Court Opinion

ID: 622131
Source: CourtListenerOpinion
Date Created: 2012-02-04 01:03:53+00
Date Added: 2024-06-11T17:50:59.563132
License: Public Domain

PUBLISHED

UNITED STATES COURT OF APPEALS
              FOR THE FOURTH CIRCUIT

PENNSYLVANIA NATIONAL MUTUAL            
CASUALTY INSURANCE COMPANY,
                  Plaintiff-Appellee,
                 v.
LAKIA C. ROBERTS,
               Defendant-Appellant,
                and
ATTSGOOD REALTY COMPANY;                   No. 10-1987
STEWART D. SACHS, as trustee of
the assets of Dreck, Incorporated,
                        Defendants.

COMPLEX INSURANCE CLAIMS
LITIGATION ASSOCIATION,
      Amicus Supporting Appellee.
                                        
2      PENNSYLVANIA NAT’L MUTUAL CASUALTY INS. v. ROBERTS

PENNSYLVANIA NATIONAL MUTUAL            
CASUALTY INSURANCE COMPANY,
              Plaintiff-Appellant,
               v.
LAKIA C. ROBERTS,
             Defendant-Appellee,
                and
ATTSGOOD REALTY COMPANY;                      No. 10-1988
STEWART D. SACHS, as trustee of
the assets of Dreck, Incorporated,
                        Defendants.

COMPLEX INSURANCE CLAIMS
LITIGATION ASSOCIATION,
     Amicus Supporting Appellant.
                                        
         Appeals from the United States District Court
          for the District of Maryland, at Baltimore.
           J. Frederick Motz, Senior District Judge.
                     (1:09-cv-02650-JFM)

                   Argued: December 7, 2011

                   Decided: February 3, 2012

    Before WILKINSON and DUNCAN, Circuit Judges, and
       Richard M. GERGEL, United States District Judge
    for the District of South Carolina, sitting by designation.
    PENNSYLVANIA NAT’L MUTUAL CASUALTY INS. v. ROBERTS       3
Affirmed in part, reversed in part, and remanded by published
opinion. Judge Wilkinson wrote the opinion, in which Judge
Duncan and Judge Gergel joined.

                         COUNSEL

ARGUED: John Amato, GOODMAN, MEAGHER &
ENOCH, Baltimore, Maryland, for Lakia C. Roberts. Regina
Maria Policano, MIDKIFF, MUNCIE & ROSS, PC, Rich-
mond, Virginia, for Pennsylvania National Mutual Casualty
Insurance Company. ON BRIEF: Bruce Harrison Powell,
LAW OFFICES OF PETER T. NICHOLL, Baltimore, Mary-
land, for Lakia C. Roberts. Kevin Thomas Streit, MIDKIFF,
MUNCIE & ROSS, PC, Richmond, Virginia, for Pennsylva-
nia National Mutual Casualty Insurance Company. Laura A.
Foggan, Gregory J. Langlois, WILEY REIN LLP, Washing-
ton, D.C., for Complex Insurance Claims Litigation Associa-
tion.

                         OPINION

WILKINSON, Circuit Judge:

   In this case, an insurer sought a declaratory judgment that
it was required to indemnify its insured for no more than 40
percent of a state court judgment because it had covered its
insured for no more than 40 percent of the time in which the
state court plaintiff was exposed to lead poisoning. The dis-
trict court agreed that the insurer was responsible for only a
portion of the judgment, notwithstanding the fact that its
insured was held jointly and severally liable for the entire
judgment in the underlying state proceeding. The state plain-
tiff (and defendant in the federal declaratory action) appeals,
and we affirm in part and reverse in part. The principle under-
lying our decision is a straightforward one: an insurance com-
4   PENNSYLVANIA NAT’L MUTUAL CASUALTY INS. v. ROBERTS
pany cannot be held liable for periods of risk it never
contracted to cover.

                              I.

                              A.

   From her birth on January 17, 1991 until 1998, Lakia Rob-
erts resided at a house on 1740 East Preston Street in Balti-
more, Maryland. In September 1992, when she was 20
months old, Roberts was diagnosed with lead poisoning. A
test indicated that she had an elevated blood lead level of 28
micrograms of lead per deciliter of blood ("mcg/dL"). She
continued to exhibit elevated blood lead levels until August
1995.

   On February 4, 2005, Roberts filed a complaint in Mary-
land state court against Attsgood Realty Company alleging
that the injuries she sustained from the lead poisoning were
the result of its negligent management of the East Preston
Street property. Attsgood had owned, leased, and managed
the property from Roberts’s birth until November 1, 1993,
when it had sold the property to Gordon Gondrezick.

   Attsgood then requested defense and indemnification from
Pennsylvania National Mutual Casualty Insurance Company
("Penn National") under the terms of its insurance contract. In
1992, Penn National had issued a liability insurance policy to
Attsgood covering the period from January 13, 1992 to Janu-
ary 13, 1993. The policy was later renewed to extend cover-
age to January 13, 1994. According to the terms of the
contract, Penn National promised Attsgood that it would pro-
vide liability insurance for "Premises You Own, Rent or
Occupy," including 1740 East Preston Street. From Roberts’s
birth in January 1991 until this coverage began in January
1992, Attsgood lacked liability insurance for the East Preston
Street property.
    PENNSYLVANIA NAT’L MUTUAL CASUALTY INS. v. ROBERTS       5
   Under the contract, Penn National promised to "pay those
sums that [Attsgood] becomes legally obligated to pay as
damages because of ‘bodily injury’ or ‘property damage’ to
which this insurance applies" as well as "defend any ‘suit’
seeking those damages." This guarantee was in turn qualified
by a provision stating that "this insurance applies to ‘bodily
injury’ and ‘property damage’ only if . . . the ‘bodily injury’
or ‘property damage’ occurs during the policy period." The
contract also made clear that Attsgood’s "rights and duties
under this policy may not be transferred without [Penn
National’s] written consent except in the case of death of an
individual [n]amed [i]nsured."

  In accordance with the policy, Penn National agreed to
defend Attsgood subject to a reservation of its rights. Atts-
good then filed a third party complaint against Gondrezick
seeking contribution and indemnification in the event that
Roberts prevailed. After Gondrezick failed to appear or other-
wise defend himself, the Maryland court entered an order of
default against him in favor of Attsgood.

   Following discovery, the state case went to trial on May 4,
2009 on counts of negligence and unfair trade practices. To
prove the property owners’ liability, Roberts’s mother and her
expert witness provided testimony indicating that Roberts had
been exposed to lead poisoning at the East Preston Street
property since her infancy and that this exposure had resulted
in permanent brain damage. Attsgood in turn challenged the
contention that the presence of lead at its property was the
actual source of Roberts’s injuries.

  The trial ended on May 8, 2009. The jury returned a verdict
in favor of Roberts for $2,000,000, which was reduced to
$850,000 following an application of Maryland’s non-
economic damages cap. It is undisputed that Attsgood and
Gondrezick are jointly and severally liable for this amount.
6    PENNSYLVANIA NAT’L MUTUAL CASUALTY INS. v. ROBERTS
                               B.

   On October 9, 2009, Penn National filed a declaratory
judgment action against Attsgood and Roberts in federal court
on the basis of diversity jurisdiction. The insurer sought a
determination that it was obligated to indemnify Attsgood for
no more than 40 percent of the total judgment, or $340,000.
Penn National filed a motion for default judgment against
Attsgood after it failed to respond. Penn National also filed a
motion for summary judgment against Roberts arguing that it
should be liable for only 22 months of the entire period of
Roberts’s exposure to the risk of lead poisoning. It calculated
that while it had insured Attsgood for the 24 months from
January 1992 to January 1994, Attsgood had sold the property
to Gondrezick in November 1993, thereby resulting in a total
of 22 months of coverage.

   Roberts saw the matter differently. She argued that Penn
National was responsible for paying the entire $850,000 judg-
ment in light of "the joint and several liability of [its]
insured." She also contended that even if the district court
decided to allocate liability, "virtually all" of her "lead expo-
sure occurred during Penn National’s two policy periods,"
beginning with the discovery of her elevated blood lead level
in September 1992.

   The district court largely agreed with Penn National. Rely-
ing on Mayor & City Council of Baltimore v. Utica Mutual
Insurance Co., 802 A.2d 1070, 1104 (Md. Ct. Spec. App.
2002), the court observed that in lead paint or "continuous
trigger" cases such as this, Maryland courts determine an
insurer’s liability through a "pro-rata allocation by ‘time on
the risk.’" Applying this method of allocation to the $850,000
judgment, the district court determined that the "evidence in
the underlying litigation . . . established that Roberts was first
exposed to lead paint when she was born on January 17,
1991." It then used August 1995, the month of Roberts’s final
elevated blood lead level, as the cut-off point for her period
     PENNSYLVANIA NAT’L MUTUAL CASUALTY INS. v. ROBERTS        7
of exposure. Based on these dates, the district court concluded
that Roberts had been exposed to lead poisoning from January
17, 1991 to August 1995, for a total of 55 full months.

   The district court then calculated Penn National’s period of
coverage. It concluded that Penn National provided insurance
to Attsgood from January 13, 1992 to January 13, 1994, for
a total of 24 months. The court rejected Penn National’s argu-
ment that its period of coverage should be reduced to 22
months because Attsgood had sold the property to Gondrezick
on November 1, 1993, concluding that while "under the terms
of the insurance contract Penn National may be correct, the
record is entirely barren of facts showing that Penn National’s
coverage in fact was terminated."

   In its allocation of liability, the district court used the 24
months of coverage as the numerator and the 55 months of
exposure to lead poisoning as the denominator to conclude
that Penn National was responsible for 24/55, or approxi-
mately 43.6 percent, of the judgment. It then found that "Penn
National is liable to Roberts for $370,600 (43.6% x
$850,000), but no more."

                               C.

   Both Roberts and Penn National appeal from the district
court’s judgment. On appeal, Roberts advances two main
arguments. She first contends that the district court erred in
allocating Penn National’s liability on a pro rata basis. She
next argues that even if pro rata allocation was appropriate,
the district court should have used the date of her first ele-
vated blood lead level rather than her date of birth to calculate
her period of exposure. For its part, Penn National challenges
the district court’s refusal to reduce its period of coverage to
22 months.

  We review the grant of a motion for summary judgment de
novo, applying the same standards as the district court.
8    PENNSYLVANIA NAT’L MUTUAL CASUALTY INS. v. ROBERTS
Because jurisdiction here was founded on diversity of citizen-
ship, we apply the same substantive law that a court in Mary-
land, the forum state, would apply if it were deciding this
case. See Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487,
496-97 (1941). The parties do not dispute that a Maryland
court would apply its own substantive law to the matter before
us.

  Applying Maryland law, we affirm the district court’s judg-
ment with respect to Roberts’s two arguments. With respect
to the matter raised on Penn National’s cross-appeal, how-
ever, we reverse. We address these three issues in turn.

                               II.

   Roberts first challenges the district court’s decision to allo-
cate Penn National’s liability on a pro rata basis. Although
Penn National insured Attsgood for only part of the time in
which she was exposed to lead poisoning, Roberts believes it
should be on the hook for the entire $850,000 judgment. The
thrust of her argument is that Penn National contracted to
cover the risk of any judgment against Attsgood for bodily
injury, regardless of when it occurred, by promising to "pay
those sums that [Attsgood] becomes legally obligated to pay
as damages because of ‘bodily injury.’" (emphasis added). In
other words, "the contingency insured against" was not "in-
jury to [Attsgood’s] own person or property," but Attsgood’s
"risk of liability to another for personal or property injury."
See Sentinel Ins. Co. v. First Ins. Co. of Haw., 875 P.2d 894,
919 (Haw. 1994) (emphasis in original). Thus, Roberts con-
tends, when Attsgood was held jointly and severally liable for
$850,000 in damages, Penn National became contractually
bound to pay the entire judgment. Despite its seeming sim-
plicity, this claim suffers from three major problems.

                               A.

   The first problem with Roberts’s position is that it ignores
the plain language of the insurance contract. But "[o]ur pri-
     PENNSYLVANIA NAT’L MUTUAL CASUALTY INS. v. ROBERTS          9
mary task in interpreting an insurance policy, as with any con-
tract, is to apply the terms of the contract itself." Cole v. State
Farm Mut. Ins. Co., 753 A.2d 533, 537 (Md. 2000). Thus we
must "look first to the contract language employed by the par-
ties to determine the scope and limitations of the insurance
coverage." Id. The terms of Penn National’s insurance con-
tract plainly indicate that it never agreed to cover the risk of
the entire state judgment.

   Penn National did not contract to "pay those sums that
[Attsgood] becomes legally obligated to pay as damages
because of ‘bodily injury’" without qualification. Rather, it
contracted to "pay those sums that [Attsgood] becomes
legally obligated to pay as damages because of ‘bodily injury’
. . . to which this insurance applies." (emphasis added). The
contract in turn makes clear that "[t]his insurance applies to
‘bodily injury’ and ‘property damage’ only if . . . [t]he ‘bodily
injury’ or ‘property damage’ occurs during the policy period."
(emphasis added). By its own terms, the contract does not
cover damages Attsgood became legally obligated to pay for
injuries that occurred outside of the policy period. That fact
is fatal to Roberts’s claim that Penn National should be held
liable for injuries that began before and continued after its
period of coverage. "[C]ollecting all the indemnity from a
particular policy [for an injury spanning multiple policy peri-
ods] . . . is not consistent with the language of the policies
providing indemnification for . . . liability that resulted from
an accident or occurrence ‘during the policy period.’" Mayor
& City Council of Baltimore v. Utica Mut. Ins. Co., 802 A.2d
1070, 1103 (Md. Ct. Spec. App. 2002) (emphasis in original)
(citation omitted).

   Not only was Penn National’s coverage limited to the pol-
icy period, it was also restricted to premises that Attsgood
"Own[ed], Rent[ed] or Occup[ied]." This language precludes
us from holding Penn National liable for injuries that occurred
when Gondrezick, and not Attsgood, owned the house at 1740
East Preston Street. In seeking to impose the entire judgment
10   PENNSYLVANIA NAT’L MUTUAL CASUALTY INS. v. ROBERTS
on Penn National, Roberts would have us turn a blind eye to
these terms and hold an insurance company liable for risks for
which it never contracted and for which it never received pre-
miums. We decline to do so.

                               B.

   In addition to ignoring contractual language, Roberts’s
position conflicts with Maryland law. In lead paint or continu-
ous trigger cases such as this one, Maryland courts engage in
a "pro rata by time-on-the-risk allocation" of liability. See Md.
Cas. Co. v. Hanson, 902 A.2d 152, 168 (Md. Ct. Spec. App.
2006) (quoting Riley v. United Servs. Auto. Ass’n, 871 A.2d
599, 611 (Md. Ct. Spec. App. 2005)); see also In re Wallace
& Gale Co., 385 F.3d 820, 835 (4th Cir. 2004) (holding that
after Utica Mutual, "the pro-rata allocation method is correct
under Maryland law"). Under this method of allocation,
"[e]ach insurer is liable for that period of time it was on the
risk compared to the entire period during which damages
occurred" and "losses will be prorated to the insured" for peri-
ods during which it was uninsured. Utica Mutual, 802 A.2d
at 1104 (emphasis in original) (citation omitted); see also In
re Wallace & Gale, 385 F.3d at 833 ("The allocation of risk
to the insured is for periods for which there is no insurance
in force or for which there is no coverage by an insurance pol-
icy which is in force."). These cases prohibit us from holding
Penn National liable for periods during which it did not pro-
vide coverage to Attsgood.

   While Roberts concedes that Maryland courts engage in pro
rata allocation, she contends that this method is inappropriate
here. According to Roberts, Maryland courts use the pro rata
approach only when allocating liability across multiple policy
periods of a single insured. In support of this position, she
points out that none of the previously cited Maryland cases
involved more than one insured and argues that extending the
pro rata approach to situations involving multiple tortfeasors
(here Attsgood and Gondrezick) would allow an insurance
     PENNSYLVANIA NAT’L MUTUAL CASUALTY INS. v. ROBERTS        11
company to do an end run around the joint and several liabil-
ity of its policyholder.

   Like the district court, we find Roberts’s proposed limita-
tion "entirely unpersuasive." There is nothing in Maryland
law to indicate it would abandon the pro rata approach and
commitment to contractual language when multiple tortfea-
sors are involved. And those courts that have considered Rob-
erts’s argument have rejected it. Other jurisdictions that
employ the pro rata approach do not suddenly change their
method of allocation depending on how many tortfeasors are
involved. See Ins. Co. of N. Am. v. Forty-Eight Insulations,
Inc., 633 F.2d 1212, 1225 (6th Cir. 1980) (holding that when
"allocating the cost of indemnification . . . [e]ach insurer is
liable for its pro rata share" even if an insured is found to "be
jointly and severally liable"); Outboard Marine Corp. v. Lib-
erty Mut. Ins. Co., 670 N.E.2d 740, 750 (Ill. App. Ct. 1996)
(rejecting the "novel proposition that, because [an insured’s]
liability . . . is joint and several, the liability of the excess
insurers cannot be apportioned on a pro rata basis") (empha-
sis in original). And even those jurisdictions that take a differ-
ent approach recognize that the allocation of contractual
liability cannot hinge on tort concepts. See, e.g., Armstrong
World Indus., Inc. v. Aetna Cas. & Sur. Co., 52 Cal. Rptr. 2d
690, 712 (Cal. Ct. App. 1996) ("The contractual obligations
of insurers to a single manufacturer-policyholder are separate
and distinct from the tort liability of multiple asbestos manu-
facturers to an asbestos claimant. No matter what the tort lia-
bility of an asbestos manufacturer—whether joint and several,
proportionate to fault or proportionate to market share—the
indemnity obligations of its insurers [do not change].").

   The reason why Roberts’s proposed distinction has failed
to gain traction should be evident. The rationale behind the
pro rata approach bears no relation to the amount of tortfea-
sors in a particular case. "At the level of greatest generality,"
the pro rata method is based on the fact that "[a]n insured pur-
chases an insurance policy to indemnify it against injuries
12   PENNSYLVANIA NAT’L MUTUAL CASUALTY INS. v. ROBERTS
occurring within the policy period, not injuries occurring out-
side that period." Olin Corp. v. Ins. Co. of N. Am., 221 F.3d
307, 322 (2d Cir. 2000). This explains why the pro rata
approach not only allocates liability across multiple insurers
of a single tortfeasor, but also "accommodates the need to
hold liable those businesses that chose not to purchase insur-
ance or coverage" by allocating liability to them for periods
during which they were uninsured. See Utica Mutual, 802
A.2d at 1104. Pro rata allocation of liability is thus concerned
with the length of a policy period, not the number of tortfea-
sors.

   Ultimately, Roberts’s proposed distinction stems not from
a plausible approach to pro rata allocation, but from a confla-
tion of tort and contract law. According to Roberts, the district
court’s decision to apply the pro rata approach here "effec-
tively destroys the concept of joint and several liability."
Appellant’s Br. at 20. But as the district court noted, this argu-
ment "misses the point" because "[t]he law that applies to
joint and several liability is entirely different, and separate
and apart, from Maryland’s pro-rata allocation law."

   No one disputes that Attsgood and Gondrezick are jointly
and severally liable and that each is responsible for the entire
judgment under longstanding principles of tort law. See Coo-
per v. Bikle, 640 A.2d 1120, 1125 (Md. 1994). The question
before us, however, is not whether Attsgood is liable for the
entire $850,000 judgment, but whether Penn National is. And
that question can be answered only by reference to the insur-
ance contract, which necessarily involves the application of
contract law. Consequently, fears of end runs around the tort
doctrine of joint and several liability are not germane to our
analysis. See Outboard Marine Corp., 670 N.E.2d at 750
(holding that because "insurance coverage disputes are gov-
erned by contract law . . . [w]e can find no rationale to support
the imposition of joint and several liability upon the insurers
simply because [the insured’s] liability [was joint and sev-
    PENNSYLVANIA NAT’L MUTUAL CASUALTY INS. v. ROBERTS       13
eral]"). We simply cannot distinguish away Maryland cases
concerning contractual obligations on the basis of tort law.

                              C.

    While contractual text and Maryland precedent provide
ample reason to reject Roberts’s position, it is also worth not-
ing that her approach to allocating liability would upend
insurance underwriting. Not only is it "neither equitable nor
fair to require an insurance company to pay for coverage dur-
ing a period for which no effective coverage is in force," In
re Wallace & Gale, 385 F.3d at 833, it is disruptive for insur-
ance markets as well. As multiple courts have pointed out,
Roberts’s approach would impose the same amount of liabil-
ity on an insurance company whether it provided coverage for
one month or for 10 years. See Forty-Eight Insulations, 633
F.2d at 1225 ("Were we to adopt [the policyholder’s] position
. . . a manufacturer which had insurance coverage for only one
year out of 20 would be entitled to a complete defense of all
asbestos actions the same as a manufacturer which had cover-
age for 20 years out of 20. Neither logic nor precedent support
such a result."); Pub. Serv. Co. of Colo. v. Wallis & Cos., 986
P.2d 924, 939-40 (Colo. 1999) (observing that this position
"creates a false equivalence between an insured who has pur-
chased insurance coverage continuously for many years and
an insured who has purchased only one year of insurance cov-
erage").

   The problem with such an arrangement is that it would dis-
courage tortfeasors like Attsgood and Gondrezick from buy-
ing insurance. It is well settled that "the law should, at a
minimum, not provide disincentives to parties to acquire
insurance when available to cover their risks," Owens-Illinois,
Inc. v. United Ins. Co., 650 A.2d 974, 992 (N.J. 1994), and
this is precisely what Roberts’s position would do. If Atts-
good knew that Penn National would be forced to indemnify
it against any judgment no matter how long it was insured, it
would have little reason to purchase more than a year’s worth
14   PENNSYLVANIA NAT’L MUTUAL CASUALTY INS. v. ROBERTS
of coverage. Cf. Keene Corp. v. Ins. Co. of N. Am., 667 F.2d
1034, 1058 (D.C. Cir. 1981) (Wald, J., concurring in part) ("If
the risk is to be shared only by the insurance companies [and
not by manufacturing companies who were temporarily unin-
sured], a manufacturing company that purchased insurance
intermittently during the risk period would be as secure as
those prudent companies that continually purchased insur-
ance."). Thus, Roberts’s proposed rule would inevitably "re-
duce[] the incentive of . . . property owners to insure against
future risks." Owens-Illinois, 650 A.2d at 992. And that
reduced incentive would redound to the detriment of injured
parties as well.

   What is more, the uncertainty generated under this frame-
work would impose significant costs on both insurance com-
panies and their policyholders. At bottom, an insurance
contract is an agreement to accept a premium in exchange for
a contractually defined risk. If an insurance company cannot
limit its risk to a defined period, it will be unable to determine
the precise risks assumed under a contract, which in turn will
prevent it from accurately pricing coverage. See Uniroyal,
Inc. v. Home Ins. Co., 707 F. Supp. 1368, 1392 (E.D.N.Y.
1988) (noting that an approach where "an insurer who was on
the risk for a day but who then is burdened with the entire loss
incurred over several years . . . cannot help correlate risks
insured with premiums charged"). Not only will this hinder
rational underwriting, but the higher premiums necessary to
compensate for this rising uncertainty will be passed on to
policyholders everywhere. Because we do not wish to force
"insureds to bear the expense of increased premiums necessi-
tated by the erroneous expansion of their insurers’ potential
liabilities," see Bao v. Liberty Mut. Fire Ins. Co., 535 F. Supp.
2d 532, 541 (D. Md. 2008) (internal quotation marks and cita-
tion omitted), we refuse to adopt Roberts’s approach.

                               D.

   We recognize that Roberts unfortunately may not be able
to recover her entire judgment from either Attsgood or Gon-
     PENNSYLVANIA NAT’L MUTUAL CASUALTY INS. v. ROBERTS       15
drezick. It is a dispiriting but inescapable fact that sometimes
really bad things happen, and those responsible are either
insolvent or inadequately insured. But that regrettable reality
does not allow us to ignore Maryland law, to hold an insur-
ance company to a contractual provision to which it never
agreed, or to scramble together whole areas of law that are
conceptually distinct. The district court was right to allocate
Penn National’s liability using the pro-rata time on-the-risk
approach.

                              III.

   Roberts also contends that even if pro rata allocation of lia-
bility is appropriate, the district court should not have used
her date of birth, January 17, 1991, in calculating the period
in which she was exposed to lead poisoning. She argues that
it should instead have used September 1992, when she was 20
months old and diagnosed with lead poisoning, as its starting
point in light of the testimony of her expert witness, Jaclyn
Blackwell-White, M.D., at the state trial. Roberts points to Dr.
Blackwell-White’s testimony that Roberts’s "lead levels
themselves indicate that she was exposed, conservatively, . . .
to lead from the age of 20 months on through to four years."
She also points to Dr. Blackwell-White’s observation that
children often ingest lead by "pull[ing] up on window sills
and . . . licking" them or by transferring lead dust and paint
chips from their fingers to their mouths after "crawling on
floors." In Roberts’s view, that indicates she could not have
suffered lead poisoning during her infancy because she could
neither pull up on anything nor crawl about at that time.

  Roberts’s reason for pursuing a starting point of September
1992 is obvious. The district court found that Roberts was
exposed to lead poisoning for 55 months and that Penn
National insured Attsgood for 24 of those months. It accord-
ingly held Penn National liable for 24/55 of the total judg-
ment. Because the denominator drives the amount of Penn
16   PENNSYLVANIA NAT’L MUTUAL CASUALTY INS. v. ROBERTS
National’s liability, Roberts seeks to shrink it as much as pos-
sible in order to maximize her recovery.

   We think, however, that the district court’s decision to use
Roberts’s date of birth as the starting point was sound. Indeed
it was based on the extensive evidence Roberts herself pro-
vided in the state trial indicating that she had been exposed to
lead poisoning since her infancy. In contrast to her current
position, Roberts presented evidence at the state trial indicat-
ing that it is quite possible for an infant to suffer lead poison-
ing. Dr. Blackwell-White, Roberts’s own expert, testified that
"lead on a developing brain" in "infants and toddlers . . . does
significant damage," and that the "most critical age of the
developing brain in a young child" for the purposes of lead
poisoning is "birth through . . . five, six years old." The mere
fact that children can ingest lead by pulling up on window
sills or by crawling around says nothing about whether Rob-
erts could have consumed lead as an infant through other
means.

   Moreover, the evidence presented at trial made clear that
Roberts’s living environment posed a significant risk of lead
poisoning from birth. As her own expert, Dr. Blackwell-
White, testified at the state trial, "the most common source of
lead poisoning for children in urban areas like Baltimore" is
"chipping, peeling paint in houses built before 1980," and that
was precisely the threat Roberts faced at the East Preston
Street property. According to the testimony of Roberts’s
mother, there was "chipping, peeling, or flaking paint on the
exterior" of the house since the time she was pregnant and she
had "to sweep up chips or flakes of paint" from the sidewalk
near the front door on an almost daily basis. Roberts’s mother
also testified that there was "chipping paint" in the interior of
the house "from the time before Lakia was born" and that
"when Lakia was born . . . she ha[d] access to" areas where
there was "chipping, peeling, or flaking paint." And Dr.
Blackwell-White testified that "there was deterioration . . .
throughout the house" after reviewing pediatric records noting
     PENNSYLVANIA NAT’L MUTUAL CASUALTY INS. v. ROBERTS          17
the existence of "peeling, chipping paint" as well as the testi-
mony of Roberts’s mother that "part of the ceiling fell down."

   Roberts also provided evidence in the state trial indicating
that lead could be easily ingested, especially in an environ-
ment like the East Preston Street Property. As Dr. Blackwell-
White testified, it takes as little "as a fingernail[’]s worth" of
lead dust or chips "to cause brain damage from ingestion,"
and Roberts’s home contained far more readily accessible
lead than that. Roberts’s mother also testified that her daugh-
ter was "a thumb sucker" as a "young child," and it does not
require a robust imagination to see how lead dust from a dete-
riorating house could get on an infant’s fingers and then into
her mouth. Given the nature of her living environment and the
ease with which lead can be consumed, the likelihood of Rob-
erts ingesting a damaging amount of lead in her infancy was
particularly high.

   In short, Roberts’s current claim is belied by her position
in the underlying tort action that she had suffered injuries
from lead poisoning since at least her infancy. In state court,
Roberts consistently took the position that her injuries began
before she was 20 months old. In her complaint, for instance,
Roberts alleged that she "was exposed to flaking, chipping
and peeling lead paint and lead paint dust" from "[o]n or
about 1990," the year before she was born. Then at trial, both
her mother and her expert witness presented testimony indi-
cating that Roberts had been exposed to lead poisoning since
infancy. And her attorney argued at the state trial that "the
biggest hit to . . . children[’s] brain[s] . . . came from the first
ten" mcg/dL of lead in the bloodstream. Throughout the state
court proceeding, Roberts insisted that her worst injuries
occurred well before she reached a blood lead level of 28
mcg/dL in September 1992. This strategy proved to be a win-
ning one and Roberts ultimately obtained an $850,000 judg-
ment.

  But when it came time to divvy up that judgment, she
changed her tune. Whereas at trial, Roberts went to great
18   PENNSYLVANIA NAT’L MUTUAL CASUALTY INS. v. ROBERTS
lengths to show that damage occurred in the earliest stages of
her life, she now claims that her injuries began much later, in
September 1992. But the judicial process is not some kind of
game. If a litigant "assumes a certain position in a legal pro-
ceeding, and succeeds in maintaining that position, he may
not thereafter, simply because his interests have changed,
assume a contrary position, especially if it be to the prejudice
of the party who has acquiesced in the position formerly taken
by him." New Hampshire v. Maine, 532 U.S. 742, 749 (2001)
(citation omitted). This doctrine, known as judicial estoppel,
"generally prevents a party from prevailing in one phase of a
case on an argument and then relying on a contradictory argu-
ment to prevail in another phase." Pegram v. Herdrich, 530
U.S. 211, 227 n.8 (2000). Whether judicial estoppel formally
applies here is not a matter we need resolve, because at the
very least Roberts’s previous position undermines the credi-
bility of her current argument. Indeed, the exhaustive founda-
tion of her prior argument confirms our conclusion that her
present claim lacks merit.

   In sum, we agree with the district court that "Dr.
Blackwell-White’s own testimony" combined with the "argu-
ment made by Roberts’[s] counsel . . . in the underlying trial
on the merits refutes Roberts’[s] present argument that her
period of harmful lead paint exposure should be defined to
have begun only in September 1992." And its determination
that "the evidence in the underlying litigation, including the
testimony of Roberts’[s] expert, . . . established that Roberts
was first exposed to lead paint when she was born on January
17, 1991" strikes us as sound. We therefore affirm this aspect
of the district court’s judgment as well.

                              IV.

   Finally, we turn to Penn National’s cross-appeal of the dis-
trict court’s decision to hold it liable for 24 months of cover-
age rather than 22. Penn National has consistently argued that
its coverage ended when Attsgood sold the East Preston Street
    PENNSYLVANIA NAT’L MUTUAL CASUALTY INS. v. ROBERTS       19
property to Gondrezick on November 1, 1993. While noting
that "Penn National may be correct" that its coverage had
ended "under the terms of the insurance contract," the district
court nevertheless refused to reduce its liability because "the
record is entirely barren of facts showing that Penn National’s
coverage in fact was terminated."

   This view, however, cannot be squared with the terms of
the insurance contract. Once again, we "look first to the con-
tract language employed by the parties to determine the scope
and limitations of the insurance coverage," Cole, 753 A.2d at
537, and if the "terms used in the insurance policy are plain
and unambiguous, we will determine the meaning of the terms
of the contract as a matter of law." Clendenin Bros. v. U.S.
Fire Ins. Co., 889 A.2d 387, 393 (Md. 2006) (internal quota-
tion marks and citation omitted). Given the contractual lan-
guage here, we have no authority to extend Penn National’s
coverage by an additional two months.

   As the district court suggested, Penn National’s coverage
ended "under the terms of the insurance contract" when the
property was sold to Gondrezick. There was nothing ambigu-
ous about this aspect of coverage. According to the contract,
Penn National promised Attsgood that it would cover "Prem-
ises You Own, Rent or Occupy." After Attsgood sold the East
Preston Street property to Gondrezick, it obviously neither
owned, rented, nor occupied those premises. Following the
sale, the house at 1740 East Preston Street thus ceased to be
property that Penn National insured under the contract.

   Moreover, Penn National’s insurance contract contained a
non-assignment clause providing that Attsgood’s "rights and
duties under this policy may not be transferred without [Penn
National’s] written consent except in the case of death of an
individual [n]amed [i]nsured." Given that an assignment of an
insurance contract can "alter drastically the insurer’s exposure
depending on the nature of the new insured," N. Ins. Co. of
N.Y. v. Allied Mut. Ins. Co., 955 F.2d 1353, 1358 (9th Cir.
20   PENNSYLVANIA NAT’L MUTUAL CASUALTY INS. v. ROBERTS
1992), it made good sense for Penn National to require Atts-
good to get its consent before transferring coverage. Attsgood
and Gondrezick may have presented very different risks, and
Penn National contractually reserved the right to refuse to
insure the latter.

   Here, there is no evidence that Attsgood assigned the
remaining two months of coverage to Gondrezick upon sale
of the property. Nor is there any indication in the record that
Penn National gave consent to any assignment of coverage,
calculated new premiums, or even knew of Gondrezick’s
existence. We thus cannot render the contract and its non-
assignment clause a dead letter by holding Penn National lia-
ble for the conduct of a property owner from whom it had
never received premiums and whom it never agreed to insure.

                              V.

   The law may not be difficult here, but the human costs
incurred are undeniably hard. It is sad that Roberts may
recover only partially on her judgment. The jury obviously
believed this child suffered significant brain damage from
lead poisoning and that Attsgood and Gondrezick were liable.
The condition of the property and the failure to procure appro-
priate insurance were the property owners’ responsibility.
Roberts’s misfortune cannot be laid at Penn National’s feet,
for that company has not disputed that it must pay that portion
of the judgment to which its policy applied. To place the
entire judgment on the insurer would be chaotic, rewarding
those who decline to purchase adequate coverage and ulti-
mately punishing those who do. This would lead in turn to
more uncovered risks and lessened opportunities for the rec-
ompense of serious loss. For the reasons stated herein, Penn
National is liable for 22/55, or 40 percent, of the $850,000
judgment. The district court’s judgment is therefore affirmed
in part, reversed in part, and remanded for further proceedings
consistent with this opinion.
PENNSYLVANIA NAT’L MUTUAL CASUALTY INS. v. ROBERTS   21
                                AFFIRMED IN PART,
                                REVERSED IN PART,
                                   AND REMANDED