First Mercury Ins. Co. v. Cincinnati Ins. Co.
Decision Date | 26 February 2018 |
Docket Number | Nos. 17-2006,17-2010,s. 17-2006 |
Citation | 882 F.3d 1289 |
Parties | FIRST MERCURY INSURANCE COMPANY, Plaintiff-Counter/Defendant-Appellant/Cross-Appellee, v. CINCINNATI INSURANCE COMPANY, Defendant-Counter/Plaintiff-Appellee/Cross-Appellant. |
Court | U.S. Court of Appeals — Tenth Circuit |
Gregory D. Steinman, Madison, Mroz, Steinman & Dekleva, P.A., Albuquerque, New Mexico, for First Mercury Insurance Company.
Timothy L. Fields (Nathan T. Nieman and Elizabeth A. Martinez with him on the briefs), Modrall Sperling Roehl Harris & Sisk, P.A., Albuquerque, New Mexico, for Cincinnati Insurance Company.
Before BACHARACH, MURPHY, and McHUGH, Circuit Judges.
This appeal asks us to settle a dispute between insurers over coverage for the defense and indemnification of a wrongful death action brought in a separate lawsuit. First Mercury Insurance Company ("First Mercury") assumed the duty to defend the wrongful death suit against Bingham Construction Company ("Bingham"), with a reservation of rights. First Mercury then filed a complaint for declaratory judgment in federal district court for the District of New Mexico against Cincinnati Insurance Company ("Cincinnati"), seeking a declaration that it had no obligation to indemnify Bingham, and that Cincinnati had an obligation to reimburse First Mercury for the costs of defense. First Mercury argued, among other things, that the underlying contract between Bingham and High Desert Roofing, Inc. ("High Desert"), the subcontractor, was void under New Mexico Stat. Ann. § 56-7-1, and that even if valid, the policy did not cover the wrongful death action.
The parties eventually filed cross-motions for summary judgment. The district court ruled that First Mercury had a duty to defend and indemnify Bingham and that Cincinnati had no obligation to reimburse any part of the settlement amount or the defense costs. First Mercury now appeals, and Cincinnati has filed a conditional cross-appeal. We affirm the district court’s order, although we do so on different grounds. We therefore do not address the issues raised in Cincinnati’s conditional cross-appeal.
In July 2012, Bingham entered into a construction agreement ("subcontract agreement") with High Desert for roofing services to be performed by High Desert at a tractor supply store in Farmington, New Mexico. The subcontract agreement requires High Desert to procure and maintain an insurance policy relating to its work on the tractor supply store and to add Bingham as an additional insured on that policy. These conditions are set forth in the following provisions of the subcontract agreement:
In addition to the foregoing provisions, the subcontract agreement contains a number of indemnity clauses, including the following:
In accordance with the subcontract agreement, High Desert obtained an insurance policy from First Mercury. First Mercury issued High Desert policy number IL-CGL-0000003261-01 (the "First Mercury Policy"), which, barring exclusions, provides High Desert commercial general liability coverage. The general liability provisions cover, among other things, "those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury’ or ‘property damage’ to which this insurance applies," and create a "duty [for First Mercury] to defend the insured against any ‘suit’ seeking those damages."1 App. I at 94. The First Mercury Policy also includes an endorsement regarding additional insureds ("Additional Insureds Endorsement") that provides automatic additional insured status to persons or organization "[a]s required by written contract signed by both parties prior to loss." Id. at 106. That endorsement provides:
The First Mercury Policy also contains another endorsement, entitled "Primary and Non-Contributing Insurance," which provides that the policy is primary over any other insurance when required by a written contract. In relevant part, the endorsement provides:
App. II at 179. Thereafter, First Mercury provided Bingham a certificate of insurance that describes the coverage purchased by High Desert as follows:
The general liability policy includes a blanket automatic additional insured endorsement ... that provides additional insured status to the certificate holder [Bingham] only when there is a written contract between the named insured [High Desert] and the certificate holder [Bingham] that require[s] such status. The general liability policy includes a blanket automatic waiver of subrogation...
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