General Star National Insurance Company v. NY Marine and General Insurance

10-2134-cv (L)
General Star National Insurance Company v. NY Marine and General Insurance Company
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
2 for the Second Circuit, held at the Daniel Patrick Moynihan
3 United States Courthouse, 500 Pearl Street, in the City of
4 New York, on the 14th day of June, two thousand eleven.
5
6 PRESENT: DENNIS JACOBS,
7 Chief Judge,
8 DEBRA ANN LIVINGSTON,
9 Circuit Judge,
10 JED S. RAKOFF,
11 District Judge.*
12
13 - - - - - - - - - - - - - - - - - - - -X
14 GENERAL STAR NATIONAL INSURANCE
15 COMPANY,
16 Defendant-Cross-Claimant-
17 Cross-Defendant-Appellant,
18
19 -v.- 10-2134-cv (L);
20 10-2410-cv (Con)
21 UNIVERSAL FABRICATORS, INC., MUTUAL
22 MARINE OFFICE, INC., NEW YORK MARINE
23 AND GENERAL INSURANCE COMPANY,
24 Defendants-Cross-Defendants-
25 Cross-Claimants-Appellees.**
26 - - - - - - - - - - - - - - - - - - - -X
*
The Honorable Jed S. Rakoff of the United States
District Court for the Southern District of New York,
sitting by designation.
**
The Clerk of Court is respectfully directed to amend
the official caption as set forth above.
1 FOR APPELLANT: Michael S. Gollub (Christopher T.
2 Bradley, on the brief), Marshall, Conway,
3 Wright & Bradley PC, New York, New York.
4
5 FOR APPELLEES: Patrick W. Brophy, McMahon, Martine &
6 Gallagher, LLP, Brooklyn, New York.
7
8 Appeal from a judgment of the United States District
9 Court for the Southern District of New York (Scheindlin,
10 J.).
11
12 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED
13 AND DECREED that the judgment of the district court be
14 AFFIRMED.
15
16 General Star National Insurance Company (“General
17 Star”) appeals from a judgment of the United States District
18 Court for the Southern District of New York (Scheindlin, J.)
19 granting summary judgment in favor of the New York Marine
20 and General Insurance Company and Mutual Marine Office, Inc.
21 (“Mutual Marine”). Both Mutual Marine, as the primary
22 insurer, and General Star, as the excess insurer, insured
23 Universal Fabricators, Inc. (“UFI”). After a remand from
24 this Court, Gen. Star Nat’l Ins. Co. v. Universal
25 Fabricators, Inc., 585 F.3d 662 (2d Cir. 2009), the district
26 court held that General Star was obligated to reimburse
27 Mutual Marine for the amount it paid in excess of its policy
28 limit in connection with a state court suit and an agreement
29 apportioning a share of liability in that suit to UFI. We
30 assume the parties’ familiarity with the underlying facts,
31 the procedural history, and the issues presented for review.
32
33 This Court “review[s] a district court’s grant of
34 summary judgment de novo, construing the evidence in the
35 light most favorable to the non-moving party and drawing all
36 reasonable inferences in its favor.” Allianz Ins. Co. v.
37 Lerner, 416 F.3d 109, 113 (2d Cir. 2005). “We will affirm
38 the judgment only if there is no genuine issue as to any
39 material fact, and if the moving party is entitled to a
40 judgment as a matter of law.” Id. (citing Fed. R. Civ. P.
41 56(c)). “We are free to affirm an appealed decision on any
42 ground which finds support in the record, regardless of the
43 ground upon which the trial court relied.” Reid v.
2
1 Senkowski, 961 F.2d 374, 378 (2d Cir. 1992) (internal
2 quotation marks and brackets omitted) (per curiam).
3
4 General Star’s policy provides that its coverage
5 extends to UFI’s “ultimate net loss” which “may be
6 established by adjudication, arbitration or a compromise
7 settlement to which [General Star] ha[s] previously agreed
8 in writing.” J.A. at 279. General Star protests that it
9 never agreed to the compromise agreement giving rise to the
10 apportionment of liability in the underlying action against
11 UFI. However, at a time when it was anticipated that the
12 underlying action would not implicate its coverage, General
13 Star told Mutual Marine to “handle [the matter] as [it]
14 s[aw] fit” and informed Mutual Marine that it had closed its
15 file. J.A. at 186. Accordingly, Mutual Marine discharged
16 its duty to defend UFI by retaining counsel, who entered
17 into the agreement apportioning liability. See N.Y. Marine
18 & Gen. Ins. Co. v. Lafarge N. Am., Inc., 599 F.3d 102, 125
19 n.11 (2d Cir. 2010) (observing insurer generally conducts
20 defense of insured). General Star therefore relinquished
21 its ability to demand compliance with its policy provision
22 requiring written consent to a compromise agreement.
23
24 General Star further contends that counsel for UFI
25 lacked authority to enter into the agreement apportioning
26 liability. Even if counsel for UFI was not authorized to
27 enter this partial settlement agreement, the consequence
28 would be that (through counsel) the insured breached a
29 contractual duty of cooperation owed by the insured to
30 Mutual Marine. See Lowell v. Twin Disc, Inc., 527 F.2d 767,
31 770 (2d Cir. 1975) (observing that, under New York law,
32 “whenever the cooperation of the promisee is necessary for
33 the performance of the promise, there is a condition implied
34 that the cooperation will be given” (internal quotation
35 marks omitted)). Mutual Marine has obviously waived any
36 such defense to payment. Since Mutual Marine was authorized
37 by General Star to handle things as it saw fit, General Star
38 has no complaint on this score either.
39
40 Having reviewed all of the arguments properly presented
41 on appeal, we hereby AFFIRM the judgment of the district
42 court.
43 FOR THE COURT:
44 CATHERINE O’HAGAN WOLFE, CLERK
45
46
3