The opinion of the court was delivered by: JOYNER
This case is once again before this Court upon the cross-motions for summary judgment of defendants Fellheimer, Eichen, Braverman & Kaskey (hereinafter "FEB&K") and Vigilant Insurance Company on the cross-claim of the defendant law firm against Vigilant. For the reasons which follow, Vigilant's motion shall be granted and FEB&K's motion denied.
This lawsuit actually has its origins in a prior suit between plaintiff Maia Caplan and defendant FEB&K, her former employer, in which Caplan alleged that FEB&K and one of its partners, David Braverman, violated Title VII of the Civil Rights Act of 1964 by creating a hostile work environment for women at the firm and by sexually harassing Caplan's secretary. Caplan's complaint in that action also sought relief from FEB&K and Braverman under theories of negligent and intentional infliction of emotional distress, tortious interference with existing and prospective contracts, and defamation. FEB&K and Braverman tendered the defense of that case to Vigilant, which insured the firm under a Commercial Property/Business Income policy.
In May, 1995, on the basis of a clause in the policy authorizing it to act as its insureds' agent to settle claims or suits as it deemed "appropriate," Vigilant settled Caplan's claims against both FEB&K and Braverman for $ 200,000. As the settlement was without FEB&K's and Braverman's consent, they applied for and obtained an injunction from this Court. That injunction, however, was subsequently reversed by the Third Circuit and the settlement upheld.
A short while after that action
was settled, plaintiff avers that FEB&K and David Braverman, acting on behalf of the law firm, embarked on a crusade to retaliate against her for the settlement by, inter alia, commencing multiple legal actions against her and by giving false statements to the Legal Intelligencer and The Philadelphia Inquirer to the effect that she was willing to retract her claims of discrimination as false in exchange for monetary compensation and that the settlement of plaintiff's claims was needless and had consequences extending to every employer. Plaintiff further avers that Robert White, a representative of Vigilant, told the Employment Discrimination Report that Caplan I had been settled only because the legal fees were "through the roof" and Vigilant had to put an end to the escalating legal fees. As a result of these alleged activities and statements, Ms. Caplan brought this action for retaliation pursuant to Title VII and for defamation under Pennsylvania common law under this Court's diversity jurisdiction on September 12, 1996. This lawsuit, too, was formally settled by Vigilant on behalf of itself and FEB&K in December, 1996. However, the defendants' cross-claim against Vigilant and their counterclaim against Caplan for fraud, malicious prosecution and breach of contract were specifically excluded from the settlement agreement and release. It is FEB&K's cross-claim against Vigilant under the theories of breach of contract, bad faith, and for violations of the Unfair Insurance Practices Act and Unfair Trade Practices and Consumer Protection Law for Vigilant's alleged refusal to provide FEB&K with a defense in Caplan II which is the subject of the pending cross-motions for summary judgment.
Standards Governing Summary Judgment Motions
The standards for determining whether summary judgment is properly entered in cases pending before the district courts are governed by Fed.R.Civ.P. 56. Subsection (c) of that rule states, in pertinent part,
... The judgment sought shall be rendered forthwith 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 a judgment as a matter of law. A summary judgment, interlocutory in character, may be rendered on the issue of liability alone although there is a genuine issue as to the amount of damages.
In this way, a motion for summary judgment requires the court to look beyond the bare allegations of the pleadings to determine if they have sufficient factual support to warrant their consider-ation at trial. Liberty Lobby, Inc. v. Dow Jones & Co., 267 U.S. App. D.C. 337, 838 F.2d 1287 (D.C. Cir. 1988), cert. denied, 488 U.S. 825, 109 S. Ct. 75, 102 L. Ed. 2d 51 (1988). See Also : Aries Realty, Inc. v. AGS Columbia Associates, 751 F. Supp. 444 (S.D. N.Y. 1990).
As a general rule, the party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion and identifying those portions of the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986). In considering a summary judgment motion, the court must view the facts in the light most favorable to the party opposing the motion and all reasonable inferences from the facts must be drawn in favor of that party as well. U.S. v. Kensington Hospital, 760 F. Supp. 1120 (E.D. Pa. 1991); Schillachi v. Flying Dutchman Motorcycle Club, 751 F. Supp. 1169 (E.D. Pa. 1990).
When, however, "a motion for summary judgment is made and supported [by affidavits or otherwise], an adverse party may not rest upon the mere allegations or denials of the adverse party's pleading, but the adverse party's response...must set forth specific facts showing that there is a genuine issue for trial. If the adverse party does not so respond, summary judgment, if appropriate may be entered against [it]." Fed.R.Civ.P. 56(e).
A material fact has been defined as one which might affect the outcome of the suit under relevant substantive law. Boykin v. Bloomsburg University of Pennsylvania, 893 F. Supp. 378, 393 (M.D.Pa. 1995) citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). A dispute about a material fact is "genuine" if "the evidence is such that a reasonable jury could ...