Assicurazioni Generali v. Public Svc. Mut. Ins. Co. , 77 F.3d 731 ( 1996 )

Opinions of the United
1996 Decisions States Court of Appeals
for the Third Circuit
3-4-1996
Assicurazioni Generali v. Public Svc. Mut. Ins. Co.
Precedential or Non-Precedential:
Docket 95-1479
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Recommended Citation
"Assicurazioni Generali v. Public Svc. Mut. Ins. Co." (1996). 1996 Decisions. Paper 208.
http://digitalcommons.law.villanova.edu/thirdcircuit_1996/208
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UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
____________________
NO. 95-1479
____________________
ASSICURAZIONI GENERALI, S.P.A.,
Appellee,
v.
PUBLIC SERVICE MUTUAL INSURANCE COMPANY a/k/a/ PSM; MARKETING
INDUSTRIES GROUP, LTD., FORMERLY KNOWN AS SERVICE FURNITURE
DELIVERY, INC.; BLOOMINGDALE'S INC.; WILLIE WIGGINS,
Public Service Mutual Insurance Company,
a/k/a PSM,
Appellant
___________________
Appeal from the United States District Court
for the Eastern District of Pennsylvania
D.C. No. 94-cv-06054
District Judge: Honorable Marvin Katz
___________________
Argued December 8, 1995
Before: STAPLETON, SAROKIN, and ROSENN, Circuit Judges
____________________
(Filed March 4, 1996)
Bernard E.J. Quinn (argued)
German, Gallagher & Murtagh
200 South Broad Street, 5th Floor
Philadelphia, PA 19102
Counsel for Appellee
Michael J. Cawley (argued)
Eileen C. McGinley
Margolis, Edelstein & Scherlis
Sixth & Walnut Streets
1
The Curtis Center, 4th Floor
Philadelphia, PA 19106
Counsel for Appellants
________________________
OPINION OF THE COURT
________________________
ROSENN, Circuit Judge.
The appeal in this declaratory judgment diversity
action raises a question of insurance policy interpretation
whether one or both insurance companies are obligated to defend
an action for injuries sustained at the hands of their insured.
On June 30, 1994, an elevator operator filed suit in state court
against Marketing Industries Group, Ltd. ("MIG") and
Bloomingdale's, Inc. for injuries he sustained when a bed frame
fell on his foot in the course of a delivery by MIG on behalf of
the vendor, Bloomingdale's. Assicurazioni Generali, S.p.A.
("Generali") provided vehicle liability coverage to MIG, a
delivery company. Public Service Mutual Insurance Company
("PSM") provided MIG with a general liability policy. Generali
brought a declaratory judgment action in the United States
District Court for the Eastern District of Pennsylvania,1
requesting the court to hold PSM obligated to defend and
indemnify MIG in the underlying tort action, and to find that
1
Marketing Industries Group, Ltd., Bloomingdale's, Inc., and
Willie Wiggins were parties to the action. These parties did not
appeal the district court's order.
2
Generali's policy did not obligate Generali to defend MIG in the
tort suit.2
The district court found that the Generali and PSM
insurance policies provided concurrent coverage to MIG for the
pending tort litigation.3 PSM timely appealed the court's order
to the extent that it obligated PSM to defend MIG in the
underlying suit. Generali did not appeal the court's order. We
reverse the judgment of the district court insofar as it
obligated PSM to defend MIG in the underlying tort action.
I.
On July 23, 1992, MIG deliverymen delivered a bed,
purchased at Bloomingdale's, Inc., to a condominium building in
Philadelphia, Pennsylvania. The deliverymen transported the bed,
via the freight elevator, to the purchaser's apartment on the
19th floor of the building. As the MIG deliverymen moved the bed
from the elevator into the 19th floor hallway, the bedframe fell
on the foot of Willie Wiggins, the elevator operator. Wiggins
sued MIG and Bloomingdale's alleging that MIG employees
negligently caused the bed frame to fall on Wiggins's foot,
resulting in severe and permanent injuries.
2
The parties agreed that there were no factual issues in dispute
and requested the court dispose of the declaratory judgment
action through Cross-Motions for Summary Judgment.
3
The district court properly exercised diversity jurisdiction of
the declaratory judgment action pursuant to 28 U.S.C. § 1332. We
may hear the appeal as a final order of the district court. See
28 U.S.C. § 1291.
3
At the time of the Wiggins incident, MIG held insurance
policies with both Generali and PSM. The Generali policy covered
the maintenance and use of trucks and motor vehicles. The policy
stated, in relevant part:
A. Coverage
We will pay all sums an "insured" legally must pay
as damages because of "bodily injury" or "property
damage" to which this insurance applies, caused by
an "accident" and resulting from the ownership,
maintenance or use of a covered "auto".4
(A. 389)
After Wiggins served MIG with his complaint, Generali
assigned defense counsel to represent the interests of MIG, but
reserved its rights under the policy. PSM, however, denied any
obligation to defend or indemnify MIG in the tort suit under its
general liability insurance. The policy provided exclusions,
which stated, in relevant part:
2. Exclusions
This insurance does not apply to:
. . .
g. "Bodily injury" or "property damage" arising
out of the ownership, maintenance, use or
entrustment to others of any aircraft, "auto" or
watercraft owned or operated by or rented or
loaned to any insured. Use includes operation and
"loading or unloading". (A. 413).5
4
The Generali policy contained several exclusions, including an
exclusion for property moved by mechanical device. Generali
argued that the mechanical device exclusion should apply in the
Wiggins action because the deliverymen were using the freight
elevator. The district court rejected this argument, and
Generali did not appeal the court's order.
5
The policy provided the following definition of "loading and
unloading":
4
PSM argued that the court should read the term "use" of
an auto in the Generali policy broadly to include the
transportation of the bed between the vehicle and the final place
of delivery, the purchaser's 19th floor apartment. Further, PSM
asserted that the court should apply the broad reading of the
term "use" to the PSM exclusion clause, and thus conclude that
PSM is not obligated to defend MIG.
The district court applied the broad definition of
"use" to the Generali policy, and found that Generali was
obligated to defend MIG. It declined, however, to extend the
definition to PSM's exclusion clause. The court construed the
exclusion narrowly, and held that it applied only to the
unloading of the truck to the front door of the apartment
building. Thus, the court found Generali and PSM to be co-
insurers of MIG.
II.
7. "Loading or unloading" means the handling of
property:
a. After it is moved from the place where it is
accepted for movement into or onto an aircraft,
watercraft or "auto";
b. While it is in or on an aircraft, watercraft or
"auto"; or
c. While it is being moved from an aircraft,
watercraft or "auto" to the place where it is finally
delivered; but "loading or unloading" does not include
the movement of property by means of a mechanical
device, other than a hand truck, that is not attached
to the aircraft, watercraft or "auto".(A. 419)
5
The district court's grant of summary judgment is
subject to plenary review. Kost v. Kozakiewicz, 1 F.3d 176, 183
(3rd Cir. 1993); see also Electric Ins. Co. v. Rubin, 32 F.3d
814, 815 (3rd Cir. 1994) (district court's interpretation of
insurance contract subject to plenary review). The parties agree
that New York state law controls the insurance policy
interpretation.
The leading New York case interpreting the terms
"loading and unloading" in an insurance policy is Wagman v.
American Fidelity and Casualty Co., 304 N.Y. 490, 109 N.E.2d 592
(1952). In Wagman, the defendant insurance company issued a
policy to a motor carrier which covered claims for damages
arising out of the ownership, maintenance or use of the carrier's
vehicles. The policy provided that "use of the automobile for
the purposes stated includes the loading and unloading thereof."
Id. at 492.
When faced with the task of interpreting the policy,
the court noted that policies defining "use" as including
"loading and unloading" have been subject to both narrow and
broad interpretations. It stated:
The broader construction, adopted in a majority of
the jurisdictions which have passed upon the
question, is that "loading and unloading" embrace,
not only the immediate transference of the goods
to or from the vehicle, but the "complete
operation" of transporting the goods between the
vehicle and the place from or to which they are
being delivered.
Id. at 494. (citations omitted)
6
The court favored the "complete operations" doctrine
over a narrower construction of the terms, asserting:
The [broad] view impresses us as sounder, as more
fully carrying out the aim of the policy to cover
the entire operation of making commercial pickups
and deliveries in the business of the insured
carrier and, indeed, the courts in this state have
already signified their approval of it.
Id. (citations omitted)
In the instant case, the district court noted New
York's pragmatic adherence to the complete operation doctrine.
Thus, it found that the Wiggins claim fell within the scope of
Generali's policy coverage. The court refused, however, to apply
the Wagman definition of "loading and unloading" to the exclusion
clause in PSM's policy. It asserted that, under New York law,
exclusions in insurance policies must be construed narrowly. See
Seaboard Surety Company v. Gillette Company, 64 N.Y.2d 304, 311,
76 N.E.2d 272, 486 N.Y.S.2d 873 (1984) (exclusions from policy
coverage are "not to be extended by interpretations or
implication, but are to be accorded a strict and narrow
construction.").
The court found the language of the exclusion clause to
be ambiguous:
It is not clear whether this exclusion concerns
the moving of the bed frame to the Building or to
its final position within the purchaser's
apartment, or somewhere in between.
Applying a narrow construction, the court determined that the PSM
policy only excluded coverage of the move to the apartment
building. Because Wiggins's injuries occurred after the MIG
7
employees moved the bed into the building, the trial court held
PSM obligated to defend MIG in the Wiggins suit.
We do not believe that New York law warrants the
district court's distinction between insurance clauses and
exclusion clauses. New York courts have applied the Wagman
interpretation of the terms "loading and unloading" to both
insuring and exclusion clauses. See Broome County Co-Operative
Fire Ins. Co. v. Aetna Life and Casualty Co., 75 Misc. 2d 587, 347
N.Y.S.2d 778 (Sup. Ct. 1973); Edmund Mayer Inc. v. Aetna Casualty
and Surety Co., 62 Misc. 2d 82, 308 N.Y.2d 667 (Sup. Ct. 1970);
see also Cenven, Inc. v. Bethlehem Steel Corp., 41 N.Y.2d 842,
362 N.E.2d 251, 393 N.Y.S.2d 700 (1977) ("It would be unwise to
proliferate fine distinctions from and exceptions to the now
judicially determined language 'loading and unloading.'").
The district court relied on Muller v. Sun Indemnity
Co. of New York, 96 N.Y.S.2d 140 (1950) and General Accident
Insurance Company v. United States Fidelity and Guarantee
Insurance Company, 193 A.D.2d 135, 602 N.Y.S.2d 948 (1993) to
support its decision to apply a narrow interpretation to PSM's
exclusion clause. We believe that the court's reliance on these
opinions is misplaced. The Muller decision preceded the New York
Court of Appeals decision in Wagman. Further, General Accident
was based on Muller and makes no reference to the Wagman
decision.
We conclude that the Wagman decision dominates New York
law on the interpretation of "loading and unloading." It
requires that this court in the instant case interpret "loading
8
and unloading" broadly to include movement of the bedframe from
the delivery truck to the place of final delivery, the
purchaser's 19th floor apartment. Thus, the Wiggins claim falls
squarely within the scope of PSM's exclusion clause, and PSM is
not obligated to defend MIG in the tort action.
III.
Although the district court's holding that PSM was
obligated to defend MIG relied upon a narrow construction of
PSM's exclusion clause, it provided an alternative rationale for
its holding. The court noted:
While the parties do not address the issue, the
court notes that an Endorsement to PSM's general
liability policy (document titled New York
Changes-Amendatory Endorsement, CG 01 63 04 86)
provides that:
3. Any definition of "loading and unloading"
does not apply.
If this endorsement is applicable, as it appears
on its face to be, then the claimed injuries
clearly fall within the coverage of PSM's policy.
(order at 10 n. 3).
The district court apparently found that, because the
endorsement deletes any definition of "loading and unloading"
from the PSM policy, the "loading and unloading" exclusion does
not apply to the Wiggins action.
PSM contends that the endorsement eliminates the
definition of "loading and unloading" in the policy, leaving New
9
York state law to define the terms. We believe PSM's argument is
persuasive. The most logical interpretation of the endorsement
is that it refers to the definition of "loading and unloading"
contained within the policy. In the absence of an agreed upon
meaning, the parties are bound by New York state law. Thus,
under the "complete operation" doctrine as set forth in Wagman,
PSM's exclusion clause applies to the Wiggins action.
IV.
In summary, under New York state law, the court must
apply the "complete operations" doctrine to the interpretation of
the terms "loading and unloading" in an insurance contract. This
broad interpretation applies to both insurance and exclusion
clauses. PSM's policy excludes coverage for incidents arising
from the use, including loading and unloading, of a vehicle.
Thus, under Wagman, PSM is not obligated to defend MIG in the
Wiggins action.
Further the court's alternative conclusion that PSM's
Amendatory Endorsement rendered the PSM exclusion inapplicable to
the Wiggins action is in error. In the absence of a definition
of "loading and unloading" in the policy, the court must apply
New York state law. Thus, the PSM exclusion clause applies to
the Wiggins suit.
Accordingly, the judgment of the district court,
insofar as it obligates PSM to defend MIG in the Wiggins action,
will be reversed. Costs taxed against Generali.
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