2001 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

3-21-2001

New Castle County v. Natl Union Fire Ins

Precedential or Non-Precedential:

Docket 00-5157

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Recommended Citation

"New Castle County v. Natl Union Fire Ins" (2001). 2001 Decisions. Paper 57.

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Filed 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 Appellant 
 Christopher 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 widely 

used in insurance policies and has been the subject of 

heated litigation throughout the entire country over the 

past thirty years. Because Delaware case law pr ovides no 

clear precedent, both parties cite numer ous decisions 

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 ("wrongful 

eviction" and "wrongful entry") pr eceding it. Such a ruling, 

however, would fly in the face of commonsense and declare 

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 the right 

of private occupancy" is ambiguous and should be 

construed in favor of New Castle County. We therefore 

reverse the District Court's grant of summary judgment. 

I. 

New Castle County is a political subdivision of the State 

of Delaware. It is responsible for , among other things, the 

permitting and zoning of real property within its 

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

and its employees from legal liability, it is common practice 

for New Castle to purchase insurance. Between 1991 and 

1993, New Castle purchased a number of policies from 

National Union Fire Insurance Company of Pittsburgh, 

Pennsylvania. The policies were of two general types: (1) 

Public Officials Liability ("POL") and (2) Commercial and 

General Liability ("CGL"). This appeal focuses on a CGL 

policy that New Castle purchased from National Union 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 decisions. 

In 1992, a Delaware real estate developer named Frank 

Acierno filed the first of three complaints, which eventually 

cost the County approximately one million dollars in legal 

expenses to defend. 

Acierno owns two tracts of land within New Castle 

County. The first is located near a shopping mall and 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, and second, 

it voided Acierno's record plan for the Westhampton

property and instead rezoned it. 

On July 1, 1992, Acierno filed his first suit, contesting 

the denial of the building permit for the mall property 

("Acierno I"). He claimed, under 42 U.S.C. S 1983, that New 

Castle had deprived him of property without due process of 

law, and had violated the Equal Protection Clause of the 

Fourteenth Amendment by arbitrarily treating him 

differently than other developers. The District Court 

granted preliminary injunctive relief in favor of Acierno. See 

Acierno v. Mitchell, 1992 WL 694590 (D. Del. 1992). We 

reversed, holding that the case was not ripe because the 

County Board of Adjustment had yet to rule on the building 

permit. See Acierno v. Mitchell, 6 F.3d 970 (3d Cir. 1993). 

One day after filing his first claim, Acier no filed a second 

suit, this time challenging New Castle's actions r egarding 

the Westhampton property ("Acierno II"). He again claimed 

he had suffered due process and equal protection 

 3 
violations. A complicated series of rulings followed.1 

Eventually, the District Court granted summary judgment 

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 in Acierno I 

(regarding the mall property) had become ripe, because 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 proceedings. 

See Acierno v. New Castle County, 40 F .3d 645 (3d Cir. 

1994). On October 24, 1997, the parties settled Acierno III 

with an agreement requiring New Castle to issue a building 

permit for the mall property and pay Acierno's attorneys' 

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 unsuccessful 

inquiries by New Castle, National Union sent a letter on 

June 25, 1993 stating that Acierno's claims"would not 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 was not 

_________________________________________________________________ 

1. First, the District Court granted summary judgment to the County on 

the procedural due process claims. It denied summary judgment, 

however, as to all other claims, including those against the individual 

County officers who had sought legislative or qualified 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, this 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. Cloutier, 40 F.3d 597 (3d 

Cir. 1994). The District Court conducted further proceedings, and on 

May 23, 2000, it granted summary judgment to the County on some of 

Acierno's outstanding claims. See Acier no v. New Castle County, C.A. No. 

92-385 (D. Del. 2000). 

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

year, legal expenses mounted and in May 1994, National 

Union filed suit against the County, seeking a declaration 

that it was not obligated to continue coverage. New Castle 

contested the claim, but the parties eventually settled, 

agreeing to a buy-out of the POL policy. The agreement 

resolved the dispute over the POL policy, but expressly did 

not address the CGL policy. 

On June 13, 1996, New Castle sent a letter to National 

Union renewing its request for coverage of its legal 

expenses and liability under the CGL policy. National Union 

denied coverage, and in response, the Countyfiled this 

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 covered by the 

CGL policy. Specifically, the court held that National Union 

was only obligated to defend New Castle in suits arising 

from one of the policy's enumerated "personal injuries." The 

only arguably applicable provision, Definition 10(c), defines 

"personal injury" as a harm resulting from: 

 c. The wrongful eviction from, wr ongful entry into, or 

 invasion of the right of private occupancy of a 

 room, dwelling or premises that a person occupies 

 by or on behalf of its owner, landlor d or lessor; . . . 

The District Court held that this definition was 

unambiguous and required the County to act as an "owner, 

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 right of 

private occupancy." 

New Castle appealed, and we reversed. See New Castle 

County v. National Union Fire Ins. Co., 174 F.3d 338, 342 

(3d Cir. 1999). We held that the "by or on behalf of " 

language of Definition 10(c) was ambiguous and should not 

be construed to preclude coverage.2 We therefore remanded 

_________________________________________________________________ 

2. The parties disagreed over which wor ds the disputed language 

modified. National Union argued that the language modified the wrongful 

 5 
the 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 remand, 

again ruled against the County, granting summary 

judgment in favor of National Union. It held that the plain 

meaning of the "invasion" language was ambiguous, but 

that its context suggested it "should be construed to 

encompass only those actions of the same general type or 

class as `wrongful eviction' and `wr ongful entry.' " Because 

Acierno failed to allege an eviction, wr ongful entry, or 

similar injury, the District Court held that the CGL policy 

did not apply. New Castle appealed. 

II. 

Jurisdiction is premised upon diversity of citizenship. 

Therefore, we must apply the substantive law of Delaware. 

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 policy 

requires National Union to cover the County's legal

expenses and liability. This is a legal question of

contractual interpretation. Because the Delawar e Supreme 

_________________________________________________________________ 

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" between the words 

"occupies" and "by." The same ef fect is achieved by ignoring a number 

of words: 

 The wrongful eviction from, wrongful entry into, or invasion of the 

 right of private occupancy of a room, dwelling or premises . . . by 

or 

 on behalf of its owner, landlord or lessor; . . . 

New Castle, on the other hand, argued that the language 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 reasonable, and therefore 

held the language was ambiguous. 

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

how it would rule. See New Castle County v. National Union 

Fire Ins. Co., 174 F.3d 338, 342 (3d Cir. 1999); Epstein 

Family P'ship v. Kmart Corp., 13 F.3d 762, 766 (3d Cir. 

1994). 

The District Court construed the CGL policy narr owly 

and granted summary judgment in favor of National Union. 

Our review of the District Court's grant of summary

judgment is plenary. See New Castle County, 174 F.3d 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 allegedly 

ambiguous language in Definition 10(c) of the CGL policy. 

See New Castle County, 174 F.3d at 344-51. The previous 

panel's discussion of Delaware law pertaining to insurance 

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 that 

 coverage is available under the policy. An insur er's 

 duty to defend is broader than its duty to indemnify, 

 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 complaint 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`required to defend 

 any action which potentially states a claim which is 

 covered under the policy.' Thus, in this case, if the 

 Acierno actions potentially state a claim that is covered 

 under definition 10(c), National is requir ed to defend 

 the county in those actions. 

 Whether the Acierno actions potentially state a claim 

 for which National has assumed liability depends upon 

 how we interpret definition 10(c). As a basic matter, 

 Delaware law requires us to interpr et insurance 

 contracts `in a common sense manner.' W e must also 

 7 
 examine the disputed language in the context of the 

 entire policy. 

 `Absent some ambiguity, Delaware courts will not 

 destroy or twist policy language under the guise of 

 construing it,' because `creating an ambiguity where 

 none exists could, in effect, create a new contract with 

 rights, liabilities and duties to which the parties ha[ve] 

 not assented.' When policy language is ambiguous, 

 however, under Delaware law this Court must apply 

 the doctrine of contra proferentem . That is, ambiguous 

 language must be construed against the drafter and in 

 conformance with the reasonable expectations of the 

 insured. 

 The premise underlying the principle of contra 

 proferentem is that an insurance contract is one of 

 adhesion. As the Delaware Supreme Court r ecently 

 explained, 

 [T]he insurer . . . is the entity in control of the 

 process of articulating the terms [of an insurance 

 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 incumbent upon 

 the dominant party to make the terms clear .

 Convoluted or confusing terms are the pr oblem of 

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

 As noted earlier, due to the insurer's dominant 

 position, when an ambiguity is found in insurance 

 policy language, we must construe the language 

 against the insurer as a matter of Delawar e law. And 

 therefore, unlike with other types of contracts, we need 

 not inquire into the parties' actual intent.

 Because ambiguous language is construed against the 

 insurer as a matter of law, we take special note of 

 Delaware law for determining whether language is 

 ambiguous. `The settled test for ambiguity is whether 

 the provisions in controversy are r easonably or fairly 

 susceptible of different interpretations or may have two 

 or more different meanings.' An insurance policy is not 

 ambiguous, however, `merely because two conflicting 

 8 
 interpretations may be suggested. Rather , both 

 interpretations must reflect a r easonable reading of the 

 contractual language.' Thus, we must examine, not 

 only whether the county's reading of definition 10(c) is 

 possible, but also whether it is reasonable.

New Castle County, 174 F.3d at 342-44 (citations omitted). 

Thus, in order to assess National Union's obligations, 

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 affirmative if 

the language of the policy is ambiguous as to its coverage 

of the specific claims. An insurance policy is ambiguous 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 occupancy" 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 court 

decisions and relevant public policy, to r each a decision.3 

B. Non-Delaware Precedent 

State courts outside of Delaware have disagr eed over 

whether an "invasion of the right of private occupancy" is 

ambiguous. A number of state courts have found the 

disputed language unambiguous, suggesting that it is 

inapplicable to Acierno's claims. A smaller , but not 

insignificant, number of decisions have held the opposite -- 

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 easoning. 

These approaches, however, are not sharply defined and 

often blur. The first and perhaps most commonly employed 

strategy is to examine the context in which the phrase is 

used (it almost always follows some variation of"wrongful 

eviction" and "wrongful entry"). States cite the Latin maxim 

_________________________________________________________________ 

3. Both parties refer extensively to dictionary definitions and the "plain 

meaning" of the terms. Not surprisingly, their arguments conflict and are 

ultimately inconclusive. As a result, we find this discussion unhelpful. 

 9 
"ejusdem generis," a tool of construction that applies when 

a general term or phrase follows an enumeration of specific 

offenses.4 Ejusdem generis requires courts to construe the 

general phrase narrowly, so that it relates only to offenses 

of the same kind or class as those specifically enumerated. 

As the Delaware Supreme Court clearly articulated over 

eighty years ago in Donaghy v. State, 100 A. 696, 707 (Del. 

1917): 

 The doctrine of ejusdem generis . . . is a rule of 

 statutory construction . . . that where general words 

 follow the enumeration of particular classes of persons 

 or things, the general words will be construed 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 eason that if it 

 was intended that the general words should be used in 

 their unrestricted sense, no mention would have been 

 made of the particular classes. 

See also Triple C Railcar Serv., Inc. v. City of Wilmington, 

630 A.2d 629, 631 (Del. 1993). Applying ejusdem generis 

would limit the right of private occupancy to of fenses, 

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. Co., 329 

Or. 303, 312-14 (1999) ("[T]he phrase,`other invasion of the 

right of private occupancy' applies only to of fenses that 

involve a possessory interest in the pr emises at issue.").5 

_________________________________________________________________ 

4. They also cite a "related" canon of construction, noscitur a sociis. 

Only 

the amicus, however, presents a case that applies the 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 Latin 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 are 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 utilized ejusdem generis 

in a similar context include Wisconsin, Florida, Massachusetts, Indiana, 

 10 
Because 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 generis. 

Almost all of the precedent invoking the Latin maxim 

involve insurance policies that include the phrase"other 

invasion of the right of private occupancy." Some courts 

have explicitly focused on the presence of the word "other": 

_________________________________________________________________ 

Michigan, Illinois, Oklahoma, California, and New York. See United 

States v. Security Mgmt. Co., Inc., 96 F .3d 260, 264 n.4 (7th Cir. 1996) 

(applying Wisconsin law and holding that"[t]he ejusdem generis rule 

makes clear that [a] right of occupancy must exist before an individual 

may be said to have suffered an `invasion of the right of private 

occupancy' "); City of Delray Beach, Florida v. Agricultural Ins. Co., 85 

F.3d 1527, 1534 (11th Cir. 1996) (applying Florida law and holding that 

"when read in context, the phrase `other invasion of 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 ejusdem 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 intended to encompass 

actions of the same general type as, though not specifically embraced 

within, `wrongful entry or eviction.' "); Liberty Mutual Ins. Co. v. East 

Central Oklahoma Elec. Coop., 97 F.3d 383, 390-91 (Okla. 1996) 

("Instead of creating an ambiguity, the ter m `invasion of the right of 

private occupancy' is included in insurance policies simply to provide a 

`catch-all' category of offenses of the same general type as "wrongful 

entry or eviction."); Stein-Brief Group, Inc. v. Home 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 the principle of ejusdem 

generis, the key to interpreting the phrase`other invasion of the right of 

private occupancy' lies in the definition of `wrongful entry' and 

`eviction,' 

both of which involve actual interference with possessory rights to real 

property."). 

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

 in contracts is peculiarly applicable where specific 

 enumeration precedes the word `other' followed 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., Liberty Mutual, 

97 F.3d at 390; Security Mgmt., 96 F .3d at n.4 (applying 

ejusdem generis, but noting that its application"would 

have more force if the word `other' preceded the general 

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 elaboration, 

that "[e]mploying the principle of ejusdem generis, rather 

than contra proferentem, adher es to the requirement that 

words be interpreted in the proper context and ensures 

greater fidelity to the meaning of the disputed term and the 

intentions of the parties to the insurance contract."6 

_________________________________________________________________ 

6. Contra proferentem is yet another Latin maxim, which requires that 

ambiguous and confusing policy language be construed against the 

insurer. The amicus suggests that the court must choose between 

applying contra preferentem and ejusdem generis. This is incorrect. 

Ejusdem generis is used to determine whether a phrase is ambiguous. 

Contra preferentem only applies after a determination 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 construed against the 

drafter."). The County, in contrast, r ecognizes this distinction, but 

nonetheless argues that contra preferentem should be applied because 

the District Court explicitly found the disputed language ambiguous. See 

Appellant's brief at 26 ("[T]he District Court ignored the doctrine of 

contra 

proferentem and construed admittedly ambiguous policy language 

against the insured.") (emphasis added). This is also incorrect. The 

District Court merely found that the "plain meaning" of the phrase was 

ambiguous. It then examined the context of the language, applied 

ejusdem generis, and held that its meaning was clear. Before we can 

apply contra proferentem, we must first review this holding and 

determine whether the disputed phrase was ambiguous. 

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

whether applying ejusdem generis in this case would help 

clarify the parties' intentions. See White v. Cr owley, 1986 

WL 5850, *2 (Del.Super. 1986) ("As with all rules of 

statutory construction, [ejusdem generis] does not apply 

when the context shows a contrary intention. In other 

words, the goal of statutory construction is tofind the 

intent of the [contracting parties], and rules of statutory 

construction are merely means towar d that end."). Because 

National Union has failed to demonstrate, and we fail to 

believe, that applying ejusdem generis is r equired or even 

helpful, our inquiry must continue. 

Under the second approach, some states have concluded, 

after reviewing the entirety of a policy, that an "invasion of 

the right of private occupancy" is only available in 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 occupancy' 

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 by a 

tenant against a landlord.").7 There is no landlord-tenant 

relationship in this case. However, New Castle cites 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 of 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 the 

right of private occupancy" requires a physical invasion, 

_________________________________________________________________ 

7. See also State Farm Fire & Cas. Co. v. Burkhardt, 96 F.Supp.2d 1343, 

1351 (M.D. Ala. 2000) (applying Alabama law); Decorative 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. Kirksville Coll. of Osteopathic 

Med., 191 F.3d 959, 963 (8th Cir. 1999); Pipefitters 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 .2d 265, 272-73 (1st Cir. 

1990). 

 13 
such 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 invasion' of a 

right of private occupancy. `Occupancy' r equires a physical 

entry upon real property."). Accor ding to this line 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 occupancy 

is the legal right to occupy premises, not the right to enjoy 

occupying those premises.").9 Acierno does not allege a 

physical invasion of any sort, and therefor e his claims 

would not qualify. 

A smaller, but not insignificant, number of decisions 

support New Castle's position. Although less unifor m in 

their approach, these decisions, in aggr egate, address each 

of National Union's arguments. First, some courts have 

held that an "invasion of the right of private occupancy" is 

ambiguous as a matter of law.10 The most factually relevant 

decisions are those of New Hampshire. In Town of Goshen 

v. Grange Mut. Ins. Co., 424 A.2d 822, 825 (N.H. 1980), a 

_________________________________________________________________ 

9. The amicus makes a related argument by distinguishing between use 

and occupancy. See Amicus brief at 10-16 (contending that the County's 

policy only covers suits arising out of harm to a claimant's occupancy, 

whereas Acierno's suits claim damages r elating to future use). For 

authority, the amicus relies primarily upon a number of Delaware 

statutes that refer to "use or occupancy." According to the amicus, the 

presence of both terms indicates that "use" and "occupancy" 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-Landmark Ins. Co., 746 

F.Supp. 1145, 1150 (D.D.C. 1990) ("The phrase `other 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 for `wrongful entry' 

and `other invasion of the right of private occupancy', is, in the context 

of the entire policy, . . . ambiguous."); Hirschberg 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.")

 14 
property owner sued a town planning boar d for refusing to 

allow him to develop a subdivision. He claimed civil rights 

violations under 42 U.S.C. S 1983. The supr eme court of 

the state held that the town's insurance policy, which 

covered suits arising from "other invasion of the right of 

private occupancy," was unclear. As a r esult, it construed 

the policy against the insurer and held that coverage 

extended to damages arising from the boar d's denial of 

"plaintiff 's right to free enjoyment of his property." See id. 

at 824-25. Later, the First Circuit Court of Appeals, 

applying New Hampshire law, held that "other invasion of 

the right of private occupancy" included har m resulting 

from "noxious odors, noise and light" that interfered 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 efused 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 held 

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, ordinary, 

and popular meaning that an average purchaser of 

insurance would ascribe to the phrase `other invasion of the 

right of private occupancy' would include a tr espass on or 

against a person's right to use premises or land." Id. at 

1185 (emphasis added). The court also consider ed and 

rejected the application of ejusdem generis . 

Even California, which has almost unifor mly rejected 

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 that" `other 

invasion of the right of private occupancy' is susceptible to 

numerous interpretations, and under California's rules of 

contract interpretation, it must be construed in favor of the 

 15 
insured." The case involved environmental claims by federal 

and state entities against Martin Marietta. 

Finally, some courts have held the language at issue is 

ambiguous simply because of the wide variance among

judicial decisions. See Travelers Indem. Co. v. Summit Corp. 

of America, 715 N.E.2d 926, 937-38 (Ind. 1999) ("This 

disagreement among the courts further indicates the

ambiguity of the personal injury provisions."). We have, in 

the past, adopted a similar, practical appr oach. See Little v. 

MGIC Indem. Corp., 836 F.2d 789, 796 (3r d Cir. 1987) 

("[T]hat different courts have arrived at conflicting 

interpretations of the policy is strongly indicative of the 

policy's essential ambiguity."). 

In sum, a review of relevant, non-Delawar e case law, 

suggests that there is a greater number of cases favoring 

National Union's position. However, "our job is not simply 

to count the number of cases on both sides," New Castle 

County, 174 F.3d at 347. We must instead evaluate the 

underlying reasoning. Reducing counsels' many arguments 

to their most persuasive essence, we believe that the 

existing non-Delaware caselaw can be characterized as 

follows: on one hand, a fairly large number of state court 

decisions apply the doctrine of ejusdem generis and find no 

ambiguity; on the other, a smaller number of decisions 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 to public 

policy concerns and commonsense. 

C. Public Policy and Commonsense 

Of the three briefs submitted in this case, only the 

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 agrees to 

 cover. Failure to enforce the insurance contract as 

 written can affect the price and availability of coverage 

 for those who lack the resources to self-insure -- most 

 notably, individuals and small businesses. 

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

completely agree with this statement. In fact, one would be 

hard-pressed to find anyone to disagree. The problem is 

that this statement assumes away the central issue in this 

case - whether the disputed policy language is ambiguous. 

It is beyond peradventure, as the amicus contends, that 

"[i]nsurance serves an important economic and social 

function," and courts must enforce unambiguous policy 

language in order to maintain its viability. The question 

remains, however, whether the CGL policy is unambiguous, 

and none of the parties provides any policy ar guments for 

addressing that particular question. 

In our opinion, the most important and relevant 

observation in this case was only casually r eferenced 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 repeatedly 

 disputed the meaning of the term `invasion of the right 

 of private occupancy.' . . . 

 After at least two decades of litigation over the meaning 

 of the term `invasion of the right of private occupancy,' 

 courts have not arrived at a uniform definition of the 

 term. Rather than attempt to construe the ter 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 other 

 techniques of contract interpretation. This court, 

 similarly will examine the meaning of the ter m in the 

 broader context of the CGL policy. 

 Insurance companies continue to employ the ter m 

 `invasion of the right of private occupancy' in their 

 policies, despite twenty years of legal decisionsfinding 

 that this term is ambiguous. It is instructive to ask 

 why. 

We also find it instructive to ask "why?" -- because we 

cannot conceive of an answer. The District Court concluded 

that insurance companies intend the disputed language to 

be read in context, to take meaning from the specific terms 

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

entry"). Perhaps this is true. But even if it is, their intent 

has been, and continues to be, unclear. 

A Westlaw search from 1973 to the present reveals 249 

cases that include the phrase "invasion of the right of 

private occupancy." Approximately half of those decisions 

required a direct interpretation of the disputed language. In 

fact, National Union itself has been forced to litigate the 

meaning of the phrase on numerous occasions, and has 

lost at least four times.11 Yet, in spite of this extensive 

history of litigation, and obvious disagreement amongst 

courts and parties alike, insurance companies, and 

National Union in particular, continue to use the phrase 

without any language defining its scope. Once again, we 

must ask, "why?" 

It is well settled under Delaware law that insurance 

policies are contracts of adhesion. Ther efore it is the 

responsibility of the insurer to write clear policies with 

adequately defined terms: 

 [Insurance contracts] must be interpreted in a common 

 sense manner, giving effect to all pr ovisions so that a 

 reasonable policyholder can understand the scope 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 entity in control 

 of the process of articulating the terms. The other 

 party, whether it be the ordinary insur ed or the 

 investor, usually has very little say about those terms 

_________________________________________________________________ 

11. See Kitsap County, 964 P.2d at 1184-86; Rozet v. City Ins. Co., 24 

F.3d 249 (9th Cir. 1994) (unpublished decision); Great Northern Nekoosa 

Corp. v. Aetna Cas. & Sur. Co., 921 F .Supp. 401, 416-18 (N.D. Miss. 

1996); Gould, 829 F.Supp. at 724, 729. National Union has, on other 

occasions, prevailed in similar suits. See e.g., City of Oakland v. 

National 

Union Fire Ins. Co. of Pittsburgh, Pa , 56 F.3d 70 (9th Cir. 1995) 

(unpublished opinion); Wackenhut Servs., Inc. v. National 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'Brien Energy Sys., Inc. 

v. American Employers' Ins. Co., 629 A.2d 957, 959, 963-63 (Pa.Super. 

1993). 

 18 
 except to take them or leave them or to select fr om 

 limited options offered by the insur er or issuer. 

 Therefore, it is incumbent upon the dominant party to 

 make terms clear. Convoluted or confusing terms are 

 the problem of the insurer or issuer -- not the insured. 

Penn Mutual, 695 A.2d at 1149-50. Because of the onesided nature of insurance policies, insurance companies 

are in the best position to clarify potentially ambiguous 

terms and avoid future disputes. The persistent litigation 

surrounding the meaning of "invasion of the right of private 

occupancy" strongly suggests that they indeed should 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-landlord 

dispute, etc.) would be dispositive. 

At oral argument, we asked counsel why National Union 

had chosen not to further define the contested phrase. 

Counsel responded that "this phraseology makes the policy 

marketable." In response to our follow-up question, counsel 

denied that the phrase was "marketable" solely because it 

created confusion; instead, he stated that"the purpose of 

this policy language is that it covers fact patter ns and 

situations and scenarios that don't narrowly fall within the 

parameters of a `wrongful entry' or `wr ongful eviction.' " 

Even if this is true, we fail to see how further defining the 

scope of the language would undercut this purpose. If 

anything, it would help clarify which fact patter ns, 

situations, and scenarios are indeed cover ed. We will not 

speculate as to why National Union has consistently

refused to clarify its language, but one thing is clear: The 

provision at issue in the National Union CGL policy is 

ambiguous. 

There is a time and place for reliance upon Latin maxims 

and principles of statutory construction, but not at the 

expense of commonsense. See SI Mgmt. L.P . v. Wininger, 

707 A.2d 37, 42 (Del. 1998) (holding that insurance

contracts "must be interpreted in a common sense manner, 

giving effect to all provisions so that a reasonable 

policyholder can understand the scope and limitation of 

coverage. It is the obligation of the insurer to state clearly 

the terms of the policy."). A single phrase, which insurance 

 19 
companies have consistently refused to define, and that has 

generated literally hundreds of lawsuits, with widely varying 

results, cannot, under our application of commonsense, be 

termed unambiguous. As such, we hold that an"invasion 

of the right of private occupancy" must be construed 

liberally, and that the CGL policy does cover the County's 

legal expenses and its liability arising from Acierno'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 opinion. 

 20 
SCIRICA, Circuit Judge, dissenting. 

Because I would affirm the judgment of the District

Court, I respectfully dissent. 

Acierno sued New Castle County alleging that its denial 

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 in violation 

of the Equal Protection Clause of the Fourteenth 

Amendment. Acierno also alleged that the County violated 

his rights to due process and equal protection when it 

voided his development plan and rezoned his pr operty. 

Contending Acierno alleges an "invasion of the right of 

private occupancy," the County maintains National Union 

Fire Insurance Company has a duty to defend. In essence, 

the County asserts that Acierno alleged that the County'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 declining 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 ejusdem 

generis and noscitur a sociis. 

As the District Court recognized, the ter m "invasion of 

the right of private occupancy" follows the enumeration of 

specific actions relating to possessory inter ests in real 

property -- wrongful eviction and wr ongful entry.2 It would 

_________________________________________________________________ 

1. As noted, the Commercial General Liability policy purchased from 

National Union Fire Insurance provides in part: 

 10. "Personal injury" means injury, other than "bodily injury," 

 arising out of one or more of the following of fenses: 

 * * * 

 c. The wrongful eviction from, wr ongful entry into, or invasion of 

 the right of private occupancy of a room, dwelling or premises that 

 a person occupies by or on behalf of its owner , landlord or 

lessor. 

2. See Sadler v. New Castle County, 565 A.2d 917, 923 (Del. 1989); 

Hercules, Inc. v. Virginia, 1999 WL 167830, at *4 (Del. Super. Feb. 12, 

 21 
seem, therefore, that applying a br oader definition, would 

expand coverage beyond the intended scope of the policy 

language. 

The related doctrine of noscitur a sociis 3 also points to the 

conclusion that when read in context, the phrase "invasion 

of the right of occupancy" should be given a meaning 

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 Acierno 

 litigation. This conclusion is consistent with the nature 

 of the insurance policies purchased by the County. The 

 County bought a POL4 policy fr om National Union to 

_________________________________________________________________ 

1999) ("Where general words follow an enumeration of 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 "general and specific 

words 

capable of the analogous meaning when associated together take color 

from each other so that the general wor ds are restricted to a sense 

analogous to the specific words." City of Delray Beach 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 Insurance 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, 1992 to July 1, 1993. The 

POL policy excludes coverage for claims arising fr om prior litigation, 

stating that National Union shall not be made liable to make any 

payment in connection with any claim for any wr ongful 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). 

 22 
 insure it against potential liabilities arising from the 

 conduct of its officials and employees. Although the 

 parties disagreed whether the "prior litigation" 

 exclusion of the POL policy obligated National Union to 

 indemnify the County for the Acierno litigation, there is 

 no dispute that the POL policy covers the kinds of 

 liabilities incurred by the County in its zoning 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 District 

Court, I would affirm its judgment. 

A True Copy: 

Teste: 

 Clerk of the United States Court of Appeals 

 for the Third Circuit 

 23