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. e du/thir dc ir c uit_2001/57Filed March 21, 2001

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 00-5157

NEW CASTLE COUNTY DE,

Appellant

v.

NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF DELAWARE (D.C. No. 96-cv-00504) District Judge: The Honorable Roderick R. McKelvie

Argued: October 31, 2000

BEFORE: SCIRICA, NYGAARD, and BARRY, Circuit Judges.

(Filed: March 21, 2001)

Richard E. Poole, Esq. Peter J. Walsh, Jr., Esq. (Argued) Potter, Anderson & Corroon

1313 Market Street

P.O. Box 951 Wilmington, DE 19899 Counsel for AppellantChristopher J. Sipe, Esq. (Argued)

Bailey & Wetzel

716 Tatnall Street

P.O. Box 2034 Wilmington, DE 19801 Counsel for Appellee

Daniel E. Troy, Esq. Wiley, Rein & Fielding 1776 K Street, N.W. Washington, DC 20006 Counsel for Amicus-appellee INS ENV Litigation

OPINION OF THE COURT

NYGAARD, Circuit Judge.

This appeal requires us to interpr et the phrase, " invasion of the right of private occupancy," under Delawar e law and determine whether it is ambiguous. The phrase is wi dely used in insurance policies and has been the subject of heated litigation throughout the entire country ove r the past thirty years. Because Delaware case law pr ovi des no clear precedent, both parties cite numer ous decisi ons outside the state. Some authority suggests that we should apply the doctrine of ejusdem generis and construe the phrase in relation to the more specific terms ("wro ngful eviction" and "wrongful entry") pr eceding it. Such a ruling, however, would fly in the face of commonsense and d eclare unambiguous a term that has generated hundr eds of law suits and widely varying judicial interpretations. We refuse to do that, and instead hold that an "invasion of t he right of private occupancy" is ambiguous and should be construed in favor of New Castle County. We therefo re reverse the District Court's grant of summary judgm ent.

I.

New Castle County is a political subdivision of the State of Delaware. It is responsible for , among other th ings, the permitting and zoning of real property within its

2geographical borders. In order to pr otect itself, its officials,

and its employees from legal liability, it is commo n practice for New Castle to purchase insurance. Between 1991 and 1993, New Castle purchased a number of policies fro m National Union Fire Insurance Company of Pittsburgh

, Pennsylvania. The policies were of two general type s: (1) Public Officials Liability ("POL") and (2) Commerci al and General Liability ("CGL"). This appeal focuses on a CGL policy that New Castle purchased from National Unio n to cover the period from July 1, 1992 to July 1, 1993.

The parties disagree whether National Union has an obligation to defend and indemnify New Castle in a number of law suits arising from zoning and per mitting de cisions. In 1992, a Delaware real estate developer named Fra nk Acierno filed the first of three complaints, which eventually cost the County approximately one million dollars i n legal expenses to defend.

Acierno owns two tracts of land within New Castle County. The first is located near a shopping mall a nd the second is referred to as Westhampton. In 1992, New Castle frustrated Acierno's plans to develop both tracts. First, it denied a building permit for the mall pr operty, an d second, it voided Acierno's record plan for the Westhampton property and instead rezoned it.

On July 1, 1992, Acierno filed his first suit, cont esting the denial of the building permit for the mall prop erty ("Acierno I"). He claimed, under 42 U.S.C. S 1983, that New Castle had deprived him of property without due pro cess of law, and had violated the Equal Protection Clause o f the Fourteenth Amendment by arbitrarily treating him differently than other developers. The District Cou rt granted preliminary injunctive relief in favor of A cierno. See Acierno v. Mitchell, 1992 WL 694590 (D. Del. 1992). We reversed, holding that the case was not ripe becaus e the County Board of Adjustment had yet to rule on the b uilding permit. See Acierno v. Mitchell, 6 F.3d 970 (3d Cir . 1993).

One day after filing his first claim, Acier no file d a second suit, this time challenging New Castle's actions r egarding the Westhampton property ("Acierno II"). He again c laimed he had suffered due process and equal protection

3violations. A complicated series of rulings followe d.1

Eventually, the District Court granted summary judg ment in favor of the County on most of Acierno's claims. A number of his claims, however, remain undecided.

Acierno filed his third suit on December 17, 1993 ("Acierno III"). In it, he ar gued that his claim i n Acierno I (regarding the mall property) had become ripe, beca use the County Board of Adjustment had refused to issue a building permit. The District Court again granted a preliminary injunction in his favor. See Acierno v. New Castle County, 1994 LEXIS 1683 (D. Del. 1994). W e reversed and remanded the case for further proceedi ngs. See Acierno v. New Castle County, 40 F .3d 645 (3d Cir. 1994). On October 24, 1997, the parties settled Aci erno III with an agreement requiring New Castle to issue a b uilding permit for the mall property and pay Acierno's atto rneys' fees up to $250,000.

Shortly after Acierno filed his claims, the County attempted to contact National Union to discuss the POL and CGL policies. After almost a year of unsuccessf ul inquiries by New Castle, National Union sent a lett er on June 25, 1993 stating that Acierno's claims"would n ot be covered under the CGL policy." However , on July 9, 1993, National Union indicated that it would tentatively undertake New Castle's defense under the POL policy . Its letter noted, in some detail, that National Union w as not

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1. First, the District Court granted summary judgme nt to the County on the procedural due process claims. It denied summar y judgment, however, as to all other claims, including those ag ainst the individual County officers who had sought legislative or quali fied immunity. See Acierno v. Cloutier, 1993 WL 215133 (D. Del. 1993). They appealed to this Court. A panel of the Third Circuit r eversed the denial of summary judgment to former officers, but found jurisdiction lacking in respect to the current officers. Upon motion for r ehearing, t his Court, sitting en banc, vacated the panel decision, held that ther e was jurisdiction over both current and former officers, and r eversed the District Court's

denial of summary judgment to them. See Acierno v. Cloutie r, 40 F.3d 597 (3d Cir. 1994). The District Court conducted further pr oceedings, and on May 23, 2000, it granted summary judgment to the Co unty on some of Acierno's outstanding claims. See Acier no v. New C astle County, C.A. No. 92-385 (D. Del. 2000).

4waiving its rights to refuse coverage later . Over the following

year, legal expenses mounted and in May 1994, Natio nal Union filed suit against the County, seeking a decl aration that it was not obligated to continue coverage. New Castle contested the claim, but the parties eventually set tled, agreeing to a buy-out of the POL policy. The agreem ent resolved the dispute over the POL policy, but expre ssly did not address the CGL policy.

On June 13, 1996, New Castle sent a letter to Natio nal Union renewing its request for coverage of its lega l expenses and liability under the CGL policy. Nation al Union denied coverage, and in response, the Countyfiled t his declaratory judgment action. On December 30, 1997, the District Court granted National Union's motion for summary judgment, holding that Acierno's suit, and its associated expenses and liabilities, were not cover ed by the CGL policy. Specifically, the court held that Natio nal Union was only obligated to defend New Castle in suits ar ising from one of the policy's enumerated "personal injur ies." The only arguably applicable provision, Definition 10(c ), defines "personal injury" as a harm resulting from:

c. The wrongful eviction from, wr ongful ent ry into, or invasion of the right of private occupancy o f a room, dwelling or premises that a person occ upies by or on behalf of its owner, landlor d or l essor; . . .

The District Court held that this definition was unambiguous and required the County to act as an "o wner, landlord or lessor" of Acierno's pr operty. Because it had not, the court granted summary judgment in favor of

National Union. The District Court did not addr ess whether

Acierno's claims constituted an "invasion of the ri ght of private occupancy."

New Castle appealed, and we reversed. See New Castl e County v. National Union Fire Ins. Co., 174 F.3d 33 8, 342 (3d Cir. 1999). We held that the "by or on behalf o f " language of Definition 10(c) was ambiguous and shou ld not be construed to preclude coverage.2 We therefore r emanded

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2. The parties disagreed over which wor ds the disp uted language modified. National Union argued that the language m odified the wrongful

5the case to determine whether New Castle's alleged actions

could constitute an "invasion of [Acier no's] right of private occupancy." Id. at 352. The District Court, on rema nd, again ruled against the County, granting summary judgment in favor of National Union. It held that t he plain meaning of the "invasion" language was ambiguous, b ut that its context suggested it "should be construed to encompass only those actions of the same general ty pe or class as `wrongful eviction' and `wr ongful entry.' " Because Acierno failed to allege an eviction, wr ongful ent ry, or similar injury, the District Court held that the CG L policy did not apply. New Castle appealed.

II.

Jurisdiction is premised upon diversity of citizens hip. Therefore, we must apply the substantive law of Del aware. See Erie R.R. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct . 817, 82 L.Ed. 1188 (1938). The sole issue for review is whether Acierno's claims, if true, constitute an "invasion of [his] right of private occupancy." If they do, the CGL po licy requires National Union to cover the County's legal expenses and liability. This is a legal question of contractual interpretation. Because the Delawar e S upreme

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acts. Under its interpretation, an eviction, entry, or invasion must be committed by the "owner, landlord or lessor" of the premises. At oral argument, counsel for National Union suggested that a proper reading of the definition required one to stop and"breathe" be tween the words "occupies" and "by." The same ef fect is achieved b y ignoring a number

of words:

The wrongful eviction from, wrongful entry i nto, or invasion of the right of private occupancy of a room, dwelli ng or premises . . . by

or on behalf of its owner, landlord or lessor;

. . .

New Castle, on the other hand, argued that the lang uage modified the words that immediately preceded it ("that a person occupies"). According to New Castle, the disputed language described "the possessory interest of the person aggrieved." New Castle Co., 174 F.3d at 346. The wrongful acts must be committed against a person who has the right to occupy the premises. We found both interpretations reasona ble, and therefore held the language was ambiguous.

6Court has yet to address the issue directly, we mus t predict

how it would rule. See New Castle County v. Nationa l Union Fire Ins. Co., 174 F.3d 338, 342 (3d Cir. 1999); Ep stein Family P'ship v. Kmart Corp., 13 F.3d 762, 766 (3d Cir. 1994).

The District Court construed the CGL policy narr ow ly and granted summary judgment in favor of National U nion. Our review of the District Court's grant of summary judgment is plenary. See New Castle County, 174 F.3 d at 342; Pacific Indem. Co. v. Linn, 766 F .2d 754, 760 (3d Cir. 1985).

A. Delaware Insurance Law

This is the second time that we have reviewed alleg edly ambiguous language in Definition 10(c) of the CGL p olicy. See New Castle County, 174 F.3d at 344-51. The prev ious panel's discussion of Delaware law pertaining to in surance policy interpretation is a good starting point for our analysis:

Before an insurer is obligated to defend or indemnify a policyholder, the insured must demonstrate t hat coverage is available under the policy. An i nsur er's duty to defend is broader than its duty to i ndemnify,

but `is limited to suits which assert claims for which it has assumed liability under the policy.' `[W ]here there exists some doubt as to whether the complain t against the insured alleges a risk insured against, that doubt

should be resolved in favor of the insur ed. ' Most importantly therefore, an insurer is`require d to defend any action which potentially states a claim which is covered under the policy.' Thus, in this cas e, if the Acierno actions potentially state a claim th at is covered under definition 10(c), National is requir e d to defend the county in those actions.

Whether the Acierno actions potentially stat e a claim for which National has assumed liability dep ends upon how we interpret definition 10(c). As a basi c matter, Delaware law requires us to interpr et insur ance contracts `in a common sense manner.' W e mu st also

7examine the disputed language in the context of the

entire policy.

`Absent some ambiguity, Delaware courts will not destroy or twist policy language under the g uise of construing it,' because `creating an ambigui ty where none exists could, in effect, create a new c ontract with rights, liabilities and duties to which the parties ha[ve] not assented.' When policy language is ambig uous, however, under Delaware law this Court must apply the doctrine of contra proferentem . That is , ambiguous language must be construed against the draft er and in conformance with the reasonable expectations of the

insured.

The premise underlying the principle of cont ra proferentem is that an insurance contract is one of adhesion. As the Delaware Supreme Court r ec ently explained,

[T]he insurer . . . is the entity in control of the process of articulating the terms [of an ins urance contract]. The other party . . . usually has very little to say about those terms except to take them or leave them or to select from limited options of fered by the insurer. . . . Therefor e, it is incu mbent upon the dominant party to make the terms clear . Convoluted or confusing terms are the pr obl em of

the insurer . . . not the insured. . . .

As noted earlier, due to the insurer's domin ant position, when an ambiguity is found in insu rance policy language, we must construe the langua ge against the insurer as a matter of Delawar e law. And therefore, unlike with other types of contra cts, we need not inquire into the parties' actual intent.

Because ambiguous language is construed agai nst the insurer as a matter of law, we take special note of Delaware law for determining whether languag e is ambiguous. `The settled test for ambiguity i s whether the provisions in controversy are r easonabl y or fairly susceptible of different interpretations or may have two or more different meanings.' An insurance po licy is not ambiguous, however, `merely because two conf licting

8interpretations may be suggested. Rather , b oth

interpretations must reflect a r easonable r eading of the contractual language.' Thus, we must examine , not only whether the county's reading of definit ion 10(c) is possible, but also whether it is reasonable.

New Castle County, 174 F.3d at 342-44 (citations om itted). Thus, in order to assess National Union's obligatio ns, Delaware law requires us to ask whether the Acierno suits potentially state a claim under Definition 10(c) of the CGL policy. See id. at 343. We must answer in the affir mative if the language of the policy is ambiguous as to its c overage of the specific claims. An insurance policy is ambi guous if there is more than one reasonable interpretation of its terms. The Delaware Supreme Court has not addressed whether an "invasion of the right of private occupa ncy" is ambiguous, and both parties agree that lower court opinions in the state provide no clear answer . As a result, we must look outside of Delaware, to other state co urt decisions and relevant public policy, to r each a d ecision.3

B. Non-Delaware Precedent

State courts outside of Delaware have disagr eed ov er whether an "invasion of the right of private occupa ncy" is ambiguous. A number of state courts have found the disputed language unambiguous, suggesting that it i s inapplicable to Acierno's claims. A smaller , but n ot insignificant, number of decisions have held the op posite -- that an invasion of the right of private occupancy is ambiguous and must therefore be construed liberally

.

Of the decisions that hold the language to be unambiguous, most adopt one of three lines of r eas oning. These approaches, however, are not sharply defined and often blur. The first and perhaps most commonly emp loyed strategy is to examine the context in which the phr ase is used (it almost always follows some variation of"wr ongful eviction" and "wrongful entry"). States cite the La tin maxim

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3. Both parties refer extensively to dictionary def initions and the "plain meaning" of the terms. Not surprisingly, their argu ments conflict and are ultimately inconclusive. As a result, we find this discussion unhelpful.

9"ejusdem generis," a tool of construction that appl ies when

a general term or phrase follows an enumeration of specific offenses.4 Ejusdem generis requires courts to const rue the general phrase narrowly, so that it relates only to offenses of the same kind or class as those specifically enu merated. As the Delaware Supreme Court clearly articulated o ver eighty years ago in Donaghy v. State, 100 A. 696, 7 07 (Del. 1917):

The doctrine of ejusdem generis . . . is a r ule of statutory construction . . . that where gene ral words follow the enumeration of particular classes of persons or things, the general words will be constru ed as applicable only to persons or things of the same general nature or class as those enumerated.

. . . [S]uch a rule is based on the obvious r easo n that if it was intended that the general words should b e used in their unrestricted sense, no mention would h ave been made of the particular classes.

See also Triple C Railcar Serv., Inc. v. City of Wi lmington, 630 A.2d 629, 631 (Del. 1993). Applying ejusdem gen eris would limit the right of private occupancy to of fe nses, similar to eviction or wrongful entry, that include a violation of the claimant's possessory inter est in real property. See Groshong v. Mutual of Enumclaw Ins. C o., 329 Or. 303, 312-14 (1999) ("[T]he phrase,`other invasi on of the right of private occupancy' applies only to of fens es that involve a possessory interest in the pr emises at i ssue.").5

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4. They also cite a "related" canon of construction , noscitur a sociis. Only the amicus, however, presents a case that applies t he concept. In City of Delray Beach, 85 F.3d at 1534, the Eleventh Circuit refers to a Florida state court decision that suggests that the two Lat in maxims are more than simply "related":

[Ejusdem generis] is actually an application of the broader maxim `noscitur a sociis' which means that general and specific words capable of analogous meaning when associated together take color from each other so that the general wor ds a re restricted to a

sense analogous to the specific words.

Thus, noscitur a sociis is simply a br oad form of ejusdem generis and requires no additional analysis.

5. In addition to Oregon, other states that have ut ilized ejusdem generis in a similar context include Wisconsin, Florida, Ma ssachusetts, Indiana,

10Because Acierno's claims do not allege a violation of his

possessory interest, adopting this appr oach would require

us to rule in favor of National Union.

There is a critical distinction, however , between this case and most of the decisions that apply ejusdem generi s. Almost all of the precedent invoking the Latin maxi m involve insurance policies that include the phrase" other invasion of the right of private occupancy." Some c ourts have explicitly focused on the presence of the word "other":

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Michigan, Illinois, Oklahoma, California, and New Y ork. See United States v. Security Mgmt. Co., Inc., 96 F .3d 260, 2 64 n.4 (7th Cir. 1996) (applying Wisconsin law and holding that"[t]he ejus dem generis rule makes clear that [a] right of occupancy must exist before an individual may be said to have suffered an `invasion of the ri ght of private occupancy' "); City of Delray Beach, Florida v. Agr icultural Ins. Co., 85 F.3d 1527, 1534 (11th Cir. 1996) (applying Florida law and holding that "when read in context, the phrase `other invasion o f the right of private occupancy' means an offense tantamount to wr ongful entry or eviction and requires an impingement upon possessory rights) ; Dryden Oil Co. of New England, Inc. v. Travelers Indem. Co., 91 F.3d 278, 288 (1st Cir. 1996) (applying ejusdem generis under Massachusetts law); Red Ball Leasing, Inc. v. Hartford Accident and Indem. Co., 915 F.2d 306, 312 (7th Cir. 1990) (applying ejusdem generis under Indiana law); Aetna Casualty & Surety Co. v. Dow Chemical Co., 933 F .Supp. 675, 680 (E.D. Mich. 1996) (interpreting Michigan law as adopting ejusde m generis); Martin v. Brunzelle, 699 F.Supp. 167, 170 (N.D. Ill. 1988) (" Ejusdem generis principles draw on the sensible notion that wor ds such as `or other invasion of the right of private occupancy' ar e in tended to encompass actions of the same general type as, though not spe cifically embraced within, `wrongful entry or eviction.' "); Liberty M utual Ins. Co. v. East Central Oklahoma Elec. Coop., 97 F.3d 383, 390-91 ( Okla. 1996) ("Instead of creating an ambiguity, the ter m `inva sion of the right of private occupancy' is included in insurance policie s simply to provide a `catch-all' category of offenses of the same genera l type as "wrongful entry or eviction."); Stein-Brief Group, Inc. v. Ho me Indem. Co., 65 Cal.App.4th 364, 373 (1998); County of Columbia v. Continental Ins. Co., 595 N.Y.S.2d 988, 991 (1993) ("By application of th e principle of ejusdem generis, the key to interpreting the phrase`other i nvasion of the right of private occupancy' lies in the definition of `wrong ful entry' and `eviction,' both of which involve actual interference with poss essory rights to real property.").

11[T]his court has stated that `the rule of ej usdem generis

in contracts is peculiarly applicable where specific enumeration precedes the word `other' follow ed by general words. . . . use of the term`other' to connect the phrase `invasion of the right of private occupancy' to the wording that precedes it satisfies us that the parties intended that such invasion also be limited to claims that involve a possessory interest in the premises.

Groshong, 329 Or. at 313-14; see also, e.g., Libert y Mutual, 97 F.3d at 390; Security Mgmt., 96 F .3d at n.4 (ap plying ejusdem generis, but noting that its application"wo uld have more force if the word `other' preceded the ge neral term."). The policy at issue in this case does not include the

word "other."

Neither National Union nor the amicus address this distinction, or why the principle should be applied . Instead, the amicus conclusively states, without further ela boration, that "[e]mploying the principle of ejusdem generis, rather than contra proferentem, adher es to the requiremen t that words be interpreted in the proper context and ensu res greater fidelity to the meaning of the disputed ter m and the intentions of the parties to the insurance contract ."6

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6. Contra proferentem is yet another Latin maxim, w hich requires that ambiguous and confusing policy language be construe d against the insurer. The amicus suggests that the court must ch oose between applying contra preferentem and ejusdem generis. Th is is incorrect. Ejusdem generis is used to determine whether a phra se is ambiguous. Contra preferentem only applies after a determinati on of ambiguity is made. See Penn Mut. Life Ins. Co. v. Oglesby, 695 A .2d 1146, 1149-50 (Del. 1997) ("[I]f the contract . . . is ambiguous, the principle of

contra proferentem dictates that the contract must be cons trued against the drafter."). The County, in contrast, r ecognizes th is distinction, but nonetheless argues that contra preferentem should b e applied because the District Court explicitly found the disputed la nguage ambiguous. See Appellant's brief at 26 ("[T]he District Court igno red the doctrine of

contra proferentem and construed admittedly ambiguous poli cy language against the insured.") (emphasis added). This is al so incorrect. The District Court merely found that the "plain meaning " of the phrase was ambiguous. It then examined the context of the lang uage, applied ejusdem generis, and held that its meaning was clea r. Before we can apply contra proferentem, we must first review this holding and determine whether the disputed phrase was ambiguous

.

12Amicus brief at 19 n.5. This begs the question, how ever, of

whether applying ejusdem generis in this case would help clarify the parties' intentions. See White v. Cr ow ley, 1986 WL 5850, *2 (Del.Super. 1986) ("As with all rules o f statutory construction, [ejusdem generis] does not apply when the context shows a contrary intention. In oth er words, the goal of statutory construction is tofind the intent of the [contracting parties], and rules of s tatutory construction are merely means towar d that end."). Because National Union has failed to demonstrate, and we fa il to believe, that applying ejusdem generis is r equired or even helpful, our inquiry must continue.

Under the second approach, some states have conclud ed, after reviewing the entirety of a policy, that an " invasion of the right of private occupancy" is only available i n a landlord-tenant context. See Dryden Oil Co. of New England, Inc. v. Travelers Indemnity Company , 91 F .3d 278, 288 (1st Cir. 1996) ("Under Massachusetts law, then , the phrase `other invasion of the right of private occu pancy' would mean `other invasion of the [tenant's] right of private occupancy,' since an actionable `wrongful entry or eviction' claim under Massachusetts law may be brought only b y a tenant against a landlord.").7 There is no landlor d-tenant relationship in this case. However, New Castle cite s a long list of cases that have rejected this position. See Appellant's

Brief at 20 n.5. There is no need to discuss each o f these cases, except to note that a number of states allow a property owner, like Mr. Acier no, to bring such a claim.8

Third, some states have held that an "invasion of t he right of private occupancy" requires a physical inv asion,

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7. See also State Farm Fire & Cas. Co. v. Burkhardt , 96 F.Supp.2d 1343, 1351 (M.D. Ala. 2000) (applying Alabama law); Decor ative Ctr. v. Employers Cas., 833 S.W.2d 257, 262 (T ex.App. 1992 ) ("The phrase `other invasion of the right of private occupancy' provides coverage only if there exists a landlord-tenant r elationship, or if the plaintiff has a vested property right.").

8. See, e.g., Royal Ins. Co. of America v. Kirksvil le Coll. of Osteopathic Med., 191 F.3d 959, 963 (8th Cir. 1999); Pipefitter s Welfare Educ. Fund v. Westchester Fire Ins. Co., 976 F.2d 1037, 1040 ( 7th Cir. 1992); Titan Holdings Syndicate, Inc. v. City of Keene, 898 F .2 d 265, 272-73 (1st Cir. 1990).

13such as a trespass. See Sterling Builders, Inc. v. United

National Ins. Co., 79 Cal.App.4th 105, 108-09 (2000 ) ("[T]here is no such thing as a `non-physical invas ion' of a right of private occupancy. `Occupancy' r equires a physical entry upon real property."). Accor ding to this lin e of reasoning, merely impinging upon a claimant's right to use or enjoy real property does not constitute such an invasion. See Columbia National Ins. v. Pacesetter Homes, Inc . , 532 N.W.2d 1, 10 (Neb. 1995) ("[T]he right of private o ccupancy is the legal right to occupy premises, not the righ t to enjoy occupying those premises.").9 Acierno does not alle ge a physical invasion of any sort, and therefor e his c laims would not qualify.

A smaller, but not insignificant, number of decisio ns support New Castle's position. Although less unifor m in their approach, these decisions, in aggr egate, add ress each of National Union's arguments. First, some courts h ave held that an "invasion of the right of private occu pancy" is ambiguous as a matter of law.10 The most factually relevant decisions are those of New Hampshire. In Town of Go shen v. Grange Mut. Ins. Co., 424 A.2d 822, 825 (N.H. 19 80), a

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9. The amicus makes a related argument by distingui shing between use and occupancy. See Amicus brief at 10-16 (contendin g that the County's policy only covers suits arising out of harm to a c laimant's occupancy, whereas Acierno's suits claim damages r elating to future use). For authority, the amicus relies primarily upon a numbe r of Delaware statutes that refer to "use or occupancy." Accordin g to the amicus, the presence of both terms indicates that "use" and "oc cupancy" are distinct concepts. We find this unconvincing. In all of the examples presented, the two words consistently appear together , amidst a long list of other concepts. It is equally reasonable to conclude that the legislature used the two words as synonyms.

10. See, e.g., Beltway Mgmt. Co. v. Lexington-Landm ark Ins. Co., 746 F.Supp. 1145, 1150 (D.D.C. 1990) ("The phrase `othe r invasion of the right of private occupancy' is ambiguous."); Gould Inc. v. Arkwright Mut. Ins. Co., 829 F.Supp. 722, 729 (M.D. Pa 1993) ("We, therefore, find that the personal injury endorsement with its coverage f or `wrongful entry' and `other invasion of the right of private occupan cy', is, in the context of the entire policy, . . . ambiguous."); Hirschber g v. Lumbermans Mut. Cas., 798 F.Supp. 600, 604 (N.D. Cal. 1992) ("At a minimum, the term `other invasion of the right of private occupancy' is ambiguous, and any ambiguity is to be resolved against the insur er.")

14property owner sued a town planning boar d for refu sing to

allow him to develop a subdivision. He claimed civi l rights violations under 42 U.S.C. S 1983. The supr eme cou rt of the state held that the town's insurance policy, wh ich covered suits arising from "other invasion of the r ight of private occupancy," was unclear. As a r esult, it c onstrued the policy against the insurer and held that covera ge extended to damages arising from the boar d's denia l of "plaintiff 's right to free enjoyment of his proper ty." See id. at 824-25. Later, the First Circuit Court of Appeal s, applying New Hampshire law, held that "other invasi on of the right of private occupancy" included har m resu lting from "noxious odors, noise and light" that interfer ed with the use of property. See Titan Holdings Syndicate, Inc. v. City of Keene, New Hampshire, 898 F .2d 265, 272-73 (1st Cir. 1990). The Court noted that, "T own of Goshen does not require an allegation of physical invasion before a claim comes within coverage for liability arising fr om ` other invasion of the right of private occupancy.' " Id. at 273.

Although a number of states have criticized or r ef used to follow Town of Goshen, see Sterling Builders, 79 Cal.App.4th at 110-11, others have reached the same conclusion. The Supreme Court of Washington has hel d that both nuisance and trespass claims qualify as " other invasion[s] of the right of private occupancy." See Kitsap County v. Allstate Ins. Co., 964 P.2d 1173, 1185-86 (Wash. 1998). In Kitsap, the court noted that the"plain, o rdinary, and popular meaning that an average purchaser of insurance would ascribe to the phrase `other invasi on of the right of private occupancy' would include a tr espa ss on or against a person's right to use premises or land." Id. at 1185 (emphasis added). The court also consider ed a nd rejected the application of ejusdem generis .

Even California, which has almost unifor mly reject ed New Hampshire's approach, has occasionally softened its interpretation of the disputed language. In Martin Marietta Corp. v. Insurance Co. of North America, 40 Cal.App .4th 1113, 1134 (1996), a state court of appeal held tha t" `other invasion of the right of private occupancy' is susc eptible to numerous interpretations, and under California's ru les of contract interpretation, it must be construed in fa vor of the

15insured." The case involved environmental claims by federal

and state entities against Martin Marietta.

Finally, some courts have held the language at issu e is ambiguous simply because of the wide variance among judicial decisions. See Travelers Indem. Co. v. Sum mit Corp. of America, 715 N.E.2d 926, 937-38 (Ind. 1999) ("Th is disagreement among the courts further indicates the ambiguity of the personal injury provisions."). We have, in the past, adopted a similar, practical appr oach. S ee Little v. MGIC Indem. Corp., 836 F.2d 789, 796 (3r d Cir. 198 7) ("[T]hat different courts have arrived at conflicti ng interpretations of the policy is strongly indicativ e of the policy's essential ambiguity.").

In sum, a review of relevant, non-Delawar e case la w, suggests that there is a greater number of cases fa voring National Union's position. However, "our job is not simply to count the number of cases on both sides," New Ca stle County, 174 F.3d at 347. We must instead evaluate t he underlying reasoning. Reducing counsels' many argum ents to their most persuasive essence, we believe that t he existing non-Delaware caselaw can be characterized as follows: on one hand, a fairly large number of stat e court decisions apply the doctrine of ejusdem generis an d find no ambiguity; on the other, a smaller number of decisi ons rely upon either broad, conclusory language or narr ow, factspecific analysis to reach the opposite r esult. We find neither approach convincing. As a result, we turn t o public policy concerns and commonsense.

C. Public Policy and Commonsense

Of the three briefs submitted in this case, only th e amicus attempts a public policy argument:

[C]ourts create great uncertainty when they disregard express, unambiguous provisions defining and circumscribing the risks that the insur er a grees to

cover. Failure to enforce the insurance cont ract as written can affect the price and availabilit y of coverage

for those who lack the resources to self-ins ure -- most notably, individuals and small businesses.

16Amicus brief at 25 (citations omitted) (emphasis ad ded). We

completely agree with this statement. In fact, one would be hard-pressed to find anyone to disagree. The proble m is that this statement assumes away the central issue in this case - whether the disputed policy language is ambi guous. It is beyond peradventure, as the amicus contends, that "[i]nsurance serves an important economic and socia l function," and courts must enforce unambiguous poli cy language in order to maintain its viability. The qu estion remains, however, whether the CGL policy is unambig uous, and none of the parties provides any policy ar gume nts for addressing that particular question.

In our opinion, the most important and relevant observation in this case was only casually r eferen ced by the

District Court. The court noted:

Insurance companies have included the clause `wrongful eviction from, wrongful entry into , or invasion of the right of private occupancy' in their policies for at least twenty years, and litigants have repea tedly disputed the meaning of the term `invasion o f the right of private occupancy.' . . .

After at least two decades of litigation ove r the meaning of the term `invasion of the right of privat e occupancy,'

courts have not arrived at a uniform definit ion of the term. Rather than attempt to construe the te r m `invasion of the right of private occupancy' solely based on its plain meaning, courts have concluded that the term is ambiguous, and have resorted to othe r techniques of contract interpretation. This court, similarly will examine the meaning of the te r m in the broader context of the CGL policy.

Insurance companies continue to employ the t er m `invasion of the right of private occupancy' in their policies, despite twenty years of legal deci sionsfinding that this term is ambiguous. It is instructi ve to ask why.

We also find it instructive to ask "why?" -- becaus e we cannot conceive of an answer. The District Court co ncluded that insurance companies intend the disputed langua ge to be read in context, to take meaning from the specif ic terms

17it follows (almost always "wrongful eviction" and " wrongful

entry"). Perhaps this is true. But even if it is, t heir intent has been, and continues to be, unclear.

A Westlaw search from 1973 to the present reveals 2 49 cases that include the phrase "invasion of the righ t of private occupancy." Approximately half of those dec isions required a direct interpretation of the disputed la nguage. In fact, National Union itself has been forced to liti gate the meaning of the phrase on numerous occasions, and ha s lost at least four times.11 Yet, in spite of this e xtensive history of litigation, and obvious disagreement amo ngst courts and parties alike, insurance companies, and National Union in particular, continue to use the p hrase without any language defining its scope. Once again , we must ask, "why?"

It is well settled under Delaware law that insuranc e policies are contracts of adhesion. Ther efore it i s the responsibility of the insurer to write clear polici es with adequately defined terms:

[Insurance contracts] must be interpreted in a common sense manner, giving effect to all pr ovisio ns so that a reasonable policyholder can understand the s cope and limitation of coverage. It is the obligation of the insurer to state clearly the terms of the policy . .

..

The policy behind this principle is that the insur er or the issuer, as the case may be, is the entit y in control of the process of articulating the terms. Th e other party, whether it be the ordinary insur ed o r the investor, usually has very little say about those terms

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11. See Kitsap County, 964 P.2d at 1184-86; Rozet v . City Ins. Co., 24 F.3d 249 (9th Cir. 1994) (unpublished decision); Gr eat Northern Nekoosa Corp. v. Aetna Cas. & Sur. Co., 921 F .Supp. 401, 4 16-18 (N.D. Miss. 1996); Gould, 829 F.Supp. at 724, 729. National Uni on has, on other occasions, prevailed in similar suits. See e.g., Ci ty of Oakland v.

National Union Fire Ins. Co. of Pittsburgh, Pa , 56 F.3d 70 (9th Cir. 1995) (unpublished opinion); Wackenhut Servs., Inc. v. Na tional Union Fire Ins. Co. of Pittsburgh, Pennsylvania, 15 F .Supp.2d 1314 , 1323-24 (S.D. Fla. 1998); Stein-Brief, 65 Cal.App.4th at 368, 373; O'B rien Energy Sys., Inc. v. American Employers' Ins. Co., 629 A.2d 957, 959, 963-63 (Pa.Super. 1993).

18except to take them or leave them or to sele ct fr om

limited options offered by the insur er or i ssuer. Therefore, it is incumbent upon the dominant party to make terms clear. Convoluted or confusing te rms are the problem of the insurer or issuer -- not the insured.

Penn Mutual, 695 A.2d at 1149-50. Because of the on esided nature of insurance policies, insurance compa nies are in the best position to clarify potentially amb iguous terms and avoid future disputes. The persistent lit igation surrounding the meaning of "invasion of the right o f private occupancy" strongly suggests that they indeed shoul d do so. A simple definition of the phrase, indicating, for example, that it refers only to offenses requiring a physical invasion (or only to those involving a tenant-landl ord dispute, etc.) would be dispositive.

At oral argument, we asked counsel why National Uni on had chosen not to further define the contested phra se. Counsel responded that "this phraseology makes the policy marketable." In response to our follow-up question, counsel denied that the phrase was "marketable" solely beca use it created confusion; instead, he stated that"the purp ose of this policy language is that it covers fact patter ns and situations and scenarios that don't narrowly fall w ithin the parameters of a `wrongful entry' or `wr ongful evic tion.' " Even if this is true, we fail to see how further de fining the scope of the language would undercut this purpose. If anything, it would help clarify which fact patter n s, situations, and scenarios are indeed cover ed. We w ill not speculate as to why National Union has consistently refused to clarify its language, but one thing is c lear: The provision at issue in the National Union CGL policy is ambiguous.

There is a time and place for reliance upon Latin m axims and principles of statutory construction, but not a t the expense of commonsense. See SI Mgmt. L.P . v. Winin ger, 707 A.2d 37, 42 (Del. 1998) (holding that insurance contracts "must be interpreted in a common sense ma nner, giving effect to all provisions so that a reasonabl e policyholder can understand the scope and limitatio n of coverage. It is the obligation of the insurer to st ate clearly the terms of the policy."). A single phrase, which insurance

19companies have consistently refused to define, and that has

generated literally hundreds of lawsuits, with wide ly varying results, cannot, under our application of commonsen se, be termed unambiguous. As such, we hold that an"invasi on of the right of private occupancy" must be construe d liberally, and that the CGL policy does cover the C ounty's legal expenses and its liability arising from Acier no's

claims.

We reverse the District Court's grant of summary judgment in favor of National Union, and remand the cause for further proceedings consistent with this opinio n.

20SCIRICA, Circuit Judge, dissenting.

Because I would affirm the judgment of the District Court, I respectfully dissent.

Acierno sued New Castle County alleging that its de nial of a building permit unlawfully deprived him of his property without due process of law and that it arbitrarily treated him differently than other real estate developers i n violation of the Equal Protection Clause of the Fourteenth Amendment. Acierno also alleged that the County vio lated his rights to due process and equal protection when it voided his development plan and rezoned his pr oper ty. Contending Acierno alleges an "invasion of the righ t of private occupancy," the County maintains National U nion Fire Insurance Company has a duty to defend. In ess ence, the County asserts that Acierno alleged that the Co unty's regulatory actions impaired Acierno's right to use and enjoy his property.1

Interpreting the policy, the District Court denied a "duty to defend" holding that "personal injury" does not extend to claims involving frustrated commercial expectations regarding future development of pr operty. After de clining to construe the term "invasion of the right of private occupancy" on a plain meaning reading, the District Court employed the well known tools of construction of ej usdem generis and noscitur a sociis.

As the District Court recognized, the ter m "invasi on of the right of private occupancy" follows the enumera tion of specific actions relating to possessory inter ests in real property -- wrongful eviction and wr ongful entry.2 It would

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1. As noted, the Commercial General Liability polic y purchased from National Union Fire Insurance provides in part:

10. "Personal injury" means injury, other th an "bodily injury," arising out of one or more of the following of fenses:

* * *

c. The wrongful eviction from, wr ongful ent ry into, or invasion of the right of private occupancy of a room, dw elling or premises that a person occupies by or on behalf of its own er , landlord or

lessor.

2. See Sadler v. New Castle County, 565 A.2d 917, 9 23 (Del. 1989); Hercules, Inc. v. Virginia, 1999 WL 167830, at *4 ( Del. Super. Feb. 12,

21seem, therefore, that applying a br oader definitio n, would

expand coverage beyond the intended scope of the po licy language.

The related doctrine of noscitur a sociis 3 also po ints to the conclusion that when read in context, the phrase "i nvasion of the right of occupancy" should be given a meanin g analogous to "wrongful eviction" and"wrongful entry ." The phrase "invasion of the right of private occupancy" does not appear to encompass financial harms like the denial of a building permit, the voiding of a development plan, and the rezoning of land.

Acierno alleges that the County improperly deprived him of his right to use and enjoy his land. He makes no allegations of eviction, entry or similar wr ongful

disturbance.

The District Court found:

that the coverage of the CGL policy does not extend to the County's liabilities arising from the Ac ierno litigation. This conclusion is consistent wi th the nature of the insurance policies purchased by the C ounty. The County bought a POL4 policy fr om National U nion to

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1999) ("Where general words follow an enumeration o f persons or things, by words of a particular and specific meaning, such general words are not to be construed in their widest extent, but ar e to be held as applying only to persons or things of the same general kind or class as those specifically mentioned."). 3. The doctrine of noscitur a sociis holds that "ge neral and specific

words capable of the analogous meaning when associated to gether take color from each other so that the general wor ds are rest ricted to a sense analogous to the specific words." City of Delray Be ach v. Agric. Ins. Co., 85 F.3d 1527, 1534 (11th Cir. 1996). 4. The District Court found that "in 1992, National Union sold the County a Public Officials and Employees Liability I nsurance Policy (Policy No. 439-12-94) (the "POL policy"). The POL policy has a $1 million limit of liability for the policy period May 12, 19 92 to July 1, 1993. The POL policy excludes coverage for claims arising fr om prior litigation, stating that National Union shall not be made liabl e to make any payment in connection with any claim for any wr ong ful act occurring prior to May 12, 1992, for which the County might r easonably expect that such wrongful act would give rise to a claim." New Castle County v. Nat'l Union Fire Ins. Co., 84 F.Supp.2d 550, 552 (D . Del. 2000).

22insure it against potential liabilities aris ing from the

conduct of its officials and employees. Alth ough the parties disagreed whether the "prior litigat ion" exclusion of the POL policy obligated Nation al Union to indemnify the County for the Acierno litigat ion, there is no dispute that the POL policy covers the ki nds of liabilities incurred by the County in its zo ning and permitting activities. Recognizing that the County had already insured itself under the POL policy against liabilities arising from the exercise of its regulatory authority, it is not surprising that its CGL policy covers a different set of potential liabilities.

New Castle, 84 F.Supp.2d at 556.

Substantially for the reasons set forth by the Dist rict Court, I would affirm its judgment.

A True Copy:

Teste:

Clerk of the United States Court of Appeals

for the Third Circuit

23