1 14-318-cv Two Farms, Inc. v. Greenwich Insurance Co. 

### UNITED STATES COURT OF APPEALS FOR THE SECO ND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROC EDURE 32.1 AND THIS COURT = S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMEN T FILED WITH THIS CO URT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATA BASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING TO A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPR ESENTED BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second Circuit, held at the 1 Thurgood Marshall United States Co urthouse, 40 Foley Square, in the City of New York, on the 2 16 th day of October, two thousand fifteen. 3 4 Present: 5 6 D EBRA A NN L IVINGSTON , 7 C HRISTOPHER F. D RONEY , 8 Circuit Judges , 9 S IDNEY H. S TEIN 10 District Judge .* 11

_____________________________________ 12 13 T WO F ARMS I NC ., 14 15 Plaintiff-Appellant , 16 17 v. No. 14-318-cv 18 19 G REENWICH I NSURANCE C O ., 20 21 Defendant-Appellee

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_____________________________________ 23 24 For Plaintiff-Appellant: Feder Kaszovitz LLP, New York, NY. 25 26 For Defendant-Appellee: Porzio Brombe rg & Newman P.C., Morristown, NJ. 27 28

* The Honorable Sidney H. Stein, of the United States District Court for the Southern District of New York, sitting by designation.2 UPON DUE CONSIDERATION WHEREOF it is hereby ORDERED, ADJUDGED, 1

AND DECREED that the judgment of the district court is AFFIRMED

. 2 Plaintiff-Appellant Two Farms Inc. (“Two Farms”) appeals from a January 6, 2014 order 3 of the Southern District of New York (Koeltl, J .) granting summary judgment to 4 Defendant-Appellee Greenwich Insurance Comp any (“Greenwich”) and denying Two Farms’ 5 motion for partial summary judgment. This divers ity case centers on the meaning of a provision 6 in an insurance policy issued by Greenwich to Tw o Farms. We assume the parties’ familiarity 7 with the underlying facts and proced ural history of the case, and w ith the issues on appeal, which 8 we describe here only as necessary to explain our decision to affirm. 9 Greenwich issued a pollution and remediati on liability policy to Two Farms on April 16, 10 2008. The policy remained in effect until April 16, 2010. The policy contains a set of 11 exclusions, denying coverage for liability resul ting from certain causes, including loss “based 12 upon or arising out of the existence of any underg round storage tank(s) and associated piping.” 13 A33. However, certain specified “underground st orage tank(s) and associated piping” are not 14 subject to this exclusion. Endorsement 10 in th e policy lists the tanks that benefit from this 15 exception. The policy in Endorsement 7 applies a sublimit to the tanks within this exception, 16 capping the coverage amount for each loss or remedi ation expense associated with an excepted 17 underground storage tank and its associated piping at $1,000,000. (The policy caps the total 18 annual coverage for such lo sses and expenses at $5,000,000). 19 In December 2009, Two Farms discovered that an underground storage tank at a Two 20 Farms gas station in Baltimore, Maryland had disc harged several thousand gallons of gasoline. 21 Two Farms alleges that three devi ces located on the exterior of th e tank in question—the “O-ring,” 22 the containment sump, and the sensor—caused this loss. The parties do not dispute that the 233 “underground tank[] and associated piping” responsible for the disc harge is listed in Endorsement 1 10, and was therefore not subject to the policy’s ex clusion. In fact, after Two Farms filed a claim 2 with Greenwich, the insurance company paid Two Farms $1,000,000 toward loss and remediation 3 expenses, plus $250,000 in legal expenses. Two Farms, interpreting the sublimit of $1,000,000 to 4 be inapplicable to its loss, file d its complaint in January 2012. 5

* * * 6 “We review de novo a district court’s ruling on cross-motions for summary judgment, in 7 each case construing the evidence in the light most favorable to the non-moving party.” Ackerson 8 v. City of White Plains, 702 F.3d 15, 19 n.1 (2d Cir. 2012) (per cu riam) (internal quotation marks 9 omitted). Summary judgment is appropriate where “t here is no genuine dispute as to any material 10

fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). “Because 11 interpretation of an insurance agreement is a question of law, we review the district court’s 12 construction of the Policy de novo.” VAM Check Cashing Corp. v. Fed. Ins. Co., 699 F.3d 727, 13 729 (2d Cir. 2012). 14 Consistent with the policy’s choice of law provision, we ap ply New York law. In New 15 York, the ordinary rules of contract inte rpretation apply to insurance policies. Accessories Biz, 16 Inc. v. Linda & Jay Keane, Inc. , 533 F. Supp. 2d 381, 386 (S.D.N.Y. 2008). Thus, “an insurance 17 contract is interpreted to give eff ect to the intent of th e parties as expressed in the clear language of 18

the contract.” Parks Real Estate Purchasing Grp. v. St. Paul Fire & Marine Ins. Co. , 472 F.3d 19 33, 42 (2d Cir. 2006) (quoting Morgan Stanley Grp. Inc. v. New England Ins. Co. , 225 F.3d 270, 20 275 (2d Cir. 2000)). In discerning intent, co urts “read [the contract] as a whole.” Iroquois 21 Master Fund, Ltd. v. Quantum Fuel Sys. Techns. Worldwide, Inc. , No. 13 Civ. 3860, 2013 WL 22 4931649, at *4 (S.D.N.Y. Sept. 12, 2013). 234 In interpreting an insurance contract, the cour t must determine as “a threshold question of 1 law” whether the contract is ambiguous. Duane Reade Inc. v. St. Paul Fire & Marine Ins. Co. , 2 411 F.3d 384, 390 (2d Cir. 2005). Su mmary judgment is appropriate when the terms of a policy 3 are unambiguous. Seiden Assocs., Inc., v. ANC Holdings, Inc. , 959 F.2d 425, 428 (2d Cir. 1992). 4 In this case, the district court correctly found no ambiguity in the challenged contract 5 provision. This litigation involves three uses of the term “underground storage tank(s) and 6 associated piping” in the policy: (1) to exclude c overage for loss “based up on or arising out of the 7 existence of any underground storage tank(s) and a ssociated piping” (“the exclusion”); (2) to 8 restore coverage for “underground storage tank (s) and associated piping” (“the exception”) 9 specified in Endorsement 10; and (3) to limit recovery for loss (“ the sublimit”) arising from the 10 specified “underground storage tank(s ) and associated piping.” 11 Two Farms contends that the meaning of the phrase, “underground storage tank(s) and 12 associated piping,” vari es across the policy. In part icular, Two Farms seeks a narrow 13 construction of “underground storage tank(s) and a ssociated piping” in Endorsement 7’s sublimit, 14 so that the sublimit would not apply to the loss es and expenses Two Farms experienced arising 15 from the malfunction of the O-ring, containment su mp, and sensor. At the same time, Two Farms 16 agrees with Greenwich that as to the exception, a broader construc tion of the phrase should apply, 17 so that these very same losses and expenses are covered by the policy. 18 Simply put, Two Farms cannot have it both wa ys. Generally, “a word used by the parties 19 in one sense will be given the same meaning throughout the contract in the absence of 20 countervailing reasons.” Iroquois Master Fund , 2013 WL 4931649, at *2 (quoting 11 Williston 21 on Contracts § 32:6 (4th ed.)). Two Farms poi nts to no “countervailing reason[]” for according 22 varying meanings to the same phrase in this insurance policy. To the contrary, the policy 235 unambiguously uses the same terms in order to precisely and cons istently define the scope of 1 coverage, both in the exclusiona ry language and in the sublimit. Two Farms reminds us that any 2 ambiguity should be construe d against the insurer. See Mack-Cali Realty Corp. v. Peerless Ins. 3

Co. , No. 14 Civ. 10135, 2015 WL 4503443, at *4 (S.D.N .Y. July 24, 2015). But there is no 4 ambiguity here. 5 The parties, however, agree that New York law applies pursuant to the choice of law 6 provision in the policy. Thus, the Maryland and fe deral regulations are not binding here. Even 7 assuming that the Maryland and fe deral regulations provi de a narrower defini tion of “underground 8 storage tank(s) and associated pipi ng,” such non-binding au thority is not persuasive. In light of 9 the clear and consistent structure of the policy, th e Maryland and federal regul ations do not offer a 10 reasonable alternative interpretation of the contract. See Seiden Assocs. , 959 F.2d at 428. We 11 have considered Two Farms’ remaining argu ments and find them to be without merit. 12 Accordingly, we AFFIRM the judgment of the district court. 13

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FOR THE COURT: 15 Catherine O’Hagan Wolfe, Clerk 16