2009 D e c i sion s O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit 11-12-2009 

# Inte rs t ate Ae ri al s, LL C v

. Gre at Ame r Ins C o NY P r e c e de nt i al or N on-P r e c e de nt i al : N on-P r e c e de nt i al D ocke t N o . 08-4901

F o llow thi s and a dd it ion al work s at : http://d i git alc ommon s .l a w . vi ll anova . e du/thir dc ir c uit_2009

Thi s de c i sion i s br ou ght t o you for f r e e and ope n a c c e s s b y the O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit at V i ll anova U nive r sity S choo l of L a

w Di git al Reposit ory

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w Di git al Reposit ory

. F or mor e inform at ion, p le as e c ont a ct Be n j amin . C arl s on@l a

w . vi ll anova . e du . Re c omme nde d C it at ion " Int e r s t at e Ae ri al s, LL C v

. Gr e at Ame r In s C o NY " (2009). 2009 D e cisio n s . P ape r 268. http://d i git alc ommon s .l a

w . vi ll anova . e du/thir dc ir c uit_2009/268

### NO T P RE CE DE NT I AL UN I TE D S TA TE S C OU RT OF AP PE AL S FO R T HE TH IRD C IRCU IT No. 08- 4901 IN T E R S T A T E A E R IA L S , L L C , A ppel l ant v. GREAT AM ERI CAN I NSURANCE CO M P ANY OF NE W YORK; AL HOR GAN G E N E R A L C O N T R A C T O R , IN C . ; E R IE I NS UR ANC E GR OUP ; F I CT I T I OUS I N SU R A N C E C O M PA N I E S 1- 10 O n A p p ea l from the U n it ed S tat es D istri ct C o u rt

forthe D i s tr i ctof N ew J er s ey ( D . C . C i vi l N o. 1- 07- cv- 03846) M a g istra te J u d g e : H o n . A n n M . D o n io Subm i tt ed Pur s uantt o T hi r d C i r cui tL A R 34. 1( a)

N ovember6, 2009 B E FO R E : SC I R I C A , C hi ef J udge, J O R D A N and C O W E N , C i r cui tJ udges

( Fi l ed: N ovember12, 2009 ) OP I NI ON C O W E N , C i r cui tJ udge

### The e s t at e of the de c e a s e d e m pl oye e fi l e d awr ongfulde ath a c t i on i n the 1 

### P enn sylv an ia C o urt o f

C o mm o nP leas, wh ichis n o t b ef o re th is C o urt. 2 I nt er s t at e A er i al s , L L C ( “I nt er s t at e A er i al s ”) appea l s fr om the j udgm entof the U ni t ed St at es D i s tr i ctC our tforthe D i s tr i ctof N ew J er s eyent er ed on N ovember26, 2 0 0 8 , d en y ing Interstate A erials’ m o ti o n fo r sum m aryjud g m en t and g ran ti n g su m m ary ju d g m e n t in f

a v o r o f G re a t A m e ri c a n In s u ra n c e C o m p a n yo f N e w Y o rk , e t a l. ( “G r eat Ame r i c a n ” ) . W e wi l l a f f i r m. I. I nt er s t at e A er i al s r ent s and l eas es cons truct i on equi pm ent , i ncl udi ng m echa ni cal aer i al l i ft s , t o contr act or s engage d i n cons truct i on pr oj ect s . I nt er s t at e A er i al s del i ver ed an aer i al l i ftt o A l H or gan G ener al C ontr act or , I nc. ( “A l H or gan”) atone of i t s cons truct i on site s. T h e lift c o llap se d , k ill in g a n e m p lo y e e o f o n e o f A l H o rg a n ’s s u b c o n tra c to rs. T h is appea l i nvol ves a di s put e betw een I nt er s t at e A er i al and i t s i ns ur er , G r eatA m er i can. 1 A t th e tim e o f

th is in c id e n t, In ter sta te A e ria ls h a d a p ro p e rtyin su ra n c e p o licyw ith G r eatA m er i can f

or“C om m er ci al I nl and M ar i ne” c over age. T he t erm s of cove r age f or l e a s e d p r o p e r tya r e s e tf o r th i n a n e n d o r s e me n tt o th e p o l i c ye n t i t l e d , “ LEASED P ROP ERT Y - CONTI NGENT I NTE RES T F ORM , ” wh i c h i s a l s o i d e n t i f i e d a s F o r m F 930. T he fi r s tpage of

the endor s ementdes cr i bes the type of pr opertycover ed bythe e n d o r s e me n ta s “ [ p ] e r s o n a l p r o p e r tyc o n s i s t i n g p r i n c i p a l l yo f EQU I PM ENT U SUA L TO AR EI AL [ sic ] L I FT . ” ( A pp. 78. ) A ddi t i onal l y , ther e i s a s ubs ect i on on the fi r s tpage of

### 3

th e e n d o rse m e n t en tit led , “L IM IT S O F L IA B IL IT Y .” T h is s u b se c tio n lim its c o v e ra g e to $200, 000 for“[p] r opertyl eas ed t o other s . . . i n the cus t odyof anyone l es s ee not s peci fi ed bel ow . ” (Id .) T h e se c o n d p a g e o f th e e n d o rse m e n t re itera tes th a t th e p ro p e rty su b jec t to th is lim itatio n is:

. . . per s onal pr opertyof the I ns ur ed, as des cr i bed i n the Schedul e, w hi ch i s : ( a) l eas ed orr ent ed t o other s ; and ( b) in te n d e d f

o r l e a s e o r r e n t to o th e rs . (A p p . 7 9 . ) N ot abl y , the s econd pa ge of the endor s emental s o cont ai ns a pr ovi s i on ent i t l ed,

“ C O N T IN G E N T C O V E R A G E ,” w h ich in d ica tes th a t:

W hen pr opertyi s i n t he cus t odyof l es s ee( s ) , thi s i ns ur ance appl i es onl yi f the I ns ur ed has obt ai ned: ( 1) A s i gned l eas e/r ent al agr eementw hi ch r equi r es the l es s ee t o: ( a) be ful l yr es pons i bl e foral l l os s ordamages ; ( b) pr ovi de i ns ur ance , no l es s br oad as r es pect s per i l s than thatpr ovi ded bythi s pol i cy , cover i ng the pr opertyt o be l eas ed; and ( 2) E vi dence of s uch phy s i cal damage i ns ur ance , w hi ch names th e In su re d (le ss o r) a s lo ss p a y e e , w h e n th e v a lu e o f p ro p e rty le a s e d to a n yo n e c u s to m e r e x c e e d s $ 5 0 ,0 0 0 . I ns ur ance underthi s pol i cys hal l notappl yunt i l the I ns ur ed has exhaus t ed al l r eas onabl e ef for t s t o col l ectthe amountof lo s s o r d a m a g e f

ro m th e le s s e e a n d its in s u re r. (Id . ) G re a t A m e ric a n re lied o n th is c o n tin g e n t co v e ra g e p ro v isio n to d e n yIn ter sta te A eri al s cl ai m , assert i ng that I nter st at e A eri al s fai l ed to ( i ) pr ocu re a s i gn ed leas e agr eementw i th A l H or gan forthe l i fti n ques t i on, and ( i i ) pr ocur e a c ert i fi cat e of

### 4

in s u ra n c e o n w h ic h In te rs ta te A e ri a ls w a s n a m e d a s a n a d d itio n a l in s u re d o r l o s s p a y e e . I nt er s t at e A er i al s comm ence d the i ns t antact i on s eeki ng a dec l ar at i on thatthe cont i ngentcover age pr ovi s i on w as unenfor cea bl e. U pon concl us i on of di s covery , the part i es cr os s - m oved fors um m aryj udgm ent . G r eatA m er i can a s s ert ed thati tw as ent i t l ed t o j udgm entdue t o I nt er s t at e A er i al s ’ fai l ur e t o compl yw i th the t erm s of cove r age a s s et f o rth in th e e n d o rse m e n t. In ter sta te A e ria ls c o n c e d e d th a t itf a iled to c o m p lyw ith b o th pr ovi s i ons ; how ever , I nt er s t at e A er i al s cont ended thatthe endor s ementw as unenfor cea bl e as a mat t erof l aw . I n s uppor tof thi s cont ent i on, I nt er s t at e A er i al s as s er t ed thatthe endor s ementw as ambi guous and bur i ed atthe end of the i ns ur ance pol i cy , and th e re f o re , it s e n f

o rc e m e n t w o u ld ru n c o n tra ryto a n yp o licyh o ld e r’s re a so n a b le e x p e c ta tio n o f

c o v e ra g e . T he D i stri ctC ou rtgrant ed G reatA m eri can’s m oti on and den i ed Int ers t at e A eri al s’ cr os s - m ot i on. T he D i s tr i ctC our thel d that( i ) the t erm s of the pol i cyand endor s ement w er e unambi guous , ( i i ) the endor s ementr equi r ed I nt er s t at e A er i al s t o compl yw i th the cont i ngentcover age pr ovi s i on, and ( i i i ) I nt er s t at e A er i al s fai l ed t o do s o, ther ebyr es ul t i ng in n o c o v e ra g e u n d e r th e p o licyf o r th e in c id e n t cla im e d . O n a p p e a l, In ter sta te A e ria ls cont ends thatthe D i s tr i ctC our tcomm i t t ed r ever s i bl e err orbydeny i ng i t s m ot i on and g ra n tin g G re a t A m e ric a n ’s m o tio n . A c c o rd in g to In ter sta te A e ria ls, it ha d a re a so n a b le expec t at i on of cove r age a s ( i ) the t erm s of the endor s ementw er e ambi guous , and ( i i ) t he e n d o rse m e n t w a s b u rie d in th e in su ra n c e p o licy . A s n o ted a b o v e , In ter sta te A e ria ls

### 5

conce ded thati tfai l ed t o compl yw i th the tw o r equi r ement s of the cont i ngentcover age pr ovi s i on. A ccor di ngl y , the s ol e i s s ue bef or e thi s C our ti s w hetherthe cont i ngent c o v e r a g e p r o v i s i o n c o n t a i n e d i n th e e n d o r s e me n ti s e n f o r c e a b l e u n d e rNe w J e r s e yl a w. II. T h e D is tr ic t C o u rt e x e rc is e d ju ri s d ic tio n o v e r t h is a c tio n p u rs u a n t to 2 8 U .S .C . § 1 3 3 2 . W e h av e jurisdicti o n o v er this ap p ea l pu rsua n t t o 2 8 U . S . C . § 1 2 9 1 . “T h e stan d ard of r evi ew appl i cabl e t o the D i s tr i ctC our t ’ s or dergr ant i ng s um m aryj udgm enti s pl enary . ” Kaut zv. Met- P r o C or

p. , 41 2 F . 3d 46 5, 46 6 (3d C i r. 20 05 ). W e m ustapp l ythe sam e t est e m p lo y e d b yth e D is tr ic t C o u rt u n d e r R u le 5 6 (c ) o f th e F e d e ra l R u le s o f

C iv il P ro c e d u re . Id . III . U n d e r N e w Je rse ylaw , “th e w o rd s o f a n in su ra n c e p o licya re to b e g iv e n th e ir pl ai n, or di narym eani ng. ” Zacar i as v. A l l s tat e I ns . C o. , 168 N . J . 590, 775 A . 2d 1262, 1264 ( 2001) . “I n t he abs ence of anyambi gui ty , court s s houl d notw r i t e forthe i ns ur ed a bett erpol i cyof i ns ur ance than the one pur chas ed. ” Id . ( quot i ng G i bs on v. C al l eghan , 158 N . J . 6 6 2 , 6 9 0 , 7 3 0 A . 2 d 1 2 7 8 ( 1 9 9 9 ) ) . I n e v a l u a t i n g i n s u r a n c e p o l i c i e s f o ra m b i g u i ty, c o u rts s h o u ld “ in terp re t[ ] th e p o licya s a w h o le, b yg iv in g a re a so n a b le m e a n in g to its form and ca s e. ” R oyal

I ns . C o. v. K

SI Tradi ng C or

p. , 563 F. 3d 68, 74 ( 3d C i r . 2009) ( i nt ernal quot at i on m arks om i t t ed) ( quot i ng A r r ow I ndus . C ar r i ers , I

nc. v. C ont i nental I ns . C o. , 2 3 2 N .J. S u p e r. 3 2 4 , 5 5 6 A .2 d 1 3 1 0 , 1 3 1 4 (1 9 8 9 )). A n in su ra n c e p o licyis

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ambi guous w hen “the phr as i ng of the pol i cyi s s o confus i ng thatthe ave r age pol i cyhol der cannotm ake outthe boundar i es of cove r age. ” W eedo v . St one- E B r i ck, I nc. , 81 N . J . 233, 4 0 5 A .2 d 7 8 8 , 7 9 5 (1 9 7 9 ). Itis w ell -sett led th at i n su ran ce p o li cies a re “ co n tr ac ts of ad h esio n an d as su ch , are s ubj ectt o s peci al rul es of i nt erpr et at i on. ” Zacar i as , 1 6 8 N .J . a t 5 9 5 , 7 7 5 A .2 d a t 1 2 6 4 .

“ W h e n th e re is a m b ig u ityin a n in su ra n c e c o n tra c t, co u rts in terp re t th e c o n tra c t to comportw i th t he r eas onabl e expe ct at i ons of the i ns ur ed, even i f a c l os e r eadi ng of the w r i t t en t extr evea l s a contr arym eani ng. ” Id . T o avoi d “s ubj ect i ng i ns ur eds ‘ t o t echni cal encumbr ance s ort o hi dden pi t fal l s . . . pol i ci es s houl d be cons trued l i ber al l yi n thei rfavor to th e e n d th a t co v e ra g e is a f f o rd e d to th e f

u ll ex ten t th a t an yf

a ir in terp re tatio n w ill al l ow . ’ ” R oyal

I ns . C o. , 563 F. 3d at74 ( quot i ng Mei erv. N ew Jer s ey Li f e I ns . C o. , 101 N . J . 597, 503 A . 2d 862, 870 ( 1986) ) . “[C]ourt s w i l l departfr om the l i t er al t extand i nt erpr et[an i ns ur ance contr act ] i n acc or dance w i th the i ns ur ed’ s under s t andi ng, even w h e n th a t u n d e rsta n d in g c o n tra d icts th e in su re d ’s in ten t, i f th e tex t ap p e a rs o v e rly t echni cal orcont ai ns hi dden pi t fal l s , cannotbe under s t ood w i thoutempl oy i ng s ubt l e or leg a listic d istin c tio n s, is o b sc u re d b yf in e p rin t, or re q u ire s s tre n u o u s s tu d yto compre hend . . . . ” Zacar i as , 168 N . J . at601, 775 A . 2d at1268 ( i nt ernal ci t at i ons o m itted). T he D i s tr i ctC our tpr oper l yrul ed thatthe endor s ementand i t s cont i ngentcover age pr ovi s i on w er e unambi guous and enf or cea bl e. T he part i es do notdi s put e thatthe

### 7

endor s ementw as partof the i ns ur ance pol i cy . N ordo theydi s put e thatthi s endor s ement se t f o rth th e ter m s f

o r c o v e ra g e o f

lea se d p ro p e rty , su c h a s th e a e ria l li f t at iss u e in th is a c tio n , an d th a t th e e n d o rse m e n t in d ica tes in p lain lan g u a g e th a t li a b ili tyf o r “ [ p ]ro p e rty l eas ed t o other s ” i s l i m i t ed t o $200, 000. T he “CO N T I N G E N T C O V E R A G E ” pr ovi s i on s et s for th tw o condi t i ons pr ece dentt o cover age, nei therone of w hi ch cont ai ns t echni cal lan g u a g e o r le g a les e th a t m ig h t co n f u se th e a v e ra g e p o licyh o ld e r. T h e se p ro v isio n s s tate in p lain lan g u a g e th a t lea se d p ro p e rtyw ill b e e x c lu d e d f ro m c o v e ra g e if

In ter sta te A e ria ls fa il s to sign a w ri tt en lease ag ree m en t w ith the lesse e o r i f th e lesse e f ail s to p roc u re p h y s ic a l d a m a g e c o v e ra g e n a m in g In te rs ta te A e ri a ls a s th e p a y e e . I nt er s t at e A er i al s cont ends thatdes pi t e thi s pl ai n l anguage , the cont i ngent cover age pr ovi s i on i s unenfor cea bl e as i ti s bur i ed atthe end of the i ns ur ance pol i cyand i s notl ocat ed on the fr ontpage of the endor s ement . T hes e cont ent i ons l ack mer i t . T he pol i cyexpr es s l yi ncorpor at es al l endor s ement s . T he fr ontpage of the endor s ement i nform s the pol i cyhol derthati ti s a thr ee- page doc um ent . A m er e per i pherys can of t he e n d o rse m e n t in d ica tes th a t th e f irst p a g e is “ (P a g e 1 o r 3 ) > ” a s th is in f o rm a tio n is s quar el yl ocat ed on the bott om of the page , on the ce nt erof the l i ne, s etapartfr om the t extof the endor s ement . T hi s di s cl os ur e nega t es anyas s ert i on thatG r eatA m er i can att empt ed t o burythe cont i ngentcover age pr ovi s i on orconfus e I nt er s t at e A er i al s as t o t he natur e of i t s cover age. M or eover , the hea di ngs of the pr ovi s i ons on the s econd pa ge, in c lu d in g th e c o n tin g e n t c o v e ra g e p ro v is io n , w e re w ri tte n in a la rg e , c a p ita liz e d f o n t.

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A ddi t i onal l y , I nt er s t at e A er i al s cont ends thatthe endor s ementoper at es as the funct i onal equi val entof a de cl ar at i on and bec aus e al l t erm s of a de cl ar at i on m us tappea r o n its f ro n t p a g e , th e e n d o rs e m e n t is u n e n f o rc e a b le . T h is c o n te n tio n , to o , la c k s m e ri t. Fi r s t , even i f thi s C our ttr eat ed the endor s ementas a dec l ar at i on, the cont i ngentcover age pr ovi s i on w oul d be enf or ceabl e. I ti s notthe l aw i n N ew J er s eythati ns ur er s m us ti ncl ude al l excl us i ons fr om cover age on the fi r s tpage of a dec l ar at i on form orotherw i s e the e x c lu s io n s a re u n e n f

o rc e a b le . See Zacar i as , 168 N . J . 603 ( expl ai ni ng that“an i ns ur ance c o n tra c t is n o t per se ambi guous beca us e i t s decl ar at i on s heet , defi ni t i on s ect i on, and excl us i on pr ovi s i ons ar e s epar at el ypr es ent ed”) . Second, a r evi ew of the i ns ur ance pol i cy s uppor t s the D i s tr i ctC our t ’ s concl us i on thatthe endor s ementw as nota dec l ar at i on. T he p o l i c yc o n t a i n s a d e c l a r a t i o n s h e e te n t i t l e d “ BU S I NE S S P RO P OL I CY CO M M ON D E C L A R A T I O N S. ” ( A pp. 33. ) T he dec l ar at i on s heeti nform s the pol i cyhol derthat endor s ementC I M F930 “change s the pol i cy . ” The decl ar at i on s heeti ns truct s the pol i cyhol dert o “[p] l eas e r ead [ For m F930] car eful l y . ” The decl ar at i on s heeti dent i fi es For m F930 as an endor s ement , and nota dec l ar at i on. A ddi t i onal l y , the dec l ar at i on s heet in s tru c ts th e p o lic yh o ld e r t o re v ie w F o rm F 9 3 0 c a re f u lly f o r c h a n g e s to c o v e ra g e . Fi nal l y , contr aryt o I nt er s t at e A er i al s ’ cont ent i on, i ti s i ncons equent i al thatthe pol i cycont ai ns anotherform thati s l abel ed as a dec l ar at i on s heet . T hi s form does not c r e a t e c o n f

u s i o n . T h e s e c o n d f

o r m, e n t i t l e d “ BU S I NE S S I NL AND MARI NE C O V E R A G E PA R T D E C L A R A T I O N S PA G E , ” i ndi cat es thatal l endor s ement s l i s t ed on

### 9

form C M 88 01 ar e i ncorpor at ed as partof the pol i cy . For m C M 88 01 l i s t s endor s ement For m F930 as one of the endor s ement s cont ai ned i n the pol i cy . T hus , l i ke the dec l ar at i on s heetdi s cus s ed above , thi s form , t oo, di r ect s the pol i cyhol dert o For m F930 i n pl ai n and s i m pl e l anguage . V I. W e a ff irm the D istri ct C o u rt ’s gra n t of G rea t A m erican ’s m o ti o n fo r sum m ary ju d g m e n t.