Matson Lumber Company v. Twin City Fire Insurance Company

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 01-1758
___________
MATSON LUMBER COMPANY,
Appellant
v.
TWIN CITY FIRE INSURANCE COMPANY
___________
On Appeal from the United States District Court
for the Western District of Pennsylvania
Magistrate Judge: The Honorable Ila Jeanne Sensenich
(D.C. Civil No. 00-cv-00001)
___________
Submitted Under Third Circuit L.A.R. 34.1(a)
Tuesday, January 8, 2002
Before: MANSMANN, RENDELL, and FUENTES, Circuit Judges
(Opinion Filed: January 17, 2002)
________________________
MEMORANDUM OPINION
________________________ FUENTES, Circuit Judge:
On March 13, 1995, Albert T. Carlisle filed a civil action in the District Court for
the Western District of Pennsylvania against Matson Lumber Company and Matson
Hardwoods, Inc. (now, by merger, Matson Lumber Company). The complaint asserted
claims for breach of contract, trespass, and conversion, alleging that Matson Lumber had
breached the terms of an agreement between Carlisle and Matson Lumber’s predecessor
in interest, when it improperly harvested trees in a "no-cut zone" on Carlisle’s property.
In addition, the complaint requested an accounting, and certain declaratory and injunctive
relief.
After commencement of the action, Carlisle voluntarily dismissed the tort claims
for trespass and conversion. Therefore, the underlying action was presented to the jury
only on Carlisle’s claims for breach of contract and declaratory relief. On December 18,
1997, the jury returned a verdict in Carlisle’s favor and awarded damages in the sum of
$110,000.
On December 10, 1999, Matson brought an insurance coverage action seeking
indemnity for the damages it was required to pay Carlisle, under a general liability
commercial insurance policy held by Twin City Fire Insurance Company ("Twin City
Fire"). That policy stated that Twin City Fire would indemnify Matson Lumber from
liability for any ’property damage’, defined as "physical damage to tangible property,
including all resulting loss of use of that property." The policy also expressly excluded
from coverage "any ’property damage’ for which the insured is obligated to pay damages
by reason of the assumption of liability in a contract or agreement."
On January 3, 2000, Twin City Fire removed the action to the District Court for
the Western District of Pennsylvania. On February 28, 2000, on cross-motions for
summary judgment, the District Court denied Matson Lumber’s motion, but granted
Twin City’s cross-motion, and dismissed Matson Lumber’s claim. See, Matson Lumber
Co. v. Twin City Fire Insurance Co., Civil Action No. 00-0001 (W.D. Penn., 2001)

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(unpublished opinion).
In its ruling, the court determined that because the exclusion language in the
policy was ’clear and unambiguous,’ and because Matson Lumber was found liable in
the underlying action solely on breach of contract, applicable Pennsylvania law does not
require Twin City to indemnify Matson. See, e.g., Redevelopment Authority of Cambria
County v. International Ins. Co., 685 A.2d 581 (Pa. Super. 1996) (en banc), appeal
denied, 695 A.2d 787 (Pa. 1997) (where "the underlying suit arises out of breach of
contract which is [excluded] by the provisions of the general liability insurance
policy...applicable case law from this and other jurisdictions compels the conclusion that
[the insurer] ...has no duty to...indemnify [the insured]"). Matson Lumber Company now
appeals the District Court’s order.
After a careful review of the briefs and appendices submitted by the parties, we
find no basis for disturbing the District Court’s rulings. Therefore, we will affirm the
order, denying Plaintiff/Appellant Matson Lumber Company’s motion for summary
judgment and granting Defendant/Appellee Twin City Fire Insurance Company’s motion
for summary judgment, substantially for the reasons expressed by Magistrate Judge
Sensenich in her well-reasoned memorandum opinion. Id. at 7-13.
_____________________________
TO THE CLERK OF THE COURT:
Kindly file the foregoing Opinion.
/s/Julio M. Fuentes
Circuit Judg

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