Court Opinion

ID: 866365
Source: CourtListenerOpinion
Date Created: 2013-05-01 17:09:21.717015+00
Date Added: 2024-06-11T11:23:00.848261
License: Public Domain

Case: 12-30705       Document: 00512225998         Page: 1     Date Filed: 05/01/2013

           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT  United States Court of Appeals
                                                    Fifth Circuit

                                                                            FILED
                                                                            May 1, 2013

                                       No. 12-30705                        Lyle W. Cayce
                                                                                Clerk

INSURANCE COMPANY OF NORTH AMERICA,

                                                  Plaintiff-Appellee,
v.

BOARD OF COMMISSIONERS OF THE PORT OF NEW ORLEANS,

                                                  Defendant-Third Party Plaintiff-
                                                  Appellant.

                   Appeal from the United States District Court
                      for the Eastern District of Louisiana
                            U.S.D.C. No. 2:07-cv-03053

Before STEWART, Chief Judge, and BENAVIDES and HIGGINSON, Circuit
Judges.
PER CURIAM:*
       Plaintiff-Appellee Insurance Company of North America (“INA”), and St.
Paul Fire and Marine Insurance Company (“St. Paul”), and American Home
Assurance Company (“AHAC”),1 (collectively “the underwriters”), each

       *
         Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
       1
        St. Paul and AHAC were named Plaintiffs-Appellees in the litigation previous to the
current proceedings but are not parties to the instant appeal.
    Case: 12-30705     Document: 00512225998    Page: 2   Date Filed: 05/01/2013

                                 No. 12-30705

subscribed as co-insurers to an excess coverage marine insurance policy insuring
Defendant-Appellant Board of Commissioners of the Port of New Orleans (“the
Port”). In previously litigated proceedings, the underwriters moved for summary
judgment on the grounds that they did not have a duty of coverage under the
policy. The district court granted summary judgment in favor of St. Paul only
and that judgment was affirmed by this court on interlocutory appeal. After this
court affirmed the district court’s summary judgment in favor of St. Paul, INA
and AHAC again moved for summary judgment citing this court’s opinion on
interlocutory appeal in support of their argument that the Port’s claims against
INA and AHAC should also be dismissed. The district court agreed and granted
summary judgment in favor of INA and AHAC. Since its claims against AHAC
have now been settled, the Port appeals herein the district court’s grant of
summary judgment in favor of INA only. We REVERSE and REMAND for
further proceedings.
                                      I.
      In 2001, the underwriters issued an excess coverage marine insurance
policy to the Port which provided coverage above the $1 million limits of the
Port’s underlying policies. Each of the underwriters subscribed to the policy by
a percentage: INA - 40%, St. Paul - 40%, and AHAC - 20%. The policy contains
the following language with respect to coverage:
            Now know ye that we the Assurers do hereby bind
            ourselves, each Company for itself only and not one for
            another and in respect only of the due proportion of
            each Company, to pay to the Assured or the Assured’s
            Executors or Administrators, all such loss, damage or
            liability as herein provided that the Assured may
            sustain during the stated period, not exceeding in all
            the sum insured, as properly apportioned to the sums,
            or to the percentages or proportions of the sum insured,
            subscribed against our names respectively.

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                                  No. 12-30705

The policy also contains the following notice provision:

            Whenever any Assured has information from which the
            Assured may reasonably conclude that an occurrence
            covered hereunder involves an event likely to involve
            this Policy, notice shall be sent to Underwriters as soon
            as practicable, provided, however, that the failure to
            notify Underwriters of any occurrence which at the time
            of its happening did not appear to involve this Policy,
            but which, at a later time, would appear to give rise to
            claims hereunder, shall not prejudice such claims.

      This dispute arose in connection with a $2.6 million judgment against the
Port for injuries sustained by John Morella in July 2001 resulting from an
accident on the Port’s property. The Port did not notify the underwriters of
Morella’s claim until late March 2007, approximately a month after the state
court judgment was rendered. In May 2007, the underwriters filed this suit
seeking declaratory judgment that they were not required to pay under the
policy because the Port did not provide timely notice of Morella’s claim. In May
2009, the underwriters filed for summary judgment. Applying New York law,
the district judge found that the notice was untimely and that the Port should
have notified the underwriters of the claim when its defense counsel indicated
that Morella’s economic loss exceeded $1.8 million. The district judge also found,
however, that “loss summaries” provided to INA and AHAC could have
constituted timely “notice” under the policies. Accordingly, the district court
rendered summary judgment in favor of St. Paul because it did not receive loss
summaries detailing the incident as its co-underwriters had and notice to its co-
underwriters did not constitute notice to St. Paul.
      The Port filed an interlocutory appeal of that summary judgment with this
court arguing that the duty of coverage was triggered for all underwriters if any
of the underwriters received notice; therefore, summary judgment was
improperly rendered in favor of St. Paul. This court rejected that argument and

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                                  No. 12-30705

affirmed the district court’s grant of summary judgment in favor of St. Paul. In
an analysis of the notice issue, this court stated the following:
             Finally, the Port argues that the district court
             misapplied the notice provision in the policy. It
             contends that at least two of the three insurers received
             notice of the underlying claim and that the district
             court improperly required proof that such notice was
             insufficient because the policy does not require notice to
             “all” of the insurers. This argument is unavailing.
                                      ...
             The policy specifically defines “Underwriters” as “the
             insurer(s) subscribing to this Policy.” Under New York
             law, which governs the contract here, the plain
             meaning of the policy language requires that all of the
             subscribing insurers must receive notice. The record
             showed that not all of the insurers here received timely
             notice. The district court did not err.

St. Paul Fire & Marine Ins. Co. v. Bd. of Comm’rs of the Port of New Orleans, 418
F. App’x 305, 309-10 (5th Cir. 2011) (internal citation omitted).
      On remand, INA and AHAC again moved for summary judgment arguing
that this court’s judgment on the interlocutory appeal required notice to all
underwriters before any were required to provide coverage. That is to say,
because St. Paul did not receive notice, INA and AHAC argued, they too were
relieved of the duty to provide coverage under the policy. The district court
agreed with this argument and subsequently rendered summary judgment in
favor of INA and AHAC, dismissing the Port’s claims. The district court stated
in its analysis:
             Defendants propose that the proper interpretation of
             the policy is that any insurer that receives notice is
             liable irrespective of whether another insurer does or
             does not. However, such interpretation is inconsistent
             with the Fifth Circuit’s interpretation [on interlocutory
             appeal] that, “the policy language requires that all of
             the subscribing insurers must receive notice.” Notably,

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                                       No. 12-30705

              the Fifth Circuit did not affirm the dismissal of St. Paul
              purely on the ground that it had not received notice.
              Rather, the Court emphasized that the Board had failed
              to comply with the notice provision itself, and it was
              that failure that resulted in the preclusion of coverage
              from St. Paul.

       The Port now appeals, arguing herein that the district court erred when
it interpreted this court’s holding on interlocutory appeal to mean that all
underwriters must receive notice before any is required to provide coverage. The
Port concedes that an underwriter must individually receive notice in order for
that underwriter to be liable for providing coverage under the policy, i.e., notice
to one underwriter does not equate to notice to all. However, the Port further
argues that, in accordance with this court’s judgment on interlocutory appeal,
any underwriter who receives notice is liable for providing coverage, regardless
of whether its co-underwriters received notice. We agree.2
                                             II.
       This court reviews a district court’s grant of summary judgment de novo.
Nat’l Cas. Co. v. W. World Ins. Co., 669 F.3d 608, 612 (5th Cir. 2012).
       At issue in the previous interlocutory appeal proceedings before this court
was the question of whether St. Paul had received any kind of purported notice,
similar to that received by INA and AHAC, such as loss summaries. With
regard to that issue, this court held that St. Paul did not receive purported
notice because it never received loss summaries similar to those sent to INA and
AHAC.3 In so holding, we rejected the Port’s argument that notice to one or

       2
         Alternatively, the Port argues that the policy’s notice clause is ambiguous and should
be resolved in favor of the Port. Because we agree with the Port’s argument that the district
court misinterpreted this court’s judgment on interlocutory appeal, we pretermit discussion
of the Port’s alternative argument that the notice clause is ambiguous.
       3
        For the purposes of this appeal, we do not decide herein whether notice, if received,
was sufficient under the policy.

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                                        No. 12-30705

more co-underwriters triggered a duty of coverage by all underwriters,
regardless of whether some underwriters did not receive notice like the others.
In conclusion of our analysis of this issue, we stated that “the policy language
requires that all of the subscribing insurers must receive notice.” Subsequently,
we affirmed the district court’s summary judgment in favor of St. Paul because
it did not receive notice under the policy as its co-underwriters may have
received.
       In interpreting our holding on interlocutory appeal, the district court
subsequently rendered judgment in favor of INA and AHAC, agreeing with their
argument that our holding mandated that all insurers receive notice before the
duty of coverage is triggered for any individual underwriter under the policy.
That summary judgment was a misapplication of our holding. However, given
the somewhat broad nature of the language in that holding, we note that the
district court could reasonably have interpreted the mandate as such. In light
of these circumstances, we clarify our mandate4 on interlocutory appeal herein.
See Hall v. White, Getgey, Meyer Co., LPA, 465 F.3d 587, 592-94 (5th Cir. 2006)
(holding that clarification of the court’s previous mandate on appeal was
necessary due to lack of specificity as to how the lower court was to award
interest on remand, because although the mandate was “plainly worded,”
clarification was required due to the magistrate judge’s reasonable difficulties
in applying the mandate as written); see also Briggs v. Pa. R.R. Co., 334 U.S.
304, 306 (1948) (holding that “an inferior court has no power or authority to
deviate from the mandate issued by an appellate court[ ]”).

       4
         Although neither party has filed a motion to recall or clarify the mandate on
interlocutory appeal, this court may sua sponte clarify its own mandate when it deems that
doing so is necessary “to prevent injustice.” U.S. Ct. of App. 5th Cir. R. 41.2; see also Leroy v.
City of Houston, 906 F.2d 1068, 1075 (5th Cir. 1990); Reaves v. Ole Man River Towing, Inc.,
761 F.2d 1111, 1112-13 (5th Cir. 1985).

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                                 No. 12-30705

      The clarified mandate is as follows: All of the subscribing insurers (INA,
AHAC, and St. Paul) must receive notice for the duty of coverage to be triggered
for all three underwriters. More specifically, the duty of coverage is triggered
for each underwriter who receives notice under the policy. Because St. Paul did
not receive notice similar to INA and AHAC, St. Paul’s duty of coverage under
the policy was not triggered as INA’s and AHAC’s duties of coverage were
triggered. We do not, however, hold the converse of this conclusion. In other
words, we do not hold that all underwriters under the policy must receive notice
as a condition precedent to a duty of coverage being triggered for any individual
underwriter under the policy.
                                      III.
      For the foregoing reasons, we REVERSE the district court’s summary
judgment in favor of INA. We REMAND for a determination of whether INA
received notice under the excess coverage marine insurance policy at issue and
for further proceedings consistent with this opinion.

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