The opinion of the court was delivered by: FULLAM
In this declaratory judgment action, the court is asked to resolve disputes concerning the interpretation of an insurance policy issued to the plaintiff stevedoring firm, and covering "stevedore liability".
The insured plaintiff conducts stevedoring operations at various locations in Philadelphia, Pennsylvania, Camden, New Jersey, and Wilmington, Delaware. During 1978, pursuant to a contract with Compania Sud Americana de Vapores (hereinafter "the steamship company"), plaintiff undertook to perform stevedoring services, viz., the discharge and service of vessels of the steamship company which were bringing fruit to this area during the 1978 Chilean fruit season. In all, plaintiff discharged cargo from these vessels on 23 separate occasions during 1978.
Subsequently, the various shippers or other persons interested in the cargo made numerous claims against the steamship company for loss or damage. Approximately 95 lawsuits were filed in state courts in New York, on behalf of various shippers, and against the steamship company. All of these actions were consolidated, and eventually removed to federal court in New York. The total claims asserted against the steamship company came to more than $1 million. The steamship company impleaded plaintiff as a third-party defendant in that action, in September 1979. Apparently, the shipping company has settled all of these claims for a total of about $365,000, and is pressing its claim against plaintiff for that amount.
Everyone agrees that the claims being asserted against plaintiff in the New York action relate to stevedoring activities as defined in the policy issued by the defendant.
The problem arises from the fact that the defendant's liability is limited to $250,000 "in any one occurrence or any series of occurrences directly or indirectly resulting from the same cause," and the policy provides for a deductible of $10,000 applicable to "each accident or occurrence hereunder". Plaintiff contends that the claims in question constitute a single "occurrence" for purposes of the deductible, since they all stem from stevedoring services performed pursuant to a single contract, that covering the "1978 Chilean fruit season". The defendant, on the other hand, contends that each of the 95 claims constitutes a separate occurrence, to which separate $10,000 deductibles should be applied.
A second area of dispute concerns the defendant's obligation to defend the New York action, or to reimburse plaintiff its costs in defending the action. There is also a dispute concerning the proper allocation of legal costs in connection with a separate lawsuit brought by plaintiff against the City of Wilmington, Delaware, seeking indemnity (pursuant to a contract) for any amounts plaintiff is required to pay in the New York action stemming from its stevedoring activities in Wilmington.
I. LIABILITY TO PAY CLAIMS
The pertinent policy language is as follows:
"This insurance also covers the legal liability of the Assured as stevedores (whether arising from negligence or otherwise) in respect of loss or damage which may occur to vessels which the assured may be loading and/or discharging . . . and/or their apparel or equipment, their freight and cargoes and other interests on board . . . resulting from or growing out of such loading and/or discharging and to pay all claims and charges in connection therewith. . . ."
"8. This insurance includes all legal expenses and costs incurred in defending and/or investigating claims coming within the scope of this cover where such defense and/or investigation is made with the approval of the underwriters, subject at all times to the limit of liability expressed herein.
"9. It is hereby understood and agreed that this company shall not be liable for more than the following amounts (including legal expenses) in any one occurrence or any series of occurrences directly or indirectly resulting from the same cause, each pier separately insured.
"A. $250,000 if resulting from or arising out of the assured's operations, work ...