Opinion
C.A. No. 01-116.
April 16, 2004
MEMORANDUM OPINION AND ORDER
American Alliance Insurance Company ("AAIC") brought this action for declaratory judgment against Penn Millers Insurance Company ("PMIC") seeking a declaration of its liability for defense and indemnification costs arising from a motor vehicle accident. Presently before the court is AAIC's motion for summary judgment. For the reasons which follow, the motion is granted.
The facts underlying the motion are not in dispute. David Beccaria and Michelle Beccaria filed a lawsuit against Gambone Brothers Construction Company ("Gambone") and Christina Mancini in Montgomery County arising from an accident involving a Plymouth, driven by Mancini, and a bicycle ridden by David Beccaria. The Plymouth was used by Mancini's parents, Linda and Carl Meixner, but was titled to Gambone. Carl was an employee of Gambone and the son-in-law of one of the company's principals. He had full time use of the Plymouth as part of his employment compensation. He was required by Gambone to secure coverage for the vehicle. Meixner secured coverage for the Plymouth under his PMIC auto insurance policy. Gambone was listed as a "loss payee/additional interest" on the PMIC policy.
After investigating the accident claim, PMIC denied coverage on the bases that (1) Meixner failed to disclose in the insurance application that the Plymouth was owned by Gambone, and (2) Meixner failed to list Mancini as a resident of his household. Thereafter, PMIC and AAIC entered in to a Cost-Sharing Agreement, by which each reserved their rights to seek declaratory relief, while funding a defense of the underlying action.
The Meixners' PMIC policy provided in pertinent part
A. We will pay damages . . . for which any "insured" becomes legally responsible. . . .
B. "Insured" as used in this Part means:
1. You or any "family member" for the ownership, maintenance or use of any auto or "trailor" (sic).
2. Any person using "your covered auto".
3. For "your covered auto", any person or organization but only with respect to legal responsibility for acts or omissions of a person for whom coverage is afforded under this Part.
The policy defines "your covered auto" as "any vehicle shown in the Declarations." It is undisputed that the Plymouth was listed as a covered vehicle in the PMIC declaration page. The policy also included an "Other Insurance" proviso:
If there is other applicable liability insurance we will pay only our share of the loss. Our share is the proportion that our limit of liability bears to the total of all applicable limits. However, any insurance we provide for a vehicle you do not own shall be excess over any other collectible insurance.
Gambone maintains an auto insurance policy with AAIC. Under that policy, an "insured" is defined as "You for any covered auto," as well as "Anyone else while using with your permission a covered `auto' you own, hire or borrow. . . ." "Covered autos" are only those autos shown in the policy's declarations. The AAIC policy does not list the Plymouth as a covered auto. The AAIC policy also contains an "Other Insurance" proviso:
a. For any covered "auto" you own, this Coverage Form provides primary insurance. For any covered "auto" you don't own, the insurance provided by this Coverage Form is excess over any other collectible insurance. . . .
. . .
d. When this Coverage Form and any other Coverage Form or policy covers on the same basis, either excess or primary, we will pay only our share. Our share is the proportion that the Limit of Insurance of our Coverage Form bears to the total of the limits of all the Coverage Forms and policies covering the same basis.
Thus, both the AAIC and PMIC policies provide that their coverages will be deemed excess when provided to a vehicle that is not a covered vehicle.
Pamela Specht is the principal of Specht Insurance Group Limited. She was the agent who wrote the Meixners' policy with PMIC, as well as Gambone's policy with AAIC. She testified in her deposition that she writes all of Gambone's insurance, and is familiar with the agreements Gambone has with its key employees. She testified that Meixner was provided a Gambone owned vehicle as part of his employment, provided that he maintained insurance on the vehicle. The vehicle was provided for the Meixners' personal use, not Gambone's use. She described the Gambone-Meixner oral agreement to provide the vehicle as the equivalent of a "verbal lease." To that end, Gambone was listed as an additional interest/loss payee on the Meixners' policy, in the same manner as would a leasing company on the personal auto policy of a vehicle lessee.
The summary judgment record also indicates that, on the PMIC application, the question: "With the exception of any encumbrances, are any vehicles not solely owned by and registered to the applicant?" was answered "No" by the Meixners. In additional, the Meixners did not list Mancini as a member of their household. PMIC's denial of coverage was based upon these alleged misrepresentations.
In deciding a motion for summary judgment under Rule 56 of the Federal Rules of Civil Procedure, "the test is whether there is a genuine issue of material fact and, if not, whether the moving party is entitled to judgment as a matter of law." Medical Protective Co. v. Watkins, 198 F.3d 100, 103 (3d Cir. 1999) (citing Armbruster v. Unisys Corp., 32 F.3d 768, 777 (3d Cir. 1994)). "As to materiality, the substantive law will identify which facts are material. Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Furthermore, "summary judgment will not lie if the dispute about a material fact is `genuine,' that is, if the evidence is such that a reasonable jury could return a verdict for the nonmoving party."Id. at 250.
On a motion for summary judgment, the facts should be reviewed in the light most favorable to the non-moving party. See Matsushita Elec.Indus.Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (quoting United States v. Diebold, inc., 369 U.S. 654, 655 (1962)). The nonmoving party "must do more than simply show that there is some metaphysical doubt as to the material facts," Matsushita, 475 U.S. at 586, and must produce more than a "mere scintilla" of evidence to demonstrate a genuine issue of material fact and avoid summary judgment. See Big Apple BMW, Inc. v. BMW of North America, Inc., 974 F.2d 1358, 1373 (3d Cir. 1992).
The evidence offered by Specht, that the Meixners' right to use the company-owned vehicle was pursuant to a verbal lease agreement, is uncontradicted. Thus, we find no issue of fact precludes summary adjudication of the rights of the parties arising from the "ownership" of the Plymouth.
Both parties agree that, under Pennsylvania law, ownership of a vehicle is not limited to the title holder, but rather can include a "person, other than a lienholder, having the property right in or title to a vehicle. The term includes a person entitled to the use and possession of a vehicle subject to a security interest in another person, but excludes a lessee under a lease not intended as security." Pa.C.S.A. tit. 75, § 102. Thus, the title certificate is merely evidence of ownership, but is not conclusive on the issue. Aetna Casualty and Surety Co. v. Duncan, 972 F.2d 523, 526 (3d Cir. 1992); The Automobile Ins. Co. of Hartford v. Currant, 994 F. Supp. 324, 330 (E.D.Pa. 1998). Rather, courts look to the attributes commonly associated with ownership. Duncan, 972 F.2d at 526. These include the use, benefit, possession, control, responsibility for, and disposition of the automobile. Id. quoting Wasilko v. Home Mutual Casualty Co., 210 Pa. Super. 322, 232 A.2d 60, 62 (1967).
It is undisputed that the Meixners had the use, benefit, possession control, and responsibility for the Plymouth. They lacked only the right to dispose of the vehicle, since it was subject to the verbal lease, and would presumably, revert to Gambone if Meixner ended his relationship with the company. We find as a matter of law that the Meixners "owned" the Plymouth insofar as ownership of the vehicle relates to which of the two insurers owes primary coverage.
The issues raised by PMIC — that AAIC's coverage is primary because PMIC may disavow primary coverage based on the Meixners' failure to disclose Gambone's ownership or that Mancini was part of the Meixner household — does not alter this conclusion. Foremost, the issue of whether these alleged misrepresentations effect PMIC's duty to defend and indemnify the Meixners is not before this court. The Meixners were never made parties to this declaratory judgment action and remained unrepresented here. The sole issue raised in the AAIC complaint is whether it or PMIC's coverage is to be deemed excess.
Based on the language of the two policies, and the undisputed facts presented, we conclude that (1) the Plymouth is a covered vehicle in the PMIC policy, (2) AAIC is entitled to a declaration that its coverage under the Gambone policy is excess to the coverage provided by PMIC under the Meixners' policy. Thus, it has no liability to contribute to defense or indemnification costs until such time as the PMIC coverage is exhausted, or PMIC's coverage dispute is resolved adversely to the Meixners.
ORDER
The motion of American Alliance Insurance Company for summary judgment is GRANTED.Judgment is ENTERED in favor of American Alliance Insurance Company and against Penn Millers Insurance Company.
The court declares:
1. That Penn Millers Insurance Company has the primary obligation to provide a defense and indemnity for Christina Mancini and Gambone Brothers for the accident described in the underlying complaint.
2. That the coverages of the policy of insurance issued by American Alliance Insurance Company is excess to the coverages of the policy of insurance issued by Penn Millers Insurance Company.
3. That Penn Millers Insurance Company must reimburse American Alliance Insurance Company for any defense cost previously incurred in the defense of the underlying matter.
IT IS SO ORDERED.