Peerless Ins. Copmany & Ohio Sec. Ins. Co. v. Builders, Civil Action No. 15-281
| Decision Date | 30 June 2016 |
| Docket Number | Civil Action No. 15-281 |
| Court | United States District Courts. 3th Circuit. United States District Courts. 3th Circuit. Western District of Pennsylvania |
| Parties | PEERLESS INSURANCE COPMANY and OHIO SECURITY INSURANCE COMPANY, Plaintiffs, v. MANOWN BUILDERS, CLINTON H. MANOWN & SONS, CLINTON H. MANOWN & MICHELLE MANOWN t/a CLINTON H. MANOWN & SONS and CLINTON H. MANOWN & MICHELLE MANOWN t/a CHM LAND COMPANY, Defendants. |
MEMORANDUM OPINION
1
Plaintiffs Peerless Insurance Company ("Peerless") and Ohio Security Insurance Company ("Ohio Security") initiated this action for declaratory judgment under 28 U.S.C. §§ 2201 and 2202 against the above-captioned Defendants, Manown Builders, et al. (collectively "Manown"). Manown is a named insured under commercial general liability insurance policies with Plaintiffs. Manown has been sued in the Court of Common Pleas of Fayette County, Pennsylvania ("State Court") by Bradley R. Scott and Rebecca J. Belski ("underlying plaintiffs") relating to Manown's allegedly deficient construction of the underlying plaintiffs' residence("underlying action"). Plaintiffs have defended Manown in the underlying action under a reservation of rights, and subsequently initiated this action herein seeking a declaration from the Court that no coverage exists in the underlying action under the applicable insurance policies, and that Plaintiffs do not have a duty to defend or indemnify Manown in the underlying action.
Currently pending before the Court are cross-motions for summary judgment. (ECF Nos. 23, 25). The Court has carefully reviewed and considered the parties' cogent arguments made in connection with these pending motions. (ECF Nos. 24-31). For the reasons that follow, Plaintiffs' motion for summary judgment will be granted and Defendants' motion for summary judgment will be denied.
Summary judgment is appropriate 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); Celotex Corp. v. Catrett, 477 U.S. 317, 330 (1986); Andreoli v. Gates, 482 F.3d 641, 647 (3d Cir. 2007). A factual dispute is genuine if a reasonable jury could find for the non-moving party, and is material if it will affect the outcome of the trial under governing substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). At the summary judgment stage, "the judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Anderson, 477 U.S. at 249; see also Marino v. Indus. Crating Co., 358 F.3d 241, 247 (3d Cir. 2004) (). In this regard, the court must consider all evidence and inferences drawn therefrom in the light most favorable to the non-moving party. Andreoli v. Gates, 482 F.3d 641, 647 (3d Cir. 2007).
To prevail on summary judgment, the moving party must affirmatively identify thoseportions of the record which demonstrate the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323-24. The moving party can discharge the burden by showing that "on all the essential elements of its case on which it bears the burden of proof at trial, no reasonable jury could find for the non-moving party." In re Bressman, 327 F.3d 229, 238 (3d Cir. 2003); see also Celotex, 477 U.S. at 325. If the moving party meets this initial burden, the non-moving party "must do more than simply show that there is some metaphysical doubt as to material facts," but must show sufficient evidence to support a jury verdict in its favor. Boyle v. Cty. of Allegheny, 139 F.3d 386, 393 (3d Cir. 1998) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986)). If the non-moving party "fails to make a showing sufficient to establish the existence of an element essential to [the non-movant's] case, and on which [the non-movant] will bear the burden of proof at trial," Rule 56 mandates the entry of summary judgment because such a failure "necessarily renders all other facts immaterial." Celotex Corp., 477 U.S. at 322-23; Jakimas v. Hoffman-La Roche, Inc., 485 F.3d 770, 777 (3d Cir. 2007).
This standard does not change merely because there are cross-motions for summary judgment. Appelmans v. City of Phila., 826 F.2d 214, 216 (3d Cir. 1987). "Cross-motions are no more than a claim by each side that it alone is entitled to summary judgment." Rains v. Cascade Indus., Inc., 402 F.2d 241, 245 (3d Cir. 1968). When considering cross-motions for summary judgment, a court is precluded from granting summary judgment to either side—even if the parties stipulate that no more evidence is needed—when there are any genuine issues of material fact. Facenda v. N.F.L. Films, Inc., 542 F.3d 1007, 1024 (3d Cir. 2008). In resolving such cross-motions, "the court is bound to view the evidence in the light most favorable to the non-moving party with respect to each motion." Stilp v. Contino, 743 F.Supp.2d 460, 465 (M.D.Pa. 2010) (citations omitted).
Meyer v. CUNA Mut. Ins. Soc., 648 F.3d 154, 163 (3d Cir. 2011) (citing Madison Const. Co. v. Harleysville Mut. Ins. Co., 735 A.2d 100, 106 (Pa. 1999)). Insurance policies are generally to be interpreted by a court, not a jury. Madison, 695 A.2d at 106. "A policy must be read as a whole and its meaning construed according to its plain language." Meyer, 648 F.3d at 163 (citations omitted).
The insurance company, as the author of the policy, bears the burden of drafting with precision; and thus, any ambiguous term must be construed in favor of the insured. Id. When a provision of the policy is clear and unambiguous, the court must give effect to that language. Donegal Mut. Ins. Co. v. Baumhammers, 938 A.2d 286, 290 (Pa. 2007). "Contractual terms are ambiguous 'if they are subject to more than one reasonable interpretation when applied to a particular set of facts.'" Liberty Mut. Ins. Co. v. Sweeney, 689 F.3d 288, 293 (3d Cir. 2012) (quoting Madison, 735 A.2d at 106). A court "will not, however, distort the meaning of the language or resort to a strained contrivance in order to find an ambiguity." Madison, 735 A.2d at 106 (citing Steuart v. McChesney, 444 A.2d 659, 663 (Pa. 1982)).
"Although the duty to defend is separate from and broader than the duty to indemnify, both duties flow from a determination that the complaint triggers coverage." Gen. Accident Ins. Co. of Am. v. Allen, 692 A.2d 1089, 1095 (Pa. 1997). The Pennsylvania Supreme Court has observed the following:
[a]n insurer's duty to defend an action against the insured is measured, in the first instance, by the allegations in the plaintiff's pleadings.... In determining the dutyto defend, the complaint claiming damages must be compared to the policy and a determination made as to whether, if the allegations are sustained, the insurer would be required to pay resulting judgment.... [T]he language of the policy and the allegations of the complaint must be construed together to determine the insurers' obligation.
Baumhammers, 938 A.2d at 290 (quoting Gene's Rest. Inc. v. Nationwide Ins. Co., 548 A.2d 246, 247 (Pa. 1988)) (alterations in original).
It is "well-established precedent" in Pennsylvania "that an insurer's duty to defend and indemnify [are] determined solely from the language of the complaint against the insured." Kvaerner Metals Div. of Kvaerner U.S., Inc. v. Commercial Union Ins. Co., 908 A.2d 888, 896 (Pa. 2006). Moreover, "[t]he particular cause of action that a complaint pleads is not determinative of whether coverage has been triggered." Mut. Benefit Ins. Co. v. Haver, 725 A.2d 743, 745 (Pa. 1999). "Instead it is necessary to look at the factual allegations contained in the complaint." Id. (citations omitted); see also Kvaerner, 908 A.2d at 896 ().
Manown is a named insured under two policies with Defendants: (1) an Ohio Security commercial general liability policy3 for the periods of March 19, 2007 through March 19, 2008 and March 19, 2008 through March 19, 2009; and (2) a Peerless commercial general liability policy4 for the policy periods of March 19, 2009 through March 19, 2010, March 19, 2010through March 19, 2011, and March 19, 2011 through March 19, 2012. Aside from the coverage periods, the substantive language in both of these policies is identical in all relevant respects. As such, for ease of reference, when discussing the language contained in said policies, the Court will collectively refer to both policies hereafter as "the policy." The Court will set forth the relevant policy language in the foregoing Discussion section.
On August 18, 2011, the underlying plaintiffs initiated a civil action against Manown and K-2 Engineering, Inc. (which is not a party herein) in State Court by filing a Writ of Summons.5 About a year and a half later, on February 11, 2013, the underlying plaintiffs filed their complaint. The underlying plaintiff's complaint states that they entered into a contract with Manown on June 29, 2007 for the construction of a residence in Uniontown, Pennsylvania. The consideration for that contract was originally $600,000 but was later amended to $700,000 via an undated but signed document. Specifications for the construction of the home were reached on July 6, 2007 in a Home Building Specification and Contract.
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