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York International Corp. v. Liberty Mutual Insurance Co.

United States District Court, M.D. Pennsylvania

July 9, 2015



SYLVIA H. RAMBO, District Judge.

In this insurance action for defense and indemnification of underlying asbestos-related claims, Plaintiff seeks declarations regarding the rights and obligations of the parties under general liability insurance policies that it purchased from Defendant, as well as damages to remedy Defendant's alleged breach of contract. Presently before the court are cross-motions for partial summary judgment with regard to choice of law (Docs. 82 & 83), wherein the parties dispute whether Pennsylvania or New York law should control the outcome of this case. Also before the court is Plaintiff's motion to strike (Doc. 89), which attacks portions of an affidavit filed by Defendant in support of its motion for partial summary judgment (Doc. 83-1). For the reasons stated herein, the court will grant Plaintiff's motion for partial summary judgment, grant in part and deny in part its motion to strike, and deny Defendant's motion for partial summary judgment.

I. Background

The facts of this case are largely undisputed. In considering each of the instant cross-motions for summary judgment, the court relied on the uncontested facts or, where the facts were disputed, viewed the facts and deduced all reasonable inferences therefrom in the light most favorable to the nonmoving party in accordance with the relevant standard when deciding a motion for summary judgment. See Doe v. C.A.R.S. Prot. Plus, 527 F.3d 358, 362 (3d Cir. 2008).

Plaintiff York International Corporation ("Plaintiff") filed this case on March 30, 2010, against Liberty Mutual Insurance Company ("Defendant"), seeking indemnification and defense from Defendant for more than one thousand underlying asbestos claims. (Doc. 1.)[1] The insurance policies that Plaintiff contends cover the underlying asbestos actions (the "York Policies") consist of four separate but functionally identical policies with one-year terms and cover the period from October 1, 1952 through October 1, 1956. Pursuant to these policies, Defendant provided general products liability insurance to York Corporation, an entity that had all of its assets and liabilities acquired by Plaintiff through a series of corporate transactions.[2] (Doc. 22, ¶¶ 2, 34, 40.) The underlying asbestos claims, which have been filed in several jurisdictions throughout the United States, sound in products liability, alleging bodily injury, sickness, and disease resulting from exposure to asbestos-containing products sold by York Corporation and shipped throughout the United States. (Doc. 1, ¶ 14.)

During the time period covered by the York Policies, as well as the negotiation and consummation of the policies, York Corporation resided in York, Pennsylvania and was incorporated in Delaware. ( Id., ¶¶ 1, 30.) At all relevant times, Defendant was, and is, a Massachusetts mutual insurance company with a principal place of business in Boston, Massachusetts. (Doc. 5, ¶ 5.)

The parties previously submitted cross-motions for summary judgment as to whether a non-assignment clause in the relevant insurance policies barred Plaintiff from receiving assignment of claims from its predecessor corporate entity, and in its decision of May 26, 2011, the court held that Plaintiff was not barred from submitting claims for asbestos-related injury to Defendant under the York Policies, but limited the scope of those claims to those occurring between October 1, 1952 and October 1, 1956. (Doc. 52.)

After Plaintiff submitted to Defendant those asbestos claims to which it believed Defendant owed a duty to defend and indemnify, a dispute arose as to choice of law. On December 8, 2014, the parties filed the instant cross-motions for summary judgment, statements of facts and supporting briefs. (Docs. 82-86.) In their respective motions, the parties seek a determination as to whether the court will apply the laws of Pennsylvania or New York to the action. Due to the passage of time between the period covered by the York Policies and the initiation of the instant action - more than fifty years - no party with firsthand knowledge of the negotiation or consummation of the policies could be identified, and complete copies of the York Policies could not be located. (Doc. 22, ¶¶ 34-43; Doc. 83-1, ¶ 6.) However, the parties were able to locate policy jackets, declarations pages, and certificates of insurance for several of the policies. ( Id., Exs. 26-30.) Relevant to the instant dispute, the declarations pages list York Corporation's address as "c/o Henry E. Wood & Associates Inc., 45 John Street, New York 38, New York." ( Id., Exs. 28 & 29.) The certificates of insurance, however, list York Corporation's address as York, Pennsylvania. ( Id., Ex. 30.)

In support of its motion for summary judgment, Defendant provided an affidavit of its former longtime employee and current consultant, Jerry McCullough (the "McCullough Affidavit"). (Doc. 83-1.) Mr. McCullough began his employment with Defendant in 1961, approximately five years after the period covered by the York Policies. ( Id. at ¶ 2.) In the affidavit, Mr. McCullough testified as to Defendant's standard practices during the 1950s, and, more specifically, as to the role that Henry E. Wood & Associates Inc. ("Henry E. Wood") played in acquiring the York Policies. ( See id. at ¶¶ 7-19.) Plaintiff has filed a motion to strike portions of the affidavit, which challenges, inter alia, Mr. McCullough's personal knowledge of the facts contained therein, primarily on the basis that his employment with Defendant began after the negotiation and consummation of the York Policies. (Doc. 89.) On January 12, 2015, Defendant filed an opposition to the motion to strike (Doc. 97), together with a supplemental affidavit, in order to provide additional foundation for Mr. McCullough's personal knowledge of the averments contained in his affidavit (Doc. 97-1).

The cross-motions for summary judgment and the motion to strike have been fully briefed and are ripe for disposition.

II. Motion to Strike

The court will first consider Plaintiff's motion to strike, which challenges the admissibility of certain portions of the McCullough Affidavit relied upon in Defendant's brief in opposition to Plaintiff's motion for summary judgment. Plaintiff contends that the court should not consider these portions of the record when deciding the cross-motions for summary judgment because the evidence would be inadmissible at trial.

A. Legal Standard

Either party may challenge the admissibility of evidence used to support a motion for summary judgment. See Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). Rule 56(c)(2) provides, in pertinent part, that "[a] party may object that the material cited to support or dispute a fact cannot be presented in a form that would be admissible in evidence." Fed.R.Civ.P. 56(c)(2). Thus, when the admissibility of evidence is challenged, the party relying on the evidence must demonstrate that such evidence is capable of admission at trial before it can be considered by the court on summary judgment. However, this requirement does

not mean that the nonmoving party must produce evidence in a form that would be admissible at trial in order to avoid summary judgment. Obviously, Rule 56 does not require the nonmoving party to depose her own witnesses. [Rule 56] permits a proper summary judgment motion to be opposed by any materials listed in Rule 56(c), except the mere pleadings themselves, and it is from this list that one would normally expect the nonmoving party to make the showing... [that specific facts show there is a genuine issue for trial].

Celotex Corp., 477 U.S. at 324; see also Lin v. Rohm & Haas Co., 293 F.Supp.2d 505, 511 (E.D. Pa. 2003). Although evidence may be considered in a form which is inadmissible at trial, the content of the evidence must be capable of admission at trial. See Fed.R.Civ.P. 56(c)(2). Accordingly, the party offering the evidence must demonstrate that it could satisfy the applicable admissibility requirements at trial before the evidence may be used on summary judgment. See Robinson v. Hartzell Propeller, Inc., 326 F.Supp.2d 631, 643 (E.D. Pa. 2004). Evidence that will be inadmissible at trial cannot be considered when ruling on a motion for summary judgment. See Pamintuan v. Nanticoke Mem. Hosp., 192 F.3d 378, 387-88 (3d Cir. 1999); Sharp v. Pa. Army Nat'l Guard, Civ. No. 1:11-cv-1262, 2013 WL 1703583, *3 (M.D. Pa. Apr. 19, 2013).

B. Discussion

Plaintiff's motion to strike asserts three separate objections to the admissibility of the McCullough Affidavit. The first contention is that some of the assertions in the McCullough Affidavit are by an affiant that lacks personal knowledge. The second contention is that certain statements in the McCullough Affidavit are contradicted by the affiant's previous deposition testimony. The third contention is that several assertions in the McCullough Affidavit constitute legal conclusions. These arguments will be addressed in turn.

1. Lack of Personal Knowledge Challenges to Contents of McCullough Affidavit

Federal Rule of Civil Procedure 56 requires that any evidence to be considered in the summary judgment record must at least be capable of being admissible evidence, and operates in conjunction with Federal Rule of Evidence 602, which governs the scope of a witness's testimony. Rule 602 permits a witness to "testify to a matter only if sufficient evidence is introduced to support a finding that the witness has personal knowledge of the matter. Evidence to prove personal knowledge may consist of the witness's own testimony." Fed.R.Evid. 602. Rule 602 creates a low threshold of admissibility, as witness testimony should be admitted if the judge could reasonably find that the witness perceived the event. Sullivan v. Warminster Twp., 461 F.Appx. 157, 162 (3d Cir. 2012). However, this should not extend so far as to allow witness testimony that is merely based on speculation as to what a third party believed or knew. See Palfrey v. Jefferson-Morgan Sch. Dist., Civ. No. 06-cv-1372, 2008 WL 4412230, *12 (W.D. Pa. Sept. 25, 2008).

Plaintiff attacks Paragraphs 7, 9, 10, 12, 13, 14, 15, 17, 18, and 19 of the McCullough Affidavit for lack of personal knowledge. These paragraphs read as follows:

7.... I am very familiar with the sales and underwriting protocols of Liberty Mutual Insurance in the 1950s and the sales and underwriting protocols for customers such as York Corporation.
9. Although documents regarding the issuance of the policies apparently have not been located, I have reviewed other documents which indicate that Henry E. Wood provided the types of services that I would expect would be provided by an insurance broker or advisor, such as advising on the types of claims that should be reported to Liberty Mutual Insurance's coverage positions, and dealing with other insurance-related problems.
10. Back in the 1950s, Liberty Mutual Insurance was a direct writer which did not typically deal with brokers, but I am familiar with the standard practices of insurance brokers and advisors during this time period.
12. When the insured employed a broker/advisor, the standard practice was to send the policy to the broker/advisor so that the broker/advisor could review the policy to make sure that it provided the coverage that had been negotiated.
13. Once the broker/advisor was satisfied that the policy provided the coverage that had been negotiated, the broker/advisor would send the policy to the insured.
14. Based on this standard practice, when Liberty Mutual Insurance issued the policies at issue, they would have been sent to Henry E. Wood in New York.
15. The Declarations pages to the Liberty Mutual Policies identify the Sales Office for the policies as New York. This indicates that the policy was sold out of the New York Division of Liberty Mutual Insurance and that a salesperson in New York would have been responsible to negotiate the policy with the designee of York Corporation.
17. Based on the above, the policies issued to York Corporation would have been negotiated in New York between a salesperson in Liberty Mutual ...

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