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WESTERN WORLD INS. CO. v. RELIANCE INS. CO.

July 13, 1995

WESTERN WORLD INSURANCE COMPANY, Plaintiff
v.
RELIANCE INSURANCE COMPANY, Defendant


James F. McClure, Jr., United States District Judge


The opinion of the court was delivered by: JAMES F. MCCLURE, JR.

July 13, 1995

 BACKGROUND:

 This declaratory judgment action *fn1" was filed by plaintiff Western World Insurance Company (Western World) against defendant Reliance Insurance Company (Reliance) *fn2" to determine which of them is the primary insurer for claims asserted in a civil rights action *fn3" filed against the City of Wilkes-Barre, Pennsylvania (the city), city officials, the Wilkes-Barre Police Department (police department), and Wilkes-Barre police officers for the death of James P. O'Boyle. O'Boyle died on September 15, 1991 after being taken into police custody by Wilkes-Barre police officers. O'Boyle's mother filed an action before this court, O'Boyle v. Jensen, 150 F.R.D. 519, Civ. No. 3:CV-92-1602 (M.D.Pa.) for the death of her son alleging civil rights and pendent state claims.

 Insurance carriers for the city and the police department cannot agree upon which has the primary obligation defend and pay the claims asserted in O'Boyle. The Wilkes-Barre Police Department is the named insured on a Law Enforcement Officers Liability Policy of Insurance (Policy No. LEL17440) issued by Western World, *fn4" effective from October 17, 1990 to October 17, 1991. Policy limits are $ 500,000.00 per occurrence and $ 500,000.00 in the aggregate.

 The city is the named insured on a Commercial General Liability Policy (Policy No. JK-2039062) issued by Reliance, *fn5" effective from October 1, 1990 to October 1, 1991. Policy limits are $ 1,000,000.00 per occurrence and $ 2,000,000.00 in the aggregate.

 The O'Boyle action was settled with contributions from both insurers paid under a reservation of rights to determine coverage. Each insurer paid 50% of the total settlement ($ 375,000.00 per carrier), and each agreed that Reliance would pay 50% of all defense costs incurred by Western World in connection with the O'Boyle action, minus a credit of 50% of the defense costs incurred by Reliance in defending the O'Boyle action. Reliance paid Western World $ 58,102.09 as reimbursement for 50% of its defense costs pursuant to the parties' agreement. (See: record document no. 10 and exhibit).

 Western World has moved for judgment on the pleadings or, in the alternative, for summary judgment in its favor (record document no. 10). For the reasons which follow, we will enter an order 1) denying Western World's motion; and 2) entering final judgment in favor of Reliance.

 DISCUSSION

 Summary judgment standard

 Summary judgment is appropriate if 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)

 
... The plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial. In such a situation, there can be 'no genuine issue as to any material fact,' since a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial. The moving party is 'entitled to judgment as a matter of law' because the nonmoving party has failed to make a sufficient showing on an essential element of her case with respect to which she has the burden of proof.

 Celotex v. Catrett, 477 U.S. 317, 323-24, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986).

 The moving party bears the initial responsibility of stating the basis for its motions and identifying those portions of the record which demonstrate the absence of a genuine issue of material fact. He or she can discharge that burden by "showing...that there is an absence of evidence to support the nonmoving party's case." Celotex, supra, 477 U.S. at 323 and 325.

 Issues of fact are "'genuine' only if a reasonable jury, considering the evidence presented, could find for the non-moving party." Childers v. Joseph, 842 F.2d 689, 693-94 (3rd Cir. 1988), citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). Material facts are those which will affect the outcome of the trial under governing law. Anderson, supra, 477 U.S. at 248. In determining whether an issue of material fact exists, the court must consider all evidence in the light most favorable to the non-moving party. White v. Westinghouse Electric Company, 862 F.2d 56, 59 (3rd Cir. 1988).

 Although the plaintiff is the moving party here and no cross-motion was filed by the defendant, grant of summary judgment in favor of the non-movant is permissible if the court finds that no genuine issue of material fact remains. Federal Deposit Insurance Corp. v. Sumner Financial Corporation, 376 F. Supp. 772, 776 (M.D.Fla. 1974). The filing of a motion for summary judgment opens the door to entry of judgment in favor of a nonmoving party.

 
The practice of allowing summary judgment to be entered for the nonmoving party in the absence of a formal cross-motion is appropriate. It is in keeping with the objective of Rule 56 to expedite the disposition of cases and, somewhat more remotely, with the mandate of Rule 54(c) requiring the court to grant relief to which a party is entitled 'even if the party has not demanded such relief in his pleadings.'

 Wright, Miller & Kane, Federal Practice and Procedure: Civil 2d § 2720 (West 1983).

 Further, if the defendant were to file a cross motion, it is clear that it would be granted. Requiring defendant to go through the mechanics of filing such a motion would be pointless. We will, therefore, enter judgment in favor of the defendant sua sponte.

 The coverage issues raised in this action are governed by Pennsylvania insurance law. *fn6" The presumptions which apply depend upon whether we find the policy language at issue to be ambiguous or unambiguous. In deciding that question, we read the policy with an eye toward avoiding ambiguities and take care not to torture policy language to create uncertainties where none in fact exist. Northbrook Insurance Co. v. Kuljian Corp., 690 F.2d 368, 372 (3d Cir. 1982) (applying Pennsylvania law).

 Policy language is ambiguous if reasonable persons could honestly differ as to its meaning, i.e. if it is susceptible of more than one meaning. Ambiguities are resolved in favor of the insured and in a manner consistent with his or her reasonable expectations when contracting for coverage. This precludes insurers from enforcing "overly-subtle or technical interpretations" in an unfair attempt to defeat the reasonable expectations of the insured. Standard Venetian Blind Company v. American Empire Insurance Company, 503 Pa. 300, 469 A.2d 563, 566 (Pa. 1984) and Harford Mutual Insurance Co. v. Moorhead, 396 Pa. Super. 234, 578 A.2d 492, 495 (Pa. Super. Ct. 1990). This rule favoring the insured applies even if the insured is a commercial, business, or governmental entity and therefore, presumably knowledgeable about contracts and their legal implications. Acands, Inc. v. Aetna Casualty and Surety Co., 764 F.2d 968, 973 (3d Cir. 1985).

 On the other hand, if policy language is found to be unambiguous, these presumptions do not come into play. Imperial Casualty & Indemnity Co. v. High Concrete Structures, Inc., 858 F.2d 128 (3d Cir. 1988) (applying Pennsylvania law). The law gives effect to the plain language of the policy as written. Harford, supra, 578 A.2d at 495 and is in keeping with that principle, that plainly-worded coverage exclusions are given effect so long as they are conspicuously displayed. There is no concomitant requirement that the insured have read or understood such exclusions. Pacific Indemnity v. Linn, 766 F.2d 754, 761 (3d Cir. 1985) and Berne v. Aetna Insurance Co., 604 F. Supp. 958, 960-61 (D.V.I. 1985). Policy language which is otherwise clear is not rendered ambiguous because it requires the insured to read thoroughly and carefully to grasp the coverage received. Viger v. Commercial Insurance Company of Newark, New Jersey, 707 F.2d 769, 774 (3d Cir. 1983).

 Linked to policy interpretation on the question of coverage is the derivative question of the duty to defend and indemnify the insured. The insurer is obligated to defend an action filed against its insured if the allegations may potentially come within policy coverage unless and until the insurer can confine the claim to a recovery outside the bounds of coverage. Imperial Casualty, supra, 858 F.2d at 131-32; Harford, supra, 578 A.2d at 494. Any doubts regarding the insurer's duty to defend must be resolved in favor of the insured. American Contract Bridge v. Nationwide Mutual Fire Insurance, 752 F.2d 71, 76 (3d Cir. 1985) and D'Auria v. Zurich Insurance Company, 352 Pa. Super. 231, 507 A.2d 857 (1986). Analysis of the duty to defend begins with the allegations of the complaint in the underlying action. The underlying plaintiff's allegations determine, in the first instance, whether a duty to defend exists.

 Allegations in the underlying action

 James P. O'Boyle was arrested and taken into police custody on September 14, 1991 for public drunkenness, 18 Pa. Cons. Stat. Ann. § 5505. Prior to his arrest, he was transported by police to Mercy Hospital in Wilkes-Barre where he was examined by the emergency room physician on duty. The only injury noted during the examination was a hematoma over O'Boyle's right eye. Tests were ordered as a precautionary measure. O'Boyle, however, refused to cooperate and became belligerent.

 Emergency room personnel summoned the police, and O'Boyle was arrested on a charge of public drunkenness. He was taken into police custody and transported to the Wilkes-Barre police station where he was placed in a holding cell. According to police, O'Boyle was found unconscious in his cell a few hours later at approximately 1:20 A.M. An ambulance was summoned. O'Boyle was transported by ambulance back to the Mercy Hospital emergency room, where he had been examined a few hours earlier. He was admitted at 1:40 A.M. in a comatose state with multiple head trauma and other injuries. A neurosurgical evaluation performed during the early morning hours of September 15, 1995 revealed "massive and severe intracranial hemorrhages throughout all ventricles and a large intracerebral hematoma in the left frontal ara, as well as a subarachnoid hemorrhage." (O'Boyle amended complaint, P 42) O'Boyle's condition was pronounced terminal, and he died later that day without ever regaining consciousness. *fn7"

 Regina O'Boyle filed an action on her own behalf and as administratrix of her son's estate against the police and city personnel for the alleged civil rights violations. Her five-count amended complaint alleged the following: 1) a section 1983 claim asserted on behalf of the estate against the police officers for alleged use of excessive force, unlawful detention, failure to protect and the denial of medical treatment; (Count I); 2) a section 1983 claim asserted by Regina O'Boyle on her own behalf for the alleged deprivation of her federal constitutional right of access to the courts, and her constitutional right of companionship (Count II); 3) a Monell claim *fn8" asserted on behalf of the estate against the city, the mayor and the Chief of Police (Count III) alleging a policy and practice of disregarding Pennsylvania Rule of Criminal Procedure 71 and the Standard Operating Procedures of the Wilkes-Barre Police Department relating to the arrest, detention, and preliminary arraignment of intoxicated individuals during evening hours (Count III); 4) pendent state law claims asserted on behalf of the estate alleging negligence and violations of the Pennsylvania Constitution (Count V); *fn9" and 5) pendent state law claims asserted by Regina O'Boyle on her own behalf alleging intentional infliction of emotional distress and violations of the Pennsylvania Constitution (Count VI). *fn10"

 Primary insurance provisions

 Western World contends that the coverage afforded under its policy is excess, not primary, and that Reliance is the primary carrier for the claims asserted in O'Boyle. It bases that contention on a clause in the Western World policy under the heading "Other Insurance" which provides that: "The insurance under this policy shall be excess insurance over any other valid and collectible insurance available to the insured, either as an insured under another policy or otherwise." (Record document no. 10, P 11)

 Western World cites excerpts from the policy issued by Reliance in further support of its position:

 
a. Coverage provided under this Coverage part is primary except as stated in ...

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