Arrowood Indem. Co. v. King, Docket No. 11-5478 (Lead)
| Decision Date | 07 November 2012 |
| Docket Number | Docket No. 11-5478 (Lead),Docket No. 11-5479 (Con) |
| Parties | ARROWOOD INDEMNITY CO., Plaintiff-Counter-Defendant-Cross-Defendant-Appellee, v. PENDLETON KING, DAPHNE KING, and PENDLETON KING JR., Defendants-Counterclaimants-Third-Party-Plaintiffs-Appellants, CONOR McENTEE, Defendant, NATIONAL SURETY CORPORATION, Third-Party-Defendant-Appellee, NEW ENGLAND BROKERAGE CORPORATION, Third-Party-Defendant-Cross-Claimant-Appellee. |
| Court | U.S. Court of Appeals — Second Circuit |
Before: KEARSE, LIVINGSTON, Circuit Judges, VITALIANO, District Judge.1
Appeal from a judgment of the United States District Court for the District of Connecticut (Stefan R. Underhill, Judge) in favor of insurance companies which had disclaimed any duty to defend or indemnify their policyholders in a separate state court action brought by a third party arising from an accident involving the operation of the policyholders' all-terrain vehicle. Based largely upon the answers of the Supreme Court of Connecticut to our certified questions, we affirm the judgment of the district court.
We return to our consideration of this appeal with the benefit of answers provided by the Supreme Court of Connecticut in Arrowood Indem. Co. v. King, 304 Conn. 179, 39 A.3d 712 (2012) ("Arrowood IV"), reconsideration denied No. SC 18658 , in response to three questions we certified to it in Arrowood Indem. Co. v. King, 605 F.3d 62, 80 (2d Cir. 2010) ("Arrowood III"). Familiarity with Arrowood III, which set forth the facts and procedural history of this case, is presumed. Some of those background details are recounted here, largely for the purpose of providing a contextual anchor for the Connecticut Supreme Court's answers to our certified questions.
Defendants-Appellants Pendleton King, Daphne King and Pendleton King Jr. ("Junior") (collectively, the "Kings" or "Appellants") appeal from a judgment of the United States District Court for the District of Connecticut (Stefan R. Underhill, Judge). The district court held that none of three separate liability insurance policies owned by the Kings covered their alleged liability to a third-party child, Conor McEntee ("Conor"). Conor was injured when he fell from a skateboard while being towed by a rope attached to an all-terrain vehicle (the "ATV") owned by the Kings and operated by Junior. The accident occurred near the Kings' home on a portion of a private road located within the residential development managed by the Kings' homeowners association.
The three insurance policies in litigation are (1) a homeowner's liability policy issued by Royal Indemnity Company ("RIC"); (2) an umbrella liability policy issued by Royal Insurance Company of America ("RICA"); and (3) an excess liability policy issued by National SuretyCorporation ("National").2 Each policy was procured through the Kings' insurance broker, New England Brokerage Corporation ("NEBC"). After investigating the accident, RIC and RICA (collectively, "Royal") filed a declaratory judgment action in the district court seeking to disclaim any duty under the homeowner's and umbrella policies to defend or indemnify the Kings for claims arising from the ATV accident. Soon after, the McEntees filed a tort complaint in Connecticut Superior Court, naming all three Kings as defendants. Among the causes of action pleaded in the McEntees' complaint were claims of negligent supervision of Junior and negligent entrustment of the ATV to him. Meanwhile, the Kings answered Royal's complaint and counterclaimed against Royal. They also filed a third-party complaint in which they named National and NEBC as third-party defendants. Lastly, NEBC, filed cross-claims against Royal.
In granting summary judgment, the district court found that the homeowner's policy did not cover the ATV accident because, in short, (1) the event location relevant to determining the availability of coverage was the accident site (not, e.g., the place where the ATV was entrusted to the minors) and (2) the accident site was not an "insured location" as provided in the homeowner's policy. Royal Indem. Co. v. King, 512 F. Supp. 2d 117, 124-27 (D. Conn. 2007) ("Arrowood I"). Coverage was also properly disclaimed under the umbrella policy, the court found, because the Kings failed to list the ATV on a declarations page of that policy as required by the policy's terms. Id. at 133. The Kings fared no better below on their remaining claims.
In our initial consideration of Appellants' arguments, and with particular attention to those regarding whether coverage existed under the homeowner's policy, we observed that "Connecticut law is unsettled as to whether a negligent entrustment claim in this context shouldbe deemed to arise where the subject vehicle was entrusted, where the vehicle was housed, or where the accident itself took place." Arrowood III, 605 F.3d at 69. We further noted that Connecticut law lacked binding precedent for determining whether an "insured location," as that term was used in the homeowner's policy, could cover the portion of the private road where the accident in this case occurred. Id. at 71.
Our first certified question sought guidance in addressing the issue of when and where the tort of negligent entrustment is deemed to accrue under Connecticut law. The second question sought guidance on the construction of the "insured location" language, an apparent term of art when used in insurance policies which had been construed in a plethora of ways by various American courts. See id. at 71-77. our final certified question, directed at the Kings' delay in alerting their insurers of the accident, asked whether post-accident, friendly social interactions belying any litigation intent, such as had occurred between the Kings and the McEntees, could justify delaying notice to an insurer under Connecticut insurance law.
In answering our first two certified questions, the Connecticut Supreme Court (1) held that under the Kings' homeowner's policy a negligent entrustment claim brought under Connecticut law, regardless of the locus of the entrustment, arises at the site of the injury-causing accident and (2) determined that the portion of the private road where this accident happened was not an "insured location" within the terms of the policy as that language is properly construed under Connecticut insurance law. In answering our third question, the Connecticut Supreme Court held that social interactions unrelated to litigation do not justify delayed notice.The answer to the third certified question is rendered academic on this appeal by the Supreme Court of Connecticut's answers to the first two questions.3
A district court's summary disposition of claims is reviewed de novo. Papelino v. Albany Coll. of Pharmacy of Union Univ., 633 F.3d 81, 88 (2d Cir. 2011). A district court's denial of a motion for leave to amend a pleading is reviewed de novo when based on rulings of law but is otherwise reviewed for an abuse of discretion. Id.
Substantively, under Connecticut law, "'[a]n insurance policy is to be interpreted by the same general rules that govern the construction of any written contract.'" Conn. Med. Ins. Co. v. Kulikowski, 286 Conn. 1, 5, 942 A.2d 334, 338 (2008) (quoting Enviro Express, Inc. v. AIU Ins. Co., 279 Conn. 194, 199, 901 A.2d 666, 669 (2006)). Consistent with the general rules of contract construction, the intent of the parties, as expressed by the policy language, is determinative in construing even the most opaque-appearing policy provisions. Hartford Cas. Ins. Co. v. Litchfield Mut. Fire Ins. Co., 274 Conn. 457, 463, 876 A.2d 1139, 1143-44 (2005). "If the terms of the policy are clear and unambiguous, then the [contract] language . . . must be accorded its natural and ordinary meaning." Schilberg Integrated Metals Corp. v. Cont'l Cas. Co., 263 Conn. 245, 267, 819 A.2d 773, 789 (2003) (citations omitted). Conn. Med. Ins. Co., 286 Conn. at 6, 942 A.2d at 338 (citations, internal quotation marks, and brackets omitted).
The Connecticut Supreme Court's answers leave no doubt that the district court correctly found (1) that the only location relevant in determining whether the homeowner's policy provided the subject coverage was the site of the accident and (2) that the accident did not occur at an "insured location," as that language is construed under Connecticut law. Accordingly, the district court properly granted summary judgment to Royal, declaring that the foundational homeowner's policy did not cover the ATV accident that allegedly caused injury to Conor.
Appellants argue that the ruling of the district court which found that the umbrella policy did not provide coverage is erroneous for two main reasons. They...
To continue reading
Request your trial