I. FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff Richard DeSilva ("DeSilva") was injured in an accident in October, 1990, while he was operating his motorcycle and was struck by another motorcycle. He made claims for bodily injury coverage under the insurance policy covering the striking motorcycle and under his own motorcycle policy and exhausted the policy limits on both policies. He then filed suit against the striking motorcyclist. See DeSilva v. Farkhondar, No. 91-7853 (E.D. Pa.). In an order dated January 29, 1993, Civil Action No. 91-7853 was placed in suspense pending resolution of possible claims by DeSilva for underinsured motorist ("UIM") coverage.
At the time of the accident, DeSilva was employed by NFC Holdings, Inc. ("NFC") as a sales representative. NFC provided a vehicle to DeSilva, for his personal and business use, which was registered in DeSilva's name at his residence in Philadelphia. Deductions were taken from DeSilva's paycheck to pay for the car's insurance. The car was insured under a policy ("the Policy") issued to NFC by defendants Kemper National Insurance Company and Lumbermans Mutual Casualty Company ("Kemper"). See Affidavit of Richard DeSilva, attached as Exhibit "B" to Plaintiff's Response to Defendants' Counterclaim; Insurance Policy No. 3ZL 920 530-00, attached as Exhibit "A" to Defendants' Answer and Counterclaim.
DeSilva now seeks UIM coverage under the Policy. DeSilva demanded arbitration of his UIM claim and, pursuant thereto, filed a Petition for Appointment of Arbitrator in the Court of Common Pleas of Philadelphia County. Kemper removed the case to this court and has filed counterclaims. The counterclaims seek a declaration that DeSilva is not entitled to UIM coverage or arbitration of his UIM claim, and ask the court to enjoin him from seeking such coverage and arbitration.
After answering the complaint and counterclaiming, Kemper filed a motion for judgment on the pleadings. Because Kemper's motion and DeSilva's response relied upon evidence outside the pleadings, the court ordered that they be considered to be cross-motions for summary judgment under Federal Rule of Civil Procedure 56. The parties were given time to submit any additional evidence made pertinent by Rule 56. See Memorandum and Order of May 24, 1993. We now consider the merits of the cross-motions for summary judgment.
II. APPLICABLE LEGAL STANDARDS
Federal Rule of Civil Procedure 56 requires that summary judgment be entered in favor of the moving party when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c).
When the underlying facts are not in dispute, the interpretation of an insurance contract is a question of law. Harad v. Aetna Cas. & Sur. Co., 839 F.2d 979, 982 (3d Cir. 1988) (citing Standard Venetian Blind Co. v. American Empire Ins. Co., 503 Pa. 300, 305, 469 A.2d 563, 566 (1983); Niagara Fire Ins. Co. v. Pepicelli, 821 F.2d 216, 219 (3d Cir. 1987)). In interpreting a policy, the court is to "ascertain the intent of the parties as manifested by the language of the written instrument." Gene & Harvey Builders, Inc. v. Pennsylvania Mfrs' . Ass'n Ins. Co., 512 Pa. 420, 517 A.2d 910, 913 (1986).
If the language of an insurance policy is clear and unambiguous, its ordinary meaning is to be given effect; policy terms should be read to avoid ambiguities; a provision is ambiguous if reasonable persons on considering it in the context of the entire policy could honestly differ as to its meaning; if ambiguities do exist in the wording chosen by the insurance company, they must be resolved in favor of the insured; a court cannot rewrite the terms of a policy or give them a construction in conflict with the accepted and plain meaning of the language of the policy.