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Dr. Mark Piechota Crefeld School v. Hartford Fire Insurance Co

January 23, 2013

DR. MARK PIECHOTA CREFELD SCHOOL, PLAINTIFF,
v.
HARTFORD FIRE INSURANCE CO., DEFENDANT.



The opinion of the court was delivered by: Diamond, J.

MEMORANDUM

Plaintiff Crefeld School brings this coverage action against Defendant Hartford Fire Insurance Company for water damage to the School. The Parties have stipulated to the facts and cross-moved for summary judgment. (Doc. Nos. 16, 18.) Because I conclude that the Hartford Policy does not cover the water damage, I will grant summary judgment in favor of Hartford.

I. LEGAL STANDARDS

The Parties correctly agree that Pennsylvania law governs this dispute. Regents of Mercerburg Coll. v. Republic Franklin Ins. Co., 458 F.3d 159, 163 (3d Cir. 2006) (an insurance contract is governed by law of state in which the contract was made).

A.Summary Judgment

Upon motion of any party, summary judgment is warranted "if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). The moving party must initially show the absence of any genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). An issue is material only if it could affect the result of the suit under governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The district court "must view the facts in the light most favorable to the non-moving party," and make every reasonable inference in that party's favor. Hugh v. Butler Cnty. Family YMCA, 418 F.3d 265, 267 (3d Cir. 2005). If the court then determines that the moving party is entitled to judgment as a matter of law, summary judgment is appropriate. See Celotex, 477 U.S. at 322; Wisniewski v. Johns-Manville Corp., 812 F.2d 81, 83 (3d Cir. 1987).

B.Construing the Insurance Policy

Under Pennsylvania law, the construction of contracts-including insurance contracts- is a legal matter for the court. 12th St. Gym, Inc. v. Gen. Star Indem. Co., 93 F.3d 1158, 1165 (3d Cir. 1996) (citing Standard Venetian Blind Co. v. Am. Empire Ins. Co., 469 A.2d 563, 566 (Pa. 1983)). In construing the Hartford Policy, I must read it as a whole. Koval v. Liberty Mut. Ins. Co., 531 A.2d 487, 489 (Pa. Super. Ct. 1987). "[A]ll provisions of a contract are to be read together and construed according to their clear meaning so as to avoid any ambiguity while at the same time giving effect to all of its provisions." Kozlowski v. Penn Mut. Ins. Co., 11 Pa. D. & C.3d 764, 768 (Pa. Com. Pl. 1979), aff'd 441 A.2d 388, 391 (Pa. Super. Ct. 1982). Policy language that is clear and unambiguous must be given its "plain and ordinary meaning." Gene & Harvey Builders, Inc. v Pa. Mfrs. Ass'n Ins. Co., 517 A.2d 910, 913 (Pa. 1986); Pa. Mfrs. Ass'n Ins. Co. v. Aetna Cas. & Sur. Ins. Co., 233 A.2d 548, 551 (Pa. 1967).

When policy language is ambiguous, however, the "provision is to be construed in favor of the insured and against the insurer." Somerset Indus., Inc. v. Lexington Ins. Co., 639 F. Supp. 2d 532 (E.D. Pa. 2009) (citing Venetian Blind Co., 469 A.2d at 566). A contract is ambiguous only "if it is reasonably susceptible of different constructions and capable of being understood in more than one sense." Steele v. Statesman Ins. Co., 607 A.2d 742, 743 (Pa. 1992). The court must read the policy "according to the plain meaning of the words involved, so as to avoid ambiguity, while at the same time giving effect to all of its provisions." Del. Cnty. Const. Co. v. Safeguard Ins. Co., 228 A.2d 15, 17 (Pa. Super. Ct. 1967). The court should construe the policy to "avoid ambiguities if possible and should not torture the language to create them." Spezialetti v. Pac. Emp'rs Ins. Co., 759 F.2d 1139, 1142 (3d Cir. 1985).

C.Coverage Exclusions and Exceptions

The Hartford Policy is "all risk," allowing recovery for "all fortuitous losses not resulting from misconduct or fraud, unless the policy contains a specific provision expressly excluding the loss from coverage." Intermetal Mexicana, S.A. v. Ins. Co. of N. Am., 866 F.2d 71, 74-76 (3d Cir. 1989). When the parties dispute the coverage provided by an all risk policy, the insurer has the initial burden of showing that a coverage exclusion applies. N. Ins. Co. of N.Y. v. Aardvark Assocs., 942 F.2d 189, 194 (3d Cir. 1991). The burden then shifts to the insured to establish that an exception to the exclusion is applicable. Fischer & Porter Co. v. Liberty Mut. Ins. Co., 656 F. Supp. 132, 140 (E.D. Pa. 1986).

II. BACKGROUND

The Parties have stipulated to the facts and Policy provisions set out here. I have construed both in the light ...


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