UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 10-1530

BRETON, LLC; HEMAN WARD, INCORPORATED; B&H MANAGEMENT 

COMPANY,

Plaintiffs - Appellees,

v.

GRAPHIC ARTS MUTUAL INSURANCE COMPANY, d/b/a Utica National 

Insurance Group,

Defendant – Appellant,

and

JEFFERSON-PILOT LIFE INSURANCE COMPANY, Merged with the 

Lincoln National Life Insurance Company,

Defendant.

No. 10-1571

BRETON, LLC; HEMAN WARD, INCORPORATED; B&H MANAGEMENT 

COMPANY,

Plaintiffs - Appellants,

v.

GRAPHIC ARTS MUTUAL INSURANCE COMPANY, d/b/a Utica National 

Insurance Group,

Defendant – Appellee,
2

and

JEFFERSON-PILOT LIFE INSURANCE COMPANY, Merged with the 

Lincoln National Life Insurance Company,

Defendant.

Appeals from the United States District Court for the Eastern 

District of Virginia, at Alexandria. Anthony John Trenga, 

District Judge. (1:09-cv-00060-AJT-TRJ)

Argued: May 12, 2011 Decided: September 6, 2011

Before KING, SHEDD, and WYNN, Circuit Judges.

Reversed and remanded by unpublished opinion. Judge Wynn wrote 

the majority opinion, in which Judge King joined. Judge Shedd 

wrote a concurring opinion.

ARGUED: Lon Arthur Berk, HUNTON & WILLIAMS, LLP, McLean, 

Virginia, for Appellant/Cross-Appellees. Charles Thomas Brown, 

SILVER & BROWN, Fairfax, Virginia, for Appellee/CrossAppellants. ON BRIEF: Brian J. Gerling, HUNTON & WILLIAMS, LLP, 

McLean, Virginia, for Appellant/Cross-Appellees. Glenn H. 

Silver, SILVER & BROWN, Fairfax, Virginia, for Appellee/CrossAppellants.

Unpublished opinions are not binding precedent in this circuit.
3

WYNN, Circuit Judge:

Summary judgment is appropriate only “if the movant 

shows that there is no genuine dispute as to any material fact 

and the movant is entitled to judgment as a matter of law.” 

Fed. R. Civ. P. 56(a). After a fire damaged its warehouse, 

Plaintiff Breton, LLC (“Breton”)1 sought a declaratory judgment 

that it was entitled to coverage under an insurance policy 

issued by Graphic Arts Mutual Insurance Co. (“Graphic Arts”). 

Breton also asserted that Graphic Arts breached the insurance 

contract by denying coverage. Graphic Arts responded that it 

was not obligated to provide coverage in part due to the 

operation of an exclusion from coverage in the policy’s 

Protective Safeguards endorsement. Because the operation of 

that exclusion hinges on an unresolved factual dispute, we 

reverse the district court’s grant of summary judgment in favor 

of Breton and remand for further proceedings.

I. 

On April 1, 2002, Graphic Arts issued Breton a 

commercial insurance policy providing coverage for, inter alia,

fire damage to Breton’s warehouse (“the warehouse”). The 

 

1 Appellees include Breton, LLC, Heman Ward, Inc., and B&H 

Management Company. For ease of reading, we will refer to these 

parties collectively as “Breton.”
4

policy, which was renewed through April 1, 2008, includes a 

Protective Safeguards endorsement stating that, “[a]s a 

condition of this insurance, you are required to maintain the 

protective devices or services listed in the Schedule above.” 

J.A. 1871.2 The only protective device or service referenced in 

the Schedule is an Automatic Sprinkler System.3 The endorsement

also contains an exclusion stating, “[Graphic Arts] will not pay 

for loss or damage caused by or resulting from fire if, prior to 

the fire, you . . . [f]ailed to maintain any protective 

safeguard listed in the Schedule above, and over which you had

control, in complete working order.” J.A. 1871. Additionally, 

the policy has a Transfer of Rights and Duties provision 

stating, “[Breton’s] rights and duties under this policy may not 

be transferred without [Graphic Arts’] written consent except in 

the case of death of an individual named insured.” J.A. 1868.

 

2 Citations herein to “J.A. __” refer to the Joint Appendix 

filed by the parties in this appeal.

3 The policy defines an Automatic Sprinkler System as: 

(1) Any automatic fire protective or extinguishing system, 

including connected: 

(a) Sprinklers and discharge nozzles; 

(b) Ducts, pipes, valves and fittings; 

(c) Tanks, their component parts and supports; and 

(d) Pumps and private fire protection mains. 

(2) When supplied from an automatic fire protection system:

(a) Non-automatic fire protective systems; and

(b) Hydrants, standpipes and outlets.

J.A. 1871.
5

On December 1, 2004, Breton leased the warehouse to 

Joe Ragan’s Coffee, Ltd. (“Ragan”).

4 The lease contract stated 

in part:

Tenant at its expense shall at all times maintain said 

Premises in good condition and repair, including all 

mechanical, plumbing, and electrical equipment and 

also in a clean, sanitary and safe condition in 

accordance with all directions, rules, and regulations 

of the . . . fire marshal . . . .

J.A. 1002.

On December 2, 2007, a fire destroyed the warehouse. 

An investigation by the local fire department revealed that the 

valve controlling the supply of water to the sprinkler heads was 

in the closed position, rendering the Automatic Sprinkler System 

inoperable. Based on this discovery, Graphic Arts asserted that 

Breton failed to maintain an Automatic Sprinkler System as 

required by the policy. Alternatively, Graphic Arts contended 

that insofar as Breton delegated the obligation to maintain the 

sprinkler system to Ragan, this delegation violated the 

insurance contract and barred coverage. On those bases, Graphic 

Arts denied coverage.

On January 21, 2009, Breton filed suit in the Eastern 

District of Virginia seeking a declaratory judgment that Graphic 

 

4 Prior to this lease agreement with Ragan, Breton leased 

the warehouse to Alexandria Packaging & Supply Company 

(“Alexandria Packaging”). Graphic Arts had knowledge of both 

rentals. 
6

Arts was obligated to provide coverage under the policy. Breton 

further alleged that Graphic Arts’ failure to provide coverage

constituted a breach of the insurance contract. Graphic Arts 

responded that Breton’s failure to maintain an operable 

sprinkler system in the warehouse constituted a failure to 

satisfy a condition placed on coverage and triggered an 

exclusion from coverage. Graphic Arts argued in the alternative

that Breton’s breach of the insurance contract’s Transfer of 

Rights and Duties provision justified denying coverage. Graphic 

Arts accordingly sought a declaratory judgment that coverage was 

barred. On August 5, 2009, the parties filed cross-motions for 

summary judgment. 

After a hearing, the district court granted Breton’s 

motion for summary judgment on November 10, 2009. First, the 

district court held that Breton satisfied the condition 

precedent to coverage included in the Protective Safeguards 

endorsement. The district court concluded that the word 

“maintain” as used in the condition was ambiguous because it has

more than one definition that could reasonably apply in the 

context of the insurance policy. The district court interpreted 

the ambiguous term in a manner favoring coverage, concluding

that “maintain” meant “to keep in existence.” J.A. 2766. 

Because there was no dispute that Breton kept an Automatic 

Sprinkler System in existence in the warehouse, the court held 
7

that Breton had demonstrated satisfaction of the condition

precedent to coverage.

Next, the district court concluded that the exclusion 

did not apply to bar coverage. The district court found the 

word “control” as used in the exclusion to be ambiguous and

again applied a definition effectuating coverage, ultimately 

interpreting “control” to mean “physical control.” The district 

court reasoned that Breton did not have such “control” over the 

sprinkler system because it lacked “physical dominion over it or 

unfettered access to it.” J.A. 2770. Because the requirement 

to keep the sprinkler system in “complete working order” was 

conditioned on Breton’s having physical control over the system, 

the district court held that the exclusion was inapplicable. 

Finally, the district court held that Breton did not 

violate the Transfer of Rights and Duties provision because 

Breton did not transfer its duty to “maintain” the sprinkler 

system to Ragan. The court therefore held that Breton was 

entitled to coverage and that Graphic Arts breached the 

insurance contract by denying coverage. The court awarded 

damages, including the cost of replacing the warehouse and 

Breton’s lost business income. 

Graphic Arts appealed, contending that the district 

court misread the policy and repeating the argument that 

Breton’s failure to “maintain” a sprinkler system in “complete 
8

working order,” or alternatively Breton’s delegation of 

contractual duties to Ragan, barred coverage. Breton filed a 

cross-appeal, arguing that the district court incorrectly 

calculated the period of time for which Graphic Arts was liable 

for Breton’s lost business income.

II. 

“[W]e review de novo a district court’s award of 

summary judgment, viewing the facts in the light most favorable 

to the non-moving party.” Lee v. York Cnty. Sch. Div., 484 F.3d 

687, 693 (4th Cir. 2007). Summary judgment is appropriate where 

“the movant shows that there is no genuine dispute as to any 

material fact and the movant is entitled to judgment as a matter 

of law.” Fed. R. Civ. P. 56(a). Material facts are “facts that 

might affect the outcome of the suit under the governing law.”

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). 

Virginia law governs the issues raised on appeal 

because this suit was brought in the Eastern District of 

Virginia on the basis of the court’s diversity jurisdiction and 

Graphic Arts delivered the insurance policy to Breton in 

Virginia. See Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 

487, 496-97 (1941) (holding that a federal court exercising 

diversity jurisdiction must apply the choice of law principles 

of the State in which the federal court is located); Buchanan v. 
9

Doe, 246 Va. 67, 70, 431 S.E.2d 289, 291 (1993) (“[T]he law of 

the place where a insurance contract is written and delivered 

controls issue as to its coverage.”).

A.

Graphic Arts first contends that the district court 

erred in concluding that Breton satisfied a condition placed on 

coverage. Paragraph 1a of the Protective Safeguards Endorsement 

states: “[a]s a condition of this insurance, you are required to 

maintain the protective devices or services listed in the 

Schedule above.” J.A. 1871. Graphic Arts argues that 

“maintain” is unambiguous as used in the condition and should be 

interpreted as requiring Breton to “do something to determine 

whether the system operates.” Opening Brief of Appellant at 22. 

Under Virginia law, “[a]n insurance policy is a 

contract, and, as in the case of any other contract, the words 

used are given their ordinary and customary meaning when they 

are susceptible of such construction.” Hill v. State Farm Mut.

Auto Ins., 237 Va. 148, 152, 375 S.E.2d 727, 729 (1989). If the 

policy language is unambiguous the court simply applies the 

terms as written. State Farm Fire and Cas. Co. v. Walton, 244 

Va. 498, 502, 423 S.E.2d 188, 191 (1992).

However, when the language of an insurance contract is 

ambiguous the terms are construed against the insurer. St. Paul 
10

Fire & Marine Ins. Co. v. S.L. Nusbaum & Co., 227 Va. 407, 411, 

316 S.E.2d 734, 736 (1984) (“Insurance policies are contracts 

whose language is ordinarily selected by insurers rather than by 

policyholders. The courts, accordingly, have been consistent in 

construing the language of such policies, where there is doubt 

as to their meaning, in favor of that interpretation which 

grants coverage, rather than that which withholds it.”); see 

also Mollenauer v. Nationwide Mut. Ins. Co., 214 Va. 131, 132, 

198 S.E.2d 591, 592 (1973) (per curiam) (“Where an insurance 

policy is susceptible of two constructions, one of which would 

effectuate coverage and the other not, it is the court’s duty to 

adopt that construction which will effectuate coverage.”); 

Central Sur. & Ins. Corp. v. Elder, 204 Va. 192, 197, 129 S.E.2d 

651, 655 (1963) (“[W]here the language of a policy is 

susceptible of two constructions, it is to be construed 

liberally in favor of the insured and strictly against the 

insurer.”). We therefore must first determine whether the 

district court erred in ruling that the policy language 

constituting the condition precedent was ambiguous. 

“Language is ambiguous when it may be understood in 

more than one way or when such language refers to two or more 

things at the same time.” Salzi v. Virginia Farm Bureau Mut. 

Ins. Co., 263 Va. 52, 55-56, 556 S.E.2d 758, 760 (2002); but see

TM Delmarva Power, LLC v. NCP of Va., LLC, 263 Va. 116, 119, 557 
11

S.E.2d 199, 200 (2002) (“A contract is not ambiguous merely 

because the parties disagree as to the meaning of the terms 

used.”). “A term is unambiguous only if, within its context, it 

is not susceptible to more than one meaning.” Gates, Hudson & 

Assoc., Inc., v. Fed. Ins. Co., 141 F.3d 500, 502 (4th Cir. 

1997) (applying Virginia law). 

In the present case, the word “maintain” “may be 

understood in more than one way,” which supports a finding of 

ambiguity. Salzi, 263 Va. at 55-56, 556 S.E.2d at 760. Black’s 

Law Dictionary defines “maintain” in relevant part as:

1. To continue (something).

2. To continue in possession of (property, etc.).

. . . .

4. To care for (property) for purposes of operational 

productivity or appearance; to engage in general 

repair and upkeep.

Black’s Law Dictionary 1039 (9th ed. 2009). Similarly,

Webster’s New World Dictionary provides multiple definitions for

“maintain,” including: “1. to keep or keep up; carry on 2. to 

keep in continuance or in a certain state, as of repair . . . 5. 

to support by supplying what is needed.” Webster’s New World 

Dictionary 363 (Warner Books ed. 1987). As the Supreme Court of 

Virginia has recognized, “the word ‘maintain’ has several 

meanings, each depending upon the context of the statement in 

which it is used.” Savage v. Com. ex rel. State Corp. Comm’n, 

186 Va. 1012, 1020, 45 S.E.2d 313, 317 (1947). 
12

Nonetheless, Graphic Arts argues that the district 

court strained to find ambiguity when ignoring the “plain

meaning” of “maintain” in the text of the contract. We 

disagree. As used in the insurance contract, “maintain” could 

be reasonably interpreted, as Graphic Arts contends, to refer to 

regular repair obligations with respect to the Automatic

Sprinkler System. However, as the district court noted, the 

word could also be reasonably interpreted to refer to an 

obligation to continue to have an Automatic Sprinkler Sprinkler 

system in the warehouse. Absent any clarification in the 

policy, we conclude that “maintain” is ambiguous here.

This conclusion is supported by other provisions of 

the contract. We note that “maintain” is also used in an 

exclusion from coverage, which we discuss below. Rather than

read the terms of the policy in isolation, we must look to other 

contract provisions that use a specific word to clarify its 

intended meaning. See Gates, 141 F.3d at 502-03. The exclusion 

expressly qualifies the word “maintain” with the words “in 

complete working order.” As the district court recognized, 

interpreting “maintain” to require ensuring operability would 

render the “in complete working order” language in the exclusion 

superfluous. However, “no word or clause in a contract will be 

treated as meaningless if a reasonable meaning can be given to 

it, and parties are presumed not to have included needless words 
13

in the contract.” TM Delmarva Power, 263 Va. at 119, 557 S.E.2d 

at 200.

5

Moreover, Graphic Arts cannot point to any contract

language defining the nature or degree of the obligations it 

contends stem from the duty to “maintain.” For instance, there 

is no indication as to how frequently any purportedly required 

inspections must take place, what components of the system would 

need to be examined during an inspection, or how rapidly defects 

revealed during an inspection must be repaired. As the district 

court noted, “to impose implied duties on an insured through the 

vagaries of the word ‘maintain’—such as the duty to access, 

inspect and repair a leased property—would necessarily require 

an insured to guess at what its duties and responsibilities are, 

something that Virginia law seeks to avoid when interpreting the 

language of an insurance policy.” J.A. 2767-68.

In contrast, defining “maintain” as “to keep” would be 

more likely to effectuate coverage, as it would simply require 

the continued retention of an Automatic Sprinkler System in 

order to satisfy the condition precedent. Virginia law compels 

our application of this definition. Mollenauer, 214 Va. at 132, 

198 S.E.2d at 592. Because it is undisputed that Breton kept an

 

5 During oral argument, Graphic Arts argued that the use of 

“maintain” in the exclusion should not be used to inform the 

meaning of “maintain” in the condition placed on coverage.
14

Automatic Sprinkler System in place at all relevant times, we 

conclude that the district court did not err in finding that 

Breton satisfied the condition placed on coverage. 

B.

Next, Graphic Arts argues that Breton cannot enforce 

the insurance agreement because Breton breached the contract by 

violating the Transfer of Rights and Duties provision. We 

disagree. The provision states, “Your rights and duties under 

this policy may not be transferred without our written consent 

except in the case of death of an individual named insured.” 

J.A. 1868. Graphic Arts contends that Breton violated this 

provision by leasing the warehouse to Ragan and, in the lease 

contract, obligating Ragan to “maintain [the warehouse] in good 

condition and repair.” J.A. 1002. Because Graphic Arts never 

gave consent, written or otherwise, to a transfer of Breton’s 

duties under the contract, Breton could not transfer its duty to 

maintain the warehouse to another. However that duty was not

“transferred” when Breton’s lease contract with Ragan also 

imposed a maintenance duty on the tenant. This is so for two 

reasons. First, even if Breton delegated its duty to maintain 

the sprinkler system to Ragan, Breton would still owe a 

maintenance duty to Graphic Arts. See Restatement (Second) of 

Contracts § 318 (“Unless the obligee agrees otherwise, neither 
15

delegation of performance nor a contract to assume the duty made 

with the obligor by the person delegated discharges any duty or 

liability of the delegating obligor.”). Second, the lease 

contract between Breton and Ragan created an independent 

maintenance duty owed by Ragan to Breton; it did not contemplate 

the transfer of a duty owed by Breton to Graphic Arts. In 

short, the fact that Ragan owed Breton a similar duty to that 

which Breton owed Graphic Arts does not mean that Breton 

transferred its duty under the insurance contract. Because 

Breton did not transfer its duties, we hold that the district 

court did not err in finding that Breton did not breach the 

contract’s Transfer of Rights and Duties provision.

C.

Finally, Graphic Arts contends that an exclusion in 

the Protective Safeguards endorsement operates to bar coverage. 

The exclusion states “[Graphic Arts] will not pay for loss or 

damage caused by or resulting from fire if, prior to the fire, 

you . . . [f]ailed to maintain any protective safeguard listed 

in the Schedule above, and over which you had control, in 

complete working order.” J.A. 1871.

As explained above, if this language is unambiguous, 

the court’s role is simply to apply the contract terms as 

written. Walton, 244 Va. at 502, 423 S.E.2d at 191. However, 
16

the exclusion is qualified by the requirement that the insured 

“had control” over the protective safeguard in question. The 

district court opined that “control” could be understood to mean 

“legal control” or “physical control.” 

Black’s Law Dictionary defines “control” as “[t]he 

direct or indirect power to govern the management and policies 

of a person or entity, whether through ownership of voting 

securities, by contract, or otherwise; the power or authority to 

manage, direct, or oversee . . . .” Black’s Law Dictionary 378

(9th ed. 2009). Webster’s New World Dictionary similarly 

defines “control” as “1. power to direct or regulate 2. a means 

of controlling; check 3. an apparatus to regulate a mechanism.” 

Webster’s New World Dictionary 137 (Warner Books ed. 1987). 

Given the similarity of these definitions, the word “control” 

would at first blush seem unambiguously to reference a power to 

manage, direct, or regulate an object or entity. Yet, as the 

district court noted, a reasonable distinction can be drawn

between the physical power to regulate an object or entity and 

the legal power to do so.

In some instances, courts construe “control” as 

established through physical power over an object. For example, 

Virginia cases addressing whether one has “control” over a 

vehicle have equated the possession of keys to the vehicle with 

control of the vehicle. See Bell v. Commonwealth, 21 Va. App. 
17

693, 699, 467 S.E.2d 289, 292 (1996) (holding that, for purposes 

of statute criminalizing theft of vehicle from victim who had 

“possession or control” of vehicle, victim’s possession of the 

car keys was sufficient to support conviction); see also

Burchette v. Commonwealth, 15 Va. App. 432, 435-36, 425 S.E.2d 

81, 84 (1992) (reversing conviction based on constructive 

possession and noting lack of evidence that defendant had keys 

to vehicle in which contraband was found); but see Overbee v. 

Commonwealth, 227 Va. 238, 243, 315 S.E.2d. 242, 244 (1984) (for 

purpose of DUI statute, which requires driving or “operation” of 

vehicle, mere possession of vehicle’s keys is not enough to 

establish “actual physical control” of the vehicle).6 Another 

example can be found in United States v. Buculei, 262 F.3d 322 

(4th Cir. 2001), where we discussed whether a child was under 

the “control” of the defendant and rejected any argument that 

“control” required legal power over the child, instead 

concluding that the statute in question contemplated the 

 

6 This conception of keys indicating “control” of a vehicle 

is not unique to Virginia. See United States v. Sotelo-Rivera, 

931 F.2d 1317, 1319 (9th Cir. 1991), cert. denied, 502 U.S. 1100 

(1992) (deeming possession of vehicle’s keys evidence of control 

over vehicle); United States v. Damsky, 740 F.2d 134, 139 (2d 

Cir.), cert. denied, 469 U.S. 918 (1984) (holding that defendant 

had dominion and control of vehicle once he was given the key

thereto); United States v. Jackson, 529 F. Supp. 1047, 1050 (D.

Md. 1981) (finding exclusive control over vehicle obtained upon 

possession of keys).
18

exercise of physical power over the child. Id. at 331-33

(analyzing language of 18 U.S.C. § 2251A(b)(2)).

In contrast, even without physical control, one may 

have legal power over an object or entity (i.e. legal control). 

See Brock v. Hamad, 867 F.2d 804, 807 (4th Cir. 1989) (holding

that, for purposes of Fair Labor Standards Act, defendant had

“control” over multiple rental properties because “[a]ll the 

properties managed and controlled by the defendant were owned by 

the defendant, or by the defendant and his wife, or the 

defendant and his mother,” and FLSA regulations defined control 

as existing “‘where total ownership is vested in a single 

person, family unit, [or] partnership.’”) (quoting 29 C.F.R. § 

779.223 (1987)); see also Fitzpatrick v. United States, 410 F.2d 

513, 516 n.3 (5th Cir. 1969) (noting that the lack of a “key or 

ownership paper” indicates lack of control) (emphasis added).

Indeed, courts have previously distinguished between 

the exercise of “physical control” and “legal control.” See, 

e.g., United States v. Joshua, 607 F.3d 379, 387 (4th Cir. 2010) 

(noting, in the habeas corpus context, the distinction between 

physical and legal control when addressing custody 

determination); see also In re Video Depot, Ltd., 127 F.3d 1195, 

1198 (9th Cir. 1997) (“Arlynn no longer had legal control over 

the funds, even if he retained physical control over them.”). 
19

As the foregoing discussion demonstrates, there are at 

least two interpretations of the word “control”. Because 

interpreting “control” to mean either “physical control” or 

“legal control” would be reasonable in the context of the

insurance contract at issue, we conclude that the term “control”

is ambiguous here. See Salzi, 263 Va. at 55-56, 556 S.E.2d at 

760. Again, when faced with an ambiguous contractual term, we 

must construe it liberally in favor of the insured. Elder, 204 

Va. at 197, 129 S.E.2d at 655. Interpreting “control” to mean 

legal control would create more instances in which the exclusion 

could be triggered. As the district court observed, “one would 

expect fire insurance policies to be often issued, as in this 

case, to persons who own the insured property.”7 J.A. 2770. 

Consequently, if “control” meant “legal control,” in many 

instances the exclusion would be triggered merely by the 

insured’s ownership of the premises. By contrast, interpreting

“control” to mean “physical control” would give greater effect 

to the qualification in the exclusion.8 Accordingly, we will 

 

7 Indeed, to enter into a valid fire insurance contract, the 

insured must have a legal or equitable interest in the covered 

property. See Liverpool & London & Globe Ins. Co. v. Bolling, 

176 Va. 182, 188-89, 10 S.E.2d 518, 520 (1940). 

8 Moreover, by construing “control” as meaning “physical 

control” we read the contract such that the insured is only 

required to perform duties which he is physically able to 

perform.
20

construe “control” as used in the exclusion to require the 

insured’s physical control over the Automatic Sprinkler System. 

To determine whether Breton had a contractual duty to 

maintain the Automatic Sprinkler System “in complete working 

order,” it is necessary to determine whether Breton had physical 

control over the system. Whether or not Breton had physical 

control over the sprinkler system therefore constitutes a 

“material fact” necessary to the resolution of this case. See

Anderson, 477 U.S. at 248. Because this material fact is in 

dispute, summary judgment is inappropriate. Fed. R. Civ. Pro. 

56(a).

Importantly, all of the controls for the warehouse’s 

Automatic Sprinkler System, including the water supply valve, 

were located within the warehouse in a Sprinkler Room. Breton 

argued that it did not have access to that room and therefore 

lacked physical control over the sprinkler system. Breton 

contended that before it leased the warehouse to Ragan, a former 

tenant, Alexandria Packaging, changed all of the locks in the 

warehouse and did not provide Breton with keys. According to 

Breton, when Ragan purchased the assets of Alexandria Packaging 

and leased the warehouse from Breton, Ragan received the keys 

from Alexandria. Breton asserts that Ragan then changed the 
21

locks9 and never gave Breton a copy of the keys, meaning that 

only Ragan had physical access to the Sprinkler Room. All told, 

Breton contends that during Alexandria Packaging’s and Ragan’s

lease of the warehouse, Breton “had no access to the Sprinkler 

Room and had no control over the Sprinkler Room.”10 J.A. 711. 

Graphic Arts, in contrast, asserts that Breton had 

control over the sprinkler system. Paul Graf, a corporate 

designee of Graphic Arts, testified that Breton “had control”

because “it’s their sprinkler system and they are in control of 

their own property.” J.A. 1316. Graphic Arts also disputed 

Breton’s contention that Ragan had sole control over the 

sprinkler system: “[I]t was disputed whether Joe Ragan or 

Breton had control of the sprinkler system.” Response Brief of 

Cross Appellee at 12. Leona Ragan, a corporate designee of Joe 

Ragan Coffee, Ltd., testified that her company had neither the 

keys nor access to the Sprinkler Room. 

We are unwilling to conclude, as did the district 

court, that Breton’s lack of “unfettered access” to the 

 

9 The record includes an invoice indicating that Baldino’s 

Lock & Key charged Ragan for changing certain unidentified locks 

in the warehouse. 

10 It bears mention that during an insurance inspection 

prior to the fire, Breton’s representative asserted that a 

contractor employed to work on the sprinkler system, rather than 

Ragan, had the keys to the Sprinkler Room. 
22

Sprinkler Room meant that Breton lacked the requisite “physical 

control” over the Automatic Sprinkler System to trigger the duty 

to maintain the system “in complete working order.” However,

under our interpretation of the contract, if Breton was entirely 

unable to enter the warehouse to access the sprinkler system, 

then it had no such duty. 

Here, the exclusion only obligated Breton to keep “in 

complete working order” those protective services or devices 

listed in the contract and “over which [Breton] had [physical] 

control.” The only protective device or service listed was the 

Automatic Sprinkler System. The qualification “and over which 

you had control,” must, to be given any effect, operate to 

distinguish between protective devices or services with respect 

to which Breton had a duty and those devices or services with 

respect to which no such duty existed. See Berry v. Klinger, 

225 Va. 201, 208, 300 S.E.2d 792, 796 (1983) (“Where possible, 

meaning must be given to every clause [in a contract].”). Since 

only one device was listed in the contract, the distinction 

contemplates Breton’s loss of control over the sprinkler system 

and further permits such a loss of control to absolve Breton of 

a duty to maintain the sprinkler system “in complete working 

order.” If Graphic Arts wanted to protect against this 

possibility, it could have easily included language obligating 

the insured to retain physical control over the sprinkler 
23

system. It did not do so, and we will not construe the 

resulting contractual ambiguity to the detriment of Breton.

In light of the competing factual assertions regarding 

Breton’s ability to access the Automatic Sprinkler System, we 

cannot agree with the district court that as a matter of law the 

exclusion was not triggered. Until the resolution of this 

material factual dispute, summary judgment is inappropriate.

III. 

In moving for summary judgment, Breton failed to 

establish that there were no genuine disputes of material fact. 

As such, the district court erred when granting summary judgment

in favor of Breton. Accordingly, we reverse and remand for 

further proceedings.11

REVERSED AND REMANDED

 

11 On cross-appeal, Breton challenges the district court’s 

calculation of damages awarded for the breach of contract by 

Graphic Arts. Because we reverse the grant of summary judgment, 

we need not address this argument.
24

SHEDD, Circuit Judge, concurring:

I agree that summary judgment should be reversed, but 

for reasons different than the majority. 

First, in the context of the insurance policy at 

issue, the term “maintain” is not ambiguous. The fact that 

“maintain” may have several meanings does not necessarily result 

in ambiguity, nor is that fact dispositive here; rather, the 

real question is whether, in the context of a fire insurance 

policy, it is reasonable to interpret “maintain” as meaning to 

merely have a sprinkler system in place. See Resource Bankshares 

Corp. v. St. Paul Mercury Ins. Co., 407 F.3d 631, 640 (4th Cir. 

2005) (“The real question, then, is whether, when read in 

context, a reasonable purchaser of insurance would believe that 

[interpretation].”). The majority concludes that it is. In my 

opinion, this is not a reasonable interpretation in light of the 

fundamental purpose of insurance, which is to allocate risk 

between the insurer and insured. See Autumn Ridge, L.P. v. 

Acordia of Virginia Ins. Agency, Inc., 613 S.E.2d 435, 438-39 

(Va. 2005).

The condition in the Protective Safeguards Endorsement 

requiring Breton “to maintain” an automatic sprinkler system

creates a duty on Breton, which is a condition precedent to 

coverage. As such, Breton must comply with this condition before 

the insurance becomes effective. In other words, in order for 
25

Graphic Arts to agree to assume the risk of loss resulting from 

fire, this protective safeguard – a safeguard that would 

minimize or prevent that risk – must be in place. To read 

“maintain” as meaning to merely “have” a sprinkler system –

regardless of whether it actually works - eliminates the purpose 

of that duty in allocating risk. Further, such an interpretation 

renders the condition completely meaningless because in this 

context having a non-working, non-functioning system is the 

factual equivalent of having no system at all (for purposes of 

risk allocation). See TM Delmarva Power, LLC v. NCP of Virginia, 

LLC, 557 S.E.2d 199, 200 (Va. 2002) (“[N]o word or clause in a 

contract will be treated as meaningless if a reasonable meaning 

can be given to it.”). 

Surely, Graphic Arts did not intend to require Breton 

to have a non-working sprinkler system. See Virginia Farm Bureau 

Mut. Ins. Co. v. Williams, 677 S.E.2d 299, 302 (Va. 2009) 

(noting that insurance provisions must be construed to 

effectuate the parties' intent). “The point is that context 

matters,” Resource Bankshares, 407 F.3d at 642, and in this 

context, the requirement to “maintain” a sprinkler system is not 
26

ambiguous – it necessarily means to have a sprinkler system 

which is in working order.1

Second, and independent of the general duty to 

maintain a sprinkler system as a condition to have coverage, the 

policy exclusion provides that Graphic Arts “will not pay for 

loss . . . [if Breton] [f]ailed to maintain [the sprinkler 

system] . . . over which [Breton] had control, in complete 

working order.” J.A. 771. Leaving aside the lease at this point, 

this exclusion clearly and independently obligated Breton to 

keep the sprinkler system in working order to ensure there was 

coverage. The lease between Breton and Ragan does not change 

this obligation. Breton controlled the premises as lessor and 

cannot eliminate its obligation by merely leasing the property 

to a third party.2

 

1 In fact, the conduct of both Breton and Graphic Arts 

underscores this interpretation of “maintain.” In August 2007,

Graphic Arts indicated to Breton’s property manager that the 

sprinkler system needed to be inspected. J.A. 2618. In response, 

Breton’s property manager informed Graphic Arts that the 

sprinkler was scheduled to be serviced later that month. Id. In 

addition, just weeks before the fire, Graphic Arts sent a letter 

reminding Breton to have the system inspected. J.A. 2017-21. 

Under the district court’s interpretation of the duty to 

maintain, these warnings by Graphic Arts – as well as Breton’s 

response - would have been unnecessary because Breton had 

fulfilled its duty under the policy by simply having the 

sprinkler system – whether it worked or not - in place. 

2 The exclusion’s requirement that the system be 

“maintain[ed] . . . in complete working order” underscores, 

rather than undercuts, my reading of the general duty to 

(Continued)
27

Notwithstanding the lease relationship between Breton 

and Ragan, Breton controlled the sprinkler system under the 

policy between Breton and Graphic Arts. That Breton somehow 

would use its status as lessor to construct a barrier to its 

access to the sprinkler system is of no moment. The lease offers 

Breton no more excuse than if Breton had thrown away its keys to 

the control room for the express purpose of defeating the 

exclusion – Breton’s obligation would still exist. An insured 

simply cannot take steps to defeat its obligation under the 

Policy and still claim coverage. See Parrish v. Wightman, 34 

S.E.2d 229, 232 (Va. 1945) (noting general contract principle 

that if a party “is the cause of the failure of performance of a 

condition upon which his own liability depends, he cannot take 

advantage of the failure”). Beyond that, Breton’s position that 

Ragan had sole control of the sprinkler system is defeated by 

the actual language of the lease. Under the lease, Breton had 

 

“maintain” a system. Under the majority’s view, the general duty 

(condition) is read to contrast with the exclusion because the 

exclusion further elaborates on “maintain.” Such a reading leads

to the odd but inevitable result that a non-working system is 

completely sufficient to satisfy the general duty. Further, 

notwithstanding any disagreement with the majority about what 

“maintain” means, the exclusion makes it clear that there will 

be no payment for a loss unless the system is in complete 

working order. Therefore, whether the focus is on the general 

duty or the exclusion, for Breton to recover under the policy 

the sprinkler system had to be in working order.
28

“the right to enter the Premises . . . to examine the same as 

well as to make any alterations and repairs . . . .” J.A. 1003. 

That fact underscores Breton had both physical control – as the 

majority interprets “control” – and legal control over the 

sprinkler system. Simply put, under the facts and any reading of 

the policy, Breton was in control of the sprinkler system and 

was therefore obligated to keep the system in working order. 

However, aside from all of this, Graphic Arts conceded 

during oral argument that there is a question of what 

constitutes the sprinkler system being “in complete working 

order.” In light of this concession, I would remand for a 

resolution of that narrow issue.