U.S. Pipe & Foundry Co. v. U.S. Fidelity & Guaranty Co., 73-3770

Citation505 F.2d 88
Decision Date13 December 1974
Docket NumberNo. 73-3770,73-3770
PartiesUNITED STATES PIPE AND FOUNDRY COMPANY, Plaintiff-Appellant, v. UNITED STATES FIDELITY AND GUARANTY CO., Defendant-Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)

Lyman H. Harris, Birmingham, Ala., for plaintiff-appellant.

S. R. Starnes, Ralph B. Tate, Birmingham, Ala., for defendant-appellee.

Before GODBOLD and MORGAN, Circuit Judges, BOOTLE, District Judge.

BOOTLE, District Judge:

United States Pipe and Foundry Company (hereinafter referred to as U.S. Pipe) filed suit seeking a declaration that it possessed certain rights under an insurance policy issued by United States Fidelity and Guaranty Company (hereinafter referred to as USF & G) or under a certificate of insurance issued incident to the policy. The district court, sitting without a jury, found that no rights accrued to U.S. Pipe as a result of either the policy or the certificate. We affirm.

William P. Reed leased certain land from U.S. Pipe. The lease was for a one year term commencing January 1, 1970, and would automatically be renewed from year to year until terminated pursuant to its terms. Under the lease, Reed was to procure liability insurance. USF & G issued a policy to 'William P. Reed DBA Southern Packaging Company' and sent a certificate of insurance to U.S. Pipe. A printed provision on the certificate stated that USF & G 'will make every effort to notify the holder of this Certificate of any material change in or cancellation of these policies, but assumes no responsibility for failure to do so.' A typed provision stated: 'A ten day notice will be given to the holder of this certificate, in event of cancellation.' Approximately six months later, Southern Packaging was incorporated as Southern Packaging Company, Inc. The insurance policy was renewed in December 1970, and another certificate of insurance, identical to the first one, was sent to U.S. Pipe.

On April 26, 1971, USF & G notified Reed that it was cancelling the policy. No notice of cancellation was ever sent to U.S. Pipe. An explosion occurred on the leased property on July 25, 1971; there was extensive damage to surrounding property, and approximately 1100 lawsuits were filed against U.S. Pipe. On the day after the explosion, USF & G mailed a premium refund check to William P. Reed.

U.S. Pipe filed suit for declaratory judgment. The district court entered its findings of fact and conclusions of law, ruling that USF & G was in no way liable to U.S. Pipe. U.S. Pipe then appealed to this court.

Since U.S. Pipe was not a named beneficiary under the insurance policy, any coverage which it seeks to enjoy would have to arise from the certificate of insurance. A certificate issued to a lessor indicating that liability insurance has been acquired by the lessee does not constitute a contract between the lessor and the insurer. See McDowell v. United States Fidelity & Guaranty Co., 260 Ala. 412, 71 So.2d 64 (1954); Provident Life & Accident Insurance Co. v. Pressley, 37 Ala.App. 153, 64 So.2d 618 (1953); Skezas v. Safway Steel Products, Inc., 85 Ill..app.2d 295, 229 N.E.2d 781 (1967); Peacock & Peacock, Inc. v. Stuyvesant, 332 F.2d 499 (8th Cir. 1964). The certificate simply provides a method whereby a lessee can show that he has complied with a lease provision requiring that insurance be obtained by the lessee.

The provision regarding notification in the event of cancellation is a mere promise, unsupported by any consideration. Although forbearance can be a consideration, the district court found no such forbearance and found further that the provision with respect to a ten day notice was not supported by 'any consideration in the legal sense by way of either detriment to U.S....

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18 cases
  • Beverly v. Macy
    • United States
    • U.S. Court of Appeals — Eleventh Circuit
    • April 11, 1983
    ...Corp. v. Anderson Gin Co., 512 F.2d 784, 787-88 (5th Cir.1975) (applying Alabama law); United States Pipe & Foundry Co. v. United States Fidelity & Guaranty Co., 505 F.2d 88, 90 (5th Cir.1974) (applying Alabama law). According to the Restatement (Second) of A beneficiary of a promise is an ......
  • Blake v. Bank of Am., N.A.
    • United States
    • U.S. District Court — Middle District of Alabama
    • February 27, 2012
    ...law); see Riegel Fiber Corp. v. Anderson Gin Co., 512 F.2d 784, 787–88 (5th Cir.1975) (same); United States Pipe & Foundry Co. v. United States Fid. & Guar. Co., 505 F.2d 88, 90 (5th Cir.1974) (same). Blake's complaint alleges the defendant's securitized her loan and, once they did, her mor......
  • Ross v. Imperial Const. Co., Inc.
    • United States
    • U.S. Court of Appeals — Fifth Circuit
    • May 5, 1978
    ...benefit. Anderson v. Howard Hall Co., 278 Ala. 491, 179 So.2d 71, 73 (1965); accord, United States Pipe & Foundry Co. v. United States Fidelity & Guaranty Co., 505 F.2d 88, 90 (5th Cir. 1974); Burgreen Contracting Co. v. Goodman, 55 Ala.App. 209, 314 So.2d 284, 287, pet. for cert. stricken,......
  • Riegel Fiber Corp. v. Anderson Gin Co.
    • United States
    • U.S. Court of Appeals — Fifth Circuit
    • May 9, 1975
    ...we do not pause to consider the merits of Riegel's other theories. (1-3) In United States Pipe v. Foundry Co. v. United States Fidelity and Guaranty Co., 5th Cir. 1974, 505 F.2d 88, 90 we noted that Under Alabama law ... for a contract to be considered made for the benefit of a third person......
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    ...165 Wash. App. 223, 267 P.3d 479 (2011). [16] Fifth Circuit: United States Pipe & Foundry Co. v. United States Fidelity & Guaranty Co., 505 F.2d 88, 89 (5th Cir. 1974); National Marine, Inc. v. Glencore, Ltd., 1998 WL 204734, at *3 (E.D. La. Apr. 23, 1998). Ninth Circuit: Atlas Assurance Co......
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    ...165 Wash. App. 223, 267 P.3d 479 (2011). [15] Fifth Circuit: United States Pipe & Foundry Co. v. United States Fidelity & Guaranty Co., 505 F.2d 88, 89 (5th Cir. 1974); National Marine, Inc. v. Glencore, Ltd., 1998 WL 204734, at *3 (E.D. La. Apr. 23, 1998). Ninth Circuit: Atlas Assurance Co......

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