647 F.3d 411 (1st Cir. 2011), 10-1096, Wright-Ryan Const., Inc. v. AIG Ins. Co. of Canada
|Citation:||647 F.3d 411|
|Opinion Judge:||LIPEZ, Circuit Judge.|
|Party Name:||WRIGHT-RYAN CONSTRUCTION, INC. and Acadia Insurance Company, Plaintiffs, Appellants, v. AIG INSURANCE COMPANY OF CANADA, Defendant, Appellee.|
|Attorney:||John S. Whitman, with whom Richardson, Whitman, Large & Badger was on brief, for appellants. Jeffrey T. Edwards, with whom Preti, Flaherty, Beliveau & Pachios, LLP was on brief, for appellee.|
|Judge Panel:||Before TORRUELLA, RIPPLE,[*] and LIPEZ, Circuit Judges.|
|Case Date:||July 27, 2011|
|Court:||United States Courts of Appeals, Court of Appeals for the First Circuit|
Heard Sept. 13, 2010.
This appeal requires us to determine which of two commercial general liability (CGL) insurance policies should be considered " primary" for coverage of a claim arising from an accident at a construction site in Portland, Maine. At the time of the subject claim, Wright-Ryan Construction, Inc. (Wright-Ryan) was insured under its own CGL insurance policy, issued by Acadia Insurance Company (Acadia), and appeared as an " Additional Insured" on a subcontractor's CGL policy, issued by AIG Commercial Insurance of Canada (AIG). Wright-Ryan and Acadia filed a complaint for a declaratory judgment that AIG was obligated to defend Wright-Ryan and for compensation of costs incurred by Acadia in Wright-Ryan's defense. On cross-motions for summary judgment, the district court granted judgment in AIG's favor, holding that Acadia's CGL policy provided primary coverage for the accident claim, with the AIG policy affording solely excess coverage.
Appealing from this grant of summary judgment, Wright-Ryan and Acadia contend that the district court erred as a matter of law in its interpretation of the " Other Insurance" clauses of the two CGL policies, which govern priority of coverage between overlapping insurance policies. According to plaintiffs, a proper reading of these " Other Insurance" clauses dictates that the AIG policy be deemed primary. We agree and therefore reverse.
The salient details of this insurance dispute are uncontested. Wright-Ryan, a Maine construction company, was hired by the University of Southern Maine as the general contractor for the construction of a building known as University Commons. Wright-Ryan in turn subcontracted with the Canadian company Norgate Metal, Inc. (Norgate) for the fabrication and erection of structural steel for the project. Although Wright-Ryan had its own CGL insurance policy, Wright-Ryan required Norgate, as a condition of the subcontract, to obtain CGL insurance for the University Commons project in the amount of $2 million and name Wright-Ryan as an additional
insured on the policy. Norgate procured the requisite coverage through AIG,1 which issued a certificate of liability insurance to Wright-Ryan and the University of Southern Maine naming them " Additional Insureds" to Norgate's policy, providing insurance coverage on a primary and non-contributory basis for all liability " arising out of [Norgate's] premises or operations."
In August 2007, Thomas Behrens, an employee of a company hired by Norgate to assist with the erection of structural steel, tripped while dismounting from a ladder at the construction site and fell through an unguarded stair opening. Behrens fell four stories and landed on wet pavement at ground level, suffering serious injuries. A little over six months later, Behrens filed suit against Wright-Ryan in Maine's Superior Court for negligence in connection with the accident. Norgate and Behrens's employer were joined as defendants in a later amended complaint.
Upon receipt of the complaint, Wright-Ryan sent a letter to Norgate and AIG tendering to them the defense of the Behrens suit under Norgate's CGL policy. With no response forthcoming from either AIG or Norgate, Wright-Ryan's CGL carrier, Acadia, assumed responsibility for the company's defense. Acadia succeeded in settling the suit against all three defendants for $150,000 in 2009.
Wright-Ryan and Acadia filed a complaint for declaratory judgment against AIG in late 2008 in the federal court for the District of Maine, seeking a declaration that AIG was obligated to defend Wright-Ryan in the Behrens lawsuit. Following settlement of the Behrens lawsuit, Wright-Ryan and Acadia amended their complaint to seek reimbursement for the $150,000 settlement payment and over $40,000 of attorney's fees incurred in Wright-Ryan's defense.
The parties each moved for summary judgment, and the matter was submitted to a magistrate judge for review. The magistrate judge's recommended decision reached two key conclusions. First, it concluded that Behrens's accident arose out of Norgate's " premises or operations," and thus Wright-Ryan was entitled to coverage under Norgate's AIG policy. Second, it concluded that the AIG policy was excess to Wright-Ryan's Acadia policy for purposes of the Behrens claim. Because the amount expended to defend and settle the Behrens suit was well within the limits of the Acadia policy— which the magistrate judge concluded to be primary coverage for the Behrens claim— the magistrate judge recommended that AIG's motion for summary judgment be granted. Adopting the magistrate judge's recommended decision in its entirety, the district court judge entered judgment against Acadia and Wright-Ryan.
This timely appeal followed.
The issue in this appeal is straightforward. AIG has not challenged the district court's holding that Wright-Ryan is entitled to coverage for the Behrens claim under its policy. The sole and determinative question is whether the district court correctly held Wright-Ryan's Acadia CGL policy to be primary and the AIG policy excess. Reviewing the court's legal construction of the insurance contracts de
novo, see Penn-Am. Ins. Co. v. Lavigne, 617 F.3d 82, 84 (1st Cir.2010), we arrive at the opposite conclusion.
Under Maine law, which the parties agree governs the interpretation of the insurance policies here, the " paramount principle in the construction of contracts is to give effect to the intention of the parties as gathered from the language of the agreement viewed in the light of all the circumstances under which it was made." Greenly v. Mariner Mgmt. Group, Inc., 192 F.3d 22, 26 (1st Cir.1999) (quoting Whit Shaw Assocs. v. Wardwell, 494 A.2d 1385, 1387 (Me.1985)) (internal quotation marks omitted). Unambiguous provisions in insurance contracts, as with any other contract, must be interpreted as written, " giving force to their plain meaning." Id. (citing Jack v. Tracy, 722 A.2d 869, 871 (Me.1999)). The mere fact of a dispute over...
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