Safeco Insurance Co. of America v. Lawrence Brunoli, Inc., Lawrence

14-2289-cv
Safeco Insurance Co. of America v. Lawrence Brunoli, Inc., Lawrence Brunoli, Jr.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
Rulings by summary order do not have precedential effect. Citation to a summary
order filed on or after January 1, 2007, is permitted and is governed by Federal
Rule of Appellate Procedure 32.1 and this court’s Local Rule 32.1.1. When citing a
summary order in a document filed with this court, a party must cite either the
Federal Appendix or an electronic database (with the notation “summary order”). A
party citing a summary order must serve a copy of it on any party not represented
by counsel.
1 At a stated term of the United States Court of Appeals for the Second Circuit, held
2 at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New
3 York, on the 1st day of April, two thousand fifteen.
4
5 PRESENT:
6
7 CHESTER J. STRAUB,
8 ROBERT D. SACK,
9 CHRISTOPHER F. DRONEY,
10 Circuit Judges,
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13 SAFECO INSURANCE COMPANY OF AMERICA,
14
15 Plaintiff-Appellee,
16
17 v. No. 14-2289-cv
18
19 LAWRENCE BRUNOLI, INC., LAWRENCE BRUNOLI, JR.,
20
21 Defendants-Appellants.
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25 FOR DEFENDANTS-APPELLANTS: Margaret Fogerty Rattigan, Murphy, Laudati,
26 Kiel, Buttler & Rattigan, LLC, Farmington, CT;
27 P. Jo Anne Burgh, Glastonbury, CT.
1
2 FOR PLAINTIFF-APPELLEE: Bradford R. Carver, Jonathan C. Burwood,
3 Hinshaw & Culbertson LLP, Boston, MA.
4
5 Appeal from a judgment of the United States District Court for the District of
6 Connecticut (Shea, J.).
7
8 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND
9 DECREED that the judgment of the District Court is AFFIRMED IN PART and
10 VACATED IN PART and the case is REMANDED.
11
12 Lawrence Brunoli, Inc. and Lawrence Brunoli, Jr. (collectively, “LBI”),
13 Defendants-Appellants, appeal from the district court’s grant of summary judgment in
14 favor of Plaintiff-Appellee Safeco Insurance Company of America (“Safeco”), awarding
15 Safeco $4,687,147.84 in collateral security. On appeal, LBI contends that it is not
16 required to post collateral where Safeco has not yet suffered any actual loss on a claim or
17 where Safeco faces allegedly meritless claims. We assume the parties’ familiarity with
18 the underlying facts, procedural history, and issues on appeal.
19 We “review[] a district court’s grant of summary judgment de novo, viewing the
20 facts in the light most favorable to the non-moving party and resolving all factual
21 ambiguities in its favor.” Singh v. City of New York, 524 F.3d 361, 366 (2d Cir. 2008).
22 Summary judgment is appropriate “when the contractual language on which the moving
23 party’s case rests is found to be wholly unambiguous and to convey a definite meaning.”
24 Topps Co. v. Cadbury Stani S.A.I.C., 526 F.3d 63, 68 (2d Cir. 2008).
25
26 Under Connecticut law, “[i]n situations where the parties have their agreement in
27 writing, their intention is to be determined from its language and not on the basis of any
28 intention either may have secretly entertained.” Sturman v. Socha, 463 A.2d 527, 532
29 (Conn. 1983) (internal quotation marks omitted).
30 A contract is unambiguous when its language is clear and
31 conveys a definite and precise intent. . . .The court will not
32 torture words to impart ambiguity where ordinary meaning
33 leaves no room for ambiguity. . . . Moreover, the mere fact
34 that the parties advance different interpretations of the
35 language in question does not necessitate a conclusion that
36 the language is ambiguous.
37 Cruz v. Visual Perceptions, LLC, 84 A.3d 828, 834 (Conn. 2014)
38 (alterations in original) (internal quotation marks omitted).
2
1 We conclude that the plain language of the General Agreement of Indemnity for
2 Contractors (“GAI”) supports a broad interpretation of the collateral security provision.
3 Under the terms of the parties’ agreement, collateral security is not limited to actual
4 losses: “[LBI] will, if requested by [Safeco], either deposit collateral with [Safeco],
5 acceptable to [Safeco], sufficient to cover all exposure under such bond or bonds, or
6 make provisions acceptable to [Safeco] for the funding of the bonded obligation(s).” App.
7 12, General Provisions ¶ 5. Moreover, the GAI’s broad language indicating that
8 collateral security should “cover all exposure” should also be read in light of another
9 provision requiring that the agreement “be liberally construed so as to protect, exonerate
10 and indemnify [Safeco].” Id., General Provisions ¶ 11. We have previously interpreted
11 the same contractual language to unambiguously require a contractor to provide a surety
12 with collateral to cover potential losses and expenses. See Safeco Ins. Co. of Am. v.
13 Hirani/MES, JV, 480 F. App’x 606, 608 (2d Cir. 2012) (summary order) (“Under the
14 plain, unambiguous language of the contracts, Defendants were required to provide
15 collateral security upon demand if Safeco became exposed to potential losses and
16 expenses under the surety bonds and, therefore, Safeco was entitled to partial summary
17 judgment as to its right to collateral security.”). The district court did not err in its
18 interpretation of the GAI.
19 At the time the district court decided the motion for summary judgment on
20 collateral security, two of the five underlying claims against Safeco had been resolved.
21 The district court’s judgment accordingly ordered that LBI provide collateral equal to the
22 amount of the remaining three claims. LBI did not subsequently argue in its submissions
23 opposing indemnification and requesting reconsideration of the value of the collateral
24 security that other claims had been resolved. Therefore, the collateral security judgment
25 properly included the amount claimed in the three remaining bond claims against LBI
26 and Safeco. Safeco acknowledges that all of the claims underlying this action, with the
27 exception of Suntech of Connecticut’s claim for $601,304.54, were resolved after the
28 district court ordered LBI to post $4,687,147.84 in collateral. It accordingly requests that
29 this Court either modify the district court’s judgment to reflect this change in
30 circumstances or vacate the district court’s judgment with respect to the amount of
31 collateral security it ordered LBI to pay. The district court will determine what claims
32 are still pending and award collateral security in the first instance. Cf. Korn v. Franchard
33 Corp., 456 F.2d 1206, 1208 (2d Cir. 1972) (“[W]here circumstances have changed
34 between the ruling below and the decision on appeal, the preferred posture is to remand
35 to give the district court an opportunity to pass on the changed circumstances.”).
36 Thus, we AFFIRM IN PART AND VACATE IN PART. We AFFIRM the
37 district court’s judgment to the extent the court ordered LBI to pay collateral security and
38 VACATE the district court’s judgment with respect to the amount of the collateral
3
1 security and REMAND to the district court to amend the judgment to recalculate the
2 amount of collateral security due to Safeco under the GAI in light of intervening
3 settlements.
4 FOR THE COURT:
5 Catherine O’Hagan Wolfe, Clerk of Court
4