Rottmund v. Continental Assur. Co.

Decision Date27 December 1990
Docket NumberCiv. A. No. 89-5970.
Citation761 F. Supp. 1203
PartiesPatti M. ROTTMUND, Executrix of the Estate of David R. Artz, Deceased, v. CONTINENTAL ASSURANCE COMPANY, and Constitution Life Insurance Company.
CourtU.S. District Court — Eastern District of Pennsylvania

James F. Mundy, Philadelphia, Pa., for plaintiff.

Stephen C. Baker, Philadelphia, Pa., for defendant Continental Assur. Co.

Michael Saltzburg, Philadelphia, Pa., for defendant Constitution Life Ins. Co.


HUYETT, District Judge.

This is an action brought by the Estate of David R. Artz pursuant to the Pennsylvania Slayers Act, 20 Pa. Cons. Stat.Ann. §§ 8801-8815 (Purdon 1975 & Supp.1989), for the proceeds of two life insurance policies. Plaintiff Patti M. Rottmund, formerly Patti M. Artz, is suing in her capacity as the Executrix of the Estate of her former husband, David R. Artz. The life insurance policies in question insured the life of the decedent David Artz and were issued by defendants Continental Assurance Company ("Continental") and Constitution Life Insurance Company ("Constitution").

Plaintiff has filed a motion for summary judgment, defendant Continental has filed a motion for summary judgment, and defendant Constitution has filed a motion for summary judgment. For the reasons set forth below, I shall deny all three motions for summary judgment.


Summary judgment is appropriate if there exists no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Small v. Seldows Stationery, 617 F.2d 992, 994 (3d Cir.1980). The court does not resolve questions of disputed fact, but simply decides whether there is a genuine issue of fact which must be resolved at trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 2510-11, 91 L.Ed.2d 202 (1986); Ettinger v. Johnson, 556 F.2d 692 (3d Cir.1977). The facts must be viewed in the light most favorable to the opposing party, and reasonable doubt as to the existence of a genuine issue of material fact is to be resolved against the moving party. Continental Insurance Co. v. Bodie, 682 F.2d 436, 438 (3d Cir.1982). However, "there is no issue for trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party. If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Anderson, 477 U.S. at 249-50, 106 S.Ct. at 2510-11 (citations omitted). The inquiry is whether the evidence presents a sufficient disagreement to require submission to the jury, or whether it is so one-sided that one party must prevail as a matter of law. Id. at 252, 106 S.Ct. at 2512.


On April 25, 1984, the decedent David Artz, as owner and Chief Executive Officer of Conestoga Fuels, Inc. ("CFI"), entered into an agreement hereinafter the "Stock Purchase Agreement" with Samuel Lombardo. Under the terms of the Stock Purchase Agreement, Lombardo agreed to purchase all of the outstanding shares of stock in CFI for a total purchase price of $1,500,000.00. After executing the Stock Purchase Agreement, Artz purchased the two insurance policies which are the subject of the present action, designating CFI as the beneficiary of both policies. Subsequently, Artz changed the beneficiary of both policies to Conestoga Holding, Inc., an erroneous designation for Conestoga Holding Company ("CHC"). CHC was jointly owned by Samuel Lombardo and John Kramer.

David Artz was murdered on February 19, 1985. As of the date of Artz's death, the Stock Purchase Agreement had not been fully executed, but service contracts had been undertaken in reliance upon it. On July 25, 1985, plaintiff, Artz's wife, entered into an agreement hereinafter the "Agreement" with Lombardo, Kramer, and others who were parties to the service contracts to terminate the Stock Purchase Agreement as well as the service contracts. Plaintiff made this Agreement in both her individual capacity and in her capacity as Executrix of the Estate of David R. Artz.

The Agreement refers to three life insurance policies, all of which insured the life of David Artz. Lombardo, Kramer and the others agreed to make no claim of ownership to, or claim the proceeds payable from, a life insurance policy with Continental, Policy No. 03229330. In exchange, plaintiff, referred to in the Agreement as Patti Artz, and CFI agreed to make no claim of ownership to, or claim the proceeds payable from, a life insurance policy with Constitution, Policy No. 8087059, and a life insurance policy with Continental, Policy No. 3264721. Neither of the defendant insurance companies was a party to the Agreement, nor part of the negotiations leading up to the Agreement.

Pursuant to their rights under the Agreement and as the owners of the CHC, the designated beneficiary, Lombardo and Kramer commenced an action against Continental and Constitution for the proceeds of the two insurance policies at issue in the present case. Continental and Constitution filed a separate action alleging, among other things, that Lombardo and Kramer had no legal rights to the insurance proceeds because they had organized and implemented the murder of the insured, David Artz. The two actions were consolidated and later withdrawn when Lombardo and Kramer voluntarily relinquished any and all claims to the proceeds under the two life insurance policies.

After Lombardo and Kramer abandoned their claims, plaintiff, on behalf of the Estate of David R. Artz, made a demand upon Continental and Constitution for payment of the proceeds under the policies. Both Continental and Constitution rejected plaintiff's demand. Thereafter, plaintiff filed the present action based on the premises that, under the Pennsylvania Slayer's Act, 20 Pa. Cons. Stat. Ann. §§ 8801-88151, the proceeds of the two life insurance policies, Continental Policy No. 3264721 and Constitution Policy No. 8087059, should be paid to the decedent's estate.


In her motion for summary judgment, plaintiff makes two arguments: (1) that this court should construe the allegations made by Continental and Constitution in the previous lawsuit as binding admissions in this lawsuit and, thus, conclusive of certain facts; and (2) that there is no evidence to support the defendants' defenses. Plaintiff contends that she is entitled to summary judgment because she satisfies her burden of proving that Lombardo and Kramer are responsible for the death of David Artz merely by introducing evidence that defendants made the same allegation with respect to Lombardo and Kramer in the earlier lawsuit. Plaintiff's contention is totally without merit.

The averments of plaintiff's Complaint are based upon, and in some cases verbatim reiterations of the averments made by the defendants in their Amended Complaint in the prior lawsuit (United States District Court, Eastern District of Pennsylvania, Civil Action No. 85-48675). In the earlier lawsuit, defendants sought to preclude Lombardo and Kramer from recovering any of the proceeds of the very insurance policies which are the subject of this litigation. Some of those averments describe the business dealings among Artz, Lombardo, and Kramer, and the history of the application for and issuance of the life insurance policies on Artz. The allegation critical to plaintiff's motion for summary judgment, which she borrowed from defendants' Amended Complaint in the earlier action, states:

On February 19, 1985 ..., David Artz was found murdered in Coral Springs, Florida by multiple gunshot wounds as a result of a conspiracy organized and implemented by Defendants Kramer and Lombardo.

In responding to plaintiff's Complaint, however, defendants state that, despite reasonable investigation, they are incapable of formulating a belief as to the truth of the very allegations they themselves alleged in their Amended Complaint in 1985.

The cases cited by plaintiff do not support her contention that defendants' allegation in the prior action is a binding admission in this proceeding and, therefore, conclusive proof of certain facts — i.e. that Lombardo and Kramer murdered, or conspired to murder, David Artz.

In Airco Industrial Gases Inc. v. Teamster Health and Welfare Pension Fund, 850 F.2d 1028 (3d Cir.1988), a defendant admitted certain facts prior to trial in response to requests for admissions pursuant to Rule 36 of the Federal Rules of Civil Procedure. After a bench trial, the District Court made factual findings favorable to defendant which were inconsistent with the admissions made by defendant in response to the request for admissions. On appeal, the Court of Appeals reversed on the basis that the Rule 36(b) provides that "any matter admitted under this Rule is conclusively established unless the court on motion permits withdrawal or amendment of the admission." Id. at 1035.

The decision in Airco is inapposite to the present case. The allegation that plaintiff claims is a binding admission was made in a pleading in another case, not in response to requests for admissions in the same case. Accordingly the provisions and effect of Rule 36 are not relevant to whether the insurance companies are bound by an allegation made in their Amended Complaint in the prior action.

In Glick v. White Motor Co., 458 F.2d 1287 (3d Cir.1972), one of the defendants during the course of trial admitted that certain exhibits offered by plaintiff were authentic and then, on appeal and after changing attorneys, attempted to dispute the authenticity of those exhibits. In holding that the defendant was precluded from disputing the authenticity of the exhibits on appeal, the court relied upon the following language from the opinion in Scarano v. Central R. Co. of New Jersey, 203 F.2d 510 (3d Cir.1953):

The rule we apply here need be and is no broader than this. A plaintiff who has obtained relief from an adversary by asserting and offering proof to support one position may not be heard later in the same court to

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