The opinion of the court was delivered by: Brotman, District Judge.
Presently before the Court is the motion of plaintiff Assurance
Company of America, Inc. ("Assurance") and the cross-motion of
third-party defendant Johnston Insurance Agency, Inc.
("Johnston") for summary judgment pursuant to Fed. R.Civ.P. 56.
I. FACTUAL AND PROCEDURAL BACKGROUND
In 1990, Jay-Mar, Inc. ("Jay-Mar"), d/b/a Absecon Home Center,
with its principals Jay and Marilyn Weisman, purchased the
premises located at 401 White Horse Pike and opened a True Value
Hardware Store. The premises is located at the intersection of
Route 30 (Whitehorse
Pike) and Route 9 in Absecon, New Jersey. Through the insurance
brokering services of Johnston Insurance Agency, Inc.
("Johnston"), Jay-Mar purchased an insurance policy from
Assurance effective from January 27, 1997 through January 27,
Due to heavy rains on August 21, 1997, water entered the
Jay-Mar premises from the ground level, causing substantial
damage. According to Jay-Mar's liability expert, Charles J.
Penza, P.E., the rainstorm which damaged the Jay-Mar premises was
classified as twice the magnitude of a "one in a hundred year"
Jay-Mar reported its loss to Johnston, thereby requesting
coverage from Assurance. Jay-Mar believed that the damage its
property sustained was due to the backup or overflow of rainwater
from nearby storm sewers, a cause of loss covered by its
insurance policy. Believing that the damage was caused by surface
water flooding, a cause of loss not covered by Jay-Mar's
insurance policy, Assurance denied Jay-Mar's claim for coverage.
On September 30, 1997, Assurance filed this action against
Jay-Mar seeking a declaratory judgment that it was not liable for
Jay-Mar's loss. On December 18, 1997, Jay-Mar filed an answer, a
counterclaim against Assurance, and a third-party complaint
against Johnston. On February 1, 1999, Assurance filed a motion
for summary judgment and Johnston filed a cross-motion for
A. STANDARD FOR SUMMARY JUDGMENT
The standard for granting a motion for summary judgment is a
stringent one, but it is not insurmountable. Fed.R.Civ.P. 56
provides that summary judgment may be granted only when materials
of record "show that there is no genuine issue as to any material
fact and that the moving party is entitled to judgment as a
matter of law." Serbin v. Bora Corp., 96 F.3d 66, 69 n. 2 (3d
Cir. 1996). In deciding whether there is a disputed issue of
material fact, the court must grant all reasonable inferences
from the evidence to the non-moving party. The threshold inquiry
is whether there are "any genuine factual issues that properly
can be resolved only by a finder of fact because they may
reasonably be resolved in favor of either party." Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91
L.Ed.2d 202 (1986).
Supreme Court decisions mandate that a summary judgment motion
must be granted unless the party opposing the motion "provides
evidence `such that a reasonable jury could return a verdict for
the nonmoving party.'" Lawrence v. National Westminster Bank New
Jersey, 98 F.3d 61, 65 (3d Cir. 1996) (quoting Anderson, 477
U.S. at 248, 106 S.Ct. 2505). Once the moving party has carried
its burden of establishing the absence of a genuine issue of
material fact, "its opponent must do more than simply show that
there is some metaphysical doubt as to material facts."
Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). The non-moving
party must "make a showing sufficient to establish the existence
of [every] element essential to that party's case, and on which
that party will bear the burden of proof at trial." Serbin, 96
F.3d at 69 n. 2 (quoting Celotex Corp. v. Catrett,
477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)); see also
Quiroga v. Hasbro, Inc., 934 F.2d 497, 500 (3d Cir. 1991)
(declaring that non-movant may not "rest upon mere allegations,
general denials, or . . . vague statements"). Thus, if the
non-movant's evidence is merely "colorable" or is "not
significantly probative," the court may grant summary judgment.
Anderson, 477 U.S. at 249-50, 106 S.Ct. 2505.
B. ASSURANCE'S LIABILITY FOR JAY-MAR'S LOSS
The insurance policy at issue in this case contains the