filed as amended february 3 1989.: January 13, 1989.
Appeal from the United States District Court for the Eastern District of Pennsylvania, D.C. Civil No. 86-0740.
Seitz, Stapleton and Cowen, Circuit Judges.
Forum Insurance Company ("Forum") appeals from the order of the district court granting summary judgment In favor of National Union Fire Insurance Company ("National Union") on Forum's declaratory judgment action seeking contribution from National Union. National Union cross-appeals from the district court's order granting summary judgment in favor of Forum on National Union's counterclaim for costs and fees. Jurisdiction in the district court was founded upon diversity of citizenship, and this court has appellate jurisdiction pursuant to 28 U.S.C. § 1291 (1982).
Forum brought this diversity action against National Union seeking a declaration that National Union should contribute to the settlement of a personal injury claim. The underlying personal injury action resulted from an automobile accident involving the decedent Richard Carmean and a tractor owned and operated by the Al Ted Trucking Corporation ("Al Ted"). The tractor was pulling a refrigerated container and chassis leased from Castle & Cooke, Inc. Decedent's estate initiated a wrongful death action against Al Ted and Castle & Cooke, among others. The Al Ted tractor was insured by Forum while Castle & Cooke was insured by National Union.
Forum settled the case for $885,000 on behalf of Al Ted without any contribution from Castle & Cooke. It then brought this action against National Union seeking a declaratory judgment that National Union should contribute to the settlement of the underlying personal injury claim. National Union denied any duty to contribute and also counterclaimed, seeking recovery of its costs and fees incurred in defending Castle & Cooke in the underlying personal injury action. The parties submitted a stipulation of facts and filed cross-motions for summary judgment on both the contribution claim and the counterclaim.
In resolving Forum's contribution claim, the district court, with the tacit approval of the parties, looked to the National Union insurance policy issued to Castle & Cooke. The district court determined that Hawaiian law governed the interpretation of the policy.*fn1 The court focused on the issue of whether Al Ted was an insured party under the National Union policy. The court concluded that Al Ted was not an insured under the National Union policy in light of the language of the exclusions in the "Persons Insured" section of the policy. That section excludes from coverage any person with respect to a trailer insured by National Union being used with any motor vehicle not covered by like insurance in the company. Because Al Ted was not an insured under the policy the court ruled that National Union could not be required to contribute to the settlement. It thereupon granted National Union's motion for summary judgment with respect to Forum's contribution claim and dismissed the declaratory judgment action.
As for National Union's counterclaim for costs and fees, the court applied New Jersey law to the Forum insurance policy issued to Al Ted. The court found that Castle & Cooke was an insured under the policy but that the policy did not require Forum to provide a defense for insureds. The district court granted Forum's motion for summary judgment on National Union's counterclaim and dismissed it.
Forum appealed and National Union cross-appealed.
The scope of review of the district court's order granting the respective motions for summary judgment Is plenary. The court of appeals "must 'apply the same test the district court should have utilized initially."' Link v. Mercedes-Benz of N. Am., Inc., 788 F.2d 918, 921 (3d Cir. 1986) (quoting Goodman v. Mead Johnson & Co., 534 F.2d 566, ...