must be started within one year after the date of loss or damage."
Fed. R. Civ. P. 56(c) instructs a court to enter summary judgment when the record reveals that "there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." This rule provides the court with a useful tool when the critical facts are undisputed, facilitating the resolution of a pending controversy without the expense and delay of conducting a trial made unnecessary by the absence of factual dispute. Peterson v. Lehigh Valley Dist. Council, 676 F.2d 81, 84 (3d Cir. 1982); Goodman v. Mead Johnson & Co., 534 F.2d 566, 573 (3d Cir. 1976), cert. denied, 429 U.S. 1038, 50 L. Ed. 2d 748, 97 S. Ct. 732 (1977). Summary judgment is inappropriate, however, where the evidence before the court reveals a genuine factual disagreement requiring submission to a jury. An issue is "genuine" only if the evidence is such that a reasonable jury could find for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S. Ct. 2505, 2510, 91 L. Ed. 2d 202 (1986). At the summary judgment stage, "the judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Id. 106 S. Ct. at 2511. However, if the evidence is merely "colorable" or is "not significantly probative," summary judgment may be granted. Id.
In a summary judgment action, the moving party bears the initial burden of identifying for the court those portions of the record which it believes demonstrate the absence of a material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 106 S. Ct. 2548, 2553, 91 L. Ed. 2d 265 (1986). Following such a showing in a case where the non-moving party is the plaintiff and therefore bears the burden of proof, it must by affidavits or by the depositions and admissions on file "make a showing sufficient to establish the existence of [every] element essential to that party's case." Id. 106 S. Ct. at 2552-53; Anderson, 106 S. Ct. at 2514; Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986); Fed. R. Civ. P. 56(e). In making its ruling on a summary judgment motion, the court must view all inferences in a light most favorable to the non-moving party, United States v. Diebold, Inc., 369 U.S. 654, 655, 8 L. Ed. 2d 176, 82 S. Ct. 993 (1962); Continental Ins. Co. v. Bodie, 682 F.2d 436, 438 (3d Cir. 1982), must resolve all doubts against the moving party, Gans v. Mundy, 762 F.2d 338, 341 (3d Cir. 1985), cert. denied, 474 U.S. 1010, 106 S. Ct. 537, 88 L. Ed. 2d 467 (1985), and must take as true all allegations of the non-moving party that conflict with those of the movant, Anderson, 106 S. Ct. at 2513.
With these standards in mind, we now turn our attention to the motion before us. The central issue in the instant case is this: does the existence of the policy's appraisal clause preclude the plaintiff from bringing this court action? We do not find the parties to be in disagreement with the facts which we have set forth above. We, therefore, consider the disposition of the instant case to turn upon the application of the relevant law to these facts.
In order to invoke the appraisal provision of a policy, the insurer must admit liability and there must be a dispute only as to the amount of the loss. Ice City, Inc. v. Insurance Company of North America, 456 Pa. 210, 314 A.2d 236, 240 (1974). Also, " if appraisal is not requested, or the request is fruitless, or appraisal proceedings are inclusive or abandoned by the parties' joint consent or liability is denied, then the appraisal provision in the contract may not bar the insured from bringing an action for relief in the courts." Id. 314 A.2d at 239 (footnotes omitted) (emphasis supplied). In none of its communications with the plaintiff did the defendant expressly deny liability for the claim and the defendant explicitly admitted liability in open court at the hearing on this motion held on October 27, 1989.
The plaintiff argues, however, that the defendant definitively denied liability when it answered her complaint. While it is true that the answer filed by the defendant in response to the plaintiff's complaint denied liability on fraud and other grounds, there is authority to suggest that such response does not constitute a denial. Authorities cited in 3 A.L.R.3d 383, 416 (1949) hold that an insurer's denial of liability, which is raised for the first time in an answer to a complaint, does not amount to a waiver of the condition precedent. In Kahnweiler v. Phoenix Insurance Co., 57 F. 562 (D. Kan. 1893), rev'd on other grounds, 67 F. 483 (8th Cir. 1895), the court stated:
The plaintiffs insist that the provision in the policy for arbitration has been waived by the company, and is inoperative; that the company could not invoke that provision to abate or defeat the plaintiffs' suit, because it made no demand for arbitration, and because it denies its liability in toto. This denial of liability in toto appears for the first time in the answer of the defendant in this suit. Up to that time the company had offered to pay its proportion of what it claimed was the actual loss of the insured, but there was an irreconcilable difference between the parties as to the amount of that loss, thus bringing the case within the provisions of the arbitration clause of the policy. Inasmuch as the arbitration should precede any suit, at no time during the period for arbitration did the company deny its liability for the loss. That the company has set up in one count of its answer a denial of any liability does not affect the case. It might waive any objection to the cause of the fire, and offer to settle, to avoid litigation; but this would not effect [sic] its right, when sued, to set up in its answer any legal defense it had to the action. . . .
In Carp v. Queen Insurance Co., 104 Mo. App. 502, 79 S.W. 757 (1904), the court also considered whether the denial of liability in an answer to the complaint constituted such denial of liability as would preclude resort to appraisement. The Carp court concluded that it did not, stating: "The denial of liability which dispenses with the necessity of an appraisal must occur, except under special circumstances, before answering in a suit on the policy; for a suit will not lie without previous appraisal, when the company has not denied liability or otherwise waived the condition." Id. 79 S.W. at 760. In the instant case, the defendant did not deny liability before filing its answer to the plaintiff's complaint.
The plaintiff raises, but does not brief, an argument that, under Pennsylvania law, as expressed in Judge v. Celina Mutual Insurance Company, 303 Pa. Super. 221, 449 A.2d 658, 661 (1982), "an affirmative defense not properly pleaded is waived." The plaintiff is here referring to the appraisal clause in the policy. The plaintiff has not explained why a Pennsylvania Rule of Civil Procedure (Pa.R.C.P.1030) should be applicable to the instant case in Federal court. Under the Federal Rules of Civil Procedure, Rule 8(c) deals with "Affirmative Defenses". That rule reads, in pertinent part: "In pleading to a preceding pleading, a party shall set forth affirmatively . . . arbitration and award. . . ." It is true that the answer filed by the defendant does not raise the appraisal clause among its affirmative defenses. Kahnweiler, 67 F. 483 (8th Cir. 1895), was, in fact, reversed by the appellate court because of the failure to raise the existence of an arbitration clause in the answer to the complaint. Karno-Smith Co. v. School District of City of Scranton, 44 F. Supp. 860 (M.D. Pa. 1942), addressed the propriety of the raising of the existence of an arbitration clause in a motion to dismiss. Said the court in Karno-Smith :
It should . . . be noted that rule 8(c) of the Federal Rules of Civil Procedure, 28 U.S.C.A. following section 734c, requires certain defenses to be set forth affirmatively. Among these defenses which must be affirmatively pleaded are arbitration and award, . . . Thus . . . these grounds are not properly before the court on defendant's motion to dismiss. . . .