Court Opinion

ID: 4357
Source: CourtListenerOpinion
Date Created: 2010-04-24 19:39:17+00
Date Added: 2024-06-11T16:43:42.436476
License: Public Domain

09-0580-cv
     Global Aerospace, Inc., et al. v. Hartford Fire Ins. Co., et al.

                          UNITED STATES COURT OF APPEALS
                              FOR THE SECOND CIRCUIT

                                     SUMMARY ORDER
     RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO SUMMARY ORDERS FILED
     AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY THIS COURT’S LOCAL RULE 32.1 AND
     FEDERAL RULE OF APPELLATE PROCEDURE 32.1. IN A BRIEF OR OTHER PAPER IN WHICH A LITIGANT
     CITES A SUMMARY ORDER, IN EACH PARAGRAPH IN WHICH A CITATION APPEARS, AT LEAST ONE CITATION
     MUST EITHER BE TO THE FEDERAL APPENDIX OR BE ACCOMPANIED BY THE NOTATION: “(SUMMARY ORDER).”
     UNLESS THE SUMMARY ORDER IS AVAILABLE IN AN ELECTRONIC DATABASE WHICH IS PUBLICLY ACCESSIBLE
     WITHOUT PAYMENT OF FEE (SUCH AS THE DATABASE AVAILABLE AT HTTP://WWW.CA2.USCOURTS.GOV), THE
     PARTY CITING THE SUMMARY ORDER MUST FILE AND SERVE A COPY OF THAT SUMMARY ORDER TOGETHER
     WITH THE PAPER IN WHICH THE SUMMARY ORDER IS CITED. IF NO COPY IS SERVED BY REASON OF THE
     AVAILABILITY OF THE ORDER ON SUCH A DATABASE, THE CITATION MUST INCLUDE REFERENCE TO THAT
     DATABASE AND THE DOCKET NUMBER OF THE CASE IN WHICH THE ORDER WAS ENTERED.

 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 25 th day of November, two thousand                  nine.
 5
 6       PRESENT: DENNIS JACOBS,
 7                         Chief Judge,
 8                PIERRE N. LEVAL,
 9                         Circuit Judge,
10                GEORGE B. DANIELS, *
11                         District Judge.
12
13       - - - - - - - - - - - - - - - - - - - -X
14       GLOBAL AEROSPACE, INC., formerly known
15       as Associated Aviation Underwriters,
16       Inc., and FEDERAL INSURANCE COMPANY,
17
18                    Plaintiffs-Appellants,
19
20                    -v.-                                       09-0580-cv
21
22       HARTFORD FIRE INSURANCE COMPANY, and
23       HARTFORD ACCIDENT AND INDEMNITY
24       COMPANY,
25
26                Defendants-Appellees.
27       - - - - - - - - - - - - - - - - - - - -X

                *
               The Honorable George B. Daniels, United States
         District Court for the Southern District of New York,
         sitting by designation.

                                                  1
 1   APPEARING FOR APPELLANTS:   KATHERINE B. POSNER, Condon &
 2                               Forsyth LLP, New York, N.Y.
 3
 4   APPEARING FOR APPELLEES:    DANIELLE SPINELLI and CATHERINE
 5                               M.A. CARROLL, Wilmer Cutler
 6                               Pickering Hale and Dorr LLP,
 7                               Washington, D.C.
 8
 9                               MICHAEL A. TROISI and MICHAEL P.
10                               VERISCHELLI, Rivkin Radler LLP,
11                               Uniondale, N.Y.
12
13        UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,
14   AND DECREED that the judgment of the district court be
15   AFFIRMED.
16
17        Global Aerospace Inc. and Federal Insurance Company
18   (collectively, “Global”) appeal from the judgment of the
19   United States District Court for the Southern District of
20   New York (Kaplan, J.), granting summary judgment in favor of
21   Hartford Fire Insurance Company and Hartford Accident and
22   Indemnity Company (collectively, “Hartford”) primarily on
23   the ground that any contractual undertaking that transpired
24   between Hartford (as primary insurer) and Global (as excess
25   insurer) was expressly subject to a general exception. We
26   assume the parties’ familiarity with the underlying facts,
27   the procedural history, and the issues presented for review.
28
29        Global contends that the district court sua sponte
30   granted summary judgment with respect to the breach of
31   contract claim on a ground that Hartford never asserted and
32   that the parties never briefed. Accordingly, Global argues,
33   its opposition to the summary judgment motion did not
34   include relevant extrinsic evidence bearing upon the issue
35   that the district court found decisive. However, Hartford’s
36   brief moving for summary judgment below expressly raised
37   this ground, Global’s opposition brief below expressly
38   argued against it, and Hartford’s 56.1 Statement recited the
39   necessary factual background. The district court thus did
40   not act sua sponte.
41

                                  2
 1        Assuming arguendo that the district court did act sua
 2   sponte, Global suffered no procedural prejudice. See
 3   Bridgeway Corp. v. Citibank, 201 F.3d 134, 139 (2d Cir.
 4   2000) (“If the district court fails to give notice before
 5   sua sponte granting summary judgment and the moving party
 6   was, as a result, procedurally prejudiced, we must reverse.
 7   A party is procedurally prejudiced if it is surprised by the
 8   district court’s action and that surprise results in the
 9   party’s failure to present evidence in support of its
10   position.”). Until Global filed its appellate reply brief,
11   Global failed to identify a single piece of evidence outside
12   the record below that it would have introduced had it been
13   given notice; moreover, the record below already included
14   evidence upon which Global could rely for the proposition
15   allegedly supported by this late-identified evidence. Cf.
16   Bridgeway Corp., 201 F.3d at 140-41 (finding no procedural
17   prejudice in part because “at no point since the district
18   court’s decision [did the appellant] identif[y] any piece of
19   evidence . . . that it would have introduced had it been
20   given notice”). Accordingly, Global’s argument that the
21   district court improperly acted sua sponte lacks merit.
22
23        We review a district court’s grant of summary judgment
24   de novo. Guilbert v. Gardner, 480 F.3d 140, 145 (2d Cir.
25   2007). Summary judgment is appropriate “if the pleadings,
26   the discovery and disclosure materials on file, and any
27   affidavits show that there is no genuine issue as to any
28   material fact and that the movant is entitled to judgment as
29   a matter of law.” Fed. R. Civ. P. 56(c).
30
31        Applying applicable standards to Global’s contentions
32   on appeal, we conclude that the general exception to the
33   payment schedule supports the grant of summary judgment with
34   respect to the breach of contract, promissory estoppel, and
35   negligent misrepresentation claims. The March 31, 1989
36   letter sent from Hartford’s counsel to Global’s counsel set
37   forth a payment schedule “[a]ssuming no further compensation
38   payments” to Captain Bond. As the district court
39   determined, the letter thereby “expressly contemplated the
40   possibility of further payments to Bond.” Global Aerospace,
41   Inc. v. Hartford Fire Ins. Co., No. 06 Civ. 7104(LAK), 2009
42   WL 89122, at *6 (S.D.N.Y. Jan. 13, 2009). Indeed, “[w]hile

                                  3
 1   [cost-of-living adjustments] were not specifically addressed
 2   in the letter, they certainly were not precluded by the
 3   broad ‘further compensation’ language.” Id. at *6 n.36.
 4   Accordingly, we affirm the district court’s grant of summary
 5   judgment on the breach of contract, promissory estoppel, and
 6   negligent misrepresentation claims.
 7
 8        Assuming arguendo that Hartford owed a duty of good
 9   faith to Global, we further conclude that Hartford did not
10   breach that duty. Under New York law, “[t]o establish a
11   prima facie case of bad faith, an excess insurer must show
12   that the primary insurer’s conduct constituted a ‘gross
13   disregard’ of the excess insurer’s interest.” Schwartz v.
14   Liberty Mut. Ins. Co., 539 F.3d 135, 151 (2d Cir. 2008).
15   The primary insurer’s conduct “must involve a deliberate or
16   reckless failure to place on equal footing the interests of
17   the excess insurer with its own interests . . . .” Id.
18   (internal quotation marks, citation, and brackets omitted).
19
20        Hartford’s failure to notify Global of Hartford’s
21   decision to pay the cost-of-living adjustments does not
22   create a genuine issue of material fact because (i) Global
23   acknowledges that it “did not place any demands on Hartford
24   to make periodic reports to Global or to notify Global of
25   any communications with Bond as they occurred,” and (ii)
26   neither Hartford nor Global identifies any independent basis
27   obliging Hartford to provide such notice. Assuming arguendo
28   that Hartford erred in determining that the Social Security
29   Administration’s classification of Bond’s disability as
30   permanent and total entitled Bond to cost-of-living
31   adjustments, such error would not amount to gross disregard.
32   See Pavia v. State Farm Mut. Auto. Ins. Co., 82 N.Y.2d 445,
33   453, 456, 626 N.E.2d 24 (1993) (a primary insurer’s
34   “ordinary negligence” or “mistaken judgment” does not
35   establish gross disregard). The remaining evidence upon
36   which Global relies in attempting to defeat summary judgment
37   is irrelevant to Hartford’s consideration of Global’s
38   interests concerning the cost-of-living adjustments.
39
40        For the foregoing reasons, we AFFIRM the judgment of
41   the district court.
42
43
44                     FOR THE COURT:
45                     CATHERINE O’HAGAN WOLFE, CLERK
46
47                     By:___________________________

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