The opinion of the court was delivered by: CYNTHIA RUFE, District Judge
MEMORANDUM OPINION AND ORDER
Before the Court are the Cross-Motions for Summary Judgment of
Plaintiff Old Republic Insurance Company ("Old Republic"), Defendant
Lumbermens Mutual Casualty Co. ("Lumbermens"), and Defendant The Venator
Group, Inc./Foot Locker, Inc. (collectively referred to as "Foot
Locker").*fn1 Old Republic filed this declaratory judgment action to
determine which party is responsible for costs associated with defending
and indemnifying Foot Locker in Ricchiuti v. The Venator Group, Inc.,
No. 99-CV-1976, a personal injury action that settled in January of
2003.*fn2 The parties dispute whether the incident at issue is covered
by Old Republic Business Auto Policy No. Z35726-10 ("Old Republic Business Auto policy")
or Lumbermens Commercial General Liability Policy No. 5AA 045 319-00
("Lumbermens CGL policy"), or both. The Court has diversity jurisdiction
over this matter pursuant to 28 U.S.C. § 1332(a)(1).
On April 19, 1999, William and Irene Ricchiuti commenced action against
Foot Locker in the United States District Court for the Eastern District
of Pennsylvania, seeking to recover damages resulting from an April 17,
1997 accident in which William Ricchiuti was injured when cargo from the
trailer of a truck fell upon him. Ricchiuti alleged that Foot Locker
employees carelessly and negligently loaded the cargo.
Ricchiuti's employer, Ryder Logistics Integrated ("Ryder"), owned the
truck and was required to transport goods from Woolworth's central
distribution center to various Woolworth store locations pursuant to a
Logistics Master Agreement, which provided that "[a]ll loads tendered to
[Ryder] would be on `shipper load and count' basis. Trailers to be sealed
by Shipper." The Logistics Master Agreement further provided that Ryder
drivers, such as Ricchiuti, were to assist in unloading at delivery
The Logistics Master Agreement contained provisions addressing
B. Insurance of Operations. [Ryder] will obtain and
maintain in effect throughout the Term the following
1. Comprehensive general liability and automobile
liability insurance for bodily injury (including
death) and property damage, each in the minimum
combined single limit per occurrence of
$1,000,000.00 or such greater limit as the U.S. DOT may require for transportation of any
Product listed in the "Hazardous Products" table of
the Schedule. The general liability coverage
includes coverage for contractual liability. [Foot
Locker] will be named an additional insured under
Logistics Master Agreement at 4-5.
Foot Locker initially undertook the defense of the claim. In October of
2001, however, Foot Locker tendered the defense of the claim to Ryder and
its insurer, Old Republic, under the Old Republic Business Auto
By letter dated December 19, 2001, Ryder and Old Republic
agreed to undertake defense of the action, subject to Old Republic's
right to disclaim coverage for Foot Locker's alleged late reporting of
On November 19, 2002, Ryder, on behalf of Old Republic, sent a second
letter to Foot Locker, purporting to reserve its rights based upon two
additional provisions in the policy.*fn4 First, Old Republic asserted
that because loading of the truck was complete when Ricchiuti was
injured, the "Completed Operations" exclusion may be grounds for denying
coverage. Second, Old Republic asserted that coverage may not apply
because Ricchiuti's injuries did not occur during the course of Foot
Locker's allegedly negligent "use" of the Ryder vehicle. The letter
stated that Old Republic would continue to provide a defense, subject to
its right to disclaim coverage based on these grounds.
On January 6, 2003, the underlying Ricchiuti case settled for
$125,000.00. While Old Republic funded the settlement, it did so without
prejudice to its right to seek reimbursement from Lumbermens and/or Foot
Locker for both the $125,000.00 settlement and costs of defense, which
totaled $41,026.41. In the instant declaratory judgment action, Old
Republic reasserts the defenses reserved in its November 19, 2002
letter. It maintains that because Foot Locker was not "using" the Ryder
vehicle when the accident occurred, it is not obligated to provide
coverage under the Old Republic Business Auto policy. Old Republic
further submits that, even if Foot Locker was "using" the vehicle,
defense and indemnity are barred by the "Completed Operations"
exclusion. Old Republic therefore asserts that Lumbermens (or Foot Locker
to the extent it is self-insured)*fn5 is responsible for the costs
associated with the defense and indemnification of Foot Locker under the
Lumbermens CGL policy.
Lumbermens and Foot Locker counter that coverage exists under the Old
Republic Business Auto policy only. They argue that the "Completed
Operations" exclusion in the Old Republic Business Auto policy is
inapplicable because the operations were not completed. Lumbermens and
Foot Locker further argue that there is no coverage under the Lumbermens
CGL policy. Specifically, they assert that the "Aircraft, Auto or
Watercraft" exclusion in the Lumbermens CGL policy bars coverage under
that policy. Moreover, Lumbermens and Foot Locker contend that even if
there were coverage under the Lumbermens CGL policy, Old Republic would
be responsible for primary coverage by operation of the "Other Insurance" clauses in the respective policies.
Summary judgment is proper when the pleadings, depositions, answers to
interrogatories, and admissions on file, together with affidavits, if
any, show 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 party moving for summary judgment has the initial burden of
showing the basis for its motion. Celotex Corp. v. Catrett, 477 U.S. 317,
323 (1986). Once the moving party adequately supports its motion, the
burden shifts to the non-moving party to go beyond the mere pleadings and
present evidence that there is a genuine issue of material fact for
trial. See id at 324. Because the Court is confronted with cross-motions
for summary judgment, the Court must consider each party's motion
individually, and each party bears the burden of establishing a lack of
genuine issues of material fact. Reinhert v. Giorgio Foods, Inc.,
15 F. Supp.2d 589, 593-94(E.D. Pa. 1998).
The Declaratory Judgment Act, 28 U.S.C. § 2201, empowers federal courts
to grant declaratory relief. State Auto Ins. Co. v. Summy, 234 F.3d 131,
133 (3d Cir. 2000). A determination of coverage under an insurance policy
is a question of law to be decided by the court. PECO Energy Co. v.
Boden, 64 F.3d 852, 855 (3d Cir. 1995). In interpreting an insurance
contract, the court must attempt to "ascertain the intent of the parties
as manifested by the language of the written instrument." Madison Const.
Co. v. Harleysville Mut. Ins. Co., 735 A.2d 100, 106 (Pa. 1999). DISCUSSION
The parties dispute whether Florida or New York law governs this case.
Old Republic argues that Florida law should govern in interpreting the
Old Republic Business Auto policy and that New York law should govern
interpreting the Lumbermens CGL policy. Lumbermens ...