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Farmers New Century Insurance Co. v. Angerson

January 22, 2008


The opinion of the court was delivered by: Judge John E. Jones III


Before the Court are cross-motions for summary judgment filed by Plaintiff Farmers New Century Insurance Company ("Farmers") and Defendant J.V. Defendants John Angerson and C.L.A. also filed a motion for summary judgment, joining J.V.'s motion. For the reasons set forth below, the Court will deny Farmers' motion (Doc. 30) and grant the Defendants' motions. (Docs. 23, 32.)


A. Summary Judgment Standard

Summary judgment is appropriate if the record establishes "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." Fed. R. Civ. P. 56(c). Initially, the moving party bears the burden of demonstrating the absence of a genuine issue of material fact.

Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The movant meets this burden by pointing to an absence of evidence supporting an essential element as to which the non-moving party will bear the burden of proof at trial. Id. at 325. Once the moving party meets its burden, the burden then shifts to the non-moving party to show that there is a genuine issue for trial. Fed. R. Civ. P. 56(e). An issue is "genuine" only if there is a sufficient evidentiary basis for a reasonable jury to find for the non-moving party, and a factual dispute is "material" only if it might affect the outcome of the action under the governing law. Anderson, 477 U.S. at 248-49.

In opposing summary judgment, the non-moving party "may not rely merely on allegations or denials in its own pleading; rather its response must ... set out specific facts showing a genuine issue for trial." Fed. R. Civ. P. 56(e)(2). The non-moving party "cannot rely on unsupported allegations, but must go beyond pleadings and provide some evidence that would show that there exists a genuine issue for trial." Jones, 214 F.3d at 407. Arguments made in briefs "are not evidence and cannot by themselves create a factual dispute sufficient to defeat a summary judgment motion." Jersey Cent. Power & Light Co. v. Twp. of Lacey, 772 F.2d 1103, 1109-10 (3d Cir. 1985). However, the facts and all reasonable inferences therefrom must be viewed in the light most favorable to the non-moving party. P.N. v. Clementon Bd. of Educ., 442 F.3d 848, 852 (3d Cir. 2006).

Summary judgment should not be granted when there is a disagreement about the facts or the proper inferences that a fact-finder could draw from them. Peterson v. Lehigh Valley Dist. Council, 676 F.2d 81, 84 (3d Cir. 1982). Still, "the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; there must be a genuine issue of material fact to preclude summary judgment." Anderson, 477 U.S. at 247-48.

The concurrent resolution of cross-motions for summary judgment, as are presented here, can present a formidable task. Interbusiness Bank, N.A. v. First Nat'l Bank of Mifflintown, 318 F. Supp. 2d 230, 235 (M.D. Pa. 2004) (citing 10A Charles Alan Wright et al., Federal Practice and Procedure § 2720 (3d ed. 1998)). The standard of review does not change. Each moving party must independently show that there is no genuine issue as to any material fact and that it is entitled to judgment as a matter of law. Rains v. Cascade Indus., Inc., 402 F.2d 241, 245 (3d Cir.1968) (stating the making of cross-motions for summary judgment "does not constitute an agreement that if one is rejected the other is necessarily justified or that the losing party waives judicial consideration and determination whether genuine issues of material fact exist"). Although the standard for deciding such motions does not change, the mandate of Rule 56 that the court view all facts in the light most favorable to the non-moving party may be difficult to apply where all parties are both moving and non-moving parties. The circumstances of a case may require separate opinions on the respective motions. See Rains, 402 F.2d at 245; United States v. Hall, 730 F. Supp. 646, 648 (M.D. Pa. 1990).

In this case, however, the essential facts are substantially undisputed and are wholly supported by the evidence submitted by all parties. Whether the facts are viewed in the light most favorable to the plaintiff or the defendants, the same story unfolds. The present cross-motions for summary judgment will therefore both be decided by this memorandum and order. See Interbusiness Bank, 318 F. Supp. 2d at 236 (citing Fed. R. Civ. P. 1 for proposition that the Federal Rules of Civil Procedure "shall be construed and administered to secure the just, speedy, and inexpensive determination of every action").

B. Applicable Law

Where a federal district court's jurisdiction is based on diversity of citizenship, as it is here, a court determines which state's substantive law governs by applying the choice-of-law rules of the jurisdiction in which the district court sits, in this case, Pennsylvania. Garcia v. Plaza Oldsmobile Ltd., 421 F.3d 216, 219 (3d Cir. 2005) (citing Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 497 (1941)). There is some disagreement among Pennsylvania decisions and federal decisions applying Pennsylvania law as to which choice of law rule governs a contract dispute. Budtel Assoc., LP v. Continental Cas. Co., 915 A.2d 640, 643-44 (Pa. Super. Ct. 2006) (collecting cases). In this case, however, the parties have relied exclusively on Pennsylvania law and seem to agree that Pennsylvania law governs the insurance contract at issue. Accordingly, to the extent that the law of a state other than Pennsylvania could control the resolution of these motions, the issue has been waived. See Mellon Bank, N.A. v. Aetna Business Credit, Inc., 619 F.2d 1001, 1005 n. 1 (3d Cir. 1980). Pennsylvania law shall apply.

In applying Pennsylvania law and in the absence of controlling authority from the Supreme Court of Pennsylvania, this Court must predict how the Supreme Court of Pennsylvania would resolve the questions posed in this case. Colliers Lanard & Axilbund v. Lloyds of London, 458 F.3d 231, 236 (3d Cir. 2006). Though not controlling, decisions from Pennsylvania's lower appellate courts are considered predictive, and in the absence of an indication otherwise, shall be accorded significant weight. Id.


The question presented by this declaratory judgment action is whether Farmers homeowners insurance policy issued to Angerson covers injuries sustained by J.V., arising out of an all-terrain vehicle ("ATV") accident.

On April 16, 2004, J.V., a minor, was a passenger on an ATV driven by Angerson's son, C.L.A., also a minor. (Pl.'s Statement of Undisputed Material Facts ["SMF"], Doc. 30-5, ¶¶ 3, 6, 8; Def's SMF, Doc. 27, ¶ 1.) C.L.A. started out from the residence where he and Angerson reside. (Pl.'s SMF ¶ 10.) C.L.A. drove the ATV approximately half a mile onto land not owned by Angerson. (Pl.'s SMF ¶¶ 26-28.) As C.L.A. was operating the ATV on a wooded path near a dirt road known as Elias Road, the ATV tipped over, resulting in serious bodily injuries to J.V. (Pl.'s SMF ¶ 4; Def.'s SMF ¶¶ 1-2.)

The Angerson residence is located on Bowen Road, a paved road, however the road does not reach the Angerson property directly, and an access road is used to get from the Angerson residence to Bowen Road. (Def.'s SMF ¶ 9.) Approximately one-third of a mile past the Angerson residence, Bowen Road becomes a dirt road and is then known as Elias Road. (Def.'s SMF ¶ 9; Karsnak Report, Doc. 22, Ex. A.)

There are numerous ATV paths in the area around the Angerson home. (Pl.'s SMF ¶ 32; Def.'s SMF ¶ 9.) C.L.A. had ridden the ATV on some of these paths to the accident site before, and used the ATV on these paths about once a week. (Def.'s SMF ¶ 9.) Neither Angerson nor C.L.A. is sure which of the paths C.L.A. took on the day of the accident. (Pl.'s SMF ¶ 29; Def.'s SMF ¶¶ 8, 10.)

However, C.L.A. took one of the paths he "always" takes "every time" he rides in that area. (Def.'s SMF ¶ 9; C.L.A. Dep. at 8, 14.) No path to the accident site originates on Angerson's property, and to get to the accident site C.L.A. would have had to cross Bowen Road or use the access road. (Pl.'s SMF ¶¶ 32-33; Def.'s SMF ¶ 10.)

Prior to the accident, Angerson and C.L.A. frequently used the ATV on their property to move rocks that accumulated because of flooding. (Pl.'s SMF ¶¶ 20-21.) Angerson also used the ATV himself about 10-15 times a month for recreation on different paths in the woods outside of his property. (Angerson Dep. at 12, 15, 18, 19.) However, Angerson had never ridden the ATV to the exact location of the accident. (Pl.'s SMF ¶ 30.) In addition, four to five times a year in 2001 and 2002, Angerson used the ATV outside of his property to gather large stones which his wife used to create rock gardens around their property. (Pl.'s SMF ¶¶ 13-16; Def.'s SMF ¶ 12.) On these occasions, Angerson would pick rocks within 100-150 yards of the accident site. (Pl.'s SMF ¶ 13; Def.'s SMF ¶ 12.)*fn1


Farmers seeks a declaration that it has no duty to defend or indemnify Angerson or C.L.A. as a result of the April 16, 2004 ATV accident under the homeowners policy it issued to Angerson. The interpretation of an insurance policy is a question of law for the court. Kvaerner, 908 A.2d at 897. The court's primary goal in interpreting a policy is to ascertain the parties' intentions as manifested by the policy's terms. Id. When the language of the policy is clear and unambiguous, the court must give effect to that language. Id. When a provision in the policy is ambiguous, "the policy is to be construed in favor of the insured to further the contract's prime purpose of indemnification and against the insurer, as the insurer drafts the policy, and controls coverage." Id. "Contractual language is ambiguous if it is reasonably susceptible of different constructions and capable of being understood in more than one sense." Prudential Prop. & Cas. Ins. Co. v. Sartno, 903 A.2d 1170, 1174 (Pa. 2006).

The insured has the initial burden of establishing coverage under an insurance policy. Butterfeld v. Giuntoli, 670 A.2d 646, 651-52 (Pa. Super. Ct. 1995). If coverage is established, the insurer then bears the burden of proving an exclusion applies to deny coverage. Madison Constr. Co. v. Harleysville Mut. Ins. Co., 735 A.2d 100, 106 (Pa. 1999). If the insurer establishes that an exclusion precludes coverage, the insured bears the burden of proving that an exception to that exclusion applies. See N. Ins. Co. of N.Y. v. Aardvark Assoc., Inc., 942 F.2d 189, 194-95 (3d Cir. 1991) (predicting Pennsylvania Supreme Court would adopt reasoning of Lower Paxon Twp. v. U.S. Fid. & Guar. Co., 557 A.2d 393 (Pa. Super. Ct. 1989)).

A. Coverage

Farmers issued a Homeowners 3 Special Form insurance policy, number 92251-70-82, to John Angerson with a policy period of February 2, 2004 to November 28, 2004. (Compl. Ex. A, Doc. 1-3, at 2.)*fn2 John Angerson is the named insured. (Id.) An insured is also defined as including "your relatives" and "other persons under the age of 21 and in the care of any person named above." (Id. at 4.) "You" and "your" refer to the named insured and his spouse. (Id.) Angerson's minor son C.L.A. is therefore also an insured.

The policy provides $300,000 per occurrence in personal liability coverage. (Id. at 2.) Section II, Coverage E - Personal Liability provides that "[i]f a claim is made or a suit is brought against an 'insured' for damages because of 'bodily injury' ... caused ...

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