10 Ellicott Square Court Corpo v. Mountain Valley Indemnity Comp, No. 10-799 (2d Cir. 2010)

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10-0799-CV 10 Ellicott Square Court Corp. v. Mountain Valley Indemnity Co. 1 UNITED STATES COURT OF APPEALS 2 FOR THE SECOND CIRCUIT 3 August Term, 2010 4 (Argued: October 8, 2010 Decided: December 23, 2010) 5 Docket No. 10-0799-CV 6 ------------------------------------- 7 10 ELLICOTT SQUARE COURT CORPORATION and 5182 GROUP, LLC, 8 Plaintiffs-Appellees, 9 - v - 10 MOUNTAIN VALLEY INDEMNITY COMPANY, 11 Defendant-Appellant. 12 ------------------------------------- 13 14 Before: 15 SACK and RAGGI, Circuit Judges, and KOELTL, District Judge.* Appeal by the defendant from a summary judgment entered 16 in the United States District Court for the Western District of 17 New York (William M. Skretny, Chief Judge) in favor of the 18 plaintiffs. 19 grounds relevant to this appeal: first, that a contract that had 20 not been signed on behalf of the parties to it nonetheless had 21 been "executed" within the meaning of the primary insurance 22 policy in issue and New York law; second, that the defendant was 23 bound to provide insurance coverage to the plaintiffs under an * The district court's judgment rested on three The Honorable John G. Koeltl of the United States District Court for the Southern District of New York, sitting by designation. 1 umbrella policy; and third, that in any event the defendant was 2 estopped from denying insurance coverage to the plaintiffs by 3 having issued a certificate of insurance identifying the 4 plaintiffs as additional insureds. 5 court's determination on the first issue, affirm on the second, 6 and certify to the New York Court of Appeals a question of New 7 York law necessary to our resolution of the third. 8 9 10 We reverse the district Affirmed in part, reversed in part, question certified to the New York Court of Appeals in part, decision reserved in part. 11 12 13 14 MAX GERSHWEIR, Hurwitz & Fine, P.C.(Katherine A. Fijal, Esq., of counsel), Buffalo, New York, for Defendant-Appellant. 15 16 17 18 JUDITH TREGER SHELTON, Kenney Shelton Liptak Nowak LLP, Buffalo, New York, for PlaintiffsAppellees. 19 SACK, Circuit Judge: 20 The plaintiffs in this action, 5182 Group, LLC, and 10 21 Ellicott Square Court Corporation, were, respectively, the owner 22 of and construction manager for a commercial building in Buffalo, 23 New York. 24 Maintenance, Inc., for the building's partial interior 25 demolition. They contracted with a third firm, Ellicott 26 The construction agreement between the plaintiffs and 27 Ellicott Maintenance required the latter to secure insurance to 28 cover the former for any legal liability arising out of the 2 1 demolition project. 2 policies--one primary, the other "umbrella"--from the defendant 3 Mountain Valley Indemnity Company. 4 LRMP, Inc., issued a certificate of insurance evidencing the 5 policies and the status of the plaintiffs as additional insureds, 6 after receipt of which Ellicott Maintenance began the demolition 7 work. 8 9 Ellicott Maintenance therefore purchased two The defendant, by its agent The primary insurance policy required that the underlying written construction agreement between the named 10 insured, Ellicott Maintenance, and the additional insureds, the 11 plaintiffs in this action, be "executed" in order for any injury 12 for which the plaintiffs sought defense and indemnification to be 13 covered by the policy. 14 Ellicott Maintenance or the plaintiffs signed the construction 15 agreement, a worker on the demolition project was injured. 16 the worker brought suit in New York State court in an attempt to 17 recover for his injuries, the plaintiffs sought defense and 18 indemnification from the defendant insurance company. 19 defendant declined coverage, arguing that because the 20 construction agreement was neither signed on behalf of the 21 parties nor fully performed prior to the worker's injury, it had 22 not been "executed" under the primary insurance policy issued by 23 the defendant to Ellicott Maintenance, and therefore the 24 plaintiffs did not qualify as additional insureds under either of 25 the policies. Before anyone on behalf of either When The The plaintiffs then brought this action in the 3 1 United States District Court for the Western District of New York 2 seeking a declaratory judgment to the contrary. 3 The district court (William M. Skretny, Chief Judge) 4 agreed with the plaintiffs, concluding that the construction 5 agreement was "executed" even though it had not been signed or 6 fully performed, and that the plaintiffs therefore were entitled 7 to coverage under both the primary and the umbrella policies. 8 The court also decided that even if the plaintiffs were not 9 entitled to coverage under the terms of the policies, the 10 defendant was estopped from denying coverage because its agent 11 had issued a certificate of insurance to Ellicott Maintenance 12 that listed the plaintiffs as additional insureds. 13 appeals. 14 The defendant We disagree with the district court's view that under 15 New York law, a contract has been "executed" despite the absence 16 of either a signature by or on behalf of both parties or full 17 performance. 18 policy's additional insured coverage did not become effective 19 prior to the accident in question. 20 the plaintiffs nonetheless were covered under the terms of the 21 umbrella policy because that policy did not require "execution" 22 of an underlying written agreement to take effect. 23 Therefore, under its terms, the primary insurance We conclude, however, that New York's intermediate appellate courts are divided as 24 to whether, despite the fact that an insurance policy's 25 additional-insured coverage is not in effect under its express 26 terms, a certificate of insurance issued by an agent of the 4 1 insurer nonetheless may estop the insurer from denying coverage 2 to a party identified as an additional insured on the 3 certificate, even where the certificate contains various 4 disclaimers, such as that it is "for informational purposes 5 only." 6 York Court of Appeals: We therefore certify the following question to the New 7 8 9 10 11 12 13 14 15 16 17 In a case brought against an insurer in which a plaintiff seeks a declaration that it is covered under an insurance policy issued by that insurer, does a certificate of insurance issued by an agent of the insurer that states that the policy is in force but also bears language that the certificate is not evidence of coverage, is for informational purposes only, or other similar disclaimers, estop the insurer from denying coverage under the policy? 18 BACKGROUND 19 The defendant Mountain Valley Indemnity Company 20 ("Mountain Valley") issued a commercial general liability 21 insurance policy, effective March 15, 2003 to March 15, 2004, 22 (the "Primary Policy") to non-party Ellicott Maintenance, Inc., a 23 general contractor in Buffalo, New York.1 24 additional-insured endorsement, the Primary Policy covered not 1 As amended by an In identifying the terms of the Primary Policy, the parties refer the Court to a Renewal Declaration contained in the joint appendix reflecting an insurance policy effective from March 15, 2004, to March 15, 2005. The policy at issue in this litigation, however, was effective from March 15, 2003 to March 15, 2004, the same dates listed on the Certificate of Insurance. Because the parties do not dispute that the Primary Policy was issued, that it was effective from 2003 to 2004, and that it was subject to the same terms and endorsements as are contained in the Renewal Declaration, we rely upon the terms of the Renewal Declaration as evidence of the contents of the Primary Policy. 5 1 only Ellicott Maintenance but also any "person or organization 2 with whom [Ellicott Maintenance] agreed, because of a written 3 contract[,] . . . to provide insurance such as is afforded under 4 [the Primary Policy], but only with respect to liability arising 5 out of [Ellicott Maintenance's] operations," and only when "the 6 written contract or agreement [between Ellicott Maintenance and 7 the additional insured] ha[d] been executed . . . prior to the 8 'bodily injury.'" 9 Policy No. 331-0013567, Issued to Ellicott Maintenance, Inc., Mountain Valley Indemnity Co. Commercial 10 Gen. Liability Extension Endorsement ¶ 11, Decl. of Katherine A. 11 Fijal in Supp. of Mountain Valley's Mot. for Summ. J. ("Fijal 12 Decl.") Ex. J., 10 Ellicott Square Court Corp. v. Mountain Valley 13 Indem. Co., No. 07-CV-0053 (W.D.N.Y. June 13, 2008). 14 Policy limited Mountain Valley's liability to one million dollars 15 "per occurrence" of bodily injury, and defined "occurrence" to 16 "mean[] an accident . . . ." 17 The Primary In addition to the Primary Policy, Mountain Valley 18 issued to Ellicott Maintenance an umbrella policy (the "Umbrella 19 Policy") bearing the same effective dates as the Primary Policy. 20 The Umbrella Policy limited Mountain Valley's liability per 21 occurrence to two million dollars "in excess of" the coverage 22 provided by the Primary Policy and stipulated that the Umbrella 23 Policy's general aggregate limit for each annual period was two 24 million dollars. 25 guaranteed coverage for bodily injury resulting from an 26 occurrence, which it defined as "an accident . . . ," and Like the Primary Policy, the Umbrella Policy 6 1 extended coverage to additional insureds with whom Ellicott 2 Maintenance had "agreed in writing prior to any [injury] . . . to 3 provide insurance such as is afforded" by the Umbrella Policy. 4 Mountain Valley Indem. Co. Commercial Umbrella Policy No. X31- 5 0013568, Issued to Ellicott Maintenance, Inc. at 8, Fijal Decl. 6 Ex. K (the "Umbrella Policy"). 7 Umbrella Policy did not provide that its coverage of additional 8 insureds was effective only if the written agreement between 9 Ellicott Maintenance and any additional insureds had been 10 Unlike the Primary Policy, the "executed." 11 On or about August 14, 2003, Ellicott Maintenance 12 contracted with plaintiffs 5182 Group, LLC, and 10 Ellicott 13 Square Court Corporation d/b/a Ellicott Development Company 14 ("EDC"), to perform interior demolition work at the Graystone 15 Building in Buffalo, New York, owned by plaintiff 5182 Group, and 16 managed by EDC. 17 the plaintiffs (the "Construction Agreement") obligated Ellicott 18 Maintenance to procure insurance coverage protecting both itself 19 and the plaintiffs against claims by employees or subcontractors 20 for, inter alia, damages resulting from bodily injury. 21 Construction Agreement required that the insurance be "primary, 22 rather than concurrent with or secondary to [the] Owner's own 23 liability insurance," that it provide coverage of no less than 24 five million dollars,2 and that Ellicott Maintenance The agreement between Ellicott Maintenance and 2 The obtain, While the Primary and Umbrella Policies, each of which limited liability to two million dollars for each annual period, 7 1 prior to the commencement of work, "Certificates of Insurance 2 naming [the plaintiffs] as additional insureds." 3 Construction, dated Sept. 12, 2003, at 10 11, Fijal Decl. Ex. G. 4 The Agreement also required Ellicott Maintenance to obtain, 5 before starting work, "Certificates of Insurance naming [the 6 plaintiffs] as additional insureds." 7 the Construction Agreement on behalf of either the plaintiffs or 8 Ellicott Maintenance until September 12, 2003. 9 Id. at 11. Agreement for No one signed Some three weeks earlier, on August 19, 2003, Mountain 10 Valley's agent, LRMP, Inc., had issued a certificate of insurance 11 (the "COI") identifying Mountain Valley as the issuer of the 12 Primary Policy and the Umbrella Policy, Ellicott Maintenance as 13 the named insured, and the plaintiffs as "additional insured with 14 respect to project: Graystone." 15 Insurance, dated August 19, 2003, Fijal Decl. Ex. L. 16 listed the limits of liability described above--one million 17 dollars per occurrence under the Primary Policy and two million 18 dollars under the Umbrella Policy. 19 appeared in the upper right-hand quadrant of the front of the 20 COI: 21 AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. 22 CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED 23 BY THE POLICIES BELOW." Certificate of Liability The COI The following language "THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY THIS Id. (capitalization in original). The did not together provide the five million dollars in coverage required by the construction agreement, that fact does not affect our resolution of the issues on appeal. 8 1 COI also provided that "THE INSURANCE AFFORDED BY THE POLICIES 2 DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND 3 CONDITIONS OF SUCH POLICIES." 4 The reverse side of the COI bore similar language under the 5 heading "DISCLAIMER": 6 not constitute a contract between the issuing insurer . . . and 7 the certificate holder, nor does it affirmatively or negatively 8 amend, extend or alter the coverage afforded by the policies 9 listed thereon." 10 11 Id. Id. (capitalization in original). "The Certificate of Insurance . . . does Ellicott Maintenance began work the day after it received the COI. On September 9, 2003, three days before Ellicott 12 Maintenance owner Theodore S. DiRienzo and EDC owner Carl P. 13 Paladino signed the construction agreement on behalf of the 14 parties to it, David DelPrince, an employee of S&A Rubbish and 15 Debris Removal--a subcontractor hired by Ellicott Maintenance-- 16 was injured when a roof collapsed at the Graystone site. 17 The plaintiffs notified Mountain Valley's agent, LRMP, 18 of DelPrince's injury and potential claim by letter dated October 19 22, 2003, requesting that Mountain Valley defend and indemnify 20 them in any suit brought by DelPrince. 21 letter dated April 13, 2004, Mountain Valley informed the 22 plaintiffs that it would not defend or indemnify them because, 23 inasmuch as the Construction Agreement had not been signed on 24 behalf of the parties before DelPrince was injured, "there was 25 not in existence on the date of loss a written contract executed 26 prior to the bodily injury," as required by the terms of the 9 Some six months later, by 1 Primary Policy. 2 [Court] Corp., dated April 13, 2004, App. to Pls.' Local R. 56.1 3 Statement of Material Facts in Supp. of Pls.' Mot. for Summ. J. 4 Ex. 10, 10 Ellicott Square Court Corp. v. Mountain Valley Indem. 5 Co., No. 07-CV-0053 (W.D.N.Y. June 13, 2008). 6 stated that even if the plaintiffs qualified as additional 7 insureds under the Primary Policy as of the date of the accident, 8 Mountain Valley would deny coverage because the plaintiffs had 9 failed to timely notify Mountain Valley of DelPrince's injury and 10 Letter from Susan Gabriele to 10 Ellicott Square The letter further possible claim, as required by the Primary Policy. 11 DelPrince filed suit against EDC, 5182 Group, and 12 Ellicott Maintenance in New York State Supreme Court, Erie 13 County, on October 28, 2004, alleging negligence and violations 14 of the New York Labor Law, and seeking to recover damages for the 15 injuries he sustained.3 16 The plaintiffs filed this declaratory judgment action 17 in the United States District Court for the Western District of 18 New York on January 30, 2007. 19 additional insureds under the Primary Policy and therefore were 20 entitled to coverage by Mountain Valley in DelPrince's suit. 21 plaintiffs further alleged that the COI bound Mountain Valley to 22 provide coverage despite the absence of a signed agreement 23 between EDC and Ellicott Maintenance. 24 alleged that Mountain Valley should be precluded from relying on 3 They alleged that they were The Finally, the plaintiffs The parties represented at oral argument before this Court that DelPrince's suit has been settled. 10 1 the defense of untimely notice because Mountain Valley's response 2 disclaiming coverage was itself untimely. 3 amended their complaint to add a claim alleging entitlement to 4 indemnification and defense as additional insureds under the 5 terms of the Umbrella Policy. The plaintiffs later The district court (Richard J. Arcara, Judge4) referred 6 7 the case to Magistrate Judge Leslie G. Foschio. In June 2008, 8 the parties brought cross-motions for summary judgment before the 9 magistrate judge. Mountain Valley's motion principally relied on 10 the same arguments made in its April 2004 letter to the 11 plaintiffs disclaiming coverage. 12 that it was not bound by the Umbrella Policy because (1) the 13 Construction Agreement required that the insurance provided to 14 the plaintiffs be "primary," and the Umbrella Policy was 15 secondary; and (2) the Umbrella Policy was "subject to all the 16 limitations of [the Primary Policy]," including the execution 17 requirement, and that because the Construction Agreement was not 18 executed before DelPrince's injury, the plaintiffs "[we]re not 19 insureds on the underlying insurance [and we]re not insureds" 20 under the Umbrella Policy. 21 Valley Indem. Co.'s Mot. for Summ. J. at 20 21, 10 Ellicott 22 Square Court Corp. v. Mountain Valley Indem. Co., No. 07-CV-0053 23 (W.D.N.Y. June 13, 2008); see Umbrella Policy at 7 8. 4 This case When, following the judge, Judge Arcara Chief Judge William Mountain Valley also argued Mem. of Law in Supp. of Mountain In support was originally assigned to Judge Arcara. reference of the case to the magistrate recused himself, the case was reassigned to M. Skretny. 11 1 of their cross-motion, the plaintiffs contended that even though 2 the Construction Agreement had not been signed on behalf of the 3 parties at the time of the accident, it nonetheless had been 4 "executed" for purposes of the Primary Policy because of the 5 parties' partial performance and because the parties to the 6 contract understood its signing to be ministerial. 7 plaintiffs further argued that even if the Agreement had not been 8 executed, the COI bound Mountain Valley to provide coverage under 9 the Primary Policy because "Mountain Valley's authorized The 10 representative represented that such coverage was in place." 11 Mem. of Law in Supp. of Pls.' Mot. for Summ. J. at 17, 10 12 Ellicott Square Court Corp. v. Mountain Valley Indem. Co., No. 13 07-CV-0053 (W.D.N.Y. June 13, 2008). 14 argued that the Umbrella Policy's own "blanket additional insured 15 provision" entitled them to that policy's coverage. 16 Finally, the plaintiffs In a Report and Recommendation (the "R&R"), 10 Ellicott 17 Square Court Corp. v. Mountain Valley Indem. Co., No. 07-CV-0053 18 (W.D.N.Y. Sept. 22, 2009), the magistrate judge recommended 19 denying Mountain Valley's motion for summary judgment and 20 granting the plaintiffs'.5 21 Construction Agreement was "executed," the magistrate judge 22 concluded that "in light of 'common speech' and the reasonable 23 expectations of a businessperson"--and because Mountain Valley, 5 With regard to whether the Subject matter jurisdiction over this action is founded on diversity of citizenship. The parties do not dispute that the plaintiffs' claims are properly resolved by applying New York law. 12 1 as the drafter of the policy, could have used the term "signed" 2 if it had intended to require a signature--the term "executed" as 3 used in the Primary Policy should not be interpreted to require 4 the parties' signatures to trigger coverage under that policy. 5 R&R at 12 13. 6 entitled to coverage based on the COI, the magistrate judge 7 recommended finding that the COI incorporated the terms of the 8 Primary and Umbrella Policies. 9 Corp. v. Skibeck Pipeline Co., 271 A.D.2d 867, 705 N.Y.S.2d 459 On the question of whether the plaintiffs were Relying on Niagara Mohawk Power 10 (4th Dep't 2000), the magistrate judge found that Mountain 11 Valley's agent, acting within the scope of its authority, "issued 12 the certificate of insurance naming [the plaintiffs] as 13 additional insureds, upon which [the plaintiffs] were entitled to 14 rely, regardless of the absence of a signing of the construction 15 contract at that time." 16 therefore recommended estopping Mountain Valley from denying 17 coverage to the plaintiffs. 18 rejected Mountain Valley's argument that the plaintiffs had not 19 provided timely notice of DelPrince's injury.6 20 R&R at 15. The magistrate judge Finally, the magistrate judge Mountain Valley filed written objections to the entire 21 R&R making essentially the same arguments it had presented to the 22 magistrate judge. 23 adopted the R&R in its entirety and without further written 24 analysis. 6 Upon de novo review, the district court 10 Ellicott Square Court Corp. v. Mountain Valley Mountain Valley does not challenge this conclusion on appeal. 13 1 Indem. Co., No. 07-CV-0053, 2010 WL 681284, 2010 U.S. Dist. LEXIS 2 14556 (W.D.N.Y. Feb. 19, 2010). 3 Mountain Valley appeals. DISCUSSION 4 5 I. Standard of Review 6 We review the district court's grant of summary 7 judgment de novo, "construing the evidence in the light most 8 favorable to the non-moving party and drawing all reasonable 9 inferences in its favor." Fincher v. Depository Trust & Clearing 10 Corp., 604 F.3d 712, 720 (2d Cir. 2010). "Summary judgment is 11 appropriate where there exists no genuine issue of material fact 12 and, based on the undisputed facts, the moving party is entitled 13 to judgment as a matter of law." 14 R.R. Passenger Corp., 537 F.3d 153, 159 (2d Cir. 2008), cert. 15 denied, 129 S. Ct. 2043 (2009) (brackets and internal quotation 16 marks omitted); see also Fed. R. Civ. P. 56(a) ("The court shall 17 grant summary judgment if the movant shows that there is no 18 genuine dispute as to any material fact and the movant is 19 entitled to judgment as a matter of law. 20 on the record the reasons for granting or denying the motion."). O & G Indus., Inc. v. Nat'l The court should state 21 II. Execution of the Construction Agreement 22 The plaintiffs argue, and the district court concluded, 23 that although no one on behalf of them or Ellicott Maintenance 24 had signed the Construction Agreement before DelPrince was 25 injured, the contract nevertheless was "executed" for purposes of 26 the Primary Policy. We disagree. 14 1 We must give "unambiguous provisions of an insurance 2 contract . . . their plain and ordinary meaning." 3 v. Laruccia Constr., Inc., 71 A.D.3d 818, 819, 898 N.Y.S.2d 558, 4 559 (2d Dep't 2010) (internal quotation marks omitted). 5 cannot disregard "the plain meaning of the policy's 6 language . . . in order to find an ambiguity where none exists."7 7 Empire Fire & Marine Ins. Co. v. Eveready Ins. Co., 48 A.D.3d 8 406, 407, 851 N.Y.S.2d 647, 648 (2d Dep't 2008). 9 Essex Ins. Co. We "[I]t is common practice for the courts of this State 10 to refer to the dictionary to determine the plain and ordinary 11 meaning of words to a contract." 12 143 A.D.2d 734, 735, 533 N.Y.S.2d 297, 297 (2d Dep't 1988) 13 (citation omitted). 14 just that in determining the meaning of New York State statutory 15 language. 16 -- N.E.2d ----, ----, --- N.Y.S.2d ----, ----, 2010 WL 4642451, 17 2010 N.Y. LEXIS 3284, at *10 (Nov. 18, 2010) (adopting a 18 dictionary definition of the word "latent" for purposes of N.Y. 19 C.P.L.R. 214-c(4)). 7 Mazzola v. Cnty. of Suffolk, The New York Court of Appeals recently did Giordano v. Market Am., Inc., --- N.Y.3d ----, ----, - The plaintiffs appear to argue that the term "executed" is ambiguous. Whether a contract term is ambiguous is a threshold question of law. Morgan Stanley Grp. Inc. v. New Eng. Ins. Co., 225 F.3d 270, 275 (2d Cir. 2000). "An ambiguity exists where the terms of an insurance contract could suggest more than one meaning when viewed objectively by a reasonably intelligent person" who is aware of trade terminology and of the context of the entire contract. Id. (internal quotation marks omitted). As we will discuss below, we conclude that the term "executed" is not ambiguous. 15 1 Black's Law Dictionary defines "executed" as: "1. (Of a 2 document) that has been signed <an executed will>. 2. That has 3 been done, given, or performed <executed consideration>." 4 Black's Law Dictionary 650 (9th ed. 2009).8 5 definition warns that "[t]he term 'executed' is a slippery 6 word. . . . 7 the document has been signed, or has been signed, sealed, and 8 delivered. 9 that has been fully performed by both parties." A note to the A contract is frequently said to be executed when Further, by executed contract is frequently meant one Id. (quoting 10 William R. Anson, Principles of the Law of Contract 26 n.* 11 (Arthur L. Corbin ed., 3d Am. ed. 1919)) (brackets and internal 12 quotation marks omitted, emphasis in original). 13 New York courts employ the standard indicated by the 14 definition in Black's, requiring that a contract be either signed 15 or fully performed before it can be considered executed.9 16 example, in Burlington Insurance Co. v. Utica First Insurance For 8 Black's Law Dictionary defines "execute" as, inter alia: "To perform or complete (a contract or duty)"; and "To make (a legal document) valid by signing; to bring (a legal document) into its final, legally enforceable form." Black's Law Dictionary, supra, at 649. 9 The parties have not pointed to, nor have we ourselves discovered, an opinion of the New York Court of Appeals addressing the definition of "executed" as it relates to contracts. Because there is no disagreement among the Departments of the Appellate Division in this regard, however, we will apply the decisions of those courts. "[W]e are bound to apply the law as interpreted by New York's intermediate appellate courts unless we find persuasive evidence that the New York Court of Appeals, which has not ruled on this issue, would reach a different conclusion." Blue Cross & Blue Shield of N.J., Inc. v. Philip Morris USA Inc., 344 F.3d 211, 221 (2d Cir. 2003) (ellipses and internal quotation marks omitted). 16 1 Co., 71 A.D.3d 712, 896 N.Y.S.2d 433 (2d Dep't 2010),10 a case 2 with facts remarkably similar to those of the case before us, a 3 construction manager contracted with a subcontractor to perform 4 work at a site in Manhattan. 5 purchase order that required the subcontractor "to obtain 6 insurance in specified minimum amounts, and to name [the 7 construction manager] as an additional insured on the Certificate 8 of Insurance." 9 additional insured endorsement provided, inter alia, that the The agreement was memorialized in a Id. at 712, 896 N.Y.S.2d at 434. The policy's 10 written contract or agreement between the manager and 11 subcontractor had to be "[c]urrently in effect or becoming 12 effective during the terms of this policy; and . . . [e]xecuted 13 prior to the 'bodily injury' [or] 'personal injury'." 14 713, 896 N.Y.S.2d at 434. 15 Id. at Before the purchase order was signed on behalf of 16 either party, and before work at the site was completed, a man 17 was injured when he fell through a sidewalk cellar door at the 18 construction site. 19 action against the construction manager and the subcontractor, 20 both of whom in turn sought coverage from the defendant insurance 21 company. 22 that [the construction manager] was not an additional insured 10 Id. Id. The injured man filed a personal injury The defendant declined coverage "on the ground The district court relied on the Supreme Court's opinion in Burlington, which the Second Department overturned, in determining applicable New York law. We of course treat the Second Department's decision, of which the district court could not have known when it decided the case at bar, as superseding the Supreme Court's view on the matter. 17 1 pursuant to the terms of the policy's additional insured 2 endorsement" because "the purchase order was not signed at the 3 time of the underlying plaintiff's alleged injury and, therefore, 4 had not been 'executed' as of that time," as required by the 5 endorsement. 6 been executed by virtue of their partial performance of their 7 duties thereunder. 8 9 Id. The plaintiffs argued that the contract had The Appellate Division, Second Department, agreed with the insurer, concluding that "the defendant demonstrated that the 10 contract was not 'executed' at the time of the alleged 11 accident . . . since it was both unsigned and had not been fully 12 performed at that time." 13 court found "no support for the plaintiffs' contention that the 14 condition in the additional insured endorsement that the contract 15 be 'executed' prior to the bodily injury or personal injury could 16 be satisfied by partial performance." 17 Id. at 714, 896 N.Y.S.2d at 435. The Id. In this case, the plaintiffs assert that although the 18 Construction Agreement was not signed, the "underlying contract" 19 requiring Ellicott Maintenance to procure insurance had been 20 fully performed in that Ellicott Maintenance had "obtained 21 insurance in favor of EDC/5182 Group by purchasing policies with 22 a blanket additional insured endorsement," and "delivered proof 23 of coverage in the form of" the COI. 24 Construction Agreement was not comprised of many individual 25 contracts, as the plaintiffs' argument implies. 26 fulfilling the insurance procurement provision constituted 18 Appellees' Br. 20. Rather, But the 1 partial performance of the Construction Agreement--satisfaction 2 of one of the duties required of Ellicott Maintenance thereunder. 3 And as the district court correctly noted, partial performance 4 does not constitute execution. 5 The plaintiffs also argue that Burlington "appears to 6 be premised on a legal fallacy," Appellees' Br. 14, i.e., that 7 the Second Department's acknowledgment that the word "executed" 8 can have more than one meaning cannot be reconciled with its 9 conclusion that this "does not render the contract uncertain or 10 ambiguous," Burlington, 71 A.D.3d at 713, 896 N.Y.S.2d at 435 11 (internal quotation marks omitted). 12 concluded that the contract before it had not been executed 13 because it had neither been signed nor fully performed. 14 Therefore, neither method of execution had been met. 15 896 N.Y.S.2d at 435. 16 contract requirement can be satisfied in more than one way that 17 the contract for that reason alone "lack[s] a definite and 18 precise meaning." 19 A.D.3d 740, 742, 905 N.Y.S.2d 321, 324 (3d Dep't 2010). 20 does it render the term ambiguous, nor create a triable issue of 21 material fact. 22 But the Burlington court Id. at 714, One cannot conclude from the fact that a SUS, Inc. v. St. Paul Travelers Grp., 75 Neither Because New York law unambiguously requires either the 23 signing of a contract or its full performance for it to be 24 "executed" within the meaning of an insurance policy requiring 25 such prior execution, and because neither occurred here, the 26 Construction Agreement was not executed as of the date of 19 1 DelPrince's injury. The district court's finding that it was and 2 its conclusion that for that reason the Primary Policy was in 3 effect at the time of the accident, are therefore in error. 4 III. Estoppel under the Certificate of Insurance 5 The plaintiffs contend that Mountain Valley is 6 nonetheless estopped from denying coverage to the plaintiffs 7 under the Primary Policy11 because Mountain Valley's agent issued, 8 and the plaintiffs relied upon, the COI. 9 agreed. 10 The district court New York's intermediate appellate courts are divided on the question. 11 New York contract law instructs that, as a general 12 matter, "[a] certificate of insurance is merely evidence of a 13 contract for insurance, not conclusive proof that the contract 14 exists, and not, in and of itself, a contract to insure." 15 Maint. Corp. v. Aetna Cas. & Sur. Co., 225 A.D.2d 443, 444, 639 16 N.Y.S.2d 355, 356 (1st Dep't 1996); see also Sevenson Envtl. 17 Servs., Inc. v. Sirius Am. Ins. Co., 74 A.D.3d 1751, 1753, 902 18 N.Y.S.2d 279, 280 (4th Dep't 2010); Tribeca Broadway Assocs., LLC 19 v. Mount Vernon Fire Ins. Co., 5 A.D.3d 198, 200, 774 N.Y.S.2d 20 11, 13 (1st Dep't 2004). 21 to raise an issue of fact" on summary judgment, "it is not 22 sufficient, standing alone . . . , to prove coverage as a matter 23 of law." 11 Horn While a certificate "may be sufficient Id. The plaintiffs make the same argument regarding the Umbrella Policy, but because we conclude in Part IV below that the Umbrella Policy was in any event in effect as to the plaintiffs for other reasons, we need not reach the question of estoppel with respect to that policy. 20 1 However, the Third and Fourth Departments have held 2 that a certificate of insurance can estop an insurance provider 3 from denying coverage where the parties intended to provide 4 coverage to the party seeking it if the certificate was issued by 5 an agent within the scope of its authority, and if the party 6 seeking coverage reasonably relied on the certificate of 7 insurance by, for example, beginning construction work. 8 Niagara Mohawk Power Corp. v. Skibeck Pipeline Co., 270 A.D.2d 9 867, 868-69, 705 N.Y.S.2d 459, 460 61 (4th Dep't 2000) See 10 (concluding that insurer was bound by certificate of insurance 11 listing the plaintiff as an additional insured, even though 12 another certificate, under which the plaintiff sought coverage, 13 did not list the plaintiff); Bucon, Inc. v. Pa. Mfg. Ass'n Ins. 14 Co., 151 A.D.2d 207, 210 11, 547 N.Y.S.2d 925, 927-28 (3d Dep't 15 1989) (estopping the defendant insurer from denying coverage to 16 the plaintiff where the plaintiff reasonably relied on a 17 certificate of insurance in commencing construction work). 18 the Second Department has declined to conclude that an insurer 19 was estopped from denying coverage to a party that was 20 erroneously named on a certificate of insurance. 21 Fuel Co. of Hempstead v. Res. Recycling, Inc., 248 A.D.2d 420, 22 423-24, 671 N.Y.S.2d 93, 96 (2d Dep't 1998) (rejecting estoppel 23 arising from a certificate of insurance where the certificate 24 stated that it was "a matter of information only and confer[red] 25 no rights upon" the plaintiff, and holding that "the doctrine of 26 estoppel may not be invoked to create coverage where none exists 21 But See Am. Ref- 1 under the policy").12 2 reluctant to find estoppel based on a certificate of insurance. 3 See Nicotra Grp., LLC v. Am. Safety Indem. Co., 48 A.D.3d 253, 4 254, 850 N.Y.S.2d 455, 457 (1st Dep't 2008) ("Nor did the 5 certificate of insurance confer additional insured status."); 6 Rodless Props., L.P. v. Westchester Fire Ins. Co., 40 A.D.3d 253, 7 254-55, 835 N.Y.S.2d 154, 155 (1st Dep't 2007) ("We agree . . . 8 that since the certificate of insurance was issued as a matter of 9 information only . . . it is neither proof of insurance nor proof The First Department, too, has been 10 of an oral contract."); Moleon v. Kreisler Borg Florman Gen. 11 Constr. Co., 304 A.D.2d 337, 339, 758 N.Y.S.2d 621, 623 (1st 12 Dep't 2003) (deciding, without reference to estoppel, that 13 certificate of insurance is "insufficient to establish that [the 14 plaintiff] is an additional insured under a policy especially 15 where, as here, the policy itself makes no provision for 16 coverage"). 12 The plaintiffs attempt to distinguish American RefFuel. In that case, the alleged additional insured was named in the certificate of insurance but was never named--and was not intended to be named--as an additional insured under the terms of the insurance contract. Id., 248 A.D.2d at 423-24, 671 N.Y.S.2d at 96. However, the court's rejection of estoppel appears to have been grounded in the plain language of the certificate itself, which, like the certificate at issue in the instant case, warned that it was for informational purposes only. Id. Mountain Valley's effort to distinguish Bucon is similarly unpersuasive, as is its reliance on Taylor v. Kinsella, 742 F.2d 709 (2d Cir. 1984), a case in which we declined to require coverage by virtue of a certificate because, inter alia, in order to provide the coverage sought, the certificate would have had to expand the scope of the policy it referenced. See id. at 711-12. 22 1 There is reason to conclude that the primary insured-- 2 here, Ellicott Maintenance--should bear the burden of ensuring 3 that all the conditions of providing "additional insured" status 4 to those with whom it contracts to provide that status have been 5 met. 6 it is not customary for an insurer or for the insurer's agent to 7 see the contract ostensibly requiring a contractor to procure 8 insurance; rather, a certificate of insurance naming the 9 additional insured is issued as a matter of course upon the At oral argument, counsel for both sides acknowledged that 10 request of the primary insured. 11 record of which we are aware that the plaintiffs ever saw the 12 policy issued to Ellicott Maintenance, or that a party in the 13 plaintiffs' position would typically see such a policy. 14 additional insureds did not have a relationship with the insurer 15 that would have given them the right to obtain or question the 16 accuracy of a certificate of insurance. 17 primary insured which has explicitly agreed to the execution of 18 the underlying contract as a condition of coverage for additional 19 insureds, which has the ability to seek to obtain that execution 20 prior to the beginning of work pursuant to the contract, and 21 which is otherwise best positioned to assure compliance with the 22 conditions of its insurance. 23 Nor is there evidence in the The It is, after all, the On the other hand, there is a reasonable argument to be 24 made that, disclaimers notwithstanding, an insurer has an 25 obligation not to issue false or potentially misleading 26 certificates of insurance -or to permit an agent to issue them 23 1 if it or the agent is aware the parties may rely upon the 2 certificate despite disclaimers to the contrary. 3 estoppel rests upon the word or deed of one [party] upon which 4 another party rightfully relies and so relying changes his 5 position to his injury." 6 Prods. Corp., 56 N.Y.2d 175, 184, 436 N.E.2d 1265, 1269, 451 7 N.Y.S.2d 663, 667 (1982) (citation and internal quotation marks 8 omitted). 9 here. "[A]n Nassau Trust Co. v. Montrose Concrete That formulation may well correctly describe the facts Moreover, insurers typically have greater control over the 10 terms of insurance contracts and certificates of insurance than 11 their insureds, along with greater knowledge of the applicable 12 law; estoppel therefore may be appropriate for much the same 13 reason that ambiguities in insurance contracts are construed 14 against insurers. 15 Ins. Co., 34 N.Y.2d 356, 361, 314 N.E.2d 37, 39, 357 N.Y.S.2d 16 705, 708 (1974). 17 be particularly appropriate in cases, such as this one, where 18 enforcement of the certificate of insurance would not expand the 19 substantive scope of the insurance contemplated by the insurer, 20 but would instead require the insurer to provide the coverage to 21 which the certificate of insurance states it has agreed. 22 Bucon, 151 A.D.2d at 210-11, 547 N.Y.S.2d at 927-28. 23 Cf. Thomas J. Lipton, Inc. v. Liberty Mut. And such a distribution of responsibility may See In any event, in light of this diversity of authority 24 among the Appellate Divisions, and of the underlying policy 25 choices involved, on what we think to be a significant issue of 26 state law, and acknowledging the absence of guidance from the 24 1 Court of Appeals, we respectfully certify to the Court the 2 following question: 3 4 5 6 7 8 9 10 11 12 13 In a case brought against an insurer in which a plaintiff seeks a declaration that it is covered under an insurance policy issued by that insurer, does a certificate of insurance by an agent of the insurer that states that the policy is in force but also bears language that the certificate is not evidence of coverage, is for informational purposes only, or other similar disclaimers, estop the insurer from denying coverage under the policy? 14 IV. 15 The plaintiffs argue that even if they are not covered Coverage Under the Umbrella Policy13 16 as additional insureds under the Primary Policy, they are covered 17 under the Umbrella Policy.14 18 Umbrella Policy is limited by the same unfulfilled "execution" 19 requirement as the Primary Policy. 20 were covered by the Umbrella Policy, Mountain Valley asserts, Mountain Valley responds that the A finding that the plaintiffs 13 In a joint post-argument submission dated October 14, 2010, the parties confirmed that even though DelPrince's lawsuit has been settled, their dispute concerning the applicability of the Umbrella Policy is not moot because, "given the particulars of the settlement in the underlying action, a finding in this case that [the] plaintiffs are entitled to coverage under the defendant's umbrella policy would result in [the] defendant having to pay under that policy." Letter from Judith Treger Shelton, Counsel for the Pls., to the U.S. Court of Appeals for the Second Circuit, dated Oct. 14, 2010, 10 Ellicott Square Court Corp. v. Mountain Valley Indem. Co., No. 10-0799-CV (2d Cir. Oct. 14, 2010), ECF No. 71. 14 The district court's finding that the Construction Agreement had been "executed" compelled its conclusion that the plaintiffs were covered under both the Primary and the Umbrella Policies. See 10 Ellicott Square Court Corp., 2010 WL 681284, at *2, 2010 U.S. Dist. LEXIS 14556, at *5. Because we conclude that the Construction Agreement was not "executed," we must consider whether the plaintiffs qualify for defense and indemnification under the Umbrella Policy. 25 1 would constitute an expansion in coverage in contravention of New 2 York law. We agree with the plaintiffs. 3 Section 3(c) of the Umbrella Policy provides: 4 person or organization with whom or with which you have agreed in 5 writing prior to any loss, 'occurrence[,]' or 'offense' to 6 provide insurance such as is afforded by this policy is an 7 insured . . . ." 8 Section 3(d), "Each person or organization who is an 'insured' in 9 the 'underlying insurance' is an 'insured' under this insurance Fijal Decl. Ex. K at 8 (§ 3(c)). "Any Pursuant to 10 subject to all the limitations of such 'underlying insurance' 11 other than the limits of the underlying insurer's liability." 12 Id. (§ 3(d)). 13 We conclude that Section 3(c) renders the plaintiffs 14 insureds under the Umbrella Policy. 15 than an agreement in writing. 16 "ha[s] long held that a contract may be valid even if it is not 17 signed by the party to be charged, provided its subject matter 18 does not implicate a statute . . . that imposes such a 19 requirement." 20 363, 368, 828 N.E.2d 593, 596 (2005). 21 may be enforceable, provided there is objective evidence 22 establishing that the parties intended to be bound." 23 828 N.E.2d at 597. 24 The policy requires no more The New York Court of Appeals Flores v. Lower E. Side Serv. Ctr., Inc., 4 N.Y.3d "[A]n unsigned contract Id. at 369, It is undisputed that the parties intended to be bound 25 by the Construction Agreement irrespective of whether and when it 26 was signed. Under New York law, it was therefore a binding 26 1 agreement prior to its execution. 2 under that agreement, the general contractor was to procure 3 insurance for the plaintiffs. 4 Construction Agreement's requirement that Ellicott Maintenance 5 obtain aggregate insurance coverage for at least five million 6 dollars, and that the Primary Policy had a general aggregate 7 limit of two million dollars. 8 9 And it is indisputable that Nor is there any issue as to the Mountain Valley argues that the Construction Agreement did not require "insurance such as is afforded" by the Umbrella 10 Policy because the Agreement required that Ellicott Maintenance's 11 insurance be in the form of a "primary policy." 12 Agreement required only that Ellicott Maintenance's policy be 13 primary in relation to the plaintiffs' own policies "rather than 14 concurrent" with them. 15 But the Fijal Decl. Ex. G at 10 (§ 7(A)(3)). Mountain Valley also contends that because the 16 Construction Agreement did not refer explicitly to umbrella 17 coverage, it did not require Ellicott Maintenance to provide 18 "such insurance as is afforded" by the Umbrella Policy. 19 Appellant's Reply. Br. at 11. 20 Umbrella Policy to require such specificity. 21 We find no language in the Notwithstanding Section 3(c), Mountain Valley argues 22 that the plaintiffs do not qualify as additional insureds 23 because, under Section 3(d), the Umbrella Policy is "subject to 24 all the limitations" of the Primary Policy. 25 whether the Primary Policy's execution requirement would preclude 26 the plaintiffs from receiving coverage under Section 3(d) of the 27 We need not resolve 1 Umbrella Policy, because the plaintiffs are eligible for coverage 2 pursuant to Section 3(c) irrespective of the effectiveness of the 3 Primary Policy. 4 which define who is an insured, provide alternative grounds 5 rather than compound requirements for qualification as an 6 additional insured. 7 conclude that the plaintiffs must qualify as insureds under both 8 Section 3(c) and Section 3(d). 9 either, they are insureds. Sections 3(c) and 3(d) of the Umbrella Policy, We will not read "and" into the policy to If they come within the terms of "[C]ourts may not by construction add 10 or excise terms . . . under the guise of interpreting the 11 writing." 12 470, 475, 807 N.E.2d 876, 879, 775 N.Y.S.2d 765, 768 (2004) 13 (citation and internal quotation marks omitted). 14 conclude that Mountain Valley is bound to provide coverage to the 15 plaintiffs under Section 3(c) of the Umbrella Policy. 16 Vt. Teddy Bear Co. v. 538 Madison Realty Co., 1 N.Y.3d We therefore Although our conclusion rests on a ground not 17 considered by the district court, we may "affirm a decision on 18 any grounds supported in the record, even if it is not one on 19 which the trial court relied." 20 Co., 460 F.3d 400, 405 (2d Cir. 2006). Thyroff v. Nationwide Mut. Ins. We do so here. 21 V. Certification to the New York Court of Appeals 22 The rules of this Court provide that "[i]f state law 23 permits, the court may certify a question of state law to that 24 state's highest court." 25 Grp. (USA) Inc. v. Am. Buddha, 609 F.3d 30, 41-42 (2d Cir. 2010). 26 "Although the parties did not request certification, we are 2d Cir. Local R. 27.2; see also Penguin 28 1 empowered to seek certification nostra sponte." Kuhne v. Cohen & 2 Slamowitz, LLP, 579 F.3d 189, 198 (2d Cir. 2009). 3 certify is discretionary, Am. Buddha, 609 F.3d at 41, and is 4 principally guided by three factors. Whether to 5 First, "certification may be appropriate if the New 6 York Court of Appeals has not squarely addressed an issue and 7 other decisions by New York courts are insufficient to predict 8 how the Court of Appeals would resolve it." 9 O'Mara v. Town of Wappinger, 485 F.3d 693, 698 (2d Cir. 2007); Id. at 42; see also 10 Blue Cross & Blue Shield of N.J., Inc. v. Philip Morris USA Inc., 11 344 F.3d 211, 220-21 (2d Cir. 2003); N.Y. Comp. Codes R. & Regs. 12 tit. 22, § 500.27(a) (2008). 13 "split of authority," 14 whether a certificate of insurance can be enforced through 15 estoppel: 16 here," and the New York Court of Appeals has not decided which is 17 correct. 18 direction from the state's highest court, we "cannot harmonize" 19 the divergent intermediate court decisions. 20 Philippone, 332 F.3d 163, 172 (2d Cir. 2003). 21 any better than the Departments of the Appellate Division how the 22 Court of Appeals would resolve the question. 23 As discussed above, there is a Blue Cross, 344 F.3d at 221, regarding "[T]wo competing lines of cases deal[] with the issue Am. Buddha, 609 F.3d at 42. In the absence of Carney v. Nor can we predict Second, the question on which we certify must be of 24 "importance . . . to the state," 25 its resolution must "require[] value judgments and important 26 public policy choices that the New York Court of Appeals is 29 O'Mara, 485 F.3d at 698, and 1 better situated than we to make," Am. Buddha, 609 F.3d at 42; 2 accord Bessemer Trust Co. v. Branin, 618 F.3d 76, 93 (2d Cir. 3 2010). 4 positioned than we to weigh who should properly bear the burden 5 under New York law of confirming that coverage exists before 6 issuing a certificate of insurance that purports to evidence such 7 coverage. 8 We think that the New York Court of Appeals is better 9 Third, we may certify if the question is "'determinative' of a claim before us." O'Mara, 485 F.3d at 698 10 (quoting 11 also Prats v. Port Auth. of N.Y. & N.J., 315 F.3d 146, 150 51 (2d 12 Cir. 2002) (certifying "unsettled" question of state law). 13 whether the plaintiffs receive coverage under the Primary Policy, 14 and therefore the extent to which the plaintiffs will be 15 indemnified for their defense in DelPrince's action, rests on 16 resolution of the certified question. 17 N.Y. Comp. Codes R. & Regs. tit. 22, § 500.27(a)); see Here, We therefore certify a question to the New York Court 18 of Appeals and reserve decision on this point pending that 19 Court's action. 20 21 22 23 24 25 26 27 28 29 30 CONCLUSION For the foregoing reasons, we certify the following question to the New York Court of Appeals: In a case brought against an insurer in which a plaintiff seeks a declaration that it is covered under an insurance policy issued by that insurer, does a certificate of insurance issued by an agent of the insurer that states that the policy is in force but also bears language that the certificate is not evidence of coverage, is for informational purposes 30 1 2 3 only, or other similar disclaimers, estop the insurer from denying coverage under the policy? 4 As is our practice, we do not intend to limit the scope of the 5 Court of Appeals' analysis through the formulation of our 6 question, and we invite the Court of Appeals to expand upon or 7 alter this question as it should deem appropriate. 8 Buddha, 609 F.3d at 42 43; Kirschner v. KPMG LLP, 590 F.3d 186, 9 195 (2d Cir. 2009). 10 See Am. Pursuant to New York Court of Appeals Rule 500.17 and 11 United States Court of Appeals for the Second Circuit Rule 27.2, 12 it is hereby ORDERED that the Clerk of this Court transmit to the 13 Clerk of the Court of Appeals of New York this opinion as our 14 certificate, together with a complete set of the briefs, 15 appendix, and record filed in this Court by the parties. 16 direct the parties to bear equally any fees and costs that may be 17 imposed by the New York Court of Appeals in connection with this 18 certification. 19 appeal after disposition of this certification by the New York 20 Court of Appeals. 21 We This panel will retain jurisdiction over the We affirm the district court's grant of summary 22 judgment to the plaintiffs with respect to coverage under the 23 Umbrella Policy. 24 grant of summary judgment to the plaintiffs with respect to 25 coverage under the Primary Policy pending the New York Court of 26 Appeals' decision as to whether to answer the question we We reserve decision as to the district court's 31 1 certify, and if it decides to do so, until its judgment in the 2 matter is final. 32

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