Standard Pacific v. Amerisure Insurance Company, No. 11-1444 (4th Cir. 2012)
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UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 11-1444 STANDARD PACIFIC OF THE CAROLINAS, LLC, Plaintiff Appellant, v. AMERISURE INSURANCE COMPANY, Defendant Appellee. Appeal from the United States District Court for the District of South Carolina, at Rock Hill. Joseph F. Anderson, Jr., District Judge. (0:10-cv-01620-JFA) Argued: September 19, 2012 Decided: December 19, 2012 Before NIEMEYER and DIAZ, Circuit Judges, and Max O. COGBURN, Jr., United States District Judge for the Western District of North Carolina, sitting by designation. Reversed and remanded by unpublished per curiam opinion. Payton Dwight Hoover, DEAN & GIBSON, Charlotte, North Carolina, for Appellant. Tracy Lynn Eggleston, COZEN O'CONNOR, Charlotte, North Carolina, for Appellee. Unpublished opinions are not binding precedent in this circuit. PER CURIAM: Standard Pacific of the Carolinas, LLC ( Standard Pacific ) brought this action against Amerisure Insurance Company ( Amerisure ), seeking a declaration of its rights to a defense and indemnity under an additional insured endorsement in an insurance policy. The district court granted summary judgment to Amerisure on Standard Pacific s claim, concluding that the endorsement did not clearly require the insurer to provide your work coverage. In our view, however, the district court read the endorsement too narrowly. favor of the insured, Standard Pacific. we Rather, construing the policy in hold that it provides coverage to Accordingly, we reverse. I. A. On June 21, 2008, Terry Shortt fell off his bicycle and broke his back after encountering an allegedly deteriorated section of an asphalt walking path in the common area of Ridge Point Community in Rock Hill, South Carolina. Standard Pacific, formerly known as Westfield Homes of the Carolinas, LLC, was the developer of the Ridge Point Community project. Standard Pacific hired Matthews Construction Company, Inc. ( Matthews ) as the general contractor for the project pursuant to a Land Development-Construction Agreement 2 (the Agreement ). Amerisure was Matthews s insurer. Matthews completed its work at the Ridge Point community in August 2004, about four years before Shortt s accident. Shortt sued Standard Pacific, Matthews, and others in South Carolina state court, alleging that they jointly and severally breached their duty to exercise reasonable care in designing, developing, constructing, managing, and maintaining the walking path to prevent dangerous and hidden conditions. Standard Pacific in turn filed a separate state suit in South Carolina seeking, among other relief, the court s declaration of the relative rights and obligations of the parties under the terms of an insurance policy issued by Amerisure to Matthews. Amerisure subsequently removed the case to the United States District Court for the District of South Carolina. B. Amerisure issued a Commercial General Liability Insurance Policy to Matthews, effective from January 1, 2008, to January 1, 2009. and a The policy had a general aggregate limit of $2,000,000 products-completed $2,000,000. Blanket J.A. 112. Additional endorsement provided The Insured coverage operations policy aggregate included Endorsement. under the a of Contractor s J.A. policy limit to 28. The additional parties whom Matthews was required to insure by written contact 3 or agreement. The endorsement limited the coverage of such additional parties to liability arising out of: (a) Premises you own, rent, lease, or occupy, or (b) Your ongoing operations performed for that additional insured, unless the written contract or agreement or the certificate of insurance requires your work coverage (or wording to that same effect) in which case the coverage provided shall extend to your work for that additional insured. Id. (emphasis added). The policy defined your work as [w]ork or operations by you or on your behalf and [m]aterials, parts or equipment operations. The furnished in connection with such work or J.A. 105. Agreement, which predated the insurance contained several provisions relevant to this appeal. policy, First, it required Matthews to furnish Standard Pacific with a certificate from a licensed insurance company showing that (1) Matthews had in effect coverage Liability a at policy least (2) Standard general equivalent Insurance Products/Completed of policy, 1 Operations Pacific s to liability the with 1986 at Aggregate predecessor, insurance Commercial least a Limit, Westfield General $500,000.000 J.A. Homes Carolina, was an additional insured under the policy. 1 providing 184, of and North Id. The 1986 Commercial General Liability Insurance Policy is a standard form insurance policy created by the Insurance Services Organization. 4 Second, the Agreement required Matthews to: indemnify, defend and hold harmless [o]wner, [c]onstruction [m]anager and the owner of the Site . . . from and against any and all claims, loss, damage or expense (including attorneys fees and other costs of defense incurred by [o]wner in defending against any claims or in enforcing this indemnity and defense obligation) arising out of or in connection with the performance of the [w]ork. Id. C. Standard Pacific Pleadings/Summary moved for Judgment regarding coverage and duty to defend. denied the judgment motion to and Amerisure. Partial The sua court on Amerisure s J.A. 350-56. instead Judgment the insurance The district court sponte noted granted that, summary the plain language of the insurance policy allows for your work coverage for the additional insured only when a written agreement requires it explicitly or with equivalent language. J.A. 559. The court reviewed the Agreement between Standard Pacific and Matthews and concluded that [n]owhere in the Work, Protection of Work, or Indemnity sections [of the Agreement] does Matthews agree to provide the equivalent to your work coverage. ambiguity J.A. as to 558. what And type to of the extent coverage 5 was that there required by was the Agreement, the district court concluded that any ambiguity was to be construed against Standard Pacific as the drafter. 2 Standard Pacific moved for reconsideration of the district court s order, dismissing, which without the court prejudice, denied. its After remaining voluntarily claims, Standard Pacific timely appealed. II. We review a grant or denial of summary judgment de novo, applying the same standard applied by the district court. Overstreet v. Kentucky Cent. Life Ins. Co., 950 F.2d 931, 938 (4th Cir. 1991). We consider here whether the language of the Agreement is sufficient to trigger coverage for Standard Pacific under the additional insured endorsement contained in the Amerisure policy issued afforded to Matthews. Standard Matthews s ongoing Amerisure Pacific by operations the contends that endorsement because clearly require your work coverage. the the is coverage limited Agreement does to not Standard Pacific responds that the endorsement does not require the use of the term your 2 The district court also held that the Agreement does not violate South Carolina Code ยง 32-2-10, which declares construction contracts that indemnify the promisee against liability resulting from their own negligence void as against public policy. That ruling has not been appealed. 6 work to provide the relevant coverage, but rather allows for coverage if the Agreement includes effect. According to Standard Pacific, such wording is found in several places in the Agreement. wording to that same We agree with Standard Pacific. Under South insurance Carolina policy are law, clauses be narrowly to of exclusion interpreted, clauses of inclusion are to be broadly construed. v. Mich. Mut. Ins. Co., 426 S.E.2d in 770, 771 an while McPherson (S.C. 1993). 3 Relatedly, where the words of an insurance policy are capable of two reasonable interpretations, the court construction most favorable to the insured. 460 S.E.2d 425, 427 (S.C. 1995). will adopt the Forner v. Butler, In this case, the endorsement issued to Matthews by Amerisure requires that a contract with an additional insured include the phrase your work or wording to that same effect operations. in order to invoke coverage for completed Thus, Standard Pacific is entitled to coverage if the Agreement satisfies either one of these conditions. Although it is certainly true, as the district court found, that the Agreement does not explicitly 3 refer to your work The parties do not dispute that this diversity action is governed by the law of South Carolina. Nor do they assert that the appeal presents anything other than a question of law regarding the scope of coverage under the policy. 7 coverage, we conclude that it does include wording to that same effect sufficient minimum trigger Insurance Liability to section amount of coverage. of the Products/Completed To begin Agreement with, requires Operations the a coverage, which South Carolina law recognizes as encompassing coverage for bodily injury and property product or your work. damages arising out of your Laidlaw Envtl. Servs. (TOC), Inc., v. Aetna Cas. & Sur. Co. of Ill., 524 S.E.2d 847, 851 (S.C. 1999). Moreover, the Indemnity section of the Agreement obligates Matthews to indemnify and hold harmless Standard Pacific from and against any and all claims, loss, damage or expense . . . arising out of or in connection with the performance of the Work or any portion thereof. arising out of and J.A. 185 (emphasis added). performance are undefined Although in the Agreement, the meaning of those terms given by other sources supports the conclusion that the parties contemplated your work coverage. In that regard, the Supreme Court of South Carolina has interpreted arising out of to mean caused by in the context of an exclusionary clause in McPherson, 426 S.E.2d at 771. a general liability policy. Additionally, performance is commonly understood to mean [t]he successful completion of a contractual duty Black s Dictionary Law and is 1252 also (9th 8 termed ed. full 2009). performance. And although performance usually result[s] in the performer s release from any past or specifically future contracted liability, for id., prospective the parties indemnity for here claims arising out of the performance of Matthews s work. In sum, Matthews committed in the Agreement to extend your work coverage to Standard Pacific, if not expressly then by using wording to policy endorsement. that same effect as contemplated by the We think this conclusion is both free from doubt and consistent with a view of the policy most favorable to the insured. McPherson, 426 S.E.2d at 771. The district court therefore erred in granting summary judgment to Amerisure. III. For the foregoing reasons, we reverse the judgment of the district court and remand with instructions that it enter summary judgment for Standard Pacific. REVERSED AND REMANDED 9
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