Suffolk Constr. v. Reliance Ins. (majority)Annotate this Case
In 1997, Suffolk Construction Company entered into a contract with the University of Connecticut (“UConn”) for the construction of several buildings on UConn’s campus. UConn secured insurance policies from Reliance Insurance Company for the Project, naming Suffolk (and other contractors) as an insured. Suffolk completed the work in January 2001. The Reliance insurance policy was extended until January 2004. However, in late 2001, however, Reliance went into liquidation. In 2013 and 2014, UConn complained of defects in the construction that resulted in damage to its buildings. UConn initiated legal proceedings against Suffolk and other contractors. In 2016, Suffolk submitted a proof of claim to the Insurance Commissioner of Pennsylvania, as the statutory liquidator of Reliance. At issue before the Pennsylvania Supreme Court in this case involved the Pennsylvania Commonwealth Court's interpretation of certain contract language using Connecticut law. The Commonwealth Court found that the language of the contract was clear and unambiguous, thus precluding consideration of extrinsic evidence of the parties’ intent. The Supreme Court determined, however, a Settlement Agreement between the parties could have been construed as nothing more than a mutual general release between UConn and Suffolk: "The ambiguity stems not from Suffolk’s 'subjective perception' of the terms of the Settlement Agreement, but from the terms of the agreement itself, as the language releasing claims for 'insurance coverage' and 'indemnification' does not have a single, clear meaning." As such, the Commonwealth Court erred by failing to consider extrinsic evidence, outside of the terms of the Settlement Agreement, to discern the parties’ intent. The Supreme Court therefore vacated the Commonwealth Court decision and remanded for further proceedings.