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Hartford Fire Insurance Co. v. Spall

March 3, 2006

HARTFORD FIRE INSURANCE COMPANY, PLAINTIFF
v.
JOHN F. SPALL AND DEBORAH D'AMICO, DEFENDANTS



The opinion of the court was delivered by: Judge Munley

MEMORANDUM

Presently before the court for disposition is Plaintiff Hartford Fire Insurance Company's Motion for Partial Summary Judgment and Defendant John Spall's Cross Motion for Summary Judgment. For the reasons that follow, we will grant summary judgment for Spall.

I. Background*fn1

Defendant John Spall purchased a theft insurance policy ("Policy") from Hartford, and while covered, filed a proof of loss of $428,534.12 resulting from a theft committed by Defendant Deborah D'Amico. Following its own investigation, Hartford confirmed that Spall had suffered a loss in the amount of $411,262.99, and issued him a check for $150,000, the policy limit, in exchange for an executed Full Release and Partial Assignment ("Release"). After Spall submitted the executed release to Hartford, he accepted a sum of $325,000 from D'Amico as settlement for his claim against her.

Hartford subsequently filed the instant action to recover the $150,000 according to the terms of the Policy and Release. In Count I, Hartford seeks to recover the $150,000 from D'Amico. In Count II, Hartford seeks to recover $150,000 from Spall pursuant to the Release. In Count III, Hartford requests that this Court declare the policy void ab initio and enter judgment against Spall for $150,000 because he fraudulently concealed his intention to refuse to surrender any portion of a recovery owed to Hartford under the Policy. In Count IV, Hartford argues that Spall suffered a loss of $411,263 and received a combined recovery from Hartford and D'Amico of $475,000, and thus the Policy requires that Spall remit to Hartford $63,737, the amount of his recovery that exceeded his loss.*fn2

II. Jurisdiction

This Court has jurisdiction pursuant to the diversity jurisdiction statute, 28 U.S.C. § 1332. Hartford is a Connecticut corporation with a principal place of business in Connecticut and the defendants are individual citizens of the Commonwealth of Pennsylvania. Because we are sitting in diversity, the substantive law of Pennsylvania shall apply to the instant case. Chamberlain v. Giampapa, 210 F.3d 154, 158 (3d Cir. 2000) (citing Erie R.R. v. Tompkins, 304 U.S. 64, 78 (1938)).

III. Standard

Granting summary judgment is proper 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. See Knabe v. Boury, 114 F.3d 407, 410 n.4 (3d Cir. 1997) (citing FED. R. CIV. P. 56(c)). "[T]his standard provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986) (emphasis in original).

In considering a motion for summary judgment, the court must examine the facts in the light most favorable to the party opposing the motion. International Raw Materials, Ltd. v. Stauffer Chemical Co., 898 F.2d 946, 949 (3d Cir. 1990). The burden is on the moving party to demonstrate that the evidence is such that a reasonable jury could not return a verdict for the non-moving party. Anderson, 477 U.S. at 248 (1986). A fact is material when it might affect the outcome of the suit under the governing law. Id. Where the non-moving party will bear 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 reduced to admissible evidence, would be insufficient to carry the non-movant's burden of proof at trial. Celotex 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.

IV. Discussion

Hartford moves for summary judgment on Counts II and III and Spall filed a cross motion for summary judgment on all counts against him. Hartford presents two principal issues: 1) whether the Release precluded Spall from recovering a payment directly from D'Amico; and 2) whether Spall's total recovery after settlement with D'Amico exceeded his loss, thus requiring that Spall submit the excess recovery to Hartford. We will address these issues seperately.

A. Release and Assignment

Hartford argues that under the Release, Spall had a duty to direct D'Amico to submit any settlement for her theft to Hartford, and Spall could not recover these sums directly from D'Amico. We find nothing in the Release that imposes a duty on Spall to decline to accept payment for his loss or precluded him from recovery his excess loss. The relevant portion of the Release provides:

(2) Subject to the "General conditions, Section X "Recoveries" in the policy, the Insured has appointed and does hereby assign, sell, transfer and set over to the Surety, to the extent of the payment referenced above, all its rights, title, and interest in relation to any and all items claimed in and by the said proof of loss, and all money that may be recovered by reason thereof.

(3) Subject to the "General conditions, Section X "Recoveries" in the policy, the Insured has appointed and does hereby appoint the Surety as its attorney in fact to ask, demand, receive, receipt for, and sue for in the name of the Insured or Surety, and take any and all lawful ways and means ...


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