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Amitie One Condominium Association v. Nationwide Property &Casualty Insurance Company

December 7, 2010


The opinion of the court was delivered by: Judge Conner


Presently before the court are cross-motions for summary judgment (Docs. 49, 59) and the Report (Doc. 73) of the Honorable William T. Prince, United States Magistrate Judge, recommending that defendant's motion be granted and plaintiff's motion be denied. Plaintiff Amitie One Condominium Association ("Amitie") has filed objections (Docs. 74-75) to the magistrate judge's report and recommendation ("R&R"). For the reasons set forth below, the court will adopt the R&R in part and reject it in part.

I. Factual Background & Procedural History*fn1

This is an insurance coverage dispute brought by Amitie against defendant Nationwide Property & Casualty Insurance ("Nationwide"). As the parties are familiar with the facts, the court will provide only a brief overview. Amitie is the homeowner's association for property insured under a policy underwritten by Nationwide. The insured property suffered damage from subsidence of the underlying soil. Amitie sought coverage under the Nationwide policy. Nationwide denied the claim, asserting that the damage fell within the ambit of an exclusion for direct losses caused by "earthmovement." (See Doc. 50 at 50, B.1.b). However, as an exception to that exclusion, the policy covers direct loss resulting from "sinkhole collapse." (See id. B.1.b.(1)). In the instant matter, the parties dispute whether the damage to the insured property resulted from "sinkhole collapse" as that term is specifically defined in the policy.*fn2

Amitie commenced this action against Nationwide alleging breach of contract and bad faith in the denial of coverage and seeks a declaratory judgment that Nationwide owes coverage under the policy. Nationwide filed a motion for summary judgment and this court referred the motion to Magistrate Judge Prince. Judge Prince's Report, filed on August 31, 2010, recommended granting summary judgment in Nationwide's favor, concluding that the policy excluded coverage. Amitie filed timely objections to the R&R. (See Docs. 74-75). Specifically, Amitie puts forth nineteen objections to the R&R, chief among them are that magistrate judge erred in: (1) concluding that the insurance policy at issue is not an "all risks" policy, which altered Amitie's burden of proof; and (2) concluding that Nationwide established an exclusion under the policy. (Doc. 74).*fn3

II. Standard of Review

A. Standard of Review for Cross-Motions for Summary Judgment

Through summary adjudication the court may dispose of those claims that do not present a "genuine issue as to any material fact" and for which a jury trial would be an empty and unnecessary formality. See FED. R. CIV. P. 56(c). The burden of proof is upon the non-moving party to come forth with "affirmative evidence, beyond the allegations of the pleadings," in support of its right to relief. Pappas v. City of Lebanon, 331 F. Supp. 2d 311, 315 (M.D. Pa. 2004); FED. R. CIV. P. 56(e); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). This evidence must be adequate, as a matter of law, to sustain a judgment in favor of the non-moving party on the claims. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250-57 (1986); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-89 (1986); see also FED. R. CIV. P. 56(c), (e). Only if this threshold is met may the cause of action proceed. Pappas, 331 F. Supp. 2d at 315.

In the instant matter, the parties have filed cross-motions for summary judgment. According to the Third Circuit:

Cross-motions are no more than a claim by each side that it alone is entitled to summary judgment, and the making of such inherently contradictory claims 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.

Lawrence v. City of Phila., 527 F.3d 299, 310 (3d Cir. 2008) (quoting Rains v. Cascade Indus., Inc., 402 F.2d 241, 245 (3d Cir. 1968)). Each movant must show that no genuine issue of material fact exists; if both parties fail to carry their respective burdens, the court must deny the motions. See Facenda v. N.F.L. Films, Inc., 542 F.3d 1007, 1023 (3d Cir. 2008). When reviewing each motion, the court is bound to view the evidence in the light most favorable to the non-movant. FED. R.CIV. P. 56; United States v. Hall, 730 F. Supp. 646, 648 (M.D. Pa. 1980).

B. Standard of Review for a Magistrate Judge's Recommendation

Where objections to a magistrate judge's report and recommendation are filed, the court must perform a de novo review of the contested portions of the report. Supinski v. United Parcel Serv., Civ. A. No. 06-0793, 2009 WL 113796, at *3 (M.D. Pa. Jan. 16, 2009) (citing Sample v. Diecks, 885 F.2d 1099, 1106 n. 3 (3d Cir. 1989); 28 U.S.C. ยง 636(b)(1)(c)). "In this regard, Local Rule of Court 72.3 requires 'written objections which . . . specifically identify the portions of the proposed findings, recommendations or report to which objection is ...

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