NATIONAL GRANGE MUTUAL INSURANCE COMPANY, Appellant v. CRS AUTO PARTS, INC., 312 F. App'x 483

OPINION OF THE COURT McKEE, Circuit Judge. National Grange appeals the verdict that was entered against it following a bench trial in this declaratory judgment action it filed to determine if it owed a duty to defend or indemnify CRS Auto Parts pursuant to an insurance policy that it issued to CRS. For the reasons that follow, we will affirm the district court’s verdict in favor of CRS. I. Inasmuch as we are writing primarily for the parties who are familiar with this case, we need not reiterate the factual or procedural background except insofar as may be helpful to our brief discussion.

After hearing all of the evidence offered at trial, the district court found that there was no credible evidence that the insurance binder issued to CRS by Turley Insurance Agency before CRS actually completed the formal application for the policy contained misrepresentations on the part of CRS or any of its agents. Rather, the court concluded that National Grange had all pei'tinent information when it issued the binder through Turley on June 30, 2003. Thus, the court found that the binder was in effect on July 10, 2003, the date of the accident underlying this declaratory action. Nat’l Grange Mut. Ins. v.

CRS Auto Parts, Inc., 2007 WL 4078728 (E.D.Pa., Nov.16, 2007). When reviewing findings of fact, we accept the final determination of the factfin-der, unless that determination is either “(1) completely devoid of minimum eviden-tiary support displaying some hue of credibility, or (2) bears no rational relationship to the supportive evidentiary data.” Frett-Smith v. Vanterpool, 511 F.3d 396, 400 (3d Cir.2008)(citing Krasnov v. Dinan, 465 F.2d 1298, 1302 (3d Cir.1972)). Our review of the district court’s application of Pennsylvania law is plenary. See Kowalsky v. Lang Beach Twp., 72 F.3d 385, 388 (3d Cir.1995).

National Grange argues that the district court’s conclusion that the insurance policy was void ab initio, and that the district court’s finding of no material misrepresentation prior to issuance of the binder was clearly erroneous. We disagree. II. When attempting to void an insurance policy under Pennsylvania law, the insurer must prove that: (1) the insured made a false representation; (2) the insured knew the representation' was false when it was made or the insured made the representation in bad faith; and (3) the representation was material to the risk being insured. See Coolspring Stone Supply, Inc. v. Am.

States Life Ins. Co., 10 F.3d 144, 148 (3d Cir.1993). Moreover, each of these three elements must be established by clear and convincing evidence. Batka v. Liberty Mut. Fire Ins. Co., 704 F.2d 684, 687 (3d Cir.1983) (“Pennsylvania requires that an insurer establish the defense of fraud in the application by ‘clear, precise and indubitable’ evidence ... [and] that the factfin-der be satisfied of the elements of the defense by clear and convincing evidence.”) (citations omitted).

National Grange attempted to prove that CRS (or its agent) knowingly failed to disclose: that Meridian/State Auto refused to renew CRS’s automobile coverage, that CRS provided inaccurate loss reports, and that CRS was a subsidiary of anothér company. However, the district court heard all of the testimony and found no evidence to suggest that CRS made any misrepresentations. Nothing on this record justifies rejecting that finding or overturning the verdict that was rendered pursuant to it.

Moreover, even if misrepresentations had been made by CRS, they were clearly not material to National Grange’s decision to issue the policy because they could only have occurred after Turley issued the binder of insurance. Thus the evidence simply did not support National Grange’s attempt to have the policy declared void ab initio and the court correctly concluded that National Grange had no right of recision. See Nat’l Grange, 2007 WL 4078728 at *2. National Grange did not receive any paperwork from CRS until July 14, 2003.

Therefore, the only representations that could have been made before insurance was “bound” would have to have been made to Turley Insurance Agency. Yet, Turley testified that he had all necessary information before he issued the binder. It is not disputed that the Agency Agreement between Turley Insurance and CRS was in effect when Turley issued the insurance binder. Thus, despite National Grange’s protestations to the contrary, the district comb correctly found that Turley was acting as National Grange’s agent. National Grange places substantial reliance on Klopp v. Keystone Ins.

Co., 528 Pa. 1, 595 A.2d 1 (1991), in arguing that an insurer can rescind a policy that was procured by fraudulent misrepresentations that are material to the insured risk. Id. at 8. However, the misrepresentations in Klopp occurred before the insurance company issued insurance. Similarly, the court correctly concluded that any backdating of the signature on the policy is also irrelevant since neither a timely and contemporaneous signature, nor a completed insurance application was material to National Grange’s decision to insure CRS. III.

Thus, for the reasons set forth above, we will affirm the judgment of the district court.