Monumental Paving & Excavating, Inc. v. Pennsylvania Manufacturers' Ass'n Ins. Co.

• Decision Date: 18 May 1999
• Docket Number: No. 96-2858,96-2858
• Citation: 176 F.3d 794
• Parties: MONUMENTAL PAVING & EXCAVATING, INCORPORATED, Plaintiff-Appellant, v. PENNSYLVANIA MANUFACTURERS' ASSOCIATION INSURANCE COMPANY, Defendant-Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 794

176 F.3d 794

MONUMENTAL PAVING & EXCAVATING, INCORPORATED, Plaintiff-Appellant, v. PENNSYLVANIA MANUFACTURERS' ASSOCIATION INSURANCE COMPANY Defendant-Appellee.

No. 96-2858.

United States Court of Appeals, Fourth Circuit.

Argued June 6, 1997.

Decided May 18, 1999.

ARGUED: James David Mathias, Piper & Marbury, L.L.P., Baltimore, Maryland, for Appellant. Geoffrey Stetson Gavett, Gavett & Datt, P.C., Rockville, Maryland, for Appellee. ON BRIEF: Glen K. Allen, Piper & Marbury, L.L.P., Baltimore, Maryland, for Appellant. Rhoda S. Barish, Gavett & Datt, P.C., Rockville, Maryland, for Appellee.

Before RUSSELL, ^* WIDENER, and WILKINS, Circuit Judges.

Affirmed in part, reversed in part and remanded with instructions by published opinion. Judge WIDENER wrote the opinion, in which Judge WILKINS concurred.

OPINION

WIDENER, Circuit Judge:

Monumental Paving & Excavating, Inc. (Monumental) appeals from a decision in favor of its insurer, Pennsylvania Manufacturers' Association Insurance Company, the PMA Group, entered by the United States District Court for the District of Maryland on cross-motions by the parties for summary judgment. Monumental initiated the action after PMA denied coverage of certain of the losses which resulted from a fire on Monumental's premises. The decision of the district court is affirmed in part and reversed in part.

I.

There is no dispute as to the material facts. On December 9, 1995 a fire destroyed Monumental's maintenance shop building on Monumental's premises at 1805-1815 Edison Highway, in Baltimore, Maryland. Among the items of personal business property contained in the building and destroyed in the fire were two Patch Masters, machines which Monumental utilized in its paving business to melt and mix asphalt in the repairing of pot holes and other paving defects. The Patch Masters functioned as melting pots for the materials used in the paving and were equipped with radiant heat panels which melted the area of pavement surrounding the repair, thereby preventing the creation of a weaker cold seam in the asphalt surface. Monumental's Patch Masters were each permanently affixed to Ford truck chassis and cab; however, it is possible to mount them on trailers. Normally they were not kept in the burned maintenance building, building number 002 on the insurance policy. According to Monumental, they were inside at the time of the fire due to harsh weather.

There is no dispute but that at the time of the fire, Monumental had a Commercial Package Policy of insurance with PMA. That plan consisted of four Coverage Parts which included (1) Commercial Property Coverage; (2) Commercial General Liability Coverage; (3)Commercial Crime Coverage; and (4) Commercial Inland Marine Coverage. The Commercial Property Coverage part of the policy provided Monumental with "blanket building and business personal property coverage for all locations" at "replacement cost value" with a total limit of $686,000. Replacement cost value is the cost of replacement without deduction for depreciation. Additionally, this portion of the policy provided coverage for lost business income in the amount of $50,000. The Commercial Inland Marine part provided insurance for those items of Contractor's Equipment specified in the included schedule by Monumental. Monumental included therein the Patch Masters which were valued at $37,500 each, or a total of $75,000, which represented their actual cash value, or cost of restoration or replacement, whichever be less, rather than their replacement value.

Monumental and PMA settled a substantial portion of the claims resulting from the fire. However, they could not agree on two issues. First, Monumental claimed that under the Commercial Property Coverage, it was entitled to recover from PMA the replacement value of the Patch Masters, which Monumental estimates is about $425,000, because the units fell within the blanket coverage as they were in the maintenance building which burned. PMA refused to pay the replacement value of the Patch Masters, asserting that Monumental was only entitled to $75,000 because that was the amount Monumental had listed on the Inland Marine Contractor's Equipment Schedule. The second point of contention is that Monumental claimed it was entitled to apply the $50,000 of business income coverage to the loss of business income and extra expenses that it claimed resulted from the destruction of the Patch Masters and other property. PMA refused payment because it contended that the business income insurance covered only the destruction of one specific building on the premises (not the one destroyed) rather than the destruction of any of the buildings.

Monumental, in a two-count complaint, brought suit to settle the outstanding claims, and subsequently the parties filed their respective motions for summary judgment. The district court decided in favor of PMA on both counts, and Monumental has appealed.

II.

Summary judgment is appropriate under Federal Rule of Civil Procedure 56(c) "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Anderson v. Liberty Lobby, 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). We review the district court's grant of summary judgment de novo. Roe v. Doe, 28 F.3d 404, 406-7 (4th Cir.1994). In doing so, we consider the facts in the light most favorable to the non-moving party. Anderson, 477 U.S. at 255, 106 S.Ct. 2505 (1986). When considering motions from both parties for summary judgment, the court applies the same standard of review and so may not resolve genuine issues of material fact. ITCO Corp. v. Michelin Tire Corp., Com. Div., 722 F.2d 42, 45, n. 3 (4th Cir.1983), cert. denied, 469 U.S. 1215, 105 S.Ct. 1191, 84 L.Ed.2d 337 (1985). Instead, we consider and rule upon each party's motion separately and determine whether summary judgment is appropriate as to each under the Rule 56 standard. See 10A Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 2720 (2d ed.1983).

III.

The facts are not disputed, so what we are faced with is a question of the legal effect of this insurance contract. Count One of Monumental's complaint alleges that the contractor is entitled to the replacement value of the Patch Masters because they fit within the "Building and Personal Property" coverage section of the policy's definition of "covered property." That section defines "covered property" as including equipment within the insured buildings.

1. Covered Property

Covered Property, as used in this Coverage Part, means the following types of property for which a Limit of Insurance is shown in the Declarations: ...

b. Your Business Personal Property located in or on the building described in the Declarations or in the open (or in a vehicle) within 100 feet of the described premises, consisting of the following unless otherwise specified in the Declarations or on Your Business Personal Property--Separation of Coverage form: ...

(2) Machinery and equipment;

(3) Stock;

(4) All other personal property owned by you and used in your business;

Building and Personal Property Coverage Form, A.1.b. (2)-(4) (emphasis added). Monumental acknowledges that its Patch Masters were specifically covered under the Commercial Inland Marine policy for their actual cash value, or cost of restoration or replacement, whichever be less, and that it would only have received that amount of $75,000 had the units been destroyed with no coverage except the Commercial Inland Marine section of the policy. Notwithstanding this, Monumental asserts that the units fall within the definition of covered property by virtue of being equipment that was within the maintenance building at the time of the fire, and that Monumental is entitled to their replacement value.

Like any insurance policy, this one contains exceptions to coverage, two of which PMA argues prevent Monumental from recovering under the business personal property policy. First, Monumental asserts, and the district court agreed, that Exclusion (k) prevented coverage of the Patch Masters under the blanket policy.

k. Property that is covered under another coverage form of this or any other policy in which it is more specifically described, except for the excess of the amount due (whether you can collect on it or not) from that insurance.

Building and Personal Property Coverage Form, A.2.k. PMA asserts that where the Patch Masters were scheduled under the Contractor's Equipment Coverage Form of the Inland Marine portion of the policy at a total of $75,000, and where that form stated that the scheduled amount was "the most that we will pay for a loss of that item," no amount was due in accordance with Exclusion (k) as replacement value over and above the $75,000 that PMA agreed to pay.

The district court agreed with PMA's analysis. Further because the court found the replacement value of the blanket policy to be inconsistent with the scheduled actual value of the Patch Masters, the court looked to whether, outside of the contract, there was any evidence that the parties had ever intended that the replacement value apply rather than the actual value that was due under the Commercial Inland Marine policy. The district court determined that "Monumental has failed to establish the existence of genuine material fact relative to its expectation of replacement cost coverage for the Patch Masters at the time it purchased the PMA policy." The court placed great weight on the fact that in its statement of values, which PMA used to determine the premium and limits of the blanket policy, Monumental listed the personal property in the burned building as worth $15,000, an amount far below the replacement value it was claiming for the Patch Masters. The court noted that while...