Court Opinion

ID: 218767
Source: CourtListenerOpinion
Date Created: 2011-06-15 00:00:27+00
Date Added: 2024-06-11T17:28:37.741220
License: Public Domain

10-2134-cv (L)
     General Star National Insurance Company v. NY Marine and General Insurance Company

                          UNITED STATES COURT OF APPEALS
                              FOR THE SECOND 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
     PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A
     DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
     ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST
     SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

 1            At a stated term of the United States Court of Appeals
 2       for the Second Circuit, held at the Daniel Patrick Moynihan
 3       United States Courthouse, 500 Pearl Street, in the City of
 4       New York, on the 14th day of June, two thousand eleven.
 5
 6       PRESENT: DENNIS JACOBS,
 7                              Chief Judge,
 8                DEBRA ANN LIVINGSTON,
 9                              Circuit Judge,
10                JED S. RAKOFF,
11                              District Judge.*
12
13       - - - - - - - - - - - - - - - - - - - -X
14       GENERAL STAR NATIONAL INSURANCE
15       COMPANY,
16                Defendant-Cross-Claimant-
17                Cross-Defendant-Appellant,
18
19                    -v.-                                        10-2134-cv (L);
20                                                                10-2410-cv (Con)
21       UNIVERSAL FABRICATORS, INC., MUTUAL
22       MARINE OFFICE, INC., NEW YORK MARINE
23       AND GENERAL INSURANCE COMPANY,
24                Defendants-Cross-Defendants-
25                Cross-Claimants-Appellees.**
26       - - - - - - - - - - - - - - - - - - - -X

                *
               The Honorable Jed S. Rakoff of the United States
         District Court for the Southern District of New York,
         sitting by designation.
                **
                The Clerk of Court is respectfully directed to amend
         the official caption as set forth above.
 1   FOR APPELLANT:    Michael S. Gollub (Christopher T.
 2                     Bradley, on the brief), Marshall, Conway,
 3                     Wright & Bradley PC, New York, New York.
 4
 5   FOR APPELLEES:    Patrick W. Brophy, McMahon, Martine &
 6                     Gallagher, LLP, Brooklyn, New York.
 7
 8        Appeal from a judgment of the United States District
 9   Court for the Southern District of New York (Scheindlin,
10   J.).
11
12        UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED
13   AND DECREED that the judgment of the district court be
14   AFFIRMED.
15
16        General Star National Insurance Company (“General
17   Star”) appeals from a judgment of the United States District
18   Court for the Southern District of New York (Scheindlin, J.)
19   granting summary judgment in favor of the New York Marine
20   and General Insurance Company and Mutual Marine Office, Inc.
21   (“Mutual Marine”). Both Mutual Marine, as the primary
22   insurer, and General Star, as the excess insurer, insured
23   Universal Fabricators, Inc. (“UFI”). After a remand from
24   this Court, Gen. Star Nat’l Ins. Co. v. Universal
25   Fabricators, Inc., 585 F.3d 662 (2d Cir. 2009), the district
26   court held that General Star was obligated to reimburse
27   Mutual Marine for the amount it paid in excess of its policy
28   limit in connection with a state court suit and an agreement
29   apportioning a share of liability in that suit to UFI. We
30   assume the parties’ familiarity with the underlying facts,
31   the procedural history, and the issues presented for review.
32
33        This Court “review[s] a district court’s grant of
34   summary judgment de novo, construing the evidence in the
35   light most favorable to the non-moving party and drawing all
36   reasonable inferences in its favor.” Allianz Ins. Co. v.
37   Lerner, 416 F.3d 109, 113 (2d Cir. 2005). “We will affirm
38   the judgment only if there is no genuine issue as to any
39   material fact, and if the moving party is entitled to a
40   judgment as a matter of law.” Id. (citing Fed. R. Civ. P.
41   56(c)). “We are free to affirm an appealed decision on any
42   ground which finds support in the record, regardless of the
43   ground upon which the trial court relied.” Reid v.

                                  2
 1   Senkowski, 961 F.2d 374, 378 (2d Cir. 1992) (internal
 2   quotation marks and brackets omitted) (per curiam).
 3
 4        General Star’s policy provides that its coverage
 5   extends to UFI’s “ultimate net loss” which “may be
 6   established by adjudication, arbitration or a compromise
 7   settlement to which [General Star] ha[s] previously agreed
 8   in writing.” J.A. at 279. General Star protests that it
 9   never agreed to the compromise agreement giving rise to the
10   apportionment of liability in the underlying action against
11   UFI. However, at a time when it was anticipated that the
12   underlying action would not implicate its coverage, General
13   Star told Mutual Marine to “handle [the matter] as [it]
14   s[aw] fit” and informed Mutual Marine that it had closed its
15   file. J.A. at 186. Accordingly, Mutual Marine discharged
16   its duty to defend UFI by retaining counsel, who entered
17   into the agreement apportioning liability. See N.Y. Marine
18   & Gen. Ins. Co. v. Lafarge N. Am., Inc., 599 F.3d 102, 125
19   n.11 (2d Cir. 2010) (observing insurer generally conducts
20   defense of insured). General Star therefore relinquished
21   its ability to demand compliance with its policy provision
22   requiring written consent to a compromise agreement.
23
24        General Star further contends that counsel for UFI
25   lacked authority to enter into the agreement apportioning
26   liability. Even if counsel for UFI was not authorized to
27   enter this partial settlement agreement, the consequence
28   would be that (through counsel) the insured breached a
29   contractual duty of cooperation owed by the insured to
30   Mutual Marine. See Lowell v. Twin Disc, Inc., 527 F.2d 767,
31   770 (2d Cir. 1975) (observing that, under New York law,
32   “whenever the cooperation of the promisee is necessary for
33   the performance of the promise, there is a condition implied
34   that the cooperation will be given” (internal quotation
35   marks omitted)). Mutual Marine has obviously waived any
36   such defense to payment. Since Mutual Marine was authorized
37   by General Star to handle things as it saw fit, General Star
38   has no complaint on this score either.
39
40        Having reviewed all of the arguments properly presented
41   on appeal, we hereby AFFIRM the judgment of the district
42   court.
43                               FOR THE COURT:
44                               CATHERINE O’HAGAN WOLFE, CLERK
45
46

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