Source: https://law.justia.com/cases/federal/appellate-courts/F3/178/804/601852/
Timestamp: 2019-05-20 13:16:27
Document Index: 132692701

Matched Legal Cases: ['§ 71', '§ 25', '§ 102', '§ 231', '§ 554', '§ 2810']

Gencorp, Inc., Plaintiff-appellant, v. American International Underwriters, Also Known As A.i.u.insurance Company; Riunione Adriatica Di Sicurta, Also Knownas Adriatic Insurance Company; Allianz Versicherungs-a.g.,also Known As Allianz Insurance Company; American Insurancecompany, Also Known As American Auto Insurance; Americanhome Assurance Company; American Re-insurance Company;associated International Insurance Company; Cigna Specialtyinsurance Company; Central National Insurance Company Ofomaha; Continental Casualty Company; Dairyland Insurancecompany; Employers' Insurance of Wausau; Employersreinsurance Corporation; Federal Insurance Company; Fidelityand Casualty Company of New York; Fireman's Fund Insurancecompany; First State Insurance Company; Granite Stateinsurance Company; Insurance Company of North America;international Insurance Company; International Surplus Linesinsurance Company; Lexington Insurance Company; Libertymutual Insurance Company; Certain Underwriters at Lloyd'slondon; National Casualty Company; National Union Fireinsurance Co. of Pittsburgh, Pa; Everset Reinsurancecompany, Formerly Known As Everest Reinsurance Company;republic Insurance Company; St. Paul Fire and Marineinsurance Company; Twin City Fire Insurance Company; Unitedinsurance Company; Gibraltar Casualty Company; Unitednational Insurance Company; Lumbermens Mutual Casualtycompany; Certain London Market Insurance Companies;bellefonte Insurance Company, Ltd.; Cna Reinsurance Oflondon Limited; Lexington Insurance Company, Ltd.; Northatlantic Insurance Company, Ltd.; St. Katherine Insurancecompany, Ltd.; Stronghold Insurance Company, Ltd.;wintrethur Swiss Insurance Company, Ltd. Defendants-appellees, 178 F.3d 804 (6th Cir. 1999) :: Justia
Gencorp, Inc., Plaintiff-appellant, v. American International Underwriters, Also Known As A.i.u.insurance Company; Riunione Adriatica Di Sicurta, Also Knownas Adriatic Insurance Company; Allianz Versicherungs-a.g.,also Known As Allianz Insurance Company; American Insurancecompany, Also Known As American Auto Insurance; Americanhome Assurance Company; American Re-insurance Company;associated International Insurance Company; Cigna Specialtyinsurance Company; Central National Insurance Company Ofomaha; Continental Casualty Company; Dairyland Insurancecompany; Employers' Insurance of Wausau; Employersreinsurance Corporation; Federal Insurance Company; Fidelityand Casualty Company of New York; Fireman's Fund Insurancecompany; First State Insurance Company; Granite Stateinsurance Company; Insurance Company of North America;international Insurance Company; International Surplus Linesinsurance Company; Lexington Insurance Company; Libertymutual Insurance Company; Certain Underwriters at Lloyd'slondon; National Casualty Company; National Union Fireinsurance Co. of Pittsburgh, Pa; Everset Reinsurancecompany, Formerly Known As Everest Reinsurance Company;republic Insurance Company; St. Paul Fire and Marineinsurance Company; Twin City Fire Insurance Company; Unitedinsurance Company; Gibraltar Casualty Company; Unitednational Insurance Company; Lumbermens Mutual Casualtycompany; Certain London Market Insurance Companies;bellefonte Insurance Company, Ltd.; Cna Reinsurance Oflondon Limited; Lexington Insurance Company, Ltd.; Northatlantic Insurance Company, Ltd.; St. Katherine Insurancecompany, Ltd.; Stronghold Insurance Company, Ltd.;wintrethur Swiss Insurance Company, Ltd. Defendants-appellees, 178 F.3d 804 (6th Cir. 1999)
U.S. Court of Appeals for the Sixth Circuit - 178 F.3d 804 (6th Cir. 1999)
Argued July 30, 1998. Decided June 2, 1999
We review a district court's grant of summary judgment de novo. See Tiemeyer v. Community Mut. Ins. Co., 8 F.3d 1094, 1097-98 (6th Cir. 1993). Summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c); see Canderm Pharmacal, Ltd. v. Elder Pharm., Inc., 862 F.2d 597, 603 (6th Cir. 1988). The party moving for summary judgment bears the initial responsibility of informing the court that there is no genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986). Once the moving party has met its initial burden, the nonmoving party must present evidence that creates a genuine issue of material fact making it necessary to resolve the difference at trial. See id. at 324. "By its very terms, this standard provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). In other words, we must decide "whether the evidence presents sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Terry Barr Sales Agency, Inc. v. All-Lock Co., 96 F.3d 174, 178 (6th Cir. 1996) (internal quotations omitted). See Booker v. Brown & Williamson Tobacco Co., 879 F.2d 1304, 1310 (6th Cir. 1989).
GenCorp further claims that the district court erred by crediting the Excess Insurers with some or all of the consideration provided to GenCorp by Genco because the money paid by Genco was not "bargained for" consideration as between GenCorp and the Excess Insurers. GenCorp points out that the Settlement Agreement itself states that " [n]either GenCorp nor Genco intend to confer to any other person any right or benefit under this Agreement." (Settlement Agreement, p 3.12). GenCorp notes that, although consideration may flow to or from parties other than the promisor and promisee, the consideration cannot be separated from intent, as the consideration and the promise must "bear a reciprocal relation of motive or inducement." (Appellant's Br. at 11 (quoting Restatement (Second) of Contracts § 71 cmt. b)).
Next, GenCorp argues that insurance policies cannot be modified by endorsement subsequent to a loss. Given our conclusion that the incorporation of the absolute pollution exclusion provision into the Excess Policies was not a "modification" of the contracts between GenCorp and the Excess Insurers, this argument necessarily fails.10 In any event, the cases cited by the parties are largely distinguishable because they do not deal with multi-layer policies. Rather, they address the effect of post-loss11 and postperiod12 modifications or reformations13 on parties to a single bilateral contract and, are therefore, analogous to the relationship between GenCorp and Genco, not the relationship between GenCorp and the Excess Insurers. Furthermore, there is no per se rule against post-loss modifications.14 Compare Lee R. Russ & Thomas F. Segalla, 2 Couch on Insurance § 25:8 (3d ed.1997) (stating that " [t]he acceptance of an alteration or modification of the original contract, to be effective, must precede loss"); with Lee R. Russ & Thomas F. Segalla, 7 Couch on Insurance § 102:7 (3d ed.1997) (noting that " [w]hile the rule that loss must occur during the policy period for the insured to recover obviously excludes losses that occur before the policy is issued, the result is different when the parties validly agree to antedate the coverage and neither is aware that a loss has occurred between the date to which the policy is backdated and the date that the insurance was actually obtained"); Sara L. Johnson, et al., 43 AmJur.2d Ins. § 231 (1982 & Supp.1997) (remarking that " [i]t is generally held that where at the time of an application for insurance there has been a loss but neither the applicant nor the insurer knew of this fact, a recovery may be had on a policy subsequently issued which was antedated so as to include the time at which the loss occurred"); United States v. Patryas, 303 U.S. 341, 345, 58 S. Ct. 551, 82 L. Ed. 883 (1938) (stating that " [n]o legal obstacle prevents parties, if they so desire, from entering into contracts of insurance to protect against loss that may possibly have already occurred"); Inland Waters Pollution Control, Inc. v. National Union Fire Ins. Co., 997 F.2d 172, 176 (6th Cir. 1993) (discussing precedent for proposition that "even losses that have already occurred may be insured against, provided their occurrence is unknown to the parties at the time of insurance"); Canadian Indem. Co. v. Tacke, 257 F.2d 342, 344 (9th Cir. 1958) (observing that "a predated agreement creates a liability for an injury existing at the time it is entered into is a matter of settled insurance law"); Aetna Cas. & Sur. Co. v. Condict, 417 F. Supp. 63, 71-72 (S.D. Miss. 1976) (same); State Mut. Life Assurance Co. v. Heine, 49 F. Supp. 786, 788 (W.D. Ky. 1943); Affiliated FM Ins. Co. v. Kushner Cos., 265 N.J.Super. 454, 627 A.2d 710, 716 (N.J.1993); Burch v. Commonwealth County Mut. Ins. Co., 450 S.W.2d 838, 841 (Tex.1970); Western Fire Ins. Co. v. Moss, 11 Ill.App.3d 802, 298 N.E.2d 304, 311-12 (1973); Hunt v. Aetna Cas. & Sur. Co., 153 Colo. 584, 387 P.2d 405, 406 (1963) (en banc).
The interpretation of an insurance contract is a legal question. See Leber v. Smith, 70 Ohio St.3d 548, 639 N.E.2d 1159, 1163 (1994). If the contract terms are clear and unambiguous, the court presumes that the parties' intent resides in the words of the agreement. See Kelly v. Medical Life Ins. Co., 31 Ohio St.3d 130, 509 N.E.2d 411, 413 (1987); Park-Ohio Indus., 975 F.2d at 1218 (citations omitted). That is, if the meaning of the contract is apparent, the terms of the agreement are to be applied, not interpreted. See Timber Ridge Inv., Ltd. v. Marcus, 107 Ohio App.3d 174, 667 N.E.2d 1283, 1285 (Ohio App.1995). Extrinsic evidence is admissible, however, if the contract is unclear or ambiguous. See Graham v. Drydock Coal Co., 76 Ohio St.3d 311, 667 N.E.2d 949, 952 (1996); Shifrin v. Forest City Ent., Inc., 64 Ohio St.3d 635, 597 N.E.2d 499, 501 (1992). "An ambiguity exists only where a term cannot be determined from the four corners of the agreement or where contract language is susceptible to two or more reasonable interpretations." Affiliated FM, 16 F.3d at 686 (internal quotation omitted). Ambiguities may be patent or latent. A latent ambiguity arises when language is clear on its face, but some intrinsic fact or extraneous evidence gives rise to two or more possible meanings. See Conkle v. Conkle, 31 Ohio App.2d 44, 285 N.E.2d 883, 887-88 1972). Whether a contract is ambiguous is also a question for the court. See Potti v. Duramed Pharmaceuticals, Inc., 938 F.2d 641, 647 (6th Cir. 1991) (applying Ohio law). If the court determines that a contract term is ambiguous, a question of fact for the jury arises. See id.
Torres Vargas v. Santiago Cummings, 149 F.3d 29, 33 (1st Cir. 1998) (internal citations and quotations omitted) (analyzing an ERISA contract); see Boston Five Cents Savings Bank v. HUD, 768 F.2d 5, 8 (1st Cir. 1985) (observing that even if there is ambiguity in the language of a contract, the evidence presented about the parties' intent may be so one-sided that no reasonable person could decide the contrary) (citing 3 Corbin on Contracts § 554 (1960)); see also Terry Barr Sales Agency, Inc. v. All-Lock Co., 96 F.3d 174, 179 (6th Cir. 1996) (observing that summary judgment is proper in contract actions when documents or evidence underlying the contract are undisputed and there is no question as to intent) (applying Michigan law); Parrett v. American Ship Building Co., 990 F.2d 854, 858 (6th Cir. 1993) (same) (ERISA action).
Id. at 291; James Wm. Moore, et al., Moore's Federal Practice, p 59.62(3d ed.1997) (same; citing Peterman) . Similarly, in Abbs, Judge Posner observed:
To constitute "newly discovered evidence," the evidence must have been previously unavailable. See ACandS, 5 F.3d at 1263; Javetz v. Board of Control, Grand Valley State Univ. 903 F. Supp. 1181, 1191 (W.D. Mich. 1995) (and cases cited therein); Charles A. Wright, 11 Federal Practice and Procedure § 2810.1 at 127-28 (1995). Although the Second Amended Settlement Agreement did not technically exist prior to the district court's May 20, 1997 order, it was certainly within GenCorp's power and control to revise the Settlement Agreement prior to the lower court's ruling. The district court did not abuse its discretion in denying GenCorp's motion on the basis of newly discovered evidence.
The Excess Insurers cite several cases dealing with reformation. See Broadhead v. Hartford Cas. Ins. Co., 773 F. Supp. 882, 911-15 (S.D. Miss. 1991), aff'd, 979 F.2d 209 (5th Cir. 1992); R.W. Beck & Assoc. v. City & Borough of Sitka, 27 F.3d 1475, 1480-83 (9th Cir. 1994); Truck Ins. Exch. v. Wilshire Ins. Co., 8 Cal. App. 3d 553, 87 Cal. Rptr. 604, 607-08 (1970). Under Ohio law, " [r]eformation of an instrument is an equitable remedy whereby a court modifies the instrument, which, due to mutual mistake on the part of the original parties to the instrument, does not evince the actual intention of those parties." Mason v. Swartz, 76 Ohio App.3d 43, 600 N.E.2d 1121, 1125 (1991) (per curiam) (citation omitted). This is not a reformation case, and neither side makes such a claim