In this case the "guaranteed loss ratio plan" language was not contained in any writing in the policies of insurance, and it is again important to note that all of the policies of insurance contained an integration clause stating that each policy embodied all agreements existing between the parties. (See, e.g., Pl. Ex. 7A; D. Ex. U, KK, LL, UU). In support of the Court's decision at trial that the written insurance contracts were integrated, and therefore that parol evidence was inadmissible, the testimony of Plaintiff's witness, Mr. Dianis, is particularly significant. Dianis stated that no written "guaranteed loss ratio plan" was affixed to the policy, that he recommended it be done, that it would be a reasonable and a prudent business practice to have affixed said "plan" to the policy in writing. Mr. Dianis told Mr. Sobcyzinski to put the language in the written contracts, and he (Mr. Sobcyzinski) intentionally and purposefully refused to insert into the written policy the necessary language about the plan. Tr., July 17, 1981, at 68. Plaintiff's Exhibit 10 indicates that the "guaranteed loss ratio" language was the subject of discussion: "review and discussion for guaranteed loss ratio endorsement before final draft." (Emphasis added). (The credibility of Plaintiff's witnesses, Mr. Dianis and Mr. Sobcyzinski was never in issue.)
The uncontroverted evidence presented at trial, including that of both Plaintiff and Defendant, clearly established that the "guaranteed loss ratio plan" language was the subject of discussion, and related to the same subject matter embodied in the written policies of insurance, was so interrelated that had the parties so intended, said "plan" would have been and should have been included in the writing, and was purposefully and intentionally omitted from the written contracts by the Plaintiff. Plaintiff's own witnesses and exhibits indicate that the written contracts were integrated. The uncontroverted evidence shows clearly that the omission of a written endorsement dealing with the "guaranteed loss ratio plan" was a conscious decision on the part of Plaintiff, and was not due to accident or mistake. The insurance contract was a unilateral contract, and CNA easily could have included the "guaranteed loss ratio plan" language into the policies of insurance at any time. The "guaranteed loss ratio plan" language could have been put in writing, and the integration clause of the several policies of insurance required that the "guaranteed loss ratio plan" language should have been in writing if it were intended to be part of the unilateral insurance contracts. The evidence is uncontroverted and even beyond any reasonable doubt that CNA intentionally and purposefully failed to place the required language describing said plan in their unilateral contracts of insurance. Thus, it is obvious that the policies were intended to be complete without the "guaranteed loss ratio plan" language. These circumstances mandated the Court's previous ruling that the parol evidence rule barred the introduction of the alleged oral agreement. As a matter of law, there was nothing for the jury to decide.
CNA argues that certain terms of the insurance policy are ambiguous and that extrinsic proof and reference to the guaranteed loss ratio agreements is consistent with the fundamental principles of contract construction. They point to three terms which they contend are ambiguous: "advance premiums", "estimated premium", and "net premium adjustment". For example, because the term "advance premium" does not describe the manner of payment, the method of computing the premium against which the sum is advanced, or how the advance is to be credited toward the final premiums, CNA claims the term is ambiguous, and seeks to have the term interpreted as meaning that an applicable rating program, namely, the "guaranteed loss ratio plan," will be used to make adjustments to the premiums paid throughout the year.
In Pennsylvania, words of an insurance policy are to be given their plain and ordinary meaning if they are clear and unambiguous. St. Paul Fire and Marine Insurance v. United States Fire Insurance Co., 655 F.2d 521, 524 (3d Cir. 1981); Eastern Associated Coal Corp. v. Aetna Casualty & Surety Co., 632 F.2d 1068, 1075 (3d Cir. 1980). Moreover, "A court should read policy provisions to avoid ambiguities, if possible, and not torture the language to create them. If the language is unambiguous, interpretation of the contract is a matter of law for the court. In the event that ambiguities do exist in wording adopted by the insurance company, then the provisions must be resolved in favor of the insured." St. Paul Fire and Marine Insurance, supra at 524.
In the instant case, while it is true that the terms "advance premiums", "estimated premiums" and "net premium adjustment" could theoretically be argued as being ambiguous, Plaintiff CNA did not offer any evidence of any kind that the three phrases above mentioned are ambiguous in the context in which they are used in the policies. For example, Plaintiff's witness, Mr. Dianis explained that "estimated" refers to a change in premium due to an audit or acquisition. Tr., July 20, 1981, at 426-27, 461. To hold the terms of the insurance policy ambiguous in this case would enable Plaintiff CNA to intentionally and purposefully omit an important clause of the unilateral insurance contract, and then unfairly retain the benefit of the alleged omitted clause by claiming ambiguity in the wording of its own contract and thereby circumventing the operation of the written integration clauses in the policies and all in contravention of the parol evidence rule. This our courts will not allow. The written terms of the contracts cannot be made clear by oral testimony which is in direct contradiction to said terms. Nor, as a matter of public policy, will the court allow a party purposefully to create ambiguities in a unilateral written contract, in order to retain the right to adjust, alter and vary the terms of the written insurance policy in the light of changing circumstances to unfairly enhance the financial advantage of the insurance company, and much to the great financial detriment of the named insured and directly contrary to the expressed written intentions of the parties. To allow Plaintiff CNA's contention in this case would be unconscionable and would relieve said Plaintiff of all the risk taking that is inherent in contracts of insurance, contrary to the expressed written agreement of the parties.
In passing, it should be noted that the relevant written unilateral contracts of insurance in this case embody literally hundreds of pages of terms and conditions. There is no evidence of any kind in the record to support the Plaintiff's proposition that the so-called "guaranteed loss ratio plan" was to have been an integral part of the agreed upon insurance plan between the parties, but to the contrary, Plaintiff, who had complete charge of reducing the policies to written form, purposefully and intentionally kept said "plan" out of the written integrated policies of insurance.
Plaintiff also contends it was error for the Court to grant a directed verdict as to the other Counts of the Complaint. These arguments are without merit.
Plaintiff CNA seeks to recover under a theory of unjust enrichment, arguing that it conferred benefits upon National Steel in the good faith belief that the Defendant had agreed to make the supplemental premium payments called for under the alleged "guaranteed loss ratio" policy language. As discussed previously, the evidence clearly establishes that the alleged "guaranteed loss ratio plan" language was not part of the written contract; in order for said "plan" to have been effective, it should have been part of the contract; and although the appropriate officer was told to make said plan part of the unilateral contract, he admittedly intentionally refused to do so. Under these circumstances there can be no unjust enrichment since it was Plaintiff CNA who purposefully chose to omit the "guaranteed loss ratio plan" language from the integrated unilateral contract. As heretofore noted, Plaintiff CNA's own witnesses have so testified without contradiction. See, e.g., Tr., July 17, 1981, at 65-69. (There was no credibility problem of any kind with these Plaintiff's witnesses as to this issue.)
Plaintiff CNA also argues that it is entitled to recover under theories of fraudulent and negligent misrepresentation. Plaintiff CNA is again trying to circumvent the operation of the parol evidence rule by presenting evidence of the alleged oral agreement that Plaintiff CNA admittedly, purposefully and intentionally omitted from the unilateral contracts which Plaintiff CNA employees drafted. Plaintiff CNA alleges that National represented that National intended to pay supplemental premiums in accordance with the alleged "guaranteed loss ratio plan", when it knew such representations were false. In light of Mr. Dianis' testimony that the "guaranteed loss ratio plan" language should have been inserted in the written policies, that it was a reasonably prudent business practice to do so, and that his colleague, Mr. Sobcyzinski, intentionally and with clear understanding refused to place said language in the policies, Plaintiff CNA could not have justifiably relied on National's alleged fraudulent representations, even if the same had been made. This Court found no evidence of any kind whatsoever in the record that the Defendant National ever made any such fraudulent representations at any relevant time.
It was therefore right and proper for the Court to have ruled in favor of Defendant on all four Counts when it considered the Defendant's Motions for the Directed Verdict.
Plaintiff CNA contends that the court improperly weighed and judged the credibility of its witnesses when considering the motion for a directed verdict. It is true that the judge may not usurp the functions of the jury as fact finders and credibility assessors. See, e.g., United States v. Lena, 497 F. Supp. 1352, 1357 (W.D.Pa.1980). However, the Court must first determine when it is proper for the jury to determine a matter:
The matter is essentially one to be worked out in particular situations and for particular types of cases. Whatever may be the general formulation, the essential requirement is that mere speculation not be allowed to do duty for probative facts after making due allowance for all reasonably possible inferences favoring the party whose case is attacked.
(Emphasis added). Edward J. Sweeney & Sons, Inc. v. Texaco, Inc., 637 F.2d 105, 115 (3d Cir. 1980), citing Galloway v. United States, 319 U.S. 372, 395, 63 S. Ct. 1077, 1089, 87 L. Ed. 1458 (1943).
The role of the jury is thus explained in Sweeney, supra at 115-16:
The jury's role in our legal tradition probably represents modern America's unique characteristic in the trial of civil cases. It's role cannot be minimized, nor its importance dissipated one iota. Yet the limits of the jury's role must always be recognized. The jury translates as found fact a congeries of relevant evidence on controverted factual issues. The jury does not engage in the final stage of this process until the court makes the critical legal decision that there is sufficient evidence to submit to the jury for the purpose of resolving conflicts in the evidence or inferences permissibly drawn from the evidence, or both.