exceeded the $10,000 threshold, and it is clear that the insurer does bear a substantial responsibility for defense costs, as well as indemnity, with respect to these claims.
Although it seems clear that an appropriate allocation of the litigation expenses among the various claims involved in the litigation will be necessary, the present record does not afford a basis for such allocation by this court. All that can be decided at this juncture is that the insurer does have responsibility for the cost of investigating claims and the allocable portion of litigation expenses attributable to such claims, when the aggregate of claims and expenses exceeds $10,000, up to a maximum of $250,000.
III. COUNSEL FEES AND EXPENSES OF THIS ACTION
When an insurance company wrongfully refuses to provide a defense to its insured, and the latter successfully prosecutes a declaratory judgment action resolving the issue, the insurance company may (and perhaps must) be required to pay the insured's counsel fees and expenses in the declaratory judgment litigation. Montgomery Ward & Co., Inc. v. Pacific Indemnity Co., 557 F.2d 51 (3d Cir. 1977); Kelmo Enterprises v. Commercial Union Ins. Co., 285 Pa. Super. 13, 426 A.2d 680 (1981). In the present case, plaintiff has not succeeded in establishing that the defendants owed a duty of providing a defense, but merely that the defendants have the obligation of reimbursing plaintiff for some portion of its litigation expenses, not yet determinable. Moreover, on the coverage, deductible, and limitations issues, the result in this case is more favorable to the defendants than to the plaintiff. In these circumstances, an award of counsel fees and expenses would be inappropriate.
As noted earlier, plaintiff is also pursuing an action for contractual indemnity against the City of Wilmington. The merits of that claim are not before me, but plaintiff seeks a present ruling as to counsel fees and expenses incurred in that suit. In my view, that litigation is not within the policy coverage of defense costs, but is governed by ordinary principles of subrogation. To the extent the result may benefit the insurer, an appropriate deduction for counsel fees would be in order; but no present obligation of the defendants has been established.
AND NOW, this 14th day of January, 1985, upon consideration of the motion of plaintiff, Northern Shipping Company, for partial summary judgment, the response thereto, and after hearing thereon, it is
ORDERED, ADJUDGED AND DECLARED, that:
1. Under the terms of the insurance policies in suit, all losses sustained as a result of the same act or omission constituting negligence constitute a single occurrence, happening, or event, for purposes of applying the $250,000 coverage limitation and the $10,000 deductible. Where it is not feasible to identify a single operative cause of the loss or losses, the operation of unloading a particular vessel at a particular pier should be treated as constituting a single occurrence, happening, or event, for those purposes.
2. Under the terms of the insurance policies in suit, the insurer's obligation to pay legal expenses and costs of investigating and/or defense of claims asserted against the assured arises only when, and to the extent that, the aggregate of such claims and associated investigative/defense expenses exceeds $10,000, and does not exceed $250,000.
3. Where more than one claim, arising from separate occurrences, are asserted against the assured in a single lawsuit, and not all of such individual claims reach the $10,000 threshold, the insurer's obligation to pay investigative/ defense expenses is to be determined by an appropriate allocation thereof among the claims asserted.
4. In all other respects, plaintiff's Motion for Partial Summary Judgment is DENIED.
5. Inasmuch as the foregoing rulings dispose of all of the issues involved in this case, this Order shall be deemed to constitute the final judgment in this case.
6. Plaintiff's application for counsel fees is DENIED. Each party to bear its own costs.