PNC Bank NA v. Axis Insurance Co
24-1670
3rd Cir.Mar 21, 2025Background:
- PNC Bank acquired National City Corporation on December 31, 2008, and subsequently merged it into PNC Bank, making PNC the successor-in-interest to National City.
- Plaintiffs obtained a $106 million judgment against PNC Bank arising from wrongful acts committed by a bank previously acquired by National City, before National City was acquired by PNC.
- PNC Bank sought coverage under a management liability insurance policy issued by a group of insurers, arguing the loss fell within the policy's general coverage terms.
- The insurers denied coverage, relying on an exclusion (the “Changes in Exposure Provision”) for pre-acquisition wrongful acts committed by acquired companies.
- Both sides moved for judgment on the pleadings; the District Court found for the insurers, and PNC Bank appealed.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Application of Exclusionary Provision | Exclusion doesn't apply since PNC defended & paid claim, and was not itself acquired | Exclusion applies to claims for pre-acquisition acts regardless of entity defending claim | Exclusion applies; bars coverage |
| Conflict between Coverage and Exclusion Terms | Coverage should prevail over exclusion if conflict exists | No conflict; the exclusion defines coverage's scope | No conflict; exclusions validly limit coverage |
Key Cases Cited
- Gallagher v. GEICO Indem. Co., 201 A.3d 131 (Pa. 2019) (clear policy language must be given effect; ambiguities construed against insurer)
- Madison Constr. Co. v. Harleysville Mut. Ins. Co., 735 A.2d 100 (Pa. 1999) (insurance policy ambiguities construed against insurer)
- 401 Fourth St., Inc. v. Invs. Ins. Grp., 879 A.2d 166 (Pa. 2005) (courts enforce unambiguous policy language as written)