The opinion of the court was delivered by: JAMES KELLY, Senior District Judge
Presently before the Court is a Motion for Summary Judgment filed by
Plaintiff Adam Brown d/b/a Iliad Antik ("Plaintiff") seeking judgment as
a matter of law pursuant to Federal Rule of Civil Procedure 56(c) that
Defendant Zurich-American Insurance Company ("Defendant") must provide
coverage for Plaintiff's loss pursuant to the terms of a 12-month
all-risk insurance policy (the "Policy") issued by Defendant to
Plaintiff. Plaintiff is in the business of selling antiques and other
goods, and suffered a loss of its goods stored in a second floor workshop
in Prague, Czech Republic as a result of water damage. Defendant denied
Plaintiff's claim based on a "Territorial Limits" provision contained in
the Policy that excluded coverage in "the former Iron Curtain countries."
Plaintiff argues that the exclusionary provision does not apply in this
matter because its loss occurred in the Czech Republic, a country that
was born in 1993, after the fall of the Iron Curtain and, thus,
it cannot be considered a former Iron Curtain country. Plaintiff also
argues that, even if the Czech Republic can be considered a
former Iron Curtain
country, judgment in favor of coverage must be rendered to avoid an
absurd result. For the following reasons, Plaintiff's Motion for Summary
Judgment is DENIED.
Plaintiff is in the business of selling antiques, fine arts and other
goods from its principal location at 237 East 58th Street in New York
City. Plaintiff specializes in antiques known as Biedermeier Furniture,
which was popular more than 150 years ago in Austro-Hungary,
specifically, in and around the City of Prague. Plaintiff obtains most of
its inventory from residents living in and around Prague who possess such
furniture in various states of disrepair. Plaintiff's employees gather
this furniture in Prague and ship large parcels of it to their New York
City showroom. In January 2002, Plaintiff leased a workshop and holding
facility in Prague where it restores the furniture to museum quality
before shipping the furniture to New York City.
Previously, Plaintiff sought casualty insurance from his Pennsylvania
insurance agent, the Robert J. McCallister Agency, Inc. ("McCallister"),
to cover both consigned and purchased goods while in Plaintiff's custody
and in transit. McCallister enlisted the New York broker, DeWitt Stern
Group, Inc. ("DeWitt"), to obtain the coverage and, on or about December
26, 2001, Plaintiff was issued the Policy, No. 1M3501568-00, by
The Policy provided coverage for up to one million dollars for goods
damaged "[w]hile in the custody and control of the Insured or while
carried by any member of the Insured's firm or in transit to or from or
while at any conventions, shows or exhibitions and auctions worldwide."
(Pl.'s Ex. C, Declarations Page ¶ 8.) The Policy also contained a
form entitled "Antique and Fine Arts Dealers Wording," which set forth
"Territorial Limits," including the following limitation:
The Property insured is covered while at the
Insured premises and/or in transit and/or
exhibition and/or otherwise anywhere in the world
excluding the former Iron Curtain
countries subject to the limits defined in
Clause 4 below.
(Pl.'s Ex. D, Antique and Fine Arts Dealers Wording ¶ 3
(emphasis added).) The Policy does not contain any other provisions
defining the phrase "former Iron Curtain countries" or listing the
specific countries intended for inclusion in this phrase.
On or about August 12, 2002, a one-in-five-hundred-year flood occurred
in Prague, damaging approximately two million dollars worth of inventory
on the second floor of Plaintiff's Prague workshop. Plaintiff timely
submitted a claim to Defendant and, in a letter dated October 11, 2002,
Defendant denied Plaintiff's claim based on the "former Iron Curtain
countries" exclusion contained in the Policy.
Plaintiff brought the instant action against Defendant in this Court
seeking to recover for the loss of goods stored in the
second floor workshop in Prague, Czech Republic as a result of the
water damage.*fn1 Plaintiff now moves for summary judgment that it
should be entitled to coverage for its loss pursuant to the Policy issued
by Defendant. Defendant responded, and Plaintiff replied thereto.
Under Federal Rule of Civil Procedure 56(c), 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 a judgment as a matter of law." Fed.R.Civ.P. 56
(c). In resolving a motion for summary judgment pursuant to Rule 56, the
Court must determine whether "the evidence is such that a reasonable jury
could return a verdict for the nonmoving party." Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986). The evidence of the
nonmoving party is to be believed, and the district court must draw all
reasonable inferences in the nonmovant's favor. Id. at 255.
Credibility determinations, the weighing of the
evidence and the drawing of legitimate inferences from the facts
are jury functions, not those of a judge. Id.
Where the nonmoving party bears the burden of proof at trial, the party
moving for summary judgment may meet its burden by showing that the
evidentiary materials of record, if admissible, would be insufficient to
carry the nonmovant's burden of proof at trial. Celotex Corp. v.
Catrett, 477 U.S. 317, 322 (1986). Once the moving party satisfies
its burden, the burden shifts to the nonmoving party, who must go beyond
its pleadings, and designate specific facts by the use of affidavits,
depositions, admissions or answers to interrogatories showing that there
is a genuine issue for trial. Id. at 324.
Interpretation of an insurance policy is a question of law that a court
may resolve on a motion for summary judgment. Reliance Ins. Co. v.
Moessner, 121 F.3d 895, 900 (3d Cir. 1997); Harleysville
Insurance Company v. Aetna Casualty and Surety Insurance Company,
795 A.2d 383, 385 (Pa. 2002). The parties do not dispute that
Pennsylvania law governs this case.
Before addressing the merits of Plaintiff's arguments, we briefly turn
to the history of the term, "Iron Curtain," which the parties do not
dispute. Winston S. Churchill popularized the term "Iron
Curtain" in a speech he gave at Westminster College in
Fulton, Missouri on March 5, 1946, after being conferred
an honorary degree there. See Sinews of Peace (Iron Curtain)
Speech published by The Churchill Centre available at
introduced the term to describe the political, military and ideological
divide between Western Europe and the Soviet Bloc*fn2 from approximately
1945 to 1990, which ideological border extended approximately 1,600 miles