Opinions of the United
2004 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


5-17-2004

Kearns v. Essex Source Realty
Precedential or Non-Precedential: Non-Precedential

Docket No. 02-3586




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Recommended Citation
"Kearns v. Essex Source Realty" (2004). 2004 Decisions. Paper 702.
http://digitalcommons.law.villanova.edu/thirdcircuit_2004/702


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                                                                  NOT PRECEDENTIAL

                     UNITED STATES COURT OF APPEALS
                          FOR THE THIRD CIRCUIT
                               ___________

                                    No. 02-3586
                                    ___________

                     JILL B. KEARNS; RICHARD E. KEARNS

                                           v.

 ESSEX SOURCE REALTY GROUP, LLC; ANTON F. KUPPECK LANDSCAPING,
  INC.; EDUCATIONAL TESTING SERVICE; JOHN DOE, (Nos. 1-5); JANE ROE,
(Nos. 1-5), unknown servants, agents, employees, corporation, partnerships, or company
                                of known defendants

                                          v.

                     ESSEX SOURCE REALTY GROUP, LLC,

                                                Third-party plaintiff

   EDUCATIONAL TESTING SERVICE; FEDERAL INSURANCE COMPANY;

                                                Third-party defendants

                          Federal Insurance Company,

                                           Appellant
                            ________________________

    ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE
                    DISTRICT OF NEW JERSEY

                 District Court Judge: The Honorable Mary L. Cooper
                                (D.C. No. 00-cv-03784)
                                     ___________

                    Submitted Under Third Circuit L.A.R. 34.1(a)
                                   May 6, 2004
                   BEFORE: SLOVITER and FUENTES, Circuit Judges,
                            and POLLAK, District Judge.*

                                 (Opinion Filed: May 17, 2004)
                                 ________________________

                                  OPINION OF THE COURT
                                 ________________________




FUENTES, Circuit Judge:

       This case involves a dispute between two insurers over the priority of coverage under

their respective policies.1 In August 1998, Jill Kearns, an employee of Educational Testing

Service (“ETS”), fell as she was leaving work and sustained serious injuries. Kearns brought

a negligence suit against ETS; Appellee Essex Source Realty Group (“Essex”), the lessor of

ETS’s office space; and Anton Kuppeck Landscaping (“Anton”), who provided landscaping

for the building. Essex filed a third-party complaint against Appellant Vigilant Insurance

Company (“Vigilant”), ETS’s insurer, seeking coverage as an “additional insured” for any

damages owed by Essex to Kearns. Kearns’s action was subsequently settled for $100,000,

of which Essex paid $87,500 and Anton the remaining $12,500. Vigilant and Travelers

Property Casualty Company (“Travelers”), Essex’s insurer, split the $87,500 cost, each




*        Honorable Louis H. Pollak, Senior District Judge for the United States District Court for
the Eastern District of Pennsylvania, sitting by designation.

   This case falls within the subject matter jurisdiction of the federal courts under 28 U.S.C. §
1332(a), as there is complete diversity of citizenship among the parties and the amount in
controversy exceeds $75,000.

                                                -2-
reserving the right to sue the other for full contribution. In October 2001, Vigilant and

Travelers each filed a motion seeking to place responsibility for the full $87,500 cost with

the other insurer, based on interpretation of their insurance policies’ respective “Other

Insurance” clauses. The District Court ruled that Vigilant’s coverage had priority over

Travelers’, meaning that Vigilant was primarily liable for the $87,500 and Travelers’ was

only liable for any excess over Vigilant’s coverage. Since Vigilant’s coverage limit exceeded

$87,500, the District Court’s ruling effectively placed the burden for the entire $87,500 on

Vigilant.

       On appeal, Vigilant argues that Travelers’ policy is ambiguous as to whether it has

lower or equal priority relative to Vigilant’s policy: specifically, the main text of the

Travelers policy and a subsequent endorsement (#1197) make no mention of policy priority,

while a second endorsement (#0192) explicitly states that any other insurer’s policy will get

priority over Travelers’ policy. Essex (defended by Travelers) responds that the policy is not

ambiguous because Endorsement #0192 is the only provision targeting additional insureds

in particular and is therefore controlling. Upon examination of the Travelers policy, we

agree with Essex that the policy is not ambiguous. Endorsement #0192 is titled “OTHER

INSURANCE–ADDITIONAL INSUREDS,” and explicitly dictates that the Travelers policy

“is excess over any of the other insurance . . . [t]hat is valid and collectible insurance

available to you if you are added as an additional insured under any other policy.” App. at

325. This provision explicitly subordinates the Travelers policy to the Vigilant policy, as



                                             -3-
Essex is an additional insured under Vigilant’s policy.

       No other Travelers policy provision or endorsement contradicts Endorsement #0192.

It is true that two other sections of the policy discussing excess insurance do not cover

prioritizations of policies, but that does not create an ambiguity. Rather, we read the

Travelers policy as unambiguously stating that in the specific context of additional insureds,

the Travelers policy will be subordinated to other additional insured coverage. The silence

of the main text and Endorsement #1197 as to policy prioritization does not undercut this

clear statement, as neither of those provisions deals with additional insured coverage.

Accordingly, we affirm the District Court’s judgment. 2




   Because we find that the Travelers policy is unambiguous, the parties’ argument over how to
resolve any alleged ambiguity is rendered moot.

                                              -4-