United States District Court, E.D. Pennsylvania
MEMORANDUM OPINION PLAINTIFF'S MOTION FOR SUMMARY
JUDGMENT, ECF NO. 28 - GRANTED
F. LEESON, JR. United States District Judge.
Zurich American Insurance Company of Illinois issued
Defendant All County Employment Services, Inc. a one-year
workers' compensation insurance policy. Zurich claims
that All County failed to pay the full amount of the
insurance premium, and it has sued All County for breach of
contract. Zurich now moves for summary judgment. All County
did not respond. Because the undisputed facts show that All
County breached its obligation to pay Zurich, summary
judgment is granted in Zurich's favor.
issued All County a one-year workers' compensation
insurance policy in July 2014. At that time, it prepared an
estimate of the cost of the policy based on All County's
anticipated exposure to workers' compensation obligations
over the coming year. See Totzke Aff. ¶ 7, ECF
No. 28-4; Totzke Aff. Ex. B, at 4,  ECF No. 28-6 [hereinafter
Policy]. Under the terms of the policy, All County was to
make premium payments based on that estimate, and at the end
of the term, Zurich would review All County's records and
calculate the true cost of the policy based on All
County's actual exposure over the prior year. Totzke Aff.
¶ 7; Policy § 5(E)-(G). If the final cost turned
out to exceed the original estimate, All County owed Zurich
the difference, and vice versa. Id.
one-year term ended on July 23, 2015. As contemplated by the
policy, Zurich then performed an audit of All County's
records and concluded that All County's exposure during
the period had been higher than anticipated. Totzke Aff.
¶ 8. Accordingly, it issued All County an invoice for
$160, 634, which represented the difference between
Zurich's calculation of the final cost of the policy and
the amount of premium payments that All County had made based
on the policy's estimated cost. Id.; Totzke Aff.
Ex. C, ECF No. 28-7. The invoice was dated January 11, 2016,
and called for payment by January 29, 2016. Totzke Aff. Ex.
C, at 5. Included with the invoice was an audit report that
Zurich prepared, which explained how Zurich arrived at the
final premium. Id. at 1-4.
January 22 and February 18, the two sides exchanged a series
of emails about the invoice; in one of them, All County
stated that it had “some fundamental questions”
about Zurich's calculation and had “engag[ed] an
expert in these areas to help [it] validate or invalidate
[Zurich's] claim, ” but All County did not further
elaborate. Totzke Aff. Ex. D, at 2, ECF No. 28-8. Zurich
asked All County to describe its concerns in greater detail,
but it appears that All County did not respond. Id.
at 1. Zurich filed this suit soon after.
closed without All County either identifying any particular
error in Zurich's audit report or submitting any expert
reports to challenge Zurich's calculation of the final
premium. Kadian Aff. ¶¶ 7-8, ECF No. 9. The $160,
634 invoice still has not been paid. Totzke Aff. ¶ 10.
moved for summary judgment on this record. All County did not
Legal standard - Summary judgment
judgment is appropriate if the moving party “shows that
there is no genuine dispute as to any material
fact”-that is, that no reasonable jury could return a
verdict for the nonmoving party-and that “the movant is
entitled to judgment as a matter of law.” Fed.R.Civ.P.
56(a); Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 248 (1986). “[A] party seeking summary judgment .
. . bears the initial responsibility of informing the
district court of the basis for its motion, and identifying
those portions of ‘the pleadings, depositions, answers
to interrogatories, and admissions on file, together with the
affidavits, if any, ' which it believes demonstrate the
absence of a genuine issue of material fact.”
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
Where, as here, the moving party bears the burden of proof at
trial, it “must show that it has produced enough
evidence to support the findings of fact necessary to
win.” El v. Se. Pa. Transp. Auth.
(“SEPTA”), 479 F.3d 232, 237 (3d Cir. 2007)
(citing Marzano v. Comput. Sci. Corp., 91 F.3d 497,
502 (3d Cir. 1996); Sorba v. Pa. Drilling Co., 821
F.2d 200, 202-03 (3d Cir. 1987)).
County has not responded to Zurich's motion, but that
does not mean that it may be granted automatically.
See Fed. R. Civ. P. 56(e)(3) advisory
committee's note to 2010 amendment (recognizing that
“summary judgment cannot be granted by default even if
there is a complete failure to respond to the motion”).
Instead, the court must still ensure that “the motion
and supporting materials . . . show that the movant is
entitled to it.” Fed.R.Civ.P. 56(e)(3). “Where
the moving party has the burden of proof on the relevant
issues, this means that the district court must determine
that the facts specified in or in connection with the motion
entitle the moving party to judgment as a matter of
law.” Anchorage Assocs. v. V.I. Bd. of Tax
Review, 922 F.2d 168, 175 (3d Cir. 1990).
Summary judgment is warranted in Zurich's favor.
out its breach of contract claim, Zurich must prove that
“there was a contract, [All County] breached it, and
[Zurich] suffered damages from the breach.” McShea
v. City of Phila., 995 A.2d 334, 340 (Pa.
2010). All County has admitted that the policy
was a valid contract between the parties and that it has not
paid Zurich the additional $160, 634 that it demanded
following its audit of All County's records. See
Kadian Aff. Ex. B, ¶¶ 6, 18, ECF No.
28-11. The only question, then, is whether All