EMCOR Group, Incorporated v. Great American Insurance Co.
Filing
UNPUBLISHED PER CURIAM OPINION filed. Originating case number: 1:12-cv-00142-JFM. Copies to all parties and the district court. [999741512]. [14-1682]
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 14-1682
EMCOR GROUP, INC.; THE
FORTI/POOLE
AND
KENT
CORPORATION,
POOLE
LLC;
AND KENT CORPORATION;
MONUMENTAL
INVESTMENT
Plaintiffs - Appellants,
v.
GREAT AMERICAN INSURANCE COMPANY,
Defendant - Appellee.
Appeal from the United States District Court for the District of
Maryland, at Baltimore.
J. Frederick Motz, Senior District
Judge. (1:12-cv-00142-JFM)
Argued:
December 9, 2015
Decided:
January 26, 2016
Before WILKINSON, KEENAN, and HARRIS, Circuit Judges.
Affirmed by unpublished per curiam opinion.
ARGUED: Bernard London, LONDON FISCHER LLP, New York, New York,
for Appellants.
Michael A. Graziano, ECKERT SEAMANS CHERIN &
MELLOTT LLC, Washington, D.C., for Appellee.
ON BRIEF: James
Walsh, James T.H. Deaver, LONDON FISCHER LLP, New York, New
York, for Appellants. F. Joseph Nealon, ECKERT SEAMANS CHERIN &
MELLOTT LLC, Washington, D.C., for Appellee.
Unpublished opinions are not binding precedent in this circuit.
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PER CURIAM:
EMCOR
Group,
(collectively,
American
Inc.
EMCOR)
Insurance
and
brought
Company
three
this
of
action
(Great
its
subsidiaries
against
American),
the
which
Great
provided
EMCOR with three successive commercial crime insurance policies
between
December
policies
each
1,
2002
provided
and
December
coverage
for
1,
2005.
certain
because of employees’ fraudulent acts.
The
losses
three
sustained
EMCOR contends that the
policy in effect from December 1, 2004 to December 1, 2005 (the
2004 policy), obligated Great American to provide coverage for
EMCOR employees’ fraudulent acts that occurred between December
1, 1999 and December 1, 2003.
the
unambiguous
language
of
The district court concluded that
the
2004
policy
obligated
Great
American only to provide coverage for losses sustained after
December 1, 2003.
Because we agree that the language of the
2004 policy is unambiguous, we affirm.
I.
The
times,
facts
EMCOR
policies,
at
issue
maintained
which
provided
are
not
successive
coverage
result of “employee dishonesty.”
December
1,
2002,
those
policies
2
disputed.
commercial
for
losses
At
all
crime
relevant
insurance
sustained
as
a
From December 1, 1999 until
were
provided
to
EMCOR
by
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Factory Mutual Insurance Company, which is not affiliated with
Great American.
As noted above, from December 1, 2002 until December 1,
2005, Great American provided EMCOR with three successive crime
insurance
policies.
At
the
time
one
Great
American
policy
became effective, the immediately prior policy was terminated.
At issue in the present appeal is the scope of coverage afforded
under the 2004 policy.
The
2004
policy
provided
that
the
applicable
“policy
period” began on December 1, 2004, and ended on December 1,
2005.
the
The policy also stated that, by accepting the terms of
2004
effect
policy,
from
policy),
EMCOR
December
was
agreed
1,
2003
cancelled.
that
to
The
the
“prior
December
2004
1,
policy
[p]olicy”
2004
(the
obligated
in
2003
Great
American to pay for the “loss of, and damage to,” any money,
securities,
and
dishonesty.”
property
resulting
directly
from
“employee
That coverage provision was limited by Condition
14, which stated that Great American would pay “only for loss
that
[EMCOR]
occurring
sustain[s]
during
the
through
Policy
acts
Period”
of
committed
December
or
1,
events
2004
to
December 1, 2005.
Condition 14, however, was “subject to” Condition 10, which
extended coverage as follows:
10.
Loss Sustained During Prior Insurance
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a.
If you, or any predecessor in interest, sustained
loss during the period of any prior insurance that you
. . . could have recovered under that insurance except
that the time within which to discover loss had
expired, we will pay for it under this insurance,
provided:
(1)
this insurance became effective at the time
of
cancellation
or
termination
of
the
prior
insurance; and
(2)
this loss would have been covered by this
insurance had it been in effect when the acts or
events causing the loss were committed or occurred.
(Emphasis added.)
In 2005, EMCOR notified Great American of losses of more
than $10 million resulting from fraudulent acts committed by
EMCOR employees between December 1, 1999 and December 1, 2003. 1
EMCOR submitted a claim under the 2004 policy for its losses.
Great American refused to pay the claim on the ground that the
claimed losses occurred outside the scope of coverage provided
by
the
American
2004
policy.
breached
its
EMCOR
filed
coverage
suit,
alleging
obligations
under
that
the
Great
2004
policy.
Both parties filed partial motions for summary judgment,
asking the district court to determine the extent of the 2004
EMCOR originally sought coverage for fraudulent acts
committed up to December 1, 2005.
In a separate decision, the
district court determined that EMCOR lacked an evidentiary basis
for its claim that it suffered “loss” between December 1, 2003
and December 1, 2005, and granted partial summary judgment in
favor of Great American. EMCOR does not appeal that decision.
1
4
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policy coverage.
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Great American maintained that it only was
required to cover losses arising from acts that occurred during
the 2004 policy period or the 2003 policy period, to include
only
fraudulent
acts
that
occurred
after
December
1,
2003.
EMCOR argued that Great American was obliged to cover losses
occurring as early as 1999, when Factory Mutual provided EMCOR
with commercial crime insurance.
based
on
their
differing
The parties’ arguments were
interpretations
of
the
terms
“this
insurance” and “any prior insurance” set forth in Condition 10.
In determining the meaning of those terms, the district
court relied on the language used throughout the entire 2004
policy.
In particular, although Condition 10 initially provided
that Great American would pay for loss sustained during “any
prior insurance,” that obligation immediately was limited by the
proviso
that
payment
would
be
made
only
if
“this
insurance
became effective at the time of cancellation or termination of
the prior insurance.”
(Emphasis added.)
Furthermore, under the
heading “Cancellation of Prior Insurance” in the declarations
page, the 2004 policy provided: “By acceptance of this Coverage
Part, you give us notice cancelling prior Policy or Bond Nos.
CRP
524-49-86-01
[the
2003
policy],
the
cancellation
to
be
effective at the time [the 2004 policy] becomes effective.”
Reading
those
provisions
together,
the
district
court
concluded that the plain language of the 2004 policy identified
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the 2003 policy as the “prior insurance” referenced in Condition
10.
Accordingly, the district court held that the language in
Condition
10
requiring
sustained
under
“any
Great
prior
American
insurance”
to
pay
for
unambiguously
losses
referred
only to the losses EMCOR may have sustained during the 2003
policy period, from December 1, 2003 to December 1, 2004.
district
court
therefore
favor of Great American.
granted
partial
summary
The
judgment
in
This appeal followed.
II.
On
appeal,
EMCOR
argues
that
the
phrase
“any
prior
insurance” in Condition 10 unambiguously refers to all prior
commercial crime insurance policies that EMCOR retained, even
those provided by Factory Mutual.
limitation
because
of
continuous
policy
on
American’s
“employee
began
policy
coverage
dishonesty”
commercial
period
previous
Great
crime
was
insurance
immediately
period.
EMCOR submits that the only
In
upon
EMCOR’s
for
that
losses
EMCOR
coverage,
the
so
sustained
maintained
that
termination
view,
Great
of
one
the
American
therefore is obligated to provide coverage for all of EMCOR’s
losses from acts that occurred as early as 1999, because EMCOR
retained continuous commercial crime insurance from 1999 through
the 2004 policy period.
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EMCOR argues alternatively that the meaning of “any prior
insurance” is ambiguous and therefore this Court should review
extrinsic
American
evidence
as
the
and
resolve
contract
the
drafter.
ambiguity
We
disagree
against
with
Great
EMCOR’s
arguments.
We review a district court’s grant of a motion for summary
judgment de novo.
Millenium Inorganic Chem. Ltd. v. Nat’l Fire
Ins. Co. of Pittsburgh, Pa., 744 F.3d 279, 285 (4th Cir. 2014).
In
interpreting
insurance
contracts,
we
principles applicable to any other contract.
apply
the
same
Mitchell v. AARP
Life Ins. Program, N.Y. Life Ins. Co., 779 A.2d 1061, 1069 (Md.
2001). 2
As with any other contract, we begin with the policy’s
plain language.
MAMSI Life & Health Ins. Co. v. Callaway, 825
A.2d 995, 1005 (Md. 2003).
Courts “analyze the plain language .
. . according to the words and phrases in their ordinary and
accepted meanings as defined by what a reasonably prudent lay
person would understand them to mean.”
Kendall v. Nationwide
Ins. Co., 702 A.2d 767, 771 (Md. 1997).
EMCOR argues for the first time on appeal that Connecticut
law, rather than the Maryland law applied by the district court,
applies to our interpretation of the 2004 policy.
We will not
consider this newly introduced argument.
See Muth v. United
States, 1 F.3d 246, 250 (4th Cir. 1993) (“As this court has
repeatedly held, issues raised for the first time on appeal
generally will not be considered.”).
Moreover, our decision
would be the same under either Maryland or Connecticut law.
2
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When the language of an insurance contract is unambiguous,
a court must enforce its terms.
Ass’n,
796
A.2d
758,
772
Megonnell v. United Serv. Auto.
(Md.
2002).
“A
contract
is
not
ambiguous merely because the parties do not agree as to its
meaning.”
Floyd v. Mayor & City Council of Balt., 946 A.2d 15,
48 (Md. Ct. Spec. App. 2008).
Rather, an insurance policy term
only is “ambiguous if, to a reasonably prudent person, the term
is susceptible to more than one meaning.”
Cole v. State Farm
Mut. Ins. Co., 753 A.2d 533, 537 (Md. 2000).
We agree with the district court that the language at issue
in the 2004 policy is unambiguous.
Condition 10 obligated Great
American to provide coverage for losses based on acts occurring
during “any prior insurance” period, but only if “this insurance
became effective at the time of cancellation or termination of
the
prior
insurance.”
Nothing
in
that
limiting
language
suggests that “prior insurance” means any and all commercial
crime
insurance
EMCOR
held
for
all
time,
regardless
which
insurer provided coverage or when such coverage was provided.
Nor can the limiting clause in Condition 10 be read to suggest
that
“this
insurance”
refers
collectively
to
all
of
Great
American’s insurance policies, as opposed solely to the 2004
policy.
The declarations page of the 2004 policy makes clear
that the 2003 policy was the only “prior insurance” cancelled at
the time that the 2004 insurance became effective.
8
Accordingly,
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Condition
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10
regarding
“prior
insurance”
unambiguously refers only to the 2003 policy, while the term
“this insurance” refers only to the 2004 policy.
Our conclusion is not altered by the general dictionary
definitions advanced by EMCOR of the term “insurance” as the
“state of being insured,” such that the use of “this insurance”
in Condition 10 would include all commercial crime insurance
policies EMCOR has had.
Within the four corners of the 2004
policy, the phrase “this insurance” unambiguously refers only to
the 2004 policy.
tortured
We will not read into the contract EMCOR’s
interpretation
of
the
2004
policy
language.
Additionally, because we conclude that the language of the 2004
policy is unambiguous, we do not address EMCOR’s alternative
arguments regarding the proper approach for resolving contract
ambiguity.
III.
We hold
that
the
2004
policy
extended
coverage
only
to
losses sustained as a result of fraudulent conduct occurring
during the 2003 and 2004 policy periods.
We therefore affirm
the judgment of the district court.
AFFIRMED
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