2008 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

12-4-2008

Alea N Amer Ins Co v. Salem Masonry Co Inc

Precedential or Non-Precedential: Non-Precedential

Docket No. 07-1681

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Recommended Citation

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NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

___________

No. 07-1681

___________

ALEA NORTH AMERICA INSURANCE COMPANY,

 Appellant

v.

SALEM MASONRY CO., INC. d/b/a Salem Masonry;

PADOVANO FRANKEL VOUGA AGENCY; NUNO ALEXANDRE;

GRANITE STATE INSURANCE COMPANY

___________

On Appeal from the United States District Court

for the District of New Jersey

(D.C. Civil No. 03-cv-02927)

District Judge: The Honorable Peter G. Sheridan

___________

Argued: September 9, 2008

Before: SLOVITER, FUENTES, and NYGAARD, Circuit Judges.

(Filed: December 4, 2008)

Marie A. Hoenings, Esq. (Argued)

L’Abbate, Balkan, Colavita & Contini

7 Regent Street, Suite 711

Livingston, NJ 07039

Counsel for Appellant

Christopher H. Westrick, Esq. (Argued)

Golden, Rothschild, Spagnola, Lundell, Levitt, & Boylan
2

1011 Route 22 West

P. O. Box 6881, Suite 300

Bridgewater, NJ 08807

Counsel for Appellee, Granite State Ins. Co.

___________

OPINION OF THE COURT

___________

NYGAARD, Circuit Judge.

The factual background of this appeal is well known to the parties, only

tangentially germane to our decision, and calls for only this brief summary. Joseph

Percario is a general contractor who hired Salem Masonry Inc., as a sub-contractor. 

Granite State Insurance provided workers compensation insurance to Percario. Appellant

Alea North American Insurance provided workers compensation insurance to Salem. 

Salem Masonry lied on its insurance application, claiming that none of its employees

worked at heights greater than fifteen feet. Nuno Alexandre, an employee of Salem

Masonry, was severely injured when he fell down an elevator shaft that was

approximately five or six stories high. 

Alea Insurance quickly realized that Alexandre was working at a height greater

than fifteen feet and filed an action, first, to rescind its policy because of the fraudulent

statement in the application, and second, to declare the general contractor’s carrier,

Granite State, responsible for paying workers compensation benefits to the injured
 The District Court entered final judgment on February 7, 2007, disposing of all 1.

remaining claims of the various parties. Alea filed a timely Notice of Appeal on March 6,

2007. We have jurisdiction pursuant to 28 U.S.C. § 1291.

3

employee. Alea also sought reimbursement from Granite State for the benefits it had

paid to Alexandre.

The District Court granted partial summary judgment in favor of Alea on its

equitable fraud claim. This judgment voided and rescinded Alea’s policy with Salem. 

1

Litigation continued on various claims brought against the brokers, Salem Masonry and

the claim by Alea against Granite State for reimbursement of payments to the injured

employee.

Subsequent to the partial summary judgment, the Superior Court of New Jersey

issued an opinion holding that fraudulent statements made in an application for a workers

compensation policy could not be a basis for voiding for the policy. American

Millennium Insurance v. Berganza, 902 A.2d 266 (N.J. App. Div. 2006). Based on this

new state-court precedent, Granite State filed a motion pursuant to FED.R.CIV.P. 60(b) to

have the summary judgment rescinded. The District Court determined the American

Millennium case to be “squarely on point” and granted Granite State’s motion to set aside

its previous judgment in favor of Alea.

At oral argument, Appellant withdrew its argument that FED.R.CIV.P 60(b) did not

authorize the District Court to reconsider its partial summary judgment based upon

subsequent changes in the law. That was wise. The District Court changed its ruling
4

before the litigation had ended. FED.R.CIV.P. 60(b) contemplates relief from a final

judgment. A district court is entitled to reconsider its interlocutory orders “when it is

consonant with justice to do so.” United States v. Jerry, 487 F.2d 600, 605 (3d Cir.

1973). The District Court here clearly had the authority to rescind its partial summary

judgment for Alea on the rescission claim while Alea’s damages claims were still

pending.

The only question remaining on appeal is whether the District Court erred in how

it interpreted and applied the New Jersey Appellate Division’s decision in American

Millennium to the instant action. We have carefully examined the record and considered

the parties’ arguments on appeal and conclude that the District Court did not err.

Accordingly, we will affirm essentially for the reasons set forth in Judge Sheridan’s

opinion.