NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

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No. 13-2424

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STAR INSURANCE COMPANY,

Appellant

v.

REGINELLA CONSTRUCTION COMPANY LTD.;

REGINELLA CONSTRUCTION COMPANY INC.,

individually and trading and doing business as 

Reginella Construction Company; 

JOSEPH A. REGINELLA; DONNA M. REGINELLA

______________

On Appeal from the United States District Court

for the Western District of Pennsylvania

(D.C. Civ. No. 2-12-cv-01195)

Honorable Terrence F. McVerry, District Judge

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Submitted under Third Circuit LAR 34.1(a)

February 7, 2017

BEFORE: MCKEE, COWEN, and FUENTES, Circuit Judges

(Filed: April 14, 2017)

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OPINION*

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*This disposition is not an opinion of the full court and pursuant to I.O.P. 5.7

does not constitute binding precedent.
2

COWEN, Circuit Judge.

Plaintiff Star Insurance Company (“Star”) appeals from the order entered by the 

United States District Court for the Western District of Pennsylvania granting the motion 

to dismiss filed by Defendants Reginella Construction Company LTD, Reginella 

Construction Company, Inc., Joseph Reginella, and Donna Reginella. We will affirm.

 I.

Star, a company that issues surety bonds, entered into a General Indemnity 

Agreement with “Reginella Construction Company LTD 4700 McKnight Road 

Pittsburgh, PA 15237” (as the Principal) and the Reginellas (as individual Indemnitors). 

The duty to indemnify under this general agreement “[a]pplies to each and every Bond 

Issued or procured for or requested by the Principal (or any Indemnitor acting on behalf 

of the Principal).” (JA33.) The Board of Public Education of the School District of 

Pittsburgh executed a contract for construction and renovations at Concord Elementary 

School. This contract specifically stated that the agreement was made and entered by and 

between “the BOARD OF PUBLIC EDUCATION OF THE SCHOOL DISTRICT OF 

PITTSBURGH, PA., a quasi-municipal corporation with offices located at 341 South 

Bellefield Avenue, Pittsburgh, PA 15213, hereinafter referred to as the Owner, and 

Reginella Construction Company, (a corporation), with offices located at 4700 

McKnight Road, Pittsburgh, PA 15237, hereinafter referred to as the Contractor.” 

(JA63.) Star, in turn, issued performance and payment bonds for the project. These 

bonds were issued to “Reginella Construction Company, 4700 McKnight Road, 

Pittsburgh, PA 15237, a contractor,” and they expressly incorporated the terms of the 
3

construction contract (“WHEREAS, The Contractor has by written agreement dated 

February 25, 2009, entered into a contract with the School District for New Building 

Addition / Renovations at Concord Elementary School which contract is incorporated by 

reference thereto, and is hereinafter referred to as the Contract.” (JA41, JA43)). 

After allegedly receiving claims under these bonds, Star filed this litigation, 

naming as defendants Reginella Construction Company LTD, Reginella Construction 

Company, Inc. (individually and t/d/b/a Reginella Construction Company), and the 

Reginellas. In Star’s amended complaint, it asserted five counts: (1) contractual 

exoneration and indemnification; (2) implied-in-law exoneration and indemnification 

(against Reginella Construction Company LTD and Reginella Construction Company, 

Inc.); (3) conversion (against the Reginella entities); (4) breach of contract; and (5) 

declaratory judgment. Defendants moved to dismiss pursuant to Federal Rule of Civil 

Procedure 12(b)(6). Granting their motion, the District Court dismissed the amended 

complaint with prejudice. See Star Ins. Co. v. Reginella Constr. Co., Ltd., No. 2:12-cv01195, 2013 WL 1687854 (W.D. Pa. Apr. 13, 2013). 

II.

We begin with the contractual claims.1

 The District Court rejected these claims 

because, on the one hand, the General Indemnity Agreement only applied to bonds issued 

 1 The District Court had diversity jurisdiction pursuant to 28 U.S.C. § 1332. We 

have appellate jurisdiction pursuant to 28 U.S.C. § 1291.

We exercise plenary review over a district court’s order granting a motion to 

dismiss for failure to state a claim upon which relief can be granted. See, e.g., Fowler v. 

UPMC, 578 F.3d 203, 206 (3d Cir. 2009). “To survive a motion to dismiss, a complaint 
4

to Reginella Construction Company LTD, while, on the other hand, Reginella 

Construction Company, Inc., was party to the construction contract and the bonds at issue 

in this case. “The [District] Court finds and rules that there appears to be no ambiguity 

regarding the named party to the Contract”—the construction contract referred to a 

“corporation” yet “[i]t is not disputed that Reginella Ltd is a limited partnership.” Star, 

2013 WL 1687854, at *3. Characterizing the “corporation” language as boilerplate, Star 

contends that the District Court erred by finding no ambiguity “regarding the party 

named in the contract.” Appellant’s Brief at 24 (emphasis omitted). We further 

acknowledge that Reginella Construction Company LTD (and not Reginella Construction 

Company, Inc.) was registered at 4700 McKnight Road. 

However, “a contract that is unambiguous on its face must be interpreted 

according to the natural meaning of its terms, unless the contract contains a latent 

ambiguity.” Bohler-Uddeholm Am., Inc. v. Ellwood Grp., Inc., 247 F.3d 79, 96 (3d Cir. 

2001). “[A] claim of latent ambiguity must be based on a ‘contractual hook’: the 

proffered extrinsic evidence must support an alternative meaning of a specific term or 

terms contained in the contract, rather than simply support a general claim that the parties 

meant something other than what the contract says on its face. In other words, the 

 

must contain sufficient factual matter, accepted as true, to state a claim to relief that is 

plausible on its face.” Black v. Montgomery County, 835 F.3d 358, 364 (3d Cir. 2016) 

(quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). While conclusory allegations 

must be set aside, well-pleaded facts are to be accepted as true, and the complaint must be 

construed in the light most favorable to the plaintiff. See, e.g., Fowler, 578 F.3d at 210-

11.

We grant Defendants leave to file a sur-reply brief. 
5

ambiguity inquiry must be about the parties’ ‘linguistic reference’ rather than about their 

expectations.” Id. (quoting Duquesne Light Co. v. Westinghouse Elec. Corp., 66 F.3d 

604, 614 (3d Cir. 1995)). Applying these principles, we agree with Defendants that 

Star’s attempt to identify a latent ambiguity here is without merit because there is no 

contractual hook. “Just as ‘Ten’ is not ‘Twenty,’ a ‘corporation’ cannot mean ‘a limited 

partnership.’”2

 Appellees’ Sur-Reply Brief at 5 (citing Mellon Bank, N.A. v. Aetna Bus.

Credit, 619 F.2d 1001, 1013 (3d Cir. 1980) (“For example, extrinsic evidence may be 

used to show that ‘Ten Dollars paid on January 5, 1980,’ meant ten Canadian dollars, but 

it would not be allowed to show the parties meant twenty dollars.”)). 

Star next turns to his implied-in-law exoneration cause of action. It acknowledges 

that “[i]n all cases where a court of equity has ordered exoneration, however, the 

obligation of the surety has been made absolute.” Appellant’s Brief at 27. For support, 

Star cites to Great Am. Ins. Co. v. Geris, 3 Pa. D. & C. 4th 211 (Ct. Com. Pl. 1987), 

aff’d, 541 A.2d 1157 (Pa. Super. Ct. 1988) (unpublished table decision), a state trial court 

ruling that is directly on point. In that case, AGI and Forest Builders obtained a 

performance bond in connection with a contract between AGI and the Commonwealth of 

Pennsylvania for highway and bridge work. . The Commonwealth commenced a civil 

 2 While it determined that a number of documents could be considered in 

disposing of this motion to dismiss, the District Court refused to take into account other 

materials on the grounds that they were not matters of public record, were not referenced 

in the amended complaint, and were not essential to Star’s claims. Star takes issue with 

its failure “to consider a contract between Kishmo Inc. and ReginellaLtd.” Appellant’s 

Brief at 23 (citing JA10, JA202-JA213). However, the District Court did not commit any 

reversible error in its assessment of the various documents submitted for its consideration 

(especially where it is undisputed that Star never informed the District Court that this 

contract was attached to a state court pleading). 
6

action against Great American, claiming that Great American caused damages by 

refusing to perform its obligations under the bond, which obligations arose as a result of 

the alleged breach by AGI of the construction contract. Id. at 214. Great American then 

filed a complaint against Forest Builders, AGI, and Anthony and Kathryn Geris (who 

were individual indemnitors) for, among other things, exoneration. Id. The state trial 

court dismissed the exoneration claim because there was no absolute obligation upon 

Great American to pay to the Commonwealth the money the Commonwealth sought in its 

lawsuit. Id. at 215-26. Specifically, the surety’s complaint merely claimed that the 

transportation department commenced a civil action against Great American “alleging” 

that it was damaged as a result of Great American’s alleged refusal to perform its 

obligations under the performance bond—which arose as a result of AGI’s “alleged” 

breach of its contract with the Commonwealth. Id. at 221-22. Accordingly:

From this paragraph we may infer only that an action has been filed 

against plaintiff by the commonwealth, which action makes allegations 

concerning both the performance bond and the underlying contract between 

AGI and the commonwealth. We can draw no conclusions as to either the 

alleged breach of contract by AGI or the alleged refusal of plaintiff to 

perform its obligations as required by the performance bond. There are no 

facts alleging that plaintiff’s obligation to perform has become absolute; no 

facts are alleged which state that any debt is now payable by plaintiff. At 

the time this suit was filed, the creditor, the commonwealth, had no vested 

right which it could assert against either the principal, AGI Inc., or the 

plaintiff surety. Both the principal and the surety have the opportunity to 

raise defenses against the claims of the commonwealth, and until those 

issues are resolved and the principal’s liability to the commonwealth is 

determined, either by judgment, admissions, or agreement between the 

parties, the plaintiff’s obligation is not absolute. The remedy of 

exoneration is unavailable to plaintiff in this action under the facts as set 

forth by plaintiff; count II of plaintiff’s complaint was properly dismissed.
7

Id. at 222 (footnote omitted). In the end, like Great American, Star did not allege “that 

the principal has defaulted, admitting liability and the extent of the damages, nor does 

plaintiff allege that it is obligated under the bond to pay the [obligees], nor does plaintiff 

allege that it admits the allegations of the complaint filed against it by the [obligees].”3

 

Id. at 222 n.4. 

Finally, the District Court appropriately disposed of the remaining claims against 

Defendants. With respect to the cause of action for implied-in-law indemnification, Star 

did not allege that it actually paid any damages to a third party. See, e.g., Rubin Moss 

Heany & Patterson v. Kennel, 832 F. Supp. 922, 931 (E.D. Pa. 1993) (stating that, to 

establish indemnity claim, plaintiff must show that, inter alia, it paid damages to an 

injured third party), abrogated on other grounds by In re Lemington Home for the Aged, 

777 F.3d 620 (3d Cir. 2015). Because it did not plausibly allege that it had actual or 

constructive possession, or a right to immediate possession, of the property at the time of 

conversion, Star failed to state a cognizable claim of conversion.4

 See, e.g., Potts Run 

Coal Co. v. Benjamin Coal Co., 426 A.2d 1175, 1178 (Pa. Super. Ct. 1981). 

III.

For the foregoing reasons, we will affirm the District Court’s order.

 3 In its reply brief, Star relies on the Pennsylvania Commonwealth Court’s 

decision in Almi, Inc. v. Dick Corp., 375 A.2d 1343 (Pa. Commonw. Ct. 1977). 

However, the Almi court specifically considered “the right of [the surety] in the face of 

the garnishment to set off [the principal’s] funds against its obligation to the [obligee] as 

surety on [the principal’s] notes.” Id. at 1348. In addition, the obligee confessed 

judgment against both the principal and the surety. Id. at 1347. 

4 Given the amended complaint’s legal deficiencies (and Star’s failure to indicate 

that it could remedy these deficiencies), the District Court appropriately denied “leave to 

amend as it would be futile.” Star, 2013 WL 1687854, at *7.