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Jeffrey Walters and Estate of v. American Home Assurance

September 21, 2011


The opinion of the court was delivered by: Wolfson, United States District Judge:



Presently before the Court is Defendant American Home Assurance's ("Defendant's" or "American Home's") Motion for Summary Judgment and Plaintiffs Jeffrey Walters' and the Estate of Clifford Haddox's (collectively, "Plaintiffs'") Cross-Motion for Summary Judgment. This dispute centers on whether Plaintiffs are entitled to coverage for an automobile accident that occurred while Plaintiffs were driving a pick-up truck ("Vehicle") leased by their former employer, Orgo-Thermit, Inc. ("OTI"). For the following reasons, Defendant's Motion for Summary Judgment is granted and Plaintiff's Cross-Motion for Summary Judgment is denied.


The following facts are undisputed by the parties. Beginning on January 1, 2004, OTI, a New Jersey corporation, was insured under Business Auto Policy CA 359-56-38 ("Policy") issued by American Home, a New York corporation. Ferguson Afft., ¶ 4. The Policy is a multi- state policy that covered vehicles operated by OTI throughout the United States.*fn1 The Policy provides $1,000,000 in general liability coverage to "symbol 1" vehicles. "Symbol 1" vehicles include "any 'auto." Ferguson Afft., Exh. 1 ("Business Auto Coverage Form") at 1.*fn2

Throughout this Opinion, I will refer to this section of the Policy as the "Master Policy." I refer to the entire policy as "Policy."

Important here is the Policy's $1,000,000 in uninsured motorist ("UM") coverage, which coverage is referenced in the Master Policy. Unlike the general liability coverage, the Policy's UM coverage applies to "symbol 2" vehicles, which are defined as "only those 'autos' you own.." Id. ("You" and "Your" refers to the Named Insured, OTI. Id. at 1.) The Policy does not provide UM insurance for "symbol 8" vehicles, which are defined as "autos you lease, hire, rent or borrow that are used in connection with your business." Business Auto Coverage Form at


Appended to the Master Policy are numerous endorsements. Some endorsements are not state-specific, such as the NUCLEAR ENERGY LIABILITY EXCLUSION Endorsement, id., Exh. 1 ("Nuclear Energy Liability Exclusion Endorsement") at 1, while others are state-specific, such as the WISCONSIN CHANGES endorsement, id., Exh. 1 ("Wisconsin Changes") at 1, the MINNESOTA PERSONAL INJURY PROTECTION endorsement, id., Exh. 1 ("Minnesota Personal Injury Protection"), and the WISCONSIN UNINSURED MOTORIST COVERAGE endorsement, id., Exh. 1 ("Wisconsin Uninsured Motorist Coverage"). The state-specific endorsements are for the following states: Wisconsin, Minnesota, New Jersey, and Pennsylvania. Many of the state-specific endorsements state that they apply to "a covered 'auto' licensed or principally garaged in . . ." that state. Id.

Of the state-specific endorsements, the parties argue that two are relevant here. The first is the NEW JERSEY UNINSURED AND UNDERINSURED MOTORISTS COVERAGE endorsement. Id., Exh. 1 ("New Jersey Uninsured and Underinsured Motorists Coverage") at 1. The second is the PENNSYLVANIA UNINSURED MOTORIST COVERAGE endorsement. Id., Exh. 1 ("Pennsylvania Uninsured Motorists Coverage") at 1.

The New Jersey endorsement states that an insured entitled to recover on an uninsured motorist claim is one who occupies a "covered 'auto'." New Jersey Uninsured and Underinsured Motorists Coverage at 2. The New Jersey endorsement further provides that claims for bodily injury are excluded "unless the injured person has a legal right to recover damages for such pain, suffering and inconvenience under the New Jersey Automobile Reparation Reform Act." Id. In this way, "[t]he injured person's legal right to recover damages for such pain, suffering and inconvenience under the New Jersey Automobile Reparation Reform Act will be determined by the liability tort limitation, if any, applicable to that person." Id. Importantly, the endorsement states that it applies only to those covered autos "licensed or principally garaged in . . . New Jersey." Id.

The Pennsylvania endorsement includes some language similar to that of the New Jersey endorsement. It provides for coverage for anyone occupying a "covered motor vehicle." Pennsylvania Uninsured Motorists Coverage at 1-2. Unlike the New Jersey endorsement, however, the Pennsylvania endorsement does not speak of limited tort status. In addition, the Pennsylvania endorsement includes a limitations period. It states that any legal action "must be brought within four years after the date of the 'accident' . . . [unless], within four years after the date of the 'accident,' [American Home] or the 'insured' have made a written demand for arbitration in accordance with the provisions of this endorsement." Id. at 2. It also states that it applies only to those covered autos "licensed or principally garaged in . . . Pennsylvania." Id. at 1.

On May 5, 2004, several months after the Policy was issued, OTI began leasing a Ford pick-up truck from Danella Rental Systems ("Danella"), a Pennsylvania corporation. Randall Afft., ¶ 5. Pursuant to the Danella lease agreement, OTI was required "to carry and maintain . . . Auto Liability [insurance] with limits of liability of no less than $1,000,000." Dry Afft., Exh. 1 ("Danella Rental Systems, Inc. Equipment Rental Agreement") at 1. The lease agreement also required that OTI "name [Danella] as an additional insured" on the policy that covered OTI's vehicles. Id. Furthermore, the lease agreement requires that OTI "comply with the applicable requirements of law relating to the . . . insurance, use and operation" of the Vehicle.

Importantly, there is another non-state-specific endorsement to the Policy that adds as an additional insured those to whom OTI is obligated by contract to so include. Ferguson Afft., Exh. 1 ("ADDITIONAL INSURED -- WHERE REQUIRED UNDER CONTRACT OR AGREEMENT"). That endorsement, which I will refer to as the "Additional Insured Endorsement," provides:

Any person or organization to whom you become obligated to include as an additional insured under this policy, as a result of any contract or agreement you enter into which requires you to furnish insurance to that person or organization of the type provided by this policy, but only with respect to liability arising out of your operations or premises owned by or rented to you. However, the insurance provided will not exceed the lesser of:

1. The coverage and/or limits of this policy, or 2. The coverage and/or limits required by said contract or agreement.


Sometime in 2004, OTI directed two employees, Plaintiff Jeffrey Walters and Clifford Haddox, who were residents of Ohio, Notice of Removal, ¶ 4, to drive the pick-up truck through the State of Wyoming on business. The truck "originated" in Denver, and the employees were "on their way to a job in California." Dry Supp. Afft., ¶¶ 6-7. On November 27, 2004, while in Wyoming, Plaintiffs were struck by a phantom vehicle and the truck rolled into a ditch. Both Walters and Haddox sustained injuries. The parties do not dispute that, as employees of OTI, Walters and Haddox are considered insureds under the OTI Policy.

Plaintiffs notified American Home of their claims on September 2, 2005, by way of letter by their counsel at that time. Ferguson Afft., Exh. 2 (Letter from William J. Vosper, Esq. dated Sept. 2, 2005) at 1.*fn3 In that letter, Plaintiffs' former counsel asserted that Plaintiffs were entitled to coverage because they were driving a covered auto, and that Pennsylvania law should apply to their claims because the pick-up truck was licensed, registered, and rented in Pennsylvania. Plaintiffs' former counsel also referenced the Policy's arbitration clause but did not seek to compel arbitration. Id. at 2.

One of Defendant's claim representatives responded to Plaintiffs' former counsel on November 21, 2005. In that correspondence, the representative stated that "[w]e are confirming that [the pick-up truck] is in fact owned by our insured .." Levinson Afft., Exh. A (Letter from Jeffrey E. Lucas dated Nov. 1, 2005) at 1. The following year, on August 17, 2006, the representative sent further correspondence to Plaintiffs' former counsel. In that correspondence, the representative stated that "[i]t is our understanding that you are still putting together [the Plaintiffs'] UIM demands." Id., Exh. A (Letter from Jeffrey E. Lucas dated Aug. 17, 2006) at 2.

The following day, August 18, 2006, Plaintiffs' former counsel responded with a letter setting forth a demand of $75,000. Id., Exh. A (Letter from William J. Vosper, Esq. dated Aug. 18, 2006) at 4. Plaintiffs' former counsel sent a second letter to Defendant on December 7, 2006, reasserting Plaintiffs' claim. Id., Exh. 3 (Letter from William J. Vosper, Esq. dated Dec. 7, 2006) at 1-2. In that letter, Plaintiffs' former counsel stated that he would "decide if [Plaintiffs] should file a lawsuit in Pennsylvania, Ohio, Wyoming or New Jersey, or chose [sic] to arbitrate the matter." Id. at 2.

Several days later, on December 15, 2006, Defendant issued a letter denying UM coverage. The letter explained that OTI's "policy, for UM/UIM coverage, only insures owned vehicles. . . . As we have discussed this vehicle was on a month to month lease. It is not an owned auto. Therefore it does not fit the definition of an owned auto." Ferguson Supp. Afft., Exh. 1 (Letter from Jeffrey B. Lucas dated Dec. 15, 2006). The letter further stated that "we question whether a 'phantom vehicle' triggers UM/UIM coverage under the policy." Id.

Following the denial, six months later, Plaintiffs' former counsel sent another letter to Defendant's counsel, McCormick Barstow, LLP, on June 4, 2007 addressing the question of choice of law. Id., Exh. 3 (Letter from William J. Vosper, Esq. dated June 4, 2007) at 1. In that letter, counsel argued that Pennsylvania law applied because "the Pennsylvania UM/UIM endorsement was issued for delivery in Pennsylvania and applies to a vehicle registered in Pennsylvania, garaged in Pennsylvania from time to time, driven through Pennsylvania, and owned by [Danella], an additional insured on the AIG policy." Id. at 2 (emphasis in original). The letter engaged in additional choice of law analysis, and further noted that "it is not known where the policy was issued." Id. at 3. Nonetheless, counsel argued, "the Pennsylvania UM/UIM endorsement is a clear choice of Pennsylvania law for determining UM/UIM coverage with regard to a vehicle registered and garaged at times in Pennsylvania .." Id. (emphasis in original).

On September 29, 2007, Plaintiffs' former counsel sent a letter with an increased demand for Jeffrey Walters, in part, "[t]o avoid . . . respective costs of litigation for uninsured motorist benefits in one of several jurisdictions .." Id., Exh. A (Letter from Maryjean Ellis, Esq., dated Sept. 29, 2007) at 1. By that date, Clifford Haddox had passed away and counsel continued to advocate on behalf of his estate. Id. at 2.

From June 23, 2008, through April 20, 2009, Plaintiffs' former counsel and one of Defendant's representatives exchanged emails discussing settlement possibilities. See Levinson Afft., Exh. B. Then, on April 27, 2009, Plaintiffs' former counsel informed Defendant that Mr. Walters decided to retain new counsel. Id.

Two months later, on July 20, 2009, Plaintiffs filed a complaint, through new counsel, in the Superior Court of New Jersey, Middlesex County, seeking UM benefits and an order compelling Defendant to arbitrate pursuant to the terms of the Policy. Verif. Compl. at ¶ 4. Defendant removed the case to this Court and filed an Answer and Counterclaim on September 16, 2009. Defendant's Counterclaim seeks a declaratory judgment that Plaintiffs were not covered under the Policy. Def.'s Answer and Countercl. ¶¶ 4-8. Plaintiffs subsequently filed an Order to Show Cause to compel arbitration, which Order this Court denied on July 21, 2010.*fn4

The instant matter before the Court is Defendant's Motion for Summary Judgment and Plaintiffs' Cross-Motion for Summary Judgment. Both parties argue that they are entitled to summary judgment based on a plain reading of the Policy, and disagree as to which state's law should govern interpretation of the Policy. For the following reasons, I conclude that Pennsylvania law applies and that, under that state's law, Plaintiffs' claims are barred by the statute of limitations. Accordingly, Defendant's motion for summary judgment is granted and Plaintiffs' cross-motion for summary judgment denied.


Summary judgment is appropriate where the Court is satisfied that "there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 330 (1986). A fact is "material only if it might affect the outcome of the suit under the applicable rule of law. Id. Disputes over irrelevant or unnecessary facts will not preclude a grant of summary judgment. Id. The burden of establishing that no "genuine issue" exists is on the party moving for summary judgment. Celotex, 477 U.S. at 330. Once the moving party satisfies this initial burden, the non-moving party "must set forth specific facts showing that there is a genuine issue for trial."Fed. R. Civ. P. 56(e). To do so, the non-moving party must "go beyond the pleadings and by her own affidavits, or by the 'depositions, answers to interrogatories, and admissions on file,' designate 'specific facts showing that there is a genuine issue for trial'." Celotex, 477 U.S. at 324. In other words, the non-moving party 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 (1986); see also Ridgewood Bd. of Educ. v. Stokley, 172 F.3d 238, 252 (3d Cir. 1999). A genuine issue of material fact is one that will permit a reasonable jury to return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In evaluating the evidence, a court must "view the inferences to be drawn from the underlying facts in the light most favorable to the [non-moving] party." Curley v. Klem, 298 F.3d 271, 276-77 (3d Cir. 2002).

The motion is appropriately granted when that party is entitled to judgment as a matter of law. Anchorage Assocs. v. Virgin Islands Bd. of Tax Review, 922 F.2d 168, 175 (3d Cir. 1990). Even if a record contains facts that might provide support for a non-movant's position, "the burden is on the [non-movant], not the court, to cull the record and affirmatively identify genuine, material factual issues sufficient to defeat a motion for summary judgment." Morris v. Orman, No. 87-5149, 1989 WL 17549, at *8 (E.D. Pa. Mar. 1, 1989) (citing Childers v. ...

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