Emcor Group, Inc. v. Great American Insurance Company

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 14-1682
EMCOR GROUP, INC.; THE POOLE AND KENT CORPORATION;
FORTI/POOLE AND KENT LLC; MONUMENTAL INVESTMENT
CORPORATION,
Plaintiffs - Appellants,
v.
GREAT AMERICAN INSURANCE COMPANY,
Defendant - Appellee.
Appeal from the United States District Court for the District of
Maryland, at Baltimore. J. Frederick Motz, Senior District
Judge. (1:12-cv-00142-JFM)
Argued: December 9, 2015 Decided: January 26, 2016
Before WILKINSON, KEENAN, and HARRIS, Circuit Judges.
Affirmed by unpublished per curiam opinion.
ARGUED: Bernard London, LONDON FISCHER LLP, New York, New York,
for Appellants. Michael A. Graziano, ECKERT SEAMANS CHERIN &
MELLOTT LLC, Washington, D.C., for Appellee. ON BRIEF: James
Walsh, James T.H. Deaver, LONDON FISCHER LLP, New York, New
York, for Appellants. F. Joseph Nealon, ECKERT SEAMANS CHERIN &
MELLOTT LLC, Washington, D.C., for Appellee.
Unpublished opinions are not binding precedent in this circuit.

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PER CURIAM:
EMCOR Group, Inc. and three of its subsidiaries
(collectively, EMCOR) brought this action against the Great
American Insurance Company (Great American), which provided
EMCOR with three successive commercial crime insurance policies
between December 1, 2002 and December 1, 2005. The three
policies each provided coverage for certain losses sustained
because of employees’ fraudulent acts. EMCOR contends that the
policy in effect from December 1, 2004 to December 1, 2005 (the
2004 policy), obligated Great American to provide coverage for
EMCOR employees’ fraudulent acts that occurred between December
1, 1999 and December 1, 2003. The district court concluded that
the unambiguous language of the 2004 policy obligated Great
American only to provide coverage for losses sustained after
December 1, 2003. Because we agree that the language of the
2004 policy is unambiguous, we affirm.
I.
The facts at issue are not disputed. At all relevant
times, EMCOR maintained successive commercial crime insurance
policies, which provided coverage for losses sustained as a
result of “employee dishonesty.” From December 1, 1999 until
December 1, 2002, those policies were provided to EMCOR by

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Factory Mutual Insurance Company, which is not affiliated with
Great American.
As noted above, from December 1, 2002 until December 1,
2005, Great American provided EMCOR with three successive crime
insurance policies. At the time one Great American policy
became effective, the immediately prior policy was terminated.
At issue in the present appeal is the scope of coverage afforded
under the 2004 policy.
The 2004 policy provided that the applicable “policy
period” began on December 1, 2004, and ended on December 1,
2005. The policy also stated that, by accepting the terms of
the 2004 policy, EMCOR agreed that the “prior [p]olicy” in
effect from December 1, 2003 to December 1, 2004 (the 2003
policy), was cancelled. The 2004 policy obligated Great
American to pay for the “loss of, and damage to,” any money,
securities, and property resulting directly from “employee
dishonesty.” That coverage provision was limited by Condition
14, which stated that Great American would pay “only for loss
that [EMCOR] sustain[s] through acts committed or events
occurring during the Policy Period” of December 1, 2004 to
December 1, 2005.
Condition 14, however, was “subject to” Condition 10, which
extended coverage as follows:
10. Loss Sustained During Prior Insurance

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a. If you, or any predecessor in interest, sustained
loss during the period of any prior insurance that you
. . . could have recovered under that insurance except
that the time within which to discover loss had
expired, we will pay for it under this insurance,
provided:
(1) this insurance became effective at the time
of cancellation or termination of the prior
insurance; and
(2) this loss would have been covered by this
insurance had it been in effect when the acts or
events causing the loss were committed or occurred.
(Emphasis added.)
In 2005, EMCOR notified Great American of losses of more
than $10 million resulting from fraudulent acts committed by
EMCOR employees between December 1, 1999 and December 1, 2003.1
EMCOR submitted a claim under the 2004 policy for its losses.
Great American refused to pay the claim on the ground that the
claimed losses occurred outside the scope of coverage provided
by the 2004 policy. EMCOR filed suit, alleging that Great
American breached its coverage obligations under the 2004
policy.
Both parties filed partial motions for summary judgment,
asking the district court to determine the extent of the 2004
1 EMCOR originally sought coverage for fraudulent acts
committed up to December 1, 2005. In a separate decision, the
district court determined that EMCOR lacked an evidentiary basis
for its claim that it suffered “loss” between December 1, 2003
and December 1, 2005, and granted partial summary judgment in
favor of Great American. EMCOR does not appeal that decision.

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policy coverage. Great American maintained that it only was
required to cover losses arising from acts that occurred during
the 2004 policy period or the 2003 policy period, to include
only fraudulent acts that occurred after December 1, 2003.
EMCOR argued that Great American was obliged to cover losses
occurring as early as 1999, when Factory Mutual provided EMCOR
with commercial crime insurance. The parties’ arguments were
based on their differing interpretations of the terms “this
insurance” and “any prior insurance” set forth in Condition 10.
In determining the meaning of those terms, the district
court relied on the language used throughout the entire 2004
policy. In particular, although Condition 10 initially provided
that Great American would pay for loss sustained during “any
prior insurance,” that obligation immediately was limited by the
proviso that payment would be made only if “this insurance
became effective at the time of cancellation or termination of
the prior insurance.” (Emphasis added.) Furthermore, under the
heading “Cancellation of Prior Insurance” in the declarations
page, the 2004 policy provided: “By acceptance of this Coverage
Part, you give us notice cancelling prior Policy or Bond Nos.
CRP 524-49-86-01 [the 2003 policy], the cancellation to be
effective at the time [the 2004 policy] becomes effective.”
Reading those provisions together, the district court
concluded that the plain language of the 2004 policy identified

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the 2003 policy as the “prior insurance” referenced in Condition
10. Accordingly, the district court held that the language in
Condition 10 requiring Great American to pay for losses
sustained under “any prior insurance” unambiguously referred
only to the losses EMCOR may have sustained during the 2003
policy period, from December 1, 2003 to December 1, 2004. The
district court therefore granted partial summary judgment in
favor of Great American. This appeal followed.
II.
On appeal, EMCOR argues that the phrase “any prior
insurance” in Condition 10 unambiguously refers to all prior
commercial crime insurance policies that EMCOR retained, even
those provided by Factory Mutual. EMCOR submits that the only
limitation on Great American’s coverage for losses sustained
because of “employee dishonesty” was that EMCOR maintained
continuous commercial crime insurance coverage, so that one
policy period began immediately upon the termination of the
previous policy period. In EMCOR’s view, Great American
therefore is obligated to provide coverage for all of EMCOR’s
losses from acts that occurred as early as 1999, because EMCOR
retained continuous commercial crime insurance from 1999 through
the 2004 policy period.

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EMCOR argues alternatively that the meaning of “any prior
insurance” is ambiguous and therefore this Court should review
extrinsic evidence and resolve the ambiguity against Great
American as the contract drafter. We disagree with EMCOR’s
arguments.
We review a district court’s grant of a motion for summary
judgment de novo. Millenium Inorganic Chem. Ltd. v. Nat’l Fire
Ins. Co. of Pittsburgh, Pa., 744 F.3d 279, 285 (4th Cir. 2014).
In interpreting insurance contracts, we apply the same
principles applicable to any other contract. Mitchell v. AARP
Life Ins. Program, N.Y. Life Ins. Co., 779 A.2d 1061, 1069 (Md.
2001).2 As with any other contract, we begin with the policy’s
plain language. MAMSI Life & Health Ins. Co. v. Callaway, 825
A.2d 995, 1005 (Md. 2003). Courts “analyze the plain language .
. . according to the words and phrases in their ordinary and
accepted meanings as defined by what a reasonably prudent lay
person would understand them to mean.” Kendall v. Nationwide
Ins. Co., 702 A.2d 767, 771 (Md. 1997).
2 EMCOR argues for the first time on appeal that Connecticut
law, rather than the Maryland law applied by the district court,
applies to our interpretation of the 2004 policy. We will not
consider this newly introduced argument. See Muth v. United
States, 1 F.3d 246, 250 (4th Cir. 1993) (“As this court has
repeatedly held, issues raised for the first time on appeal
generally will not be considered.”). Moreover, our decision
would be the same under either Maryland or Connecticut law.

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When the language of an insurance contract is unambiguous,
a court must enforce its terms. Megonnell v. United Serv. Auto.
Ass’n, 796 A.2d 758, 772 (Md. 2002). “A contract is not
ambiguous merely because the parties do not agree as to its
meaning.” Floyd v. Mayor & City Council of Balt., 946 A.2d 15,
48 (Md. Ct. Spec. App. 2008). Rather, an insurance policy term
only is “ambiguous if, to a reasonably prudent person, the term
is susceptible to more than one meaning.” Cole v. State Farm
Mut. Ins. Co., 753 A.2d 533, 537 (Md. 2000).
We agree with the district court that the language at issue
in the 2004 policy is unambiguous. Condition 10 obligated Great
American to provide coverage for losses based on acts occurring
during “any prior insurance” period, but only if “this insurance
became effective at the time of cancellation or termination of
the prior insurance.” Nothing in that limiting language
suggests that “prior insurance” means any and all commercial
crime insurance EMCOR held for all time, regardless which
insurer provided coverage or when such coverage was provided.
Nor can the limiting clause in Condition 10 be read to suggest
that “this insurance” refers collectively to all of Great
American’s insurance policies, as opposed solely to the 2004
policy. The declarations page of the 2004 policy makes clear
that the 2003 policy was the only “prior insurance” cancelled at
the time that the 2004 insurance became effective. Accordingly,

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the language of Condition 10 regarding “prior insurance”
unambiguously refers only to the 2003 policy, while the term
“this insurance” refers only to the 2004 policy.
Our conclusion is not altered by the general dictionary
definitions advanced by EMCOR of the term “insurance” as the
“state of being insured,” such that the use of “this insurance”
in Condition 10 would include all commercial crime insurance
policies EMCOR has had. Within the four corners of the 2004
policy, the phrase “this insurance” unambiguously refers only to
the 2004 policy. We will not read into the contract EMCOR’s
tortured interpretation of the 2004 policy language.
Additionally, because we conclude that the language of the 2004
policy is unambiguous, we do not address EMCOR’s alternative
arguments regarding the proper approach for resolving contract
ambiguity.
III.
We hold that the 2004 policy extended coverage only to
losses sustained as a result of fraudulent conduct occurring
during the 2003 and 2004 policy periods. We therefore affirm
the judgment of the district court.
AFFIRMED

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