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COREGIS INSURANCE COMPANY v. CITY OF HARRISBURG

November 9, 2005.

COREGIS INSURANCE COMPANY, Plaintiff,
v.
CITY OF HARRISBURG, et al., Defendants and Third-Party Plaintiff. v. ST. PAUL FIRE AND MARINE INSURANCE COMPANY, et al., Third-Party Defendants.



The opinion of the court was delivered by: YVETTE KANE, District Judge

MEMORANDUM AND ORDER

Pending before the Court are cross motions for summary judgment filed by Third-Party Defendant CNA Financial Corporation ("CNA")*fn1 and the City of Harrisburg. (Doc. Nos. 179 and 248.) By its motion, CNA seeks entry of an order declaring that CNA is under no duty to defend or indemnify Harrisburg under a claims-made law enforcement liability insurance policy in effect from January 28, 1998 to January 28, 1999 with respect to the underlying civil rights action of Steven D. Crawford v. Commonwealth of Pennsylvania, et al., Civil Action No. 1:CV-03-693 ("Crawford").*fn2 Additionally, CNA seeks entry of summary judgment on Harrisburg's claims that CNA is obligated to insure the city pursuant to certain insurance policies allegedly issued between 1972 to 1976, which Harrisburg contends provided coverage for civil rights violations. Neither Harrisburg nor CNA has located the insurance policies issued to Harrisburg during these years, and CNA notes that the insurer has no record of issuing Harrisburg insurance policies during those years that would have provided coverage for the claims made in the Crawford action. CNA argues that Harrisburg has failed to sustain its burden of proving through and convincing evidence that it is entitled to coverage under the lost policies. In contrast, Harrisburg contends that it has adduced sufficient evidence that it is entitled to coverage under the missing policies and that summary judgment should be entered in its favor. The motions have been fully briefed and are ripe for disposition. For the reasons that follow, CNA's motion for summary judgment will be granted and Harrisburg's motion for summary judgment will be denied.

I. BACKGROUND

  On June 2, 2003, Coregis Insurance Company commenced the instant action by filing a complaint seeking a declaratory judgment that certain insurance policies issued to Harrisburg and Dauphin County do not provide coverage for the underlying Crawford litigation. Harrisburg and Dauphin County each answered Coregis's complaint on August 4, 2003. Thereafter, on August 14, 2003, Harrisburg filed a third-party complaint against a number of insurance companies that allegedly issued policies to the city between 1972 and 2003, including CNA. All of the insurance companies denied that Harrisburg was entitled to coverage under the respective policies. By the third-party complaint, Harrisburg seeks, inter alia, entry of an order declaring that the third-party defendants are under a duty to defend Harrisburg and its additional insureds under each of the subject insurance policies. On December 3, 2004, CNA filed its motion for summary judgment seeking entry of an order declaring it has no duty to indemnify Harrisburg under the 1998 claims-made policy, nor under any policy allegedly issued between 1972 and 1976. On August 19, 2005 Harrisburg moved for summary judgment on its claims that CNA is contractually obligated to defend and, if necessary, indemnify the city in connection with the Crawford action under the missing policies.

  II. STANDARD OF REVIEW

  Summary judgment is proper 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 a judgment as a matter of law." Fed.R.Civ.P. 56. A factual dispute is material if it might affect the outcome of the suit under the applicable law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A factual dispute is genuine only if there is a sufficient evidentiary basis which would allow a reasonable fact-finder to return a verdict for the non-moving party. Id. at 249. The nonmoving party receives the benefit of all reasonable inferences. Sempier v. Johnson & Higgins, 45 F.3d 724, 727 (3d Cir. 1995).

  Once the moving party has shown that there is an absence of evidence to support the claims of the non-moving party, the non-moving party may not simply sit back and rest on the allegations in the complaint. Instead, it must "go beyond the pleadings and by [its] own affidavits, or by the depositions, answers to interrogatories, and admissions on file, designate specific facts showing that there is a genuine issue for trial." Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). Summary judgment should be granted where a party "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 at trial." Id. at 322.

  III. DISCUSSION

  A. The 1998 Claims-Made Policy

  CNA issued Harrisburg a claims-made law enforcement liability policy, with a policy number of LEC 185873504, effective from January 28, 1998 to January 28, 1999. The policy's declaration page provided as follows:
Your insurance is written on a claims made basis. It provides coverage for claims made against you occurring and reported during the policy period shown on this declaration sheet. We agree, in return for payment of the premium by you, to provide you with insurance, subject to the terms and conditions herein stated.
(Doc. No. 181 ¶ 10.) In addition to stating a policy period of January 28, 1998 to January 28, 1999, the policy expressly limited coverage to injuries resulting from wrongful acts which occured on or after January 28, 1987. (Id. ¶ 12.) The policy provided for one automatic extended reporting period of sixty days. Although Harrisburg was given the option of purchasing additional reporting periods, the city did not do so. (Id. ¶ 15.) Accordingly, in order to be eligible for coverage under policy LEC-185873504, Harrisburg was required to report any claims to CNA by March 29, 1999, or sixty days after the policy period expired on January 28, 1999.

  It is undisputed that Harrisburg first notified CNA regarding Crawford's claims in May 2003, more than four years after the deadline prescribed under the policy. (Id. ¶ 18.) In its response to CNA's statement of undisputed facts, Harrisburg states that it "is required at this juncture to concede without prejudice that the law of the case precludes coverage under the 1998 CNA policy." (Doc. No. 186, at 2.) In this concession, Harrisburg specifically references a memorandum and order the Court entered on December 7, 2004 (Doc. No. 182) granting judgment in favor of another third-party defendant that had issued Harrisburg certain occurrence-based insurance policies that were later converted to claims-made policies. Because it was undisputed that Harrisburg had not made any claims under the relevant policies within the applicable policy periods, the Court concluded that the insurer had no contractual duty to defend or indemnify Harrisburg in connection with the Crawford litigation.

  If anything, it is even more evident that CNA has no obligation to defend Harrisburg under an insurance policy that was at all times in effect on a claims-made basis, and where Harrisburg undeniably did not make a claim under the policy until more than four years after the reporting period expired. Although Harrisburg purports to be conceding this issue "without prejudice" in order to preserve its rights on appeal, the Court cannot fathom what arguments Harrisburg could martial that CNA should somehow be required to defend the city under a policy that expressly required claims to be made not later than March 28, 1999, where it is undeniable that Harrisburg made no claims relating to the Crawford litigation until May 2003. There is no basis to dismiss this claim without prejudice.*fn3 CNA is entitled to summary judgment on its claim that it has no contractual obligation to defend or indemnify Harrisburg in connection with the Crawford litigation under the 1998 claims-made policy issued to the city.

  B. The Missing 1972-1976 Insurance Policies

  Harrisburg has alleged that CNA is contractually obligated to provide the city with a defense and, if necessary, indemnification under certain missing insurance policies that the insurer issued the city between 1972 and 1976.*fn4 Unlike other policies that the Court has considered in connection with this case, the very absence of the missing policies has made it difficult to analyze meaningfully ...


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