Atlantic Mutual Ins v. NationsBank ( 2001 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
SECURITY INSURANCE COMPANY OF 
HARTFORD,
Plaintiff,
and
ATLANTIC MUTUAL INSURANCE
COMPANY; COMMERCIAL UNION
INSURANCE COMPANY; FEDERAL
INSURANCE COMPANY; LIBERTY
MUTUAL INSURANCE COMPANY;
GENERAL ACCIDENT INSURANCE
COMPANY OF AMERICA; HARTFORD
FIRE INSURANCE COMPANY; VIGILANT
INSURANCE COMPANY, GREAT
NORTHERN INSURANCE COMPANY,
Intervenors-Appellants,
v.  No. 00-1482
NATIONSBANK, N.A.,
Defendant-Appellee,
and
ARCADE TEXTILES, INCORPORATED;
YORK COUNTY INDUSTRIES, LIMITED;
ABSOLUTELY TERRY COMPANY,
INCORPORATED; AMERICAN SPIRIT
INDUSTRIES, INCORPORATED; AMERICAN
SPIRIT FASHIONS, LIMITED, BARAS
JERSEY, INCORPORATED; BEATE
REALTY CORPORATION; BLOCK’S
FASHION FABRICS, INCORPORATED;
BRASKINGS INCORPORATED; BRITANNIA
MILLS, INCORPORATED; BROOKS

2 SECURITY INSURANCE CO. v. NATIONSBANK
TEXTILES, INCORPORATED; C&L OF 
NEW YORK CORPORATION; CHARLENE
FABRICS CORPORATION; CONTEMPORA
FABRICS, INCORPORATED; CREATIVE
FABRIC SERVICES, LLC; CYBER KNITS,
INCORPORATED; DYNASTY USA,
INCORPORATED; ESSEX FABRICS,
INCORPORATED; ETHNIX NEW YORK,
INCORPORATED; FABRIC AND FABRIC,
INCORPORATED; FAVRILE FABRICS OF
FLORIDA, INCORPORATED; KARMAR
FABRICS, INCORPORATED; KNIT IDEAS,
INCORPORATED; KUTTNER PRINTS,
INCORPORATED; LA CENTURY
TEXTILES, INCORPORATED; LEAMARK,
INCORPORATED; LIBA FABRICS
CORPORATION; PLAN B TEXTILES,
LLC; PAUL GOTTLIEB & COMPANY; 
PLAZA TEXTILE CORPORATION; RG
TEXTILE COMPANY, INCORPORATED;
RPJ SPORTSWEAR, INCORPORATED;
ROSS SPORTS WEAR, INCORPORATED;
SPANTECH FABRICS CORPORATION;
SPORTSWEAR, INCORPORATED;
STARENSIER, INCORPORATED;
STYLETEX, INCORPORATED; SUMMIT
KNITTING MILLS, INCORPORATED;
SWINGTIME, INCORPORATED; SYMPHONY
FABRICS CORPORATION; TODD
KNITTING CORPORATION; TRIPLE TEX
FABRICS; UNIVERSAL MFG
CORPORATION; VERATEX,
INCORPORATED,
Defendants,

SECURITY INSURANCE CO. v. NATIONSBANK 3

ZURICH INSURANCE COMPANY,

Intervenor-Defendant.

SECURITY INSURANCE COMPANY OF 
HARTFORD,
Plaintiff,
and
ZURICH INSURANCE COMPANY,
Intervenor-Appellant,
v.
NATIONSBANK, N.A.,
Defendant-Appellee,
and
ARCADE TEXTILES, INCORPORATED;
YORK COUNTY INDUSTRIES, LIMITED;
ABSOLUTELY TERRY COMPANY,  No. 00-1501
INCORPORATED; AMERICAN SPIRIT
INDUSTRIES, INCORPORATED; AMERICAN
SPIRIT FASHIONS, LIMITED, BARAS
JERSEY, INCORPORATED; BEATE
REALTY CORPORATION; BLOCK’S
FASHION FABRICS, INCORPORATED;
BRASKINGS INCORPORATED; BRITANNIA
MILLS, INCORPORATED; BROOKS
TEXTILES, INCORPORATED; C&L OF
NEW YORK CORPORATION; CHARLENE
FABRICS CORPORATION; CONTEMPORA
FABRICS, INCORPORATED; CREATIVE
FABRIC SERVICES, LLC; CYBER KNITS,
INCORPORATED; DYNASTY USA,

4 SECURITY INSURANCE CO. v. NATIONSBANK
INCORPORATED; ESSEX FABRICS, 
INCORPORATED; ETHNIX NEW YORK,
INCORPORATED; FABRIC AND FABRIC,
INCORPORATED; FAVRILE FABRICS OF
FLORIDA, INCORPORATED; KARMAR
FABRICS, INCORPORATED; KNIT IDEAS,
INCORPORATED; KUTTNER PRINTS,
INCORPORATED; LA CENTURY
TEXTILES, INCORPORATED; LEAMARK,
INCORPORATED; LIBA FABRICS
CORPORATION; PLAN B TEXTILES,
LLC; PAUL GOTTLIEB & COMPANY;
PLAZA TEXTILE CORPORATION; RG
TEXTILE COMPANY, INCORPORATED;
RPJ SPORTSWEAR, INCORPORATED; 
ROSS SPORTS WEAR, INCORPORATED;
SPANTECH FABRICS CORPORATION;
SPORTSWEAR, INCORPORATED;
STARENSIER, INCORPORATED;
STYLETEX, INCORPORATED; SUMMIT
KNITTING MILLS, INCORPORATED;
SWINGTIME, INCORPORATED; SYMPHONY
FABRICS CORPORATION; TODD
KNITTING CORPORATION; TRIPLE TEX
FABRICS; UNIVERSAL MFG
CORPORATION; VERATEX,
INCORPORATED,
Defendants,

SECURITY INSURANCE CO. v. NATIONSBANK 5
ATLANTIC MUTUAL INSURANCE 
COMPANY; COMMERCIAL UNION
INSURANCE COMPANY; FEDERAL
INSURANCE COMPANY; LIBERTY
MUTUAL INSURANCE COMPANY;
GENERAL ACCIDENT INSURANCE 
COMPANY OF AMERICA; HARTFORD
FIRE INSURANCE COMPANY; VIGILANT
INSURANCE COMPANY; GREAT
NORTHERN INSURANCE COMPANY,
Intervenors-Defendants.

Appeals from the United States District Court
for the District of South Carolina, at Rock Hill.
Joseph F. Anderson Jr., Chief District Judge.
(CA-98-2545-0-17)
Argued: January 24, 2001
Decided: March 15, 2001
Before NIEMEYER and KING, Circuit Judges, and
David A. FABER, United States District Judge for the
Southern District of West Virginia, sitting by designation.
Affirmed by unpublished per curiam opinion.
COUNSEL
ARGUED: Peter W. Vogt, Charlotte, North Carolina, for Appellants.
James Wade Sheedy, SPENCER & SPENCER, P.A., Rock Hill,
South Carolina, for Appellee. ON BRIEF: Tracy Eggleston, Char-
lotte, North Carolina; John F. Blount, SWIFT, CURRIE, MCGHEE
& HIERS, Atlanta, Georgia, for Appellants. W. Chaplin Spencer, Jr.,
6 SECURITY INSURANCE CO. v. NATIONSBANK
SPENCER & SPENCER, P.A., Rock Hill, South Carolina, for Appel-
lee.
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
OPINION
PER CURIAM:
In this diversity action, the Intervenor-Appellants Atlantic Mutual
Insurance Company, et al. ("Appellants"),1 challenge the district
court’s award of partial summary judgment to appellee NationsBank.
The district court filed its Order granting partial summary judgment
on March 16, 2000; thereafter, on April 28, 2000, the court certified
its Order as immediately appealable under Rule 54(b) of the Federal
Rules of Civil Procedure.2 We agree with the analysis of the district
court, and we affirm its decision.
1
The nine Intervenor-Appellants are Atlantic Mutual Insurance Com-
pany, Commercial Union Insurance Company, Federal Insurance Com-
pany, General Accident Insurance Company of America, Great Northern
Insurance Company, Hartford Fire Insurance Company, Liberty Mutual
Insurance Company, Vigilant Insurance Company, and Zurich Insurance
Company.
2
We recognize that an award of partial summary judgment is not ordi-
narily a final order and, as such, not immediately appealable. In this case,
however, after Notices of Appeal were prematurely filed (on April 12
and April 17, 2000), the district court, on April 28, 2000, certified its
March 16, 2000 Order as a "final judgment" under Rule 54(b). See Har-
rison v. Edison Bros. Apparel Stores, Inc., 924 F.2d 530, 532 (4th Cir.
1991) (absent prejudice to appellee, district court may enter a 54(b) judg-
ment after notice of appeal has been filed). Thus, in conformance with
Rule 4(b)(2) of the Federal Rules of Appellate Procedure, the prema-
turely filed notices of appeal are treated as filed on "the date of and after
the entry" of judgment. We accordingly possess jurisdiction over these
appeals pursuant to 28 U.S.C. § 1291.
SECURITY INSURANCE CO. v. NATIONSBANK 7
I.
A.
On November 3, 1997, a fire destroyed a textile mill operated by
Arcade Textile, Inc. ("Arcade") in Rock Hill, South Carolina. Among
the items lost in the fire were a significant volume of "griege goods,"
which belonged to Arcade’s customers and were in various stages of
finishing. Arcade was insured under a policy (the "Policy") issued by
Plaintiff Security Insurance Company ("Security"). The Policy pro-
vided Arcade with $4.42 million in coverage for "Business Personal
Property," including coverage for the "personal property of others."
J.A. 92. Pursuant to the Policy, the phrase "personal property of oth-
ers" was defined as "property of others that is in ‘your’ care, custody,
or control." Id.
As a result of the losses caused by the fire, more than twenty-five
of Arcade’s customers have claimed against the proceeds of the Pol-
icy. Together, the claims total several millions of dollars in excess of
the coverage provided Arcade under the Policy. In order to settle the
various issues arising from these claims, Security filed a Complaint
for Interpleader in the District of South Carolina, asking the court to
distribute the proceeds of the Policy.
The nine Appellants insured fifteen of Arcade’s customers. In
accordance with those customers’ insurance policies, the Appellants
were called upon to reimburse their policyholders for the destruction
of the griege goods. The Appellants sought leave to intervene in the
interpleader proceedings in the district court, requesting contribution
under the Business Personal Property provisions of the Policy. On
August 6, 1999, NationsBank filed its Motion for Summary Judgment
in the interpleader action, seeking a ruling that the Appellants were
not entitled to contribution of any kind under the Policy.3 The district
court agreed with NationsBank on this point and issued its March 16,
2000 Order granting partial summary judgment. This appeal followed.
3
NationsBank possesses a lien on Arcade’s personal property that was
damaged in the fire. It therefore was also a claimant on the proceeds of
the Policy.
8 SECURITY INSURANCE CO. v. NATIONSBANK
B.
The Appellants assert that, because the coverage provided by the
Policy on the griege goods was concurrent with the coverage they
provided their policyholders for those same goods, they are entitled
to pro rata contribution from the proceeds of the Policy. Under South
Carolina law, concurrent insurance coverage exists if separate policies
insure (1) the same entity, (2) against the same risk, (3) to the same
object, (4) absent some express intent to the contrary ("total policy
insuring intent"). South Carolina Ins. Co. v. Fidelity and Guaranty
Ins. Underwriters, Inc., 489 S.E.2d 200, 203 (S.C. 1997) ("SCIC"). In
its Order, the district court analyzed the issues fully, and it found that
concurrent coverage did not exist because the Policy, on the one hand,
and the policies written by the Appellants, on the other, did not insure
the same entity. Specifically, the court ruled that "[a]lthough the cov-
erage [of ‘personal property of others’ in the Policy] benefitted the
third parties, it was primarily for the benefit of Arcade." Order, at 6.
Additionally, the district court concluded that the "total policy
insuring intent" of both the Policy and the policies written by the
Appellants was that the losses involved should not be prorated. The
district court based this determination on three factors. First, it held
that the "policies are not on an equal footing" because they were
intended to insure different entities, namely, either Arcade or the
Appellants, but not both. Order, at 6, 7. Second, the district court
observed that the Appellants were "attempting to benefit from a pol-
icy on which they have not paid any premium." Id., at 7. Third, the
court reasoned that prorating "only benefits the intervenor insurance
companies." Id.; see SCIC, 489 S.E.2d at 204 (listing factors for
courts to consider in ascertaining intent of insurance policies).
II.
We have fully considered the briefs and arguments of the parties,
and we agree with the district court. It properly concluded, applying
the law of South Carolina, that NationsBank was entitled to partial
summary judgment. We are therefore content to affirm on the reason-
ing of the district court’s Order of March 16, 2000. See Security Ins.
Co. of Hartford v. Arcade Textiles, Inc., No. CA-98-2545-17 (D.S.C.
Mar. 16, 2000).
AFFIRMED