Court Opinion

ID: 74452
Source: CourtListenerOpinion
Date Created: 2010-04-26 08:48:01+00
Date Added: 2024-06-11T09:39:37.443481
License: Public Domain

[PUBLISH]

              IN THE UNITED STATES COURT OF APPEALS
                                                                FILED
                      FOR THE ELEVENTH CIRCUIT           U.S. COURT OF APPEALS
                                                           ELEVENTH CIRCUIT
                                                               APR 27 2000
                        ________________________
                                                            THOMAS K. KAHN
                                                                 CLERK
                              No. 99-12844
                          Non-Argument Calendar
                        ________________________

                    D. C. Docket No. 96-01261-CV-JAL

ROYAL INSURANCE COMPANY,

                                                            Plaintiff-Appellant,

     versus

LATIN AMERICAN AVIATION SERVICES, INC.,
MILLON AIR CARGO, INC.,

                                                         Defendants-Appellees.

UNDERWRITERS,

                                                         Third-Party Defendant.

                        ________________________

                 Appeal from the United States District Court
                     for the Southern District of Florida
                       _________________________
                              (April 27, 2000)

Before COX and WILSON, Circuit Judges, and RONEY, Senior Circuit Judge.

RONEY, Senior Circuit Judge:
      This action arises from the October 22, 1995 theft of computer parts from a

warehouse located near Miami International Airport. Royal Insurance Company

(“Royal”) insured the computer parts pursuant to an insurance policy purchased by

United Information Systems, Inc. (“UIS”), the owner/exporter of the computer parts,

which were intended for export to Brazilian companies. This appeal involves the

unsuccessful attempts by Royal to recover, as subrogee, its payment to its insured on

the theft property claim. Specifically, Royal appeals the grant of summary judgment

in favor of an impled third-party defendant, the insurer of the airline slated to deliver

the stolen cargo to Brazil. The appeal turns on whether at the time of the theft, the

cargo was in the “course of carriage.” The magistrate judge held that it was not. We

affirm.

      To properly understand this appeal, a brief overview of UIS’s export procedure

is helpful. UIS is in the business of purchasing computer parts for export to Brazilian

companies. Once UIS had the cargo ready for shipment, it contacted Millon Air

Cargo (“MAC”), an airfreight forwarding company, to obtain air waybills. When

these air waybills were prepared and signed, the cargo would then be delivered to

Latin American Aviation Services,(“LAAS”), MAC’s receiver or handling agent. The

cargo remained in LAAS’s warehouse, however, until an aircraft became available

to transport the cargo. At that point, the cargo was “palletized” – wrapped in plastic

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sheets and netting -- and transferred to an aircraft supplied by Millon Air, Inc.,

(“MAI”).

       In this case, computer parts valued at $308,496 were stolen from the LAAS

warehouse. After the theft, Royal paid UIS’s claim for the loss and brought a

subrogation claim against LAAS and MAC. A non-jury trial was conducted by

consent before a magistrate judge who entered final judgment in favor of Royal in the

amount of $358,659.17. (“Order I”).

       When Royal was unsuccessful in collecting on its judgment against LAAS and

MAC, it initiated supplementary proceedings and impled as third party defendants

certain insurers, collectively British Aviation Insurance Company, Limited

(“Underwriters”). This action against Underwriters is the proceeding now before us.

       Underwriters provides aircraft liability insurance to Millon Air Inc., (“MAI”),

the airline slated to deliver the computer parts to Brazil. MAI is not a party to this

action. Royal’s theory of recovery is that LAAS and MAC are insured as “associated

companies” of MAI under the policy and are therefore entitled to indemnification

from Underwriters for the judgment entered against them. The magistrate judge

granted Underwriters summary judgment on the ground that its policy did not insure

MAI for this loss, so that of course, it did not insure any “associated companies” of

MAI.

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      MAI’s policy contains a cargo legal liability inclusion endorsement which

insures MAI’s liability for loss of cargo “during the course of carriage.”

             The Insurers will indemnify the Insured in respect of all
             sums which the Insured shall become legally liable to pay
             as compensatory damages in respect of Loss of or damage
             to Cargo during the course of carriage by the Insured and
             whilst in the care, custody, or control of the Insured
             whether in the air or on the ground including while such
             Cargo is being loaded onto or unloaded from the Aircraft.

             Coverage hereunder attaches from the time of acceptance
             of such Cargo by the Insured and ceases upon delivery by
             the Insured at the final destination or when handed over to
             a succeeding carrier.

      The magistrate judge held that the loss here did not occur while the property

was “in the course of carriage.” We affirm for two reasons.

      First, although the term “carriage” is nowhere defined in the policy, the

question Royal raises about the interpretation of “course of carriage” had already been

decided by the magistrate judge in Order I. That determination is binding on Royal

as the law of the case. See United States v. Escobar-Urrego, 110 F.3d 1556,1560

(11th Cir. 1997)(“Under the law-of-the-case doctrine, an issue decided at one stage

of a case is binding at later stages of the same case.”).

      In Order I, the magistrate judge was called on to determine whether MAC and

LAAS were entitled to a limitation on their liability, a decision dependent upon

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whether there was “carriage” under the controlling air waybill at the time of the theft.

Following the argument made by Royal, the magistrate judge stated that the term

carriage was unambiguous and attached to it its ordinary meaning: “‘[t]he act or

process of transporting or carrying’ or ‘[t]ransportation of goods, freight or

passengers,’” citing American Heritage Dictionary 206 (New Coll. ed. 1981); Black’s

Law Dictionary 214 (6th ed. 1990). The magistrate judge made the factual finding

that “the stolen goods were not ready for transport. They were just stored, waiting to

be palletized.” In its conclusions of law, the magistrate judge determined as a matter

of fact and law that

             [a]t the time of the theft, MILLON and LAAS had stored
             the cargo in the warehouse pending palletization and
             preparation for transport to Brazil. Order 15. Given its
             ordinary and unambiguous meaning, “carriage” had not
             begun. ...This court finds that at the time of the robbery, the
             defendant(s) were engaged in “services incidental” to
             carriage, and not carriage, itself.”

      No appeal was taken from Order I. The magistrate judge reiterated this

definition and factual findings in the second order. While there are exceptions to the

law of the case doctrine, see Escobar-Urrego, 110 F.3d at 1561, quoting White v.

Murtha, 377 F.2d 428,431-32(5th Cir. 1967)(footnotes omitted), none apply here: no

new evidence has been brought to the court’s attention, there has been no change in

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the law, and “the district court’s decision was not a clear error” that “would work

manifest injustice.”

      Second, we hold the district court’s decision on the merits was correct. Royal

argues that “course of carriage” encompasses a broader range of activity than the mere

term “carriage.” The magistrate court found, however, that the “goods were not ready

for transport. They were just stored, waiting to be palletized.” There was no error in

the court’s determination that there was no issue of fact on this point.

      The magistrate judge correctly determined that the only way to reach Royal’s

interpretation of the contract language is to read “and” as “or” so that the relevant

phrase is disjunctive. The clause would then provide that Underwriters agrees to

indemnify their insured for loss of cargo that occurs “either during the course of

carriage by the Insured or whilst in the care, custody or control of the Insured....” An

insurance policy must be construed in accordance with its plain language. See

Prudential Prop. and Cas. Ins. Co. v. Swindal, 622 So.2d 467,470 (Fla. 1993). Courts

are not free to rewrite an insurance policy or to add terms or meaning to it. See

Mansfield Indus. Coatings, Inc. v. Employers Nat’l. Ins. Corp., 557 So.2d 221 (Fla.

1st DCA 1990). See also Crown Life Ins. Co. v. Garcia, 424 So.2d 893,894 n.1 (Fla.

3d DCA 1982)(“[T]he conclusion that the policy terms provide coverage can be

achieved only by changing the disjunctive word ‘or,’ between the two separate

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exclusionary definitions of ‘disabled,’ to the conjunctive ‘and.’”). Accord Prudential

Ins. Co., of America v. Bellar, 391 So.2d 737 (Fla. 4th DCA 1980). “Courts are

forbidden, however from engaging in any such rewriting process, even in the guise of

‘interpreting’ an insurance policy against the company.” Garcia, 424 So.2d at 894 n.1

(quoting Griffin v. Speidel, 179 So. 2d 569 (Fla. 1965)).

      The other language in the policy is not inconsistent with this interpretation.

Neither the temporal limitation of the coverage (coverage attaches from the insured’s

acceptance to delivery or handing over to another carrier), nor the condition requiring

that the cargo in the care of the insured “be kept in secure premises at all times other

than during actual air transit,” address the period during which liability may attach.

The goods were not in the course of carriage when stolen and the loss does not fall

within the coverage provided by Underwriters.

      This decision makes it unnecessary to rule on Royal’s appeal from the denial

of its summary judgment motion arguing that LAAS and MAC were “associated

companies” with MAI under the policy. See, e.g., St. Paul Fire & Marine Ins. Co.

v.   Mayor’s Jewelers of Fort Lauderdale, Inc., 465 F.2d 317 (5th Cir.

1972)(companies associated because significant integration of both managerial and

financial control); Firemen’s Fund Ins. Co. v. American Int’l Ins. Co. of Puerto Rico,

Inc., 109 F.3d 41 (1st Cir. 1997)(twenty percent ownership of company does not

                                           7
constitute “associated”).   The record tends to support the magistrate court’s

determination that there is an issue of material fact as to the relationships of the

companies, precluding summary judgment.

      AFFIRMED.

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