2005 D e c i sion s O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit 7-7-2005 

# W i l son v . P A P rop C slty Ins P r e c e de nt i al or N on-P r e c e de nt i al : N on-P r e c e de nt i al D ocke t N o . 04-3063

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. F or mor e inform at ion, p le as e c ont a ct Be n j amin . C arl s on@l a

w . vi ll anova . e du . Re c omme nde d C it at ion " W i l s on v . P A P r op C slty In s " (2005). 2005 D e cisio n s . P ape r 887. http://d i git alc ommon s .l a

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___________ VANE S S A WI L S ON

v. RE L I ANC E I NS UR ANC E CO M P ANY, ( PENN SYLV AN I A PRO PERTY A ND CA SUA LTY IN S U R A N C E G U A R A N T Y A S S O C IA T IO N ); M OB I L E DR E DGI NG AND P UM P I NG C OM P ANY P e n n sy lv a n ia P ro p e rtya n d C a su a lty I ns ur ance G uar antyA s s oci at i on and M o b i l e D r e d g i n g a n d P u m p i n g C o m p a n y,

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___________ O n A p p ea l from the U n it ed S tat es D istri ct C o u rt f o r th e E a ste rn D istric t o f P e n n sy lv a n ia ( D . C . C i vi l N o. 03- cv- 04055) D i s t r i ctJ udge: T he H onor abl e C l i ffor d Scot tG r een

___________ Subm i t t ed U nderT hi r d C i r cui tL A R 34. 1( a)

J une 27, 20051. A ppel l ant s cl ai m t hatG ar dners t ol e the truck fr om M obi l e, butW i l s on m ai nt ai ns

thatG ar dnerhad cont i nuous perm i t t ed ac ces s t o t he truck. 2 B efore: N Y G A A R D , S M ITH , and F ISH E R , C i rcui tJudg es.

( Fi l ed: J ul y7, 2005)

___________ OPI NI ON O F THE COURT

___________ N Y G A A R D , C i r cui tJ udge.

A ppel l ant s , R el i ance I ns ur ance C om panyand Penns y l vani a Pr oper t yand C as ual tyI ns ur ance G uar ant ee A s s oci at i on ( PPC I G A ) , appea l fr om a D i s t r i ctC our tor der gr ant i ng s um m aryj udgm entt o t he A ppel l ee, V anes s a W i l s on. B eca us e w e fi nd thatt he D i s tr i ctC our terr ed bygi vi ng pr ecl us i ve ef fec tt o a pr i ordefa ul tj udgm entbythe Super i orC our tof the St at e of D el aw ar e, w e w i l l vaca t e and r emand. I. W ilso n a c c e p ted a rid e f ro m D w a yn e G a rd n e r, an e m p lo y e e o f M o b ile D r edgi ng and Pum pi ng C om pany , i n a M obi l e ow ned vehi cl e. T he truck w as i ns ur ed by 1 R el i ance . D ur i ng t he dr i ve, t he truck w as for ced of f the r oad and W i l s on s us t ai ned s e ri o u s in

ju ri e s . W i l s on di d notow n a r egi s t er ed mot orvehi cl e, nordi d s he l i ve i n a h o u se h o ld w ith a v e h icle . T h u s, W ilso n f iled a re q u e st f

o r a rb itratio n to o b tain f irst p a rty2 . P P CI GA’ s p u rp o s e i s t o “ p r o v i d e a me a n s f o rth e p a yme n to f

c o v e r e d c l a i ms undercert ai n pr opert yand ca s ual t yi ns ur ance pol i ci es , t o avoi d exce s s i ve del ayi n t he pay m ent of such clai m s and to avo i d financial l oss t o clai m ants or poli cyho l ders as a r es ul tof the i ns ol vencyof an i ns ur er . ” 40 P A . C ON S . S TAT . A NN . § 9 9 1 .1 8 0 1 (1 ). PPC I G A has “al l r i ght s dut i es and obl i gat i ons of the i ns ol venti ns ur eras i f thati ns ur er had notbecome i ns ol vent . ” 40 P A . C ON S . S TAT . A NN . § 9 9 1 . 1 8 0 3 (b)(2 ). 3 . E ss e n tially , P P C IG A a rg u e s th a t b e c a u se G a rd n e r w a s o p e ra tin g th e v e h icle w i thoutM obi l e’ s perm i s s i on, W i l s on does notqual i fyas an “i ns ur ed. ” I f W i l s on does no tm eett he d efi nit i on of an “i nsured, ” t hen she i s not ent i t l ed to ben efi t s. 3 m edi cal benef

i t s as an i ns ur ed underthe M obi l e pol i cy . R el i ance fai l ed t o appea ratt he a rb itratio n , so W ilso n w a s a w a rd e d m e d ica l an d w a g e b e n e f its. W h e n R e lian c e f

a iled to m ake pa ym ent s on t he arbi t r at i on aw ar d, W i l s on fi l ed a Summ ons and C om pl ai nti n t he Super i orC our tof the St at e of D el aw ar e s eeki ng t o enfor ce the aw ar d. R el i ance never a p p e a re d o r a n sw e re d th e C o m p lain t. C o n se q u e n tly , a d e f a u lt j u d g m e n t w a s e n ter e d in W i l s on’ s favor . R el i ance t hen bega n m aki ng the paym ent s t o W i l s on.

W i l s on fi l ed anotheract i on i n t he Super i orC our tof D el aw ar e i n Sept ember of 2000 t o obt ai n uni ns ur ed mot or i s tbenef i t s . I n O ct oberof 2001, R el i ance w as decl ar ed i n s o l v e n tb yt h e Co mm o n we a l t h Co u r to f P e n n s y l v a n i a . Co n s e q u e n t l y , P P CI GA s t atut or i l yacqui r ed al l of R el i ance ’ s r i ght s and obl i gat i ons . I n A pr i l 2001, PPC I G A fi l ed 2 an ans w ert o t he C om pl ai ntr ai s i ng aff i r m at i ve def

ens es forthe fi r s tt i m e. W i l s on 3 r eques t ed arbi t r at i on i n D el aw ar e C ount y , Penns y l vani a, w her e the vehi cl e w as r egi s t er ed, and fi l ed thi s decl ar at or yj udgm entact i on. I n t hi s decl ar at oryj udgm entact i on, W i l s on s eeks t o det erm i ne the pr ecl us i ve ef fec tof the def

aul tj udgm entent er ed bythe S u p e ri o r C o u rt o f

D e la w a re .4 T he part i es fi l ed cr os s m ot i ons fors um m aryj udgm entbefor e the D i s t r i ct C o u rt. T h e D istric t C o u rt f o u n d th a t th e D e law a re ju d g m e n t “e sta b lish e s a ll th e e lem e n ts nece s s aryt o m ake the j udgm entval i d forthe Pl ai nt i ff t o be ent i t l ed t o an aw ar d of benef i t s . ” The C our tfound thati tw as r equi r ed t o gi ve ful l fai t h and cr edi tt o t he D el aw are C ou rt , and t hat necessaryt o the D el aw are C ou rt ’s j ud gm ent w as a det erm i nat i on t hatW i l s on w as “an i ns ur ed. ” The C our tdi d nots peci fyw hetheri tw as bas i ng i t s concl us i on t hatt he D el aw ar e j udgm entpr ecl uded r e- l i t i gat i on on t he doctr i ne of col l at er al es t oppel orr es j udi cat a. T hus , w e w i l l exami ne both. III . A lth o u g h w e a g re e w ith th e D istric t C o u rt th a t th e D e law a re ju d g m e n t is ent i t l ed t o ful l fai t h and cr edi t , t hatdoes notnece s s ar i l ym ean thati thas the pr ecl us i ve eff ectW i l s on s eeks . W i l s on s eeks a dec l ar at i on thatPPC I G A i s es t opped fr om r ai s i ng c e rta in d e f

e n se s in h e r c laim f

o r u n in su re d m o to rist b e n e f its. In o rd e r to su c c e e d o n th is cl ai m , the D el aw ar e j udgm entm us tm eetthe r equi r ement s forei thercol l at er al es t oppel or r es j udi cat a. A . C ol lat er alEs t oppel

Fi r s t , w e l ook t o w hetherPPC I G A i s col l at er al l yes t opped fr om l i t i gat i ng the i s s ue of w hetherW i l s on qual i fi es as an i ns ur ed. T he t es tforcol l at er al es t oppel r equi r es t hat( 1) a ques t i on of fa ctes s ent i al t o t he j udgm ent , ( 2) be l i t i gat ed, ( 3) and d e te rm in e d , (4 ) b ya v a lid a n d f in a l ju d g m e n t. Messi ck v. Star En t er. , 655 A . 2d 1209,5

1 2 1 1 (D e l. 19 9 5 ); R ES TAT EMEN T (S EC ON D ) J UDGMENT S § 2 7 (1 9 8 2 ). T h e d e f a u lt j udgm entent er ed byt he D el aw ar e C our tdoes notm eetthe r equi r ement s of col l at er al e s to p p e l. R ES TAT EMEN T (S EC ON D ) J UDGMENT S § 27 ( 1982) , cmt . e ( expl ai ni ng thati n a ju d g m e n t en ter e d b yd e f a u lt, n o n e o f

th e iss u e s a re a c tu a llylit ig a ted ). T h u s, P P C IG A is n o t p re v e n ted f

ro m lit ig a tin g w h e th e r W ilso n w a s a n “ in su re d ” b yc o llate ra l es to p p e l. B . R e s J u d ica ta U nl i ke col l at er al es t oppel , a def aul tj udgm entcan s uppor ta cl ai m of r es ju d ic a ta . See M

or r is v. Jones , 329 U . S. 545, 550–51 ( 1947) . U nderr es j udi cat a, “a j ud gm ent i n a p ri or sui ti nv olvi ng t he sam e part i es, or pers on s i n p ri vityw i t h them , bars a s econd s ui ton t he s ame caus e of a ct i on. ” E . g. , Madanatv. A l pha Ther apeut i c C or

p. , 719 A . 2d 489, 489 ( D el . 1998) . T he i s s ue her e i s w hetherthe D el aw ar e ca s e and the curr ent cas e pr es entt he s ame caus e of a ct i on.

I n O ’ Lear y v. Li ber t

y Mut ualI

ns ur ance Co. , 9 2 3 F . 2 d 1 0 6 2 , 1 0 6 5 (3d C ir . 1 9 9 1 ), t h e p la in tif

f w a s in ju re d w h ile o p e ra tin g a v e h ic le f o r h is e m p lo y e r. I

d. a t 1 0 6 3 . H e m ad e a n u n d er-insu red m o tori st cl aim ag ains t his em p loy er’s insu ran ce ca rri er, L ib e rt yM u tu a l. I

d. at1064. W hen Li ber t yM utual deni ed cove r age, he made a demand f o r a rb itr a tio n a n d s e le c te d a n a rb itr a to r. I d. W hen Li ber t yM utual fai l ed t o s el ectan arbi tr at or , he fi l ed a Pet i t i on t o C om pel A ppoi nt m entof an A rbi t r at ori n t he C our tof C o m m o n P le a s . I

d. In i t s answ er t o the Peti t i on , L i bertyM utual setou ti t s l egal defense f o r n o t h a v in g to p a yb e n e f its . I d. T he C our tagr eed, deni ed the pet i t i on t o compel6

a rb itr a tio n , a n d e x p la in e d th e le g a l r e a s o n s w h yO ’L e a ry c o u ld n o t s u c c e e d o n h is c la im . I d. O ’ L earyt hen fi l ed a s econd a ct i on i n fede r al courts eeki ng t o r ecove runder - i ns ur ed m o to ri s t b e n e f

its f ro m L ib e rt yM u tu a l. I

d. L ibertyM u tual claim ed that O ’L ea ry ’s f e d e ra l c o u rt a c tio n w a s b a rr e d b yre s ju d ic a ta a n d c o lla te ra l e s to p p e l. I d. W e hel d t hatt he fe der al act i on w as notbarr ed byr es j udi cat a bec aus e the tw o c a u s e s o f

a c tio n w e re n o t th e s a m e . Id . at1065. W e r eas oned thatw hi l e ther e w as n o “ b rig h t-line tes t” f

o r d e c id in g w h e n th e c a u se o f a c tio n is th e sa m e , se v e ra l f a c to rs a id th e C o u rt in m a k in g th a t d e te rm in a tio n . I d. T he fa ct or s w e cons i der ed i n O ’Leary i ncl uded: ( 1) w hethert he ac t s compl ai ned of a nd the demand forr el i ef a r e the s ame; ( 2) w h e th e r th e th e o ryo f

re c o v e ryis th e sa m e ; (3 ) w h e th e r th e w itn e ss e s a n d d o c u m e n ts n e c e s s a ry a t tr ia l a re th e s a m e ; a n d (4 ) w h e th e r t h e m a te ri a l f a c ts a lle g e d a re th e s a m e . I d. W e fou nd no ne o f t he si m i l ari t i es i n the tw o acti on s, even tho ug h theybo t h arose f ro m th e s a m e in c id e n t. I d. R a th e r, w e f

o u n d th a t th e f

irst a c tio n w a s s im p lya n a c tio n to c o m p e l arb itratio n , an d in th e se c o n d , O ’L e a ryso u g h t u n d e r-in su re d m o to rist b e n e f its d ir e c tly. I

d. T he s ame r eas oni ng as appl i ed i n O ’Leary , appl i es her e. W hen W i l s on b rou g h t her c ase b ef

o re the D elaw are co u rt , sh e so u g h t t o en fo rce an arb itrati o n aw ard th a t sh e h a d a lre a d yb e e n g ra n ted . A lth o u g h sh e m a yh a v e in c lu d e d th e u n d e rly in g f a c ts4. I n hercompl ai nt , W i l s on as s ert ed thats he w as an “i ns ur ed” unde rthe pol i cyand

D el aw are s t atutes . and al l egat i ons i n hercompl ai nt , t he ca us e of a ct i on w as s i m pl yt o enfor ce the arbi t r at i on 4 a w a rd . H e re , o n th e o th e r h a n d , W ilso n is d ire c tlyse e k in g u n in su re d m o to rist b e n e f its fr om PPC I G A . A s i n O ’Leary , t hes e ar e notthe s ame caus es of ac t i on. T hus , the s econd c o n d iti o n o f

re s ju d ica ta is n o t m e t. I V. B eca us e the D el aw ar e j udgm entdoes nots at i s fythe r equi r ement s of ei ther coll at eral est op pel orres j ud i cat a, i tdo es not have p recl usi ve ef fecti n thi s act i on . T hu s, the D i s tr i ctC our t ’ s concl us i on t hati tw as bound bythe D el aw ar e C our t ’ s det erm i nat i on th a t W ilso n w a s a n “ in su re d ” is in c o rre c t. B e c a u se th is iss u e h a s n o t b e e n c o n c lu siv e ly det erm i ned, w e w i l l vaca t e the s um m aryj udgm entand r emand forfur t herpr ocee di ngs cons i s t entw i t h t hi s opi ni on.