Global Aerospace, Inc. v. Hartford Fire Insurance , 354 F. App'x 501 ( 2009 )

09-0580-cv
Global Aerospace, Inc., et al. v. Hartford Fire Ins. Co., et al.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO SUMMARY ORDERS FILED
AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY THIS COURT’S LOCAL RULE 32.1 AND
FEDERAL RULE OF APPELLATE PROCEDURE 32.1. IN A BRIEF OR OTHER PAPER IN WHICH A LITIGANT
CITES A SUMMARY ORDER, IN EACH PARAGRAPH IN WHICH A CITATION APPEARS, AT LEAST ONE CITATION
MUST EITHER BE TO THE FEDERAL APPENDIX OR BE ACCOMPANIED BY THE NOTATION: “(SUMMARY ORDER).”
UNLESS THE SUMMARY ORDER IS AVAILABLE IN AN ELECTRONIC DATABASE WHICH IS PUBLICLY ACCESSIBLE
WITHOUT PAYMENT OF FEE (SUCH AS THE DATABASE AVAILABLE AT HTTP://WWW.CA2.USCOURTS.GOV), THE
PARTY CITING THE SUMMARY ORDER MUST FILE AND SERVE A COPY OF THAT SUMMARY ORDER TOGETHER
WITH THE PAPER IN WHICH THE SUMMARY ORDER IS CITED. IF NO COPY IS SERVED BY REASON OF THE
AVAILABILITY OF THE ORDER ON SUCH A DATABASE, THE CITATION MUST INCLUDE REFERENCE TO THAT
DATABASE AND THE DOCKET NUMBER OF THE CASE IN WHICH THE ORDER WAS ENTERED.
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 25 th day of November, two thousand nine.
5
6 PRESENT: DENNIS JACOBS,
7 Chief Judge,
8 PIERRE N. LEVAL,
9 Circuit Judge,
10 GEORGE B. DANIELS, *
11 District Judge.
12
13 - - - - - - - - - - - - - - - - - - - -X
14 GLOBAL AEROSPACE, INC., formerly known
15 as Associated Aviation Underwriters,
16 Inc., and FEDERAL INSURANCE COMPANY,
17
18 Plaintiffs-Appellants,
19
20 -v.- 09-0580-cv
21
22 HARTFORD FIRE INSURANCE COMPANY, and
23 HARTFORD ACCIDENT AND INDEMNITY
24 COMPANY,
25
26 Defendants-Appellees.
27 - - - - - - - - - - - - - - - - - - - -X
*
The Honorable George B. Daniels, United States
District Court for the Southern District of New York,
sitting by designation.
1
1 APPEARING FOR APPELLANTS: KATHERINE B. POSNER, Condon &
2 Forsyth LLP, New York, N.Y.
3
4 APPEARING FOR APPELLEES: DANIELLE SPINELLI and CATHERINE
5 M.A. CARROLL, Wilmer Cutler
6 Pickering Hale and Dorr LLP,
7 Washington, D.C.
8
9 MICHAEL A. TROISI and MICHAEL P.
10 VERISCHELLI, Rivkin Radler LLP,
11 Uniondale, N.Y.
12
13 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,
14 AND DECREED that the judgment of the district court be
15 AFFIRMED.
16
17 Global Aerospace Inc. and Federal Insurance Company
18 (collectively, “Global”) appeal from the judgment of the
19 United States District Court for the Southern District of
20 New York (Kaplan, J.), granting summary judgment in favor of
21 Hartford Fire Insurance Company and Hartford Accident and
22 Indemnity Company (collectively, “Hartford”) primarily on
23 the ground that any contractual undertaking that transpired
24 between Hartford (as primary insurer) and Global (as excess
25 insurer) was expressly subject to a general exception. We
26 assume the parties’ familiarity with the underlying facts,
27 the procedural history, and the issues presented for review.
28
29 Global contends that the district court sua sponte
30 granted summary judgment with respect to the breach of
31 contract claim on a ground that Hartford never asserted and
32 that the parties never briefed. Accordingly, Global argues,
33 its opposition to the summary judgment motion did not
34 include relevant extrinsic evidence bearing upon the issue
35 that the district court found decisive. However, Hartford’s
36 brief moving for summary judgment below expressly raised
37 this ground, Global’s opposition brief below expressly
38 argued against it, and Hartford’s 56.1 Statement recited the
39 necessary factual background. The district court thus did
40 not act sua sponte.
41
2
1 Assuming arguendo that the district court did act sua
2 sponte, Global suffered no procedural prejudice. See
3 Bridgeway Corp. v. Citibank, 201 F.3d 134, 139 (2d Cir.
4 2000) (“If the district court fails to give notice before
5 sua sponte granting summary judgment and the moving party
6 was, as a result, procedurally prejudiced, we must reverse.
7 A party is procedurally prejudiced if it is surprised by the
8 district court’s action and that surprise results in the
9 party’s failure to present evidence in support of its
10 position.”). Until Global filed its appellate reply brief,
11 Global failed to identify a single piece of evidence outside
12 the record below that it would have introduced had it been
13 given notice; moreover, the record below already included
14 evidence upon which Global could rely for the proposition
15 allegedly supported by this late-identified evidence. Cf.
16 Bridgeway Corp., 201 F.3d at 140-41 (finding no procedural
17 prejudice in part because “at no point since the district
18 court’s decision [did the appellant] identif[y] any piece of
19 evidence . . . that it would have introduced had it been
20 given notice”). Accordingly, Global’s argument that the
21 district court improperly acted sua sponte lacks merit.
22
23 We review a district court’s grant of summary judgment
24 de novo. Guilbert v. Gardner, 480 F.3d 140, 145 (2d Cir.
25 2007). Summary judgment is appropriate “if the pleadings,
26 the discovery and disclosure materials on file, and any
27 affidavits show that there is no genuine issue as to any
28 material fact and that the movant is entitled to judgment as
29 a matter of law.” Fed. R. Civ. P. 56(c).
30
31 Applying applicable standards to Global’s contentions
32 on appeal, we conclude that the general exception to the
33 payment schedule supports the grant of summary judgment with
34 respect to the breach of contract, promissory estoppel, and
35 negligent misrepresentation claims. The March 31, 1989
36 letter sent from Hartford’s counsel to Global’s counsel set
37 forth a payment schedule “[a]ssuming no further compensation
38 payments” to Captain Bond. As the district court
39 determined, the letter thereby “expressly contemplated the
40 possibility of further payments to Bond.” Global Aerospace,
41 Inc. v. Hartford Fire Ins. Co., No. 06 Civ. 7104(LAK), 2009
42 WL 89122, at *6 (S.D.N.Y. Jan. 13, 2009). Indeed, “[w]hile
3
1 [cost-of-living adjustments] were not specifically addressed
2 in the letter, they certainly were not precluded by the
3 broad ‘further compensation’ language.” Id. at *6 n.36.
4 Accordingly, we affirm the district court’s grant of summary
5 judgment on the breach of contract, promissory estoppel, and
6 negligent misrepresentation claims.
7
8 Assuming arguendo that Hartford owed a duty of good
9 faith to Global, we further conclude that Hartford did not
10 breach that duty. Under New York law, “[t]o establish a
11 prima facie case of bad faith, an excess insurer must show
12 that the primary insurer’s conduct constituted a ‘gross
13 disregard’ of the excess insurer’s interest.” Schwartz v.
14 Liberty Mut. Ins. Co., 539 F.3d 135, 151 (2d Cir. 2008).
15 The primary insurer’s conduct “must involve a deliberate or
16 reckless failure to place on equal footing the interests of
17 the excess insurer with its own interests . . . .” Id.
18 (internal quotation marks, citation, and brackets omitted).
19
20 Hartford’s failure to notify Global of Hartford’s
21 decision to pay the cost-of-living adjustments does not
22 create a genuine issue of material fact because (i) Global
23 acknowledges that it “did not place any demands on Hartford
24 to make periodic reports to Global or to notify Global of
25 any communications with Bond as they occurred,” and (ii)
26 neither Hartford nor Global identifies any independent basis
27 obliging Hartford to provide such notice. Assuming arguendo
28 that Hartford erred in determining that the Social Security
29 Administration’s classification of Bond’s disability as
30 permanent and total entitled Bond to cost-of-living
31 adjustments, such error would not amount to gross disregard.
32 See Pavia v. State Farm Mut. Auto. Ins. Co., 82 N.Y.2d 445,
33 453, 456, 626 N.E.2d 24 (1993) (a primary insurer’s
34 “ordinary negligence” or “mistaken judgment” does not
35 establish gross disregard). The remaining evidence upon
36 which Global relies in attempting to defeat summary judgment
37 is irrelevant to Hartford’s consideration of Global’s
38 interests concerning the cost-of-living adjustments.
39
40 For the foregoing reasons, we AFFIRM the judgment of
41 the district court.
42
43
44 FOR THE COURT:
45 CATHERINE O’HAGAN WOLFE, CLERK
46
47 By:___________________________
4