PENN NATIONAL INSURANCE COMPANY, Appellant
v.
NORTH RIVER INSURANCE COMPANY; ABC INSURANCE COMPANIES (1-5) (fictitious names)
No. 18-2687
United States Court of Appeals, Third Circuit
July 30, 2019
NOT
PRECEDENTIAL
Submitted Under Third Circuit L.A.R. 34.1(a) May 24, 2019
On
Appeal from the United States District Court for the District
of New Jersey (D.C. No. 2-09-CV-04644) District Judge: Hon.
Katharine S. Hayden
Before: MCKEE, SHWARTZ, and FUENTES, Circuit Judges.
OPINION [**]
FUENTES, CIRCUIT JUDGE.
This
appeal asks us to consider the liability of an excess
insurance carrier, North River Insurance Company, for
payments made on behalf of an insured in three environmental
waste lawsuits, involving three sites: the Helen Kramer
landfill, the Buzby landfill, and the BEMS landfill. The
District Court concluded that the statute of limitations had
run with respect to the lawsuit over the Helen Kramer
landfill, granting summary judgment to North River. The
District Court also concluded that North River was not
responsible for contribution on the Buzby and BEMS lawsuits,
because the primary insurer, Penn National, had not exhausted
its policy limits. On the first issue, we agree with the
District Court's grant of summary judgment to North River
regarding the Helen Kramer landfill lawsuit. On the second,
we remand so that the District Court may more fully consider:
(1) the applicability of Carter-Wallace, Inc. v. Admiral
Insurance Co.; and (2) whether there was an aggregate
policy limit in effect that required North River to
contribute to the Buzby and BEMS landfill
settlements.
I.
Gus
Bittner, Inc., a non-party, is a now-defunct waste hauling
business that operated from the late 1950s through early
1996. For a ten-year period beginning January 1976, Bittner
was insured by Penn National under a series of insurance
policies and had umbrella/excess insurance policies from
North River. Below is a summary of the relevant
insurance policy limits during that time period.
|
Date
|
Penn National
|
North River
|
|
January 1976- January 1979
|
$100, 000 (per occurrence)
|
$2, 000, 000 (aggregate)
|
|
January 1979- January 1982 |
$100, 000 (per occurrence)
|
$3, 000, 000 (aggregate)
|
|
January 1982- January 1985
|
$500, 000 (per occurrence) |
$10, 000, 000 (aggregate)
|
The
heart of Perm National and North River's dispute is their
respective obligations to provide coverage for Bittner in
light of three environmental lawsuits it faced. The lawsuits
involved Bittner's hauling activities at three landfills:
the Buzby landfill, located in Voorhees, New Jersey; the BEMS
landfill, located in Burlington County, New Jersey; and the
Helen Kramer landfill, located in Mantua, New Jersey. Perm
National spent $2.55 million in indemnity payments on behalf
of Bittner in connection with the Helen Kramer landfill
lawsuit, $99, 590 in connection with the Buzby landfill
lawsuit, and $48, 013 in connection with the BEMS landfill
lawsuit. Penn National has also paid certain defense costs
for Bittner. North River has contributed $349, 680, which
went toward the Helen Kramer landfill settlement. In 2007,
Penn National informed North River that its policy limits had
been exhausted for the 1982-86 policy years, and when North
River declined to assume Bittner's defense and
indemnification costs, this lawsuit followed. Penn National
brought three claims against North River: a claim for
declaratory judgment, a breach of contract claim, and an
unjust enrichment claim.
Penn
National argued that under the insurance allocation scheme
set forth in Carter-Wallace, Inc. v. Admiral Insurance
Co., North River should be required to contribute more
for Bittner's indemnification and defense costs. North
River put forward three relevant arguments: (1) because the
Helen Kramer landfill case was settled in 1998, Penn
National's claims were time barred; (2) North River's
contribution of approximately $350, 000 toward the Helen
Kramer landfill settlement constituted a conclusive and
binding settlement between the parties; and (3) because Penn
National's policy form for the 1982- 1983 policy year did
not include an aggregate policy limit, it did not owe any
money toward the Buzby and BEMS landfill investigations.
In
2012, both parties moved for summary judgment. The District
Court denied both motions, concluding that there were two
issues of fact precluding summary judgment: first, whether
North River's Helen Kramer landfill payment constituted a
settlement between the parties; and second, whether Penn
National's 1982-1983 policy contained an aggregate limit.
The
parties moved for summary judgment again in 2016. This time,
the District Court granted North River's motion,
concluding that Penn National's claims were time-barred.
Specifically, the District Court determined that each of the
landfill claims constituted separate occurrences under New
Jersey law. The court then concluded that because the Helen
Kramer landfill lawsuit settled in 1998, Penn National's
claims were time barred with respect to that lawsuit. Because
the other claims did not reach Penn National's per
occurrence policy limits, the court found that Penn National
also could not establish its claims with respect to the BEMS
and Buzby landfills. This appeal followed.
II.
Penn
National's primary argument is that the District Court
erred by holding that the statute of limitations had expired
on Penn National's claims with respect to the Helen
Kramer landfill. It argues that because Bittner's hauling
activities were implicated in each of the three cases, they
constitute a single occurrence under New Jersey law, and as
such, the statute of limitations did not begin to run until
the resolution of the BEMS litigation in 2011.
The
District Court resolved this question by looking to guidance
from the New Jersey Appellate Division.
[5] In Doria v.
Insurance Co. of North America, the appellate division
explained that "for the purpose of counting the number
of occurrences, the term must be construed from the point of
view of the cause or causes of the accident rather than its
effect." Thus, the damages that resulted from a
young boy falling into an abandoned pool and the damages that
resulted from his brother, who fell in trying to help him,
constituted a single occurrence under the pool owners'
insurance agreement. The court emphasized that both boys were
injured due to a single cause-the failure of the pool owners
to fence and cover their pool-and their injuries were closely
connected in space and time. Under Doria, the
District Court determined that Penn National's arguments
were insufficient because "Bittner hauled to separate
landfills, in separate geographical locations, at separate
times over the course of nearly a decade, causing alleged
environmental damage at distinct and discrete
locations."
We
agree. First, Penn National argues that the District Court
erred because it should have recognized...
