Kellner v. Aetna Casualty & Surety Co.Kellner v. Aetna Casualty & Surety Co.
MEMORANDUM AND ORDER
We consider here motions for reconsideration of this Court’s order of August 29, 1984,
We address first Royal’s contention that our grant of summary judgment to the Plaintiffs was inappropriate. Actually, the grant of summary judgment to a non-moving party is a relatively frequent occurrence in federal courts. Witness the statement:
... the weight of authority is that summary judgment may be rendered in favor of the opposing party even though he has made no formal cross-motion under Rule 56.
Wright & Miller, Federal Practice аnd Procedure: Civil § 2720, pages 467-68.
This is in keeping with the objective of
Concerning the matter of Royal’s unaddressed affirmative defenses, it appears that two of them are no defense at all. The first, that the Kellners had no insurable interest in the premises which is the subject of this claim, is refuted by the facts. It is an elementary principle of insurance law that an insurable interest exists in any party who would be exposed to finаncial loss by the destruction of a certain property. 4 Appleman, Insurance Law and Practice, § 2123 at 40-41. Since Plaintiffs had reserved the right to repossess the property in quеstion if George F. Heim reneged on his payment obligation, it is clear they would be exposed to financial loss should that property be destroyed. It is equally clear that they had an insurable interest in the property.
The second of Royal’s affirmative defenses, that there was no coverаge under the binder issued to George F. Heim because he never paid a premium on said binder, is not in conformance with the law. The issuance of a binder evidences a complete, temporary, or preliminary contract of insurance effective from that time until issuance of the fоrmal policy or until rejection of the risk. 12 A Appleman,
Insurance Law and Practice,
§ 7227 at 149,
Carideo v. Phoenix Assurance Company,
The last surviving affirmative defense of Royal, the contention that its coverage of the Heim/Kellner property was in the nature of excess coverage to be used only after the primary insurer, Aetna, had disbursed the limits of its policy to the Plaintiffs, requires more detаiled analysis. It must be noted that Royal never actually issued an insurance policy on the building which burned. Any coverage they provided on that structure stеms from the binder discussed previously herein in relation to Royal’s lack of consideration defense. Royal would have us determine that, since the bindеr was to be incorporated into an existing policy which covered the contents of the burned structure and the contents of another building in Montgomery County as well, its coverage was in the nature of “blanket” insurance and therefore excess to the more specific policy provided on the same site by Aetna. Royal then cites Pennsylvania cases which arguably hold that when two policies cover the same loss and one specifically covers the damaged property only while the other covers a variety of risks including the damaged property, the former policy is primary and the latter excess.
This Court cannot reach that conclusion in this case for several reasons. First, we are not willing to make the assumption that the binder actually issued by Royal would have ultimately become part of a “blanket” policy. Even if we were to make suсh an assumption, the fact remains that the binder issued by Royal is the document that controlled the extent of its liability in this situation. As noted earlier, binders are effective until supplanted by a formal policy or the company gives notice that it has rejected the risk. Since neither of these events occurred, we are-unwilling to dis
Thus, Royal’s binder to Heim/Wham must be compared to Aetna’s policy with the Kellners. These two documents are equally spеcific in that they refer only to the structure at 148-50 Main Street, Jersey Shore, Pennsylvania. It is primarily for this reason that we cannot say, as a matter of lаw, that the Aetna policy was primary and Royal’s excess or vice versa.
There are also factual distinctions between the instant case and those cited by Royal. First, in this case it is not the same party who secured both coverages. There were two distinct insurable interests in the property, the legal interest of the Kellners and the equitable interest of Wham/Heim. The cases Royal offers in support of its position 1 all concern situations where one party took out different types of coverage on the same location. We think this an important factual distinction. Sеcond, both the policy issued by Aetna and the policy which Royal claims would have been issued in extension of its binder contain “other insurance” сlauses which assert the right to be considered as excess coverage. If this type of “boilerplate” is to be given effect what will be the recourse of an insured who takes out two equally specific policies with two separate carriers to cover the same propеrty? If each can be considered excess neither would ever pay. One of the most widely respected commentators on insurance law has declared “... where one has conflicting excess clauses, they are mutually repugnant—in other words, they cannot be excess to eаch other since they are identical.” 8 A Appleman, Insurance Law and Practice, § 4909 at 399.
For the foregoing reasons we hold that Royal’s various unaddressed affirmative defenses аre neither individually nor collectively persuasive enough to warrant changing our original judgment in this matter. We note that Royal’s right to seek proratiоn before the Pennsylvania Insurance Commission of any sum it is forced to pay pursuant to this judgment is unaffected. Consequently, we issue the following.
ORDER
AND NOW, this 14th day of Novеmber, 1984, IT IS HEREBY ORDERED as follows:
1. Royal’s motion for reconsideration of judgment in this matter is denied.
2. Aetna’s motion for reconsideration in this matter is denied. 1
3. Royal’s motion for summary judgment against Aetna is denied.
Notes
.
Meigs V. I.N.A.,
. Since Aetna has not filed a memorandum in support of its motion and since the motion itself was untimely with respect to Local Rule 604, it is unnecessary to rationalize our denial of Aetna’s motion.