Joi Caplen v. Sn Servicing Corporation

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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No. 07-4050
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JOI CAPLEN,
Appellant
v.
SN SERVICING CORPORATION; SN INSURANCE COMPANY, INC.;
SECURITY NATIONAL MASTER HOLDING COMPANY, LLC;
SECURITY NATIONAL MASTER MANAGER, LLC; ROBIN P. ARKLEY, II;
ALASKA SEABOARD PARTNERS, LP;
ALASKA SEABOARD INVESTMENTS, INC.
____________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. No. 05-cv-05982)
District Judge: Honorable Anita B. Brody
____________
Submitted Pursuant to Third Circuit LAR 34.1(a)
May 28, 2009
Before: FISHER, CHAGARES and COWEN, Circuit Judges.
(Filed: August 31, 2009 )
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OPINION OF THE COURT
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In relevant part, the promissory note provided:1
If you require me to, I will insure the Collateral against loss . . . . Any
insurance policy will provide for payment of the insurance proceeds to you
to the extent necessary to pay the amounts which I owe under this note. I
will give you any insurance policy or a certificate to show that I have it. If I
do not buy and maintain the required insurance, or if I do not pay the
premiums, you may, if you choose, do these things for me for me [sic]. If
you do this and I do not reimburse you for the premiums within a specified
time, you may add the unpaid balance of the premiums to the unpaid
balance of the Principal Amount of this note. In this case, interest will be
2
FISHER, Circuit Judge.
Joi Caplen appeals from the District Court’s orders entering summary judgment
against her. We will affirm.
I.
We write exclusively for the parties, who are familiar with the factual context and
legal history of this case. Therefore, we will set forth only those facts necessary to our
analysis.
In March 1993, Caplen and her husband, Larry, executed a promissory note in
favor of Mellon Bank, secured by a mortgage on their home in Blue Bell, Pennsylvania.
Under the terms of the note and mortgage, the Caplens agreed to carry hazard insurance
on the property and to provide evidence of insurance to the bank; if they failed to do so,
the bank was authorized to “force place” insurance on the property – that is, to
independently obtain insurance and add the cost of the premiums to the principal due
under the note – in order to protect its security interest in the property.1

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charged on the unpaid balance of these premiums at the rate shown on page
1 of this note, beginning on the date you paid the premiums.
I direct all insurance companies providing . . . insurance on real . . . property
. . . in connection with this loan to pay you any money owed to me . . . .
You may use any such money to pay amount [sic] which I owe under this
note.
App. 74. Likewise, the mortgage provided:
Mortgagor shall keep the Mortgaged Property insured against loss by fire
. . . in such amounts as Mortgagee shall require. . . . Mortgagor shall
deliver written evidence of all such insurance to Mortgagee.
If Mortgagor fails to obtain and keep in force any required insurance or fails
to pay the premiums on such insurance, Mortgagee at its sole option may
elect to do so. In the event of loss, Mortgagor shall give prompt notice to
the Insurer and Mortgagee. Mortgagee at its option may elect to make
proof of loss if Mortgagor does not do so promptly . . . .
[I]nsurance proceeds shall be applied to restoration or repair of the
Mortgaged Property or to reduction of the Obligation, as Mortgagee may
determine in its sole discretion.
App. 67.
3
The Caplens eventually defaulted on the note. On June 5, 2000, Mellon Bank
initiated foreclosure proceedings in the Court of Common Pleas of Montgomery County.
While that action was pending, Mellon Bank sold the note and mortgage to Alaska
Seaboard Partners, LP (ASP). ASP’s servicing affiliate, Security National Servicing
Corporation (SNSC), then sent a series of letters to the Caplens, informing them that ASP
had acquired their loan and asking them to provide proof of insurance. The Caplens did
not respond to these letters.

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4
On March 14, 2002, the Court of Common Pleas entered judgment against the
Caplens in the amount of $116,662.38, plus post-judgment interest. Soon afterwards, the
Caplens and ASP entered into a forbearance agreement, under which the Caplens again
agreed, among other things, to provide proof of insurance on their property. When the
Caplens still did not supply proof of insurance, SNSC obtained a force-placed insurance
policy underwritten at Lloyd’s.
In December 2003, SNSC cancelled its Lloyd’s policy and replaced it with a policy
issued by Security National Insurance Company (SNI), a captive insurance company that
provides force-placed insurance to Security National Master Holding Company, LLC
(SNMHC) and its affiliated companies, including ASP and SNSC. The SNI force-placed
policy contained an “other insurance” clause, which provided:
“If there is available to the Assured any other insurance at the time of loss
. . . covering the same property against the same perils insured against under
this Policy . . . this insurance shall not be called upon in contribution until
the amount due from all such [other] insurance shall have been exhausted; it
being the intent of this insurance to indemnify the Assured for only the
difference between the amount due from such other insurance and the
amount of actual loss sustained by the Assured not exceeding, however, the
applicable limit specified in this Policy.”
App. 559 ¶14. The SNI policy listed “Security National Holding Company, LLC” as the
“Assured.” App. 553.
On November 10, 2004, a fire destroyed the Caplens’ home. Soon afterwards, the
Caplens sent a letter to SNSC to inform it of the fire but, as they admit, used an incorrect
zip code; SNSC never received the incorrectly addressed letter. The Caplens then

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5
defaulted on the note for a second time, prompting ASP to file a motion to reassess
damages in the foreclosure action. In connection with that motion, SNSC sent an
inspector to the Caplens’ property on April 20, 2005; when the inspector saw the damage
caused by the fire, he quickly informed SNSC.
A few weeks later, SNSC was contacted by an attorney representing the Blue Bell
Woods Community Association – the homeowners’ association for the development in
which the Caplens’ home was located – who informed SNSC that the Caplens’ property
was covered by an insurance policy issued to the association by the Greater New York
Mutual Insurance Company and that the proceeds of that policy would be used to repair
the property. Among the many provisions of the Greater New York policy was a clause
titled “Unit-Owner’s Insurance,” which specified: “A unit-owner may have other
insurance covering the same property as this insurance. This insurance is intended to be
primary, and not to contribute with such other insurance.” App. 116 ¶6.
On June 24, 2005, the Court of Common Pleas granted ASP’s motion to reassess
damages and entered an amended judgment against the Caplens in the amount of
$129,127.44 – including $1,607.13 for premiums on the SNI force-placed insurance
policy from March 2001 through February 2005 – plus post-judgment interest. A little
over a year later, the Caplens sold their property for a net profit. They ultimately paid
$2,407.21 to ASP for premiums on the SNI policy through June 2006.

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6
On November 15, 2005, Joi Caplen filed this suit in the United States District
Court for the Eastern District of Pennsylvania against SNMHC, ASP, SNSC, and SNI, as
well as Alaska Seaboard Investments, Inc. (ASI), Security National Master Manager,
LLC, and Robin P. Arkley II. She asserted claims predicated on breach of fiduciary duty,
breach of contract, fraud, abuse of process, and bad faith under Pa. Cons. Stat. Ann.
§ 8371, among other claims. Following discovery, the defendants moved for summary
judgment, which the District Court granted as to all counts. This timely appeal followed.
II.
The District Court had jurisdiction under 28 U.S.C. § 1332 and we have
jurisdiction under 28 U.S.C. § 1291. We exercise plenary review over a district court’s
decision to grant summary judgment, applying the same standard the district court should
apply. Union Pac. R.R. Co. v. Greentree Transp. Trucking Co., 293 F.3d 120, 125 (3d
Cir. 2002). Summary judgment is appropriate only “if the pleadings, the discovery and
disclosure materials on file, and any affidavits show that there is no genuine issue as to
any material fact and that the movant is entitled to judgment as a matter of law.” Fed. R.
Civ. P. 56(c). The facts must be viewed in the light most favorable to the nonmoving
party and all reasonable inferences from the evidence must be drawn in that party’s favor.
Conopco, Inc. v. United States, 572 F.3d 162, 165 (3d Cir. 2009). “We may affirm the
District Court’s order granting summary judgment on different grounds, so long as the
record supports the judgment.” Id. (citing Turner v. Crawford Square Apartments III,

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The District Court determined, and the parties do not dispute, that the substantive2
law of Pennsylvania governs here. See, e.g., Berrier v. Simplicity Mfg., Inc., 563 F.3d 38,
46 n.11 (3d Cir. 2009).
7
L.P., 449 F.3d 542, 548 (3d Cir. 2006) and Guthrie v. Lady Jane Collieries, Inc., 722 F.2d
1141, 1145 n.1 (3d Cir. 1983)).
III.
On appeal, Caplen argues that the District Court erred in determining that SNI did
not owe her any duty under its force-placed policy because, she insists, she and her
husband “were insureds under the policy.” This argument is without merit.
Under Pennsylvania law, a court interpreting an insurance policy “must ascertain
the intent of the parties as manifested by the language of the written agreement. When
the policy language is clear and unambiguous, the court must give effect to the language
of the contract.” Riccio v. Am. Republic Ins. Co., 705 A.2d 422, 426 (Pa. 1997). “[A]n2
insurance policy, like every other written contract, must be read in its entirety and the
intent of the policy is gathered from consideration of the entire instrument.” Id.; accord
Nationwide Ins. Co. v. Schneider, 906 A.2d 586, 591 (Pa. Super. Ct. 2006).
Caplen acknowledges that she is not a named insured under the SNI policy, but
supports her argument by pointing to language in the SNI policy indicating that it insures
“the financial interest of a Borrower in Covered Property in the event that such Covered
Property suffers Direct Physical Loss or Damage.” App. 556 ¶1. But the SNI policy also
unambiguously provides that it may be “called upon in contribution” only after all other

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8
available insurance on the property has been “exhausted.” App. 559 ¶14. In brief, the
SNI policy is plainly an “excess” policy – Caplen’s argument to the contrary
notwithstanding – and the undisputed evidence in the record demonstrates that the Greater
New York insurance policy completely covered the cost of restoring the Caplens’ home,
leaving no excess amount for the SNI policy to contribute. Thus, after considering the
SNI policy in its entirety, we agree with the District Court that SNI did not owe Caplen
any duty under its policy. Moreover, to the extent Caplen intends to argue that the
District Court erred in concluding that SNI owed her no fiduciary duty, she points to no
evidence in the record or case law that would lead us to disturb that determination.
Accordingly, Caplen’s claims against SNI fail as a matter of law.
We also reject Caplen’s contention that the District Court should not have granted
summary judgment in favor of the other defendants on her abuse of process claim. “The
gist of an action for abuse of process is the improper use of process after it has been
issued, that is, a perversion of it.” McGee v. Feege, 535 A.2d 1020, 1023 (Pa. 1987)
(internal citation omitted). To establish a claim for abuse of process, a plaintiff must
show that the defendant “(1) used a legal process against the plaintiff, (2) primarily to
accomplish a purpose for which the process was not designed[,] and (3) harm has been
caused to the plaintiff.” Cruz v. Princeton Ins. Co., 972 A.2d 14, 15 n.1 (Pa. Super. Ct.
2009) (internal quotation marks omitted); accord Rosen v. Am. Bank of Rolla, 627 A.2d
190, 192 (Pa. Super. Ct. 1993).

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We have considered the sundry other assertions in Caplen’s appellate briefs and,3
to the extent we can decipher them, we reject them as unsupported by the record.
9
Caplen argues that ASP (and, by extension, the other non-SNI defendants) only
sought reimbursement for premiums on the SNI force-placed policy in the foreclosure
action, and refused to release the lien on the Caplens’ property, in order “to extort greater
payment than what is owed by the already strapped sub-prime borrower.” But ASP was
authorized, under the clear terms of the mortgage and promissory note, to force place
insurance on the Caplens’ property in the absence of proof of insurance, and Caplen has
introduced no evidence that she ever provided such proof. Nor has she introduced any
evidence that ASP pursued any aspect of the foreclosure process for illegitimate reasons.
The District Court correctly granted summary judgment on this claim.3
IV.
For the foregoing reasons, we will affirm the District Court’s orders granting
summary judgment in favor of the defendants.

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