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United Farm Family Insurance Co. v. Orton

March 19, 2008


The opinion of the court was delivered by: Judge McLaughlin



This matter is before the Court upon Plaintiff's Motion for Summary Judgment.


The following facts are undisputed. On September 4, 2004, Defendants Michelle and David Mungo were injured when their vehicle was struck by a 2003 Dodge Caravan owned by Defendant Lewis Orton and operated by his son, Defendant Mark L. Orton. (Complaint ¶¶8-9). At the time, Mark Orton was using the automobile to make a bank deposit for his father's business. (Id. ¶ 15). Defendants Michelle and David Mungo filed suit as a result of their injuries. (Id. ¶ 10). Defendants Lewis Orton, individually and d/b/a Orton's Fruit Farm, Orton, Mark Farm, Inc., and Marilyn Orton (collectively, the "Insured Defendants") requested coverage under the three policies that they hold through Plaintiff United Farm Family Insurance ("United Farm"): a Commercial Auto Policy, a Business Advantage Special policy, and a Special Farm Package policy. (Id. ¶ 11).

Plaintiff, for reasons discussed below has filed a Complaint for Declaratory Judgment pursuant to the Declaratory Judgment Act, 42 Pa. C.S.A. 1601, seeking a determination that it is not obligated to indemnify the Defendants under any of the three policies. On August 24, 2007, Plaintiff moved for summary judgment. On October 16, 2007, Defendants jointly responded to the motion. On November 5, 2007, Plaintiff filed a reply. This matter is ripe for review.


The standard for summary judgment in a declaratory judgment action is the same as for any other type of relief. Tranguard Ins. Co. of America, Inc. v. Hinchey, 464 F.Supp.2d 425 (M.D. Pa. 2006) (citing Cloverland-Green Spring Dairies, Inc. v. Pa. Milk Marketing Board, 298 F.3d 201, 210 n. 12 (3rd Cir. 2002)). 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." Fed.R.Civ.P. 56(c). In order to withstand a motion for summary judgment, the non-moving party must "make a showing sufficient to establish the existence of [each] element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). In evaluating whether the non-moving party has established each necessary element, the Court must grant all reasonable inferences from the evidence to the non-moving party. Knabe v. Boury Corp., 114 F.3d 407, 410, n.4 (3d Cir. 1997) (citingMatsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986)). "Where the record taken as a whole could not lead a reasonable trier of fact to find for the non-moving party, there is no 'genuine issue for trial.'" Id. (quoting Matsushita, 475 U.S. at 587).


The interpretation of an insurance policy is a question of law for the court. Reliance Insurance Co. v. Moessner, 121 F.3d 895, 900 (3rd Cir.1997); Standard Venetian Blind Co. v. American Empire Insurance Co., 503 Pa. 300 (1983). Construing an insurance policy requires the court to ascertain the intent of the parties as manifest by the language used in the written agreement. Riccio v. American Republic Ins. Co., 550 Pa. 254 (1997). The policy is to be read as a whole and the intent of the parties is to be ascertained from the entire instrument. Id. at 426 (citing Smith v. Cassida, 403 Pa. 404 (1961)). "When the policy language is clear and unambiguous, the court must give effect to the language in the contract." Id.; see also The Medical Protective Co. v. Watkins, 198 F.3d 100, 103 (3rd Cir.1999) (citing Standard Venetian Blind Co., 469 A.2d at 566). Where, however, the policy is ambiguous, the clause giving rise to the ambiguity must be construed in favor of the insured. The Medical Protective Co., 198 F.3d at 103; Reliance Ins. Co., 121 F.3d at 900-01; Riccio, 705 A.2d at 426; Standard Venetian Blind, 469 A.2d at 566. In ascertaining the intent of the parties the court is to interpret the policy with an eye toward avoiding ambiguities and giving effect to all of the provisions in the policy. The Medical Protective Co., 198 F.3d at 103 (citing Little v. MGIC Indemnity Corp., 836 F.2d 789, 793 (3d Cir.1987)). "Contractual terms are ambiguous if they are subject to more than one reasonable interpretation when applied to a particular set of facts," however, "the court is not permitted to distort the meaning of the language or employ a strained contrivance in order to create an ambiguity." USX Corp. v. Adriatic Insurance Co., 99 F.Supp.2d 593, 609 (W.D. Pa. 2000) (quoting Madison Construction Co. v. Harleysville Mutual Ins. Co., 557 Pa 595, 735 A.2d 100, 106 (1999)).

With these principles in mind, we consider each of the relevant insurance policies in turn.

A. The Commercial Auto Policy

Pursuant to the Commercial Auto Policy, coverage is only available for bodily injury resulting from an incident concerning a "covered auto" owned by the Insured Defendants. (Complaint, Exhibit B). It is undisputed that the Mungos suffered injury as a result of an automobile accident involving a 2003 Dodge Caravan driven by Defendant Mark Orton. However, Plaintiff asserts that the 2003 Dodge Caravan is not a "covered auto" under the terms of the Commercial Auto policy because, while the policy identifies two other vehicles in the section detailing "covered autos" - a 1986 Dodge van and a 1988 GMC van - it does not list the 2003 Dodge Caravan anywhere in the policy. (Complaint, Ex. B).

Defendants admit that the 2003 Dodge Caravan is not listed in the policy, but argue that the system of symbols used in the Commercial Auto policy to designate coverages creates an ambiguity which innures to the Defendant's benefit. Further explication of the Defendants' position requires, in the interest of clarity, that the relevant ...

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