.
Covered Property, as used in this Coverage Part, means the type of property described in this section A.1., and limited in A.2., Property Not Covered, if a Limit of Insurance is shown in the Declarations for that type of property.
a. Building, meaning the building or structure described in the Declarations, including:
(1) Completed additions;
(2) Fixtures, outside of individual units, including outdoor fixtures;
(3) Permanently installed:
(a) Machinery and
(b) Equipment;
* * * * * *
Covered Property does not include:
* * * * * *
f. The cost of excavations, grading, back filling or filling;
g. Foundations of buildings, structures, machinery or boilers if their foundations are below:
(1) The lowest basement floor; or
(2) The surface of the ground if there is no basement.
* * * * * *
j. Bulkheads, pilings, piers, wharves or docks;
* * * * * *
See applicable Causes of Loss Form as shown in the Declarations.
The "Causes of Loss — Special Form" details the types of "Covered Causes of Loss" covered by...
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