Opinions of the United
2005 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


6-20-2005

Brown v. Zurich Amer Ins Co
Precedential or Non-Precedential: Non-Precedential

Docket No. 04-2282




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"Brown v. Zurich Amer Ins Co" (2005). 2005 Decisions. Paper 990.
http://digitalcommons.law.villanova.edu/thirdcircuit_2005/990


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                                                               NOT PRECEDENTIAL

                         UNITED STATES COURT OF APPEALS
                              FOR THE THIRD CIRCUIT




                                        No. 04-2282


                                      ADAM BROWN
                                      d/b/a Iliad Antik,

                                                                         Appellant
                                              v.

                   ZURICH-AMERICAN INSURANCE COMPANY


                       On Appeal from the United States District Court
                          for the Eastern District of Pennsylvania
                                 (D.C. Civ. No. 02-07838)
                        Honorable James McGirr Kelly, District Judge


                                    Argued June 2, 2005

          BEFORE: FUENTES, GREENBERG, and COWEN, Circuit Judges

                                   (Filed: June 20, 2005)


Alan C. Milstein (argued)
Sherman, Silverstein, Kohl,
Rose & Podolsky
4300 Haddonfield Road
Suite 311
Pennsauken, N.J. 08109

   Attorneys for Appellant

Robert B. White, Jr.
1515 Market Street

Suite 1800
Philadelphia, PA 19102

John J. Hession (argued)
1225 Franklin Avenue
Suite 325
Garden City, NY 11530

   Attorneys for Appellee


                                OPINION OF THE COURT


GREENBERG, Circuit Judge.

       This matter comes on before this court on the appeal of plaintiff Adam Brown,

d/b/a Iliad Antik, from an order entered in the district court on April 29, 2004, dismissing

this action. We first set forth the unusual procedural and factual history of this case.

       Brown initiated this diversity of citizenship action governed by Pennsylvania law

against Zurich-American Insurance Company seeking to recover under a policy Zurich

wrote covering property damage losses, alleging that on or about August 12, 2002, he had

suffered flood damage to Biedermeier furniture that he had acquired and that was in a

facility in Prague, in the Czech Republic, at the time of the flood. Brown had acquired

the furniture from its owners in and around Prague with the intent of importing it into the

United States and to sell it in a restored condition. While there is no question that Zurich

wrote the policy and that it was in effect at the time of the loss and, in some



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circumstances, would have covered his loss, when Brown made his claim Zurich denied

coverage. Zurich denied the claim because while the policy provided that its “territorial

limits” were “anywhere in the World,” it further provided that the territorial limits of the

policy “exclud[ed] the former Iron Curtain countries,” and thus excluded the Czech

Republic.

       Brown moved for summary judgment on the theory that at the time of the loss the

property had not been in a “former Iron Curtain” country as the Czech Republic did not

exist as a political entity until January 1, 1993, which was after the dissolution of the Iron

Curtain. Thus, in Brown’s view, the property had not been in a former Iron Curtain

country during the time he owned it or at the time of the loss, and, accordingly, the

exclusion to the world-wide coverage area could not apply. Of course, Zurich opposed

the motion. Nevertheless, even though its argument, if accepted, i.e. that the Czech

Republic should be regarded as a former Iron Curtain country for purposes of Brown’s

policy, would have entitled it to a summary judgment, it did not file a cross-motion

seeking such a judgment.

       The district court ruled on Brown’s motion by a memorandum and order dated

March 31, 2004. After setting forth the factual history of the case and the criteria for

disposition of the motion under Fed. R. Civ. P. 56(c), the court continued with its

discussion, describing the history of the Iron Curtain and Brown’s argument. The court

pointed out that during the time of the Iron Curtain the Czech Republic and Slovakia



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together constituted Czechoslovakia which undoubtedly had been an Iron Curtain

country. It then concluded that a former Iron Curtain country “include[d] any political

state that was previously an Iron Curtain country, without regard for what form that

political state is in now.” It continued that the Czech Republic “was not fashioned from

whole cloth, but derived from the divorce of the Czechs and the Slovaks that made up

Czechoslovakia [and thus] was previously or at a time in the past, Czechoslovakia, an

Iron Curtain country.” Consequently, it concluded that whether “examined

geographically or grammatically, there is only one reasonable interpretation of the phrase

‘former Iron Curtain countries’” and that the Czech Republic is one such country.

Therefore, it denied Brown’s motion for summary judgment.

       The court’s disposition left the case in a peculiar posture. Clearly, under its

opinion Zurich was entitled to a summary judgment though it had not sought one. Thus,

notwithstanding the March 31, 2004 opinion and order the case would go on to its

inevitable demise. Brown, of course, recognized that the court’s decision “had the

practical effect of granting [Zurich] summary judgment,” appellant’s br. at 3, and he

accordingly filed a motion to convert the order of March 31, 2004, into a final order so

that the case would be over and he could appeal. The district court on April 29, 2004,

granted Brown’s motion and in its order “summarily dismissed [the complaint] for the

reasons stated in the Memorandum and Order of March 31, 2004.” This order, in effect,

granted Zurich a summary judgment on the merits. Brown then appealed from the order



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of April 29, 2004.

       Ordinarily we would not have jurisdiction over an appeal from an order denying

summary judgment. That principle, however, is inapplicable here as Brown appeals from

an order effectively granting summary judgment against him. Furthermore, usually a

party cannot appeal from an order it sought. Here, however, it is clear that Brown sought

the order of April 29, 2004, only as a logical corollary to the order of March 31, 2004.

Certainly, Brown did not bring this action in the hope it would be dismissed. Rather, he

wanted to recover a judgment against Zurich. Finally, we are not barred from

entertaining this appeal on the theory that some aspect of the case remains open in the

district court or that the case was dismissed without prejudice. To the contrary, the case

was resolved completely in the district court and, inasmuch as the dismissal was on the

merits, Brown cannot reinstitute it without being barred by principles of claim preclusion.

Thus, we have jurisdiction under 28 U.S.C. § 1291.

       On this appeal we exercise plenary review. See USX Corp. v. Adriatic Ins. Co.,

, 199 (3d Cir. 2003), cert. denied, 

(2004). Therefore, we use

the same standard as the district court did in originally granting summary judgment and

can affirm only “if the pleadings, depositions, answers to the interrogatories, and

admissions on file, together with the affidavits, if any, show that there is no genuine issue

as to any material fact and [Zurich] is entitled to judgment as a matter of law.” Fed. R.

Civ. P. 56(c).



                                              5
       After our review of this matter, we have concluded that the policy is not

ambiguous with respect to its application to Brown’s property. The territorial limitation

provision does not relate to political entities. Thus, it is not captioned, e.g., “Political

Entity Limits.” Rather, it is captioned “Territorial Limits,” i.e., therefore relating to land

mass. Accordingly, the reference to Iron Curtain countries was for the purpose of

defining areas. Therefore, inasmuch as Prague undoubtedly was behind the Iron Curtain,

the exclusion applies.

       We realize, as Brown points out, that there possibly could be a different result in

cases involving losses at locations within the former German Democratic Republic (East

Germany), which was an Iron Curtain country. To reunify Germany, the former East

Germany became a part of the Federal Republic of Germany (formerly West Germany),

an entity that never was an Iron Curtain country. But the Czech Republic is different

from the Federal Republic of Germany, as it did not in political terms exist before the

dissolution of the Iron Curtain. Moreover, the Czech Republic and Slovakia are the

successors to Czechoslovakia which undoubtedly was behind the Iron Curtain.

Consequently, Prague and the entire Czech Republic, unlike the German Democratic

Republic, did not become part of a country that never was behind the Iron Curtain.

Therefore, the Federal Republic of Germany is not, unlike the Czech Republic, a

replacement of an Iron Curtain country.

       In reaching our result we also point out that if the loss here had been prior to



                                               6
January 1, 1993, there clearly could not have been a recovery on the policy had it been in

effect at that time. After all, everyone agrees that before that date the property was in an

Iron Curtain country. It is difficult to understand why the result should be any different

for a loss on or after that date merely because Czechoslovakia was partioned at that time,

as we see no reason to believe that the partioning somehow could have lessened the risk

that Zurich was taking. In any event, Brown does not contend that the political

dissolution of Czechoslovakia decreased the risk to property in Prague from the risk to it

immediately prior to the partion.

       In reaching our result we have not overlooked Brown’s argument that the district

court’s decision (and thus by extension our opinion) achieves “a result that is respectfully

called absurd.” Appellant’s br. at 24. He makes this statement because he correctly

points out that the exclusion does not apply in countries that never were behind the Iron

Curtain but in which, in his view, “chaos has replaced the rule of law.” 

his argument with the principle that “the proper interpretation of a

contract ‘is the one which appears to be in accord with justice and common sense and the

probable intention of the parties,’” quoting Keating v. Stadium Mgmt. Corp. 

, 124-25 (Mass. App. Ct. 1987). Appellant’s br. at 24. But this principle does not

allow us to rewrite the policy. Thus, we cannot delete the Territorial Limits provision

from the policy or delete the Iron Curtain exclusion from the provision. Moreover, we

cannot borrow principles of under inclusion from First Amendment constitutional law and



                                              7
apply them in a contract law setting so as to eliminate the Iron Curtain exclusion. Thus,

while we agree that risk to property is probably far greater in certain areas of the world

that never were behind the Iron Curtain than the risk in Prague, which we know has

redeveloped into a magnificent city, still we cannot eliminate the Iron Curtain exclusion

on the grounds that it is foolish for Zurich to include it in its policies.

       Furthermore, it is difficult for Brown to argue cogently that the “probable intention

of the parties” was to provide for coverage here. After all, Brown obtained the policy on

or about December 26, 2000, for a one-year term (it was renewed in December 2001) and

did not lease his facility in Prague until January 2002. Moreover, he testified at his

disposition that while he “reviewed the policy” when he obtained it he was not aware of

the Territorial Limits provision and did not become so “until after [he] had the losses” in

the flood. App. at 47. It is unfortunate that when Brown leased his Prague facility he did

not review his insurance for if he had read the Territorial Limits provision it surely would

have alerted him to his potential insurance coverage problem.

       The order of April 29, 2004, will be affirmed.




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