Brawner Builders, Inc. v. Northern Assurance Company , 637 F. App'x 703 ( 2015 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 14-1787
BRAWNER BUILDERS, INC.,
Plaintiff - Appellant,
v.
NORTHERN ASSURANCE COMPANY OF AMERICA,
Defendant - Appellee.
Appeal from the United States District Court for the District of
Maryland, at Baltimore. Catherine C. Blake, Chief District
Judge. (1:13-cv-01042-CCB)
Argued: September 16, 2015 Decided: December 15, 2015
Before MOTZ and WYNN, Circuit Judges, and DAVIS, Senior Circuit
Judge.
Affirmed by unpublished per curiam opinion.
ARGUED: Stephan Young Brennan, ILIFF, MEREDITH, WILDBERGER &
BRENNAN, P.C., Pasadena, Maryland, for Appellant. Robert
Lawrence Ferguson, Jr., FERGUSON, SCHETELICH & BALLEW, P.A.,
Baltimore, Maryland, for Appellee. ON BRIEF: Ann D. Ware,
FERGUSON, SCHETELICH & BALLEW, P.A., Baltimore, Maryland, for
Appellee.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Appellee Northern Assurance Company of America (“Northern”)
insured Appellant Brawner Builders, Inc. (“Brawner”) for
personal injury claims arising aboard Brawner’s insured vessels,
subject to an endorsement that listed six crew members to whom
the insurance policy applied. Dino Kalandras was a Brawner crew
member who was not listed in that endorsement. He suffered an
injury aboard an insured vessel and sued Brawner. Asserting
that the insurance policy did not afford coverage for the
Kalandras claim, Northern declined to provide a defense to
Brawner. Brawner sued Northern for breach of contract, and the
district court granted Northern’s motion for summary judgment.
Brawner timely appealed, and we affirm.
I.
A.
Northern, a Massachusetts insurance company, insured
Brawner, a Maryland construction contracting business, for
bodily injuries sustained and medical expenses incurred aboard
Brawner’s insured vessels (the “Policy”). The Policy provided
for defense and indemnity coverage. Under the Policy, Northern
insured Brawner for “[c]osts incurred . . . for investigation
and defense of claims.” J.A. 140. The indemnity portion of the
Policy covered claims, regardless of crew member status, for:
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(1) Loss of life and bodily injury or illness; but
excluding amounts paid under any compensation act.
(2) Hospital, medical and other expenses necessarily
and reasonably incurred with respect to loss of life,
bodily injury to, or illness of, any person.
Id. The indemnity portion also contained crew-specific
provisions, which covered:
(3) Crew member burial expense[s] not to exceed $1,000
per person.
(4) Repatriation expenses of crew member[s], excepting
such as arise from the termination of any agreement in
accordance with its terms, or the sale of the Vessel
or other voluntary act of the Assured. . . .
Id.
The dispute in this case centers on an endorsement attached
to the Policy with special conditions for navigation,
passengers, and crew members. The special conditions for
navigation and passengers stated the following:
1. Navigation
It is a condition of this policy that the vessel shall
be confined to: Chesapeake Bay and tributaries,
Susquehanna and Potomac Rivers. In no event shall the
vessel be navigated beyond the limits permitted by the
United States Coast Guard. If there is a failure to
comply with this condition there is no coverage under
this policy.
2. Passengers
It is a condition of this Policy that the number of
passengers on board the vessel shall not exceed the
number of passengers permitted by the United States
Coast Guard or other governmental authority, whichever
is less. If there is a failure to comply with this
condition there is not coverage under this policy.
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J.A. 143.
Of particular relevance here is the special condition
regarding crew members (the “Crew Condition”), which provided as
follows:
3. Crew
It is a condition of this Policy that the named crew
members covered under this policy [are] Robert
Tormollan, Robert Baker, Jr., Francis Lauer, Robert W.
Waldron, James F. Guess and Stephen Austin.
However it is a condition of this policy that there
shall not be more than two (2) crew members aboard the
insured vessel at any one time.
In the event additional crew is to be employed the
assured shall give prior notice to this company and
pay such additional premium as is required. If the
assured shall fail to give such prior notice and at
the time of loss in respects to crew there are more
crew employed, the insurance shall respond only in the
proportion that the slated number of crew bears to the
number on board at the time of the accident.
Id.
B.
On September 14, 2011, Kalandras was injured while removing
an engine cover aboard one of Brawner’s insured vessels.
Kalandras was a Brawner crew member. Brawner, however, had
inadvertently failed to inform Northern that Kalandras had been
working on insured vessels until the day of the incident. On
October 26, 2011, following an investigation, Northern denied
coverage for the claim because Kalandras was not one of the
named crew members under the Policy. Kalandras filed suit on
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December 19, 2011, against Brawner in the United States District
Court for the District of Maryland. Brawner defended the case,
and eventually settled the claim, at its own expense.
On April 8, 2013, in the United States District Court for
the District of Maryland, Brawner filed this suit against
Northern, alleging two counts of breach of contract, arguing
that Northern breached its duties to defend and to indemnify
Brawner in the suit initiated by Kalandras. Northern filed a
motion for summary judgment. The district court, construing
Brawner’s memorandum in opposition as a cross-motion for summary
judgment, denied Brawner’s cross-motion, granted Northern’s
motion, and entered judgment in favor of Northern. Brawner
Builders, Inc. v. N. Assurance Co. of Am., No. CCB-13-1042, 2014
WL 3421535, at *6 (July 9, 2014). Looking first at the language
of the Policy, the district court concluded that a reasonably
prudent layperson could interpret the Policy as providing
coverage only for the crew members expressly listed in the Crew
Condition. Next, the district court concluded that, “even if
the court were to assume a reasonable person could also
interpret the Policy” to cover crew members not listed in the
Crew Condition, the extrinsic evidence demonstrated that crew
members were required to be listed in the Crew Condition to be
covered under the Policy. Id. at *5. Brawner timely appealed.
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II.
We review grants of summary judgment de novo. Am. Civil
Liberties Union v. Mote, 423 F.3d 438, 442 (4th Cir. 2005)
(citing Lone Star Steakhouse & Saloon, Inc. v. Alpha of Va.,
Inc., 43 F.3d 922, 928 (4th Cir. 1995)). Summary judgment is
appropriate when “there is no genuine issue as to any material
fact and . . . the moving party is entitled to judgment as a
matter of law.” Id. (quoting Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 247 (1986)).
When reviewing cross-motions for summary judgment, the
Court “must review each motion separately on its own merits to
determine whether either of the parties deserves judgment as a
matter of law.” Rossignol v. Voorhaar, 316 F.3d 516, 523 (4th
Cir. 2003) (quoting Philip Morris Inc. v. Harshbarger, 122 F.3d
58, 62 n.4 (1st Cir. 1997)) (internal quotation marks omitted).
As the Court considers each individual motion, it must “resolve
all factual disputes and any competing, rational inferences in
the light most favorable to the party opposing that motion.”
Id. (quoting Wightman v. Springfield Terminal Ry. Co., 100 F.3d
228, 230 (1st Cir. 1996)) (internal quotation marks omitted).
III.
This appeal requires us to interpret the Policy to
determine its coverage in light of the Crew Condition. Brawner
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argues that the Policy is ambiguous and, as a result, should be
construed in favor of the insured. We disagree.
The parties agree that, in this diversity action, Maryland
law is controlling. See Provident Bank of Md. v. Travelers
Prop. Cas. Corp., 236 F.3d 138, 142 (4th Cir. 2000). In
Maryland, before a court may find a breach of a duty to defend
or indemnify, the insured must first establish that the claim is
potentially covered under the insurance contract. See Aetna
Cas. & Sur. Co. v. Cochran, 651 A.2d 859, 862 (Md. 1995). We
construe an insurance contract by examining its terms. Pac.
Indem. Co. v. Interstate Fire & Cas. Co., 488 A.2d 486, 488 (Md.
1985). To determine the parties’ intent, we construe the
insurance contract as a whole and afford each word its ordinary
meaning. Id.
A word’s ordinary meaning is determined “by what meaning a
reasonably prudent layperson would attach to the term” and may
be deduced by consulting dictionaries. See id. If a reasonably
prudent layperson would attach only one meaning, then the
contract is unambiguous, and we may construe it as a matter of
law. Id. at 489. If a reasonably prudent layperson could
attach more than one meaning, then the language is ambiguous,
and we may consider extrinsic evidence to resolve the ambiguity.
Id.
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Here, we have no hesitation in concluding that the Policy
is unambiguous because a reasonably prudent layperson would
construe it to have only one meaning — that the Policy covered
only the crew members listed in the Crew Condition. While the
Policy covered bodily injury and medical expenses, it specified
that such coverage was “[s]ubject to all exclusions and other
terms of this Policy.” J.A. 140. The Crew Condition was one
such “term.” Not only was the Crew Condition “attached to and
made part of” the Policy, J.A. 143, but also, under Maryland
law, “the main insurance policy and an endorsement constitute a
single insurance contract, and an effort should be made to
construe them harmoniously,” Prince George’s Cty. v. Local Gov’t
Ins. Trust, 879 A.2d 81, 88 (Md. 2005). The Crew Condition
therefore modified the Policy’s coverage for bodily injury and
medical expenses.
To resolve the central issue before us, then, we examine
whether the Crew Condition modified the Policy to require crew
members to be named. We conclude that it did. The Crew
Condition provided that the listed individuals were “the named
crew members covered under this policy.” J.A. 143. This
language plainly established that the Policy covered only those
named crew members. Merriam-Webster defines “cover” in the
insurance context as “afford[ing] protection against or
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compensation for.” Cover, Merriam-Webster Dictionary,
http://www.merriam-webster.com/dictionary/cover (last visited
Nov. 13, 2015). Similarly, Oxford defines “cover” as
“protect[ing] against a liability, loss, or accident involving
financial consequences.” Cover, Oxford Dictionaries,
http://www.oxforddictionaries.com/us/definition/american_english
/cover (last visited Nov. 13, 2015).
Giving “cover” its ordinary meaning based on these
definitions, we determine that the Policy protected Brawner
against liability for injuries to the crew members named in the
Crew Condition. It follows that a reasonably prudent layperson
would construe the Crew Condition as having identified the crew
members covered by the Policy and that, because Kalandras was
not one of the crew members identified, the Policy did not cover
liability arising from his injuries.
Brawner argues that a latent ambiguity lurks in the Policy
insofar as the Crew Condition can be read alongside other
provisions of the Policy containing different language. For
example, a provision of the Policy provided that Northern would
indemnify Brawner for the medical expenses of “any person,”
J.A. 140, which, arguably, could include “any member of the
crew.” According to Brawner, other policy language is similarly
confounding: the Policy’s bodily injury and medical expenses
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provisions, for example, were not limited to crew members,
whereas the provisions for burial and repatriation expenses
were. In an analogous vein, moreover, the special policy
conditions relating to navigation and passengers expressly
stated that “there is no coverage under this policy” if Brawner
failed to comply with their terms, as did a separate provision
creating a general condition for seaworthiness. J.A. 143.
Thus, to construe the Crew Condition to limit coverage, as a
matter of law, only to the named crew members, Brawner argues,
would effectively render the language in those other provisions
superfluous. We find this contention wholly unpersuasive.
The mere fact that the Crew Condition contained no limiting
language or explicit disclaimers found elsewhere in the Policy
affords us no warrant to construct an ambiguity from their
absence. Our task is to construe the language of the Crew
Condition in accordance with the plain meaning evident as the
parties agreed to it, not to go in search of language in other
provisions of the Policy describing other coverages and other
risks.
To be sure, the Policy provided for personal injury and
medical expenses coverage for “any person,” obviously a term
more expansive than “named crew member[s].” But this difference
in language does not aid Brawner because, under Maryland law, an
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endorsement controls, rather than the main policy, where the two
provisions conflict. Local Gov’t Ins. Trust, 879 A.2d at 88.
As the Crew Condition, set forth in an endorsement to the
Policy, expressly limited coverage to “named crew members,” we
must read the Policy’s coverage as limited in the same way.
Under this reading, the Policy would still provide coverage for
“any person” injured on an insured vessel, but to the extent the
injured party is a crew member, the Crew Condition required the
crew member to be named.
Our construction of the Policy is entirely harmonious with
the language in the conditions for navigation, passengers, and
seaworthiness. The language in those conditions signals that
coverage would have been denied entirely if the conditions were
not met. If the Crew Condition was not satisfied, however,
coverage would have only been denied for any unnamed crew
member. For example, a single occurrence could result in
injuries to both a named crew member and an unnamed crew member.
In that instance, Brawner would only be denied coverage for the
unnamed crew member.
Finally, Brawner argues that the Crew Condition served
mainly to cap the number of crew members allowed aboard an
insured vessel. Brawner relies on language in the Crew
Condition, and similar language in the crew warranty, that
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stated that “there shall not be more than two (2) crew members
aboard the insured vessel at any one time.” J.A. 143, 154. If
an accident occurred with more than two crew members aboard,
then the Policy only covered “the proportion that the stated
number of crew bears to the number on board at the time of the
accident.” Id. Brawner has not shown, however, how a two-crew-
member limitation conflicts with the explicit requirement that
the two crew members be named in the Policy.
Accordingly, we hold that the Policy unambiguously required
crew members to be named in the Crew Condition for coverage to
apply, and Northern is entitled to judgment as to the Kalandras
claim because he was not a named crew member at the time he
suffered his injury. *
IV.
For the reasons set forth, the judgment of the district
court is
AFFIRMED.
* Having concluded that the Crew Condition is unambiguous
and that Northern is entitled to judgment as a matter of law, we
need not examine the district court’s alternative ruling that,
even if the Policy were deemed ambiguous in some relevant
respect, undisputed facts based on extrinsic evidence would
yield the same result.
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