Marcia H. Feszchak v. Pawtucket Mutl Ins C , 316 F. App'x 181 ( 2009 )

Opinions of the United
2009 Decisions States Court of Appeals
for the Third Circuit
3-12-2009
Marcia H. Feszchak v. Pawtucket Mutl Ins C
Precedential or Non-Precedential: Non-Precedential
Docket No. 08-2138
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Recommended Citation
"Marcia H. Feszchak v. Pawtucket Mutl Ins C" (2009). 2009 Decisions. Paper 1750.
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 08-2138
MARCIA H. FESZCHAK; RICHARD FESZCHAK, her husband,
as Assignees of Optimum Medical Center, P.C.
v.
PAWTUCKET MUTUAL INSURANCE COMPANY,
Appellant
On Appeal from the United States District Court
for the District of New Jersey
(D. C. No. 1-06-cv-00076)
District Judge: Hon. Noel L. Hillman
Submitted under Third Circuit LAR 34.1(a)
on February 3, 2009
Before: RENDELL, JORDAN and ROTH, Circuit Judges
Opinion filed: March 12, 2009
OPINION
ROTH, Circuit Judge:
This case arises from alleged injuries Marcia Feszchak sustained while riding a
stationary exercise bicycle at Optimum Medical Center. Optimum’s insurance carrier,
Pawtucket Mutual Insurance Company, appeals from the District Court’s determinations,
on summary judgment, that (1) a “professional services exclusion” in Optimum’s policy
did not bar coverage for the Feszchaks’ claims and (2) the settlement entered into
between Optimum and the Feszchaks was not unreasonable or in bad faith. We exercise
plenary review, construing the claims and the evidence in the light most favorable to the
non-moving party. Farrell v. Planters Lifesavers Co., 206 F.3d 271, 278 (3d Cir. 2000).
We assume the parties’ familiarity with the factual and procedural history, which we
describe only as necessary to explain our decision. We will affirm.
Under New Jersey law, the interpretation of an insurance contract is a legal
question for the Court and can be the basis for summary judgment. Weedo v. Stone-E-
Brick, Inc., 382 A.2d 1152, 1155 (N.J. Super. Ct. App. Div. 1977), rev’d on other
grounds 405 A.2d 788 (N.J. 1978). When an exclusionary clause is at issue and an
ambiguity arises, the clause must be strictly construed against the insurer to comport with
the reasonable expectations of the insured. Argent v. Brady, 901 A.2d 419, 424 (N.J.
Super. Ct. App. Div. 2006). Here, the policy provides coverage for “‘bodily injury,’
‘property damage,’ ‘personal injury,’ ‘advertising injury’ and ‘medical expenses’ arising
out of . . . [t]he ownership, maintenance or use of the premises shown in the schedule and
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operations necessary or incidental to those premises.” It excludes coverage for claims
“due to the rendering or failure to render any professional service.”
This Court has limited the definition of “‘professional’ act or service” to “one
arising out of a vocation, calling, occupation, or employment involving specialized
knowledge, labor, or skill, and the labor or skill involved is predominately mental or
intellectual, rather than physical or manual.” See Harad v. Aetna Cas. & Sur. Co., 839
F.2d 979, 984–85 (3d Cir. 1988) (quoting Marx v. Hartford Accident & Indem. Co., 157
N.W.2d 870, 871–72 (Neb. 1968)). The Feszchaks’ claims arise from Optimum’s failure
to maintain a stationary exercise bicycle. As the District Court noted, this failure was
“‘manual’ or ‘physical’” and “no different than that caused by loose carpeting or a
visitor’s chair with a broken leg.” Accordingly, the “professional services exclusion” in
the policy did not bar the claims. Compare Antles v. Aetna Cas. & Sur. Co., 34 Cal. Rptr.
508, 511 (Cal. Ct. App. 1963) (injuries sustained during supervised treatment under heat
lamp, where doctor adjusted lamp prior to treatment, barred by malpractice professional
services exclusion), with Duke Univ. v. St. Paul Fire & Marine Ins. Co., 386 S.E.2d 762,
766 (N.C. Ct. App. 1990) (wrongful death claim arising out of negligent maintenance of
wheelchair not barred by professional services exclusion), and D’Antoni v. Sara Mayo
Hosp., 144 So. 2d 643, 647 (La. Ct. App. 1962) (fall from bed caused by lack of side rails
not barred by professional services exclusion).
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We also reject the contention that the District Court erred in enforcing Optimum’s
settlement with the Feszchaks against Pawtucket. “‘Where an insurer wrongfully refuses
coverage and a defense to its insured, . . . the insurer is liable for the amount . . . of the
settlement made by [the insured]. . . . The only qualifications to this rule are that the
amount paid in settlement be reasonable and that the payment be made in good faith.’”
Fireman’s Fund Ins. Co. v. Sec. Ins. Co., 367 A.2d 864, 868 (N.J. 1976) (quoting N.J.
Mfrs. Indem. Ins. Co. v. U.S. Cas. Co., 220 A.2d 708, 710 (N.J. Super. Ct. App. Div.
1966)). The insurer bears the ultimate burden of persuasion that a settlement is
unreasonable or was reached in bad faith. Griggs v. Bertram, 443 A.2d 163, 173 (N.J.
1982). Here, the parties settled for the amount awarded by an arbitrator during non-
binding arbitration. Moreover, the state court that approved the settlement found that it
was “not unreasonable under the circumstances presented by the evidence in this case.”
The only evidence provided by Pawtucket regarding the settlement was the opinion of a
proposed expert that the settlement was unreasonable and lacked good faith. Determining
the reasonableness of a settlement, however, is a judicial function, and the “bad faith”
opinion of the proposed expert was completely unsupported. See Windmere, Inc. v. Int’
Ins. Co., 522 A.2d 405, 412 (N.J. 1987) (expert must base findings on objective factors).
Accordingly, the District Court did not err in failing to consider the expert’s report.
For the foregoing reasons, we will affirm the judgment of the District Court.
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