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Liberty Mutual Insurance Co. v. Muskin Leisure Products

July 6, 2007

LIBERTY MUTUAL INSURANCE CO. PLAINTIFF
v.
MUSKIN LEISURE PRODUCTS, INC., N/KA ZODIAC AMERICAN POOLS, INC., A DELAWARE CORPORATION DEFENDANT



The opinion of the court was delivered by: (judge Vanaskie)

ORDER

THE BACKGROUND OF THIS ORDER IS AS FOLLOWS:

On May 31, 2006, Plaintiff Liberty Mutual Insurance Company ("Liberty") moved for summary judgment, asserting that there is no material issue of fact that Defendant Muskin Leisure Products Inc. ("Muskin") breached a series of workers' compensation policies with Liberty. (Dkt. Entry 62.) Muskin has filed a motion to strike evidence that Liberty submitted in support of its motion for summary judgment. (Dkt. Entry 67.) Specifically, Muskin objects to the affidavit of Collete Viola, the exhibits attached to Viola's affidavit, and excerpts from the Retrospective Premium Endorsement and the Pennsylvania Workers Compensation Manual, attached as Exhibits A and B, respectively, to Liberty's motion for summary judgment. The parties' have fully briefed the matter,*fn1 and it is now ripe for resolution.

1. The Affidavit of Viola

Muskin objects to paragraphs two, four, five, six, seven, and eight of Viola's affidavit as inadmissible opinion testimony, lacking in foundation, or irrelevant. (Mot. Strike (Dkt. Entry 67) at 2.) In paragraph two of her affidavit, Viola states that: (1) she is the Senior Receivables Analyst at Liberty and (2) she has "knowledge of the nature and operation of retrospectively-rated insurance policies and plans, including those selected by the Defendant in this case." (Viola Aff. (Dkt. Entry 63) ¶ 2.)

In paragraph four, Viola explains that retrospectively-rated insurance policies are adjusted annually, without limit, after the expiration of the policy period based on the claims submitted by the insured's injured workers. (Id. ¶ 4.) She also explains why an insured may prefer a retrospective premium policy over a standard insurance policy. (Id.)

In paragraph five, Viola notes that Muskin selected retroactive rating plans for all but one of its insurance policies. (Id. ¶ 5.) She then explains the relevant factors used to calculate insurance premiums. (Id.) In paragraph six, Viola uses the 1994 insurance policy as an example to explain the factors discussed in paragraph five. (Id. ¶ 5.)

In paragraph seven, Viola certifies that exhibit two attached to her affidavit accurately describes amounts due by Muskin under the policies and explains how the numbers were calculated. (Id. ¶ 6.) She also attests that exhibit three accurately details the computation for the Eleventh Retrospective Adjustment to the 1994 policy. (Id.)

In paragraph eight, Viola states that she "personally examined the insurance policies and the retro plans at issue in this litigation, and verified that the calculations in Exhibit '2' were performed pursuant to the retrospectively rated policies and the plans, and are accurate." (Id. ¶ 8.) She also verified the amount owed by Muskin to Liberty. (Id.)

Under Rule 701 of the Federal Rules of Evidence, a lay witness' testimony: in the form of opinions or inferences is limited to those opinions or inferences which are (a) rationally based on the perception of the witness, (b) helpful to a clear understanding of the witness' testimony or the determination of a fact in issue, and (c) not based on scientific, technical, or other specialized knowledge within the scope of Rule 702.

It is clear that Viola meets the requirement for personal knowledge as she "personally examined the insurance policies and the retro plans at issue in this litigation." (Viola Aff. (Dkt. Entry 63) ¶ 8.)

Muskin appears to be asserting that the statements are not "helpful" under the second requirement of Rule 702, because contract law dictates that it is not proper for the Court to consider the statements in interpreting the policies. Initially, it should be noted that the statements contained in paragraphs two, seven, and eight do not address the terms of the contract, but set forth Viola's personal knowledge of the polices, her experience with retrospectively-rated policies, and the premium amount Liberty alleges Muskin owes. These statements do not constitute impermissible extrinsic evidence under contract law, and are helpful in determining Viola's foundation for presenting evidence and the damages sought by Liberty.

While Muskin is correct that it would be improper to consider the statements in paragraphs four through six in ascertaining the intent of the parties if the Court concludes that the terms of the insurance policies are clear and unambiguous, the statements may be relevant (and helpful) if the Court concludes that the written contract between the parties is ambiguous. See Kripp v. Kripp, 849 A.2d 1159, 1163 (Pa. 2004) (reviewing contract law in Pennsylvania and the admissibility of extrinsic evidence). On this point, it is significant that Muskin argues that the policies are "hopelessly vague and ambiguous" in its brief in opposition to Liberty's motion for summary judgment. (Def.'s Br. Opp. Summ. J. (Dkt. Entry 69) at 3.)

The statements may also be helpful to other issues, such as whether the parties agreed to terminate the policies. Accordingly, the Court finds that the testimony is helpful under Rule 701, but will not consider the statements in ascertaining the intent of the parties if the ...


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