Policy Ambiguity and Insured Expectations
Raven Logistics purchased a liability policy that contained conflicting clauses about coverage for leased equipment. When a loss occurred, the insurer denied the claim under the narrower reading. The court applied the reasonable expectation doctrine to interpret the ambiguity in favor of the coverage Raven Logistics reasonably anticipated when it bought the policy.
City of Erie v. Pap’s A.M.529 U.S. 277 (2000)
In September 1994 the city council of Erie, Pennsylvania, enacted Ordinance 75-1994. The ordinance made it a summary offense to knowingly or intentionally appear in public in a state of nudity. It defined nudity to include the showing of human male or female genitals, pubic area, buttocks, or female breast below the top of the areola as well as any device simulating those areas. Pap's A. M., a Pennsylvania corporation, operated an establishment known as Kandyland in Erie that featured totally nude erotic dancing performed by women. After the ordinance took effect, the dancers began wearing pasties and G-strings to comply with its requirements. On October 14, 1994, Pap's filed a complaint in the Court of Common Pleas of Erie County against the city, the mayor, and members of the city council. The complaint sought declaratory relief and a permanent injunction against enforcement of the ordinance. The trial court granted the injunction and struck down the ordinance as unconstitutional. On cross-appeals the Commonwealth Court reversed the trial court's order. The Pennsylvania Supreme Court granted review and reversed again, holding that the public nudity provisions violated Pap's rights to freedom of expression under the First and Fourteenth Amendments. The city petitioned for a writ of certiorari, which the United States Supreme Court granted. Pap's then filed a motion to dismiss the case as moot on the ground that Kandyland was no longer operating as a nude dancing club and Pap's was not operating such a club at any other location. The Supreme Court denied the motion.
View case