Wm. C. Vick Construction Company v. Great American Insurance Company

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
WM. C. VICK CONSTRUCTION
COMPANY,
Plaintiff-Appellant,
v.
No. 99-1577
GREAT AMERICAN INSURANCE
COMPANY; PENNSYLVANIA NATIONAL
MUTUAL CASUALTY INSURANCE
COMPANY,
Defendants-Appellees.
Appeal from the United States District Court
for the Eastern District of North Carolina, at Raleigh.
W. Earl Britt, Senior District Judge.
(CA-97-692-5-BR)
Argued: April 4, 2000
Decided: April 28, 2000
Before LUTTIG, WILLIAMS, and MOTZ, Circuit Judges.
_________________________________________________________________
Affirmed by unpublished per curiam opinion.
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COUNSEL
ARGUED: James T. Johnson, LEWIS & ROBERTS, P.L.L.C.,
Raleigh, North Carolina, for Appellant. Walter Edgar Brock, Jr.,
YOUNG, MOORE & HENDERSON, P.A., Raleigh, North Carolina,
for Appellee Pennsylvania National; Theodore Blackburn Smyth,

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THOMPSON, SMYTH & CIOFFI, L.L.P., Raleigh, North Carolina,
for Appellee Great American. ON BRIEF: Daniel K. Bryson, A. Gra-
ham Shirley, II, LEWIS & ROBERTS, P.L.L.C., Raleigh, North Car-
olina, for Appellant.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
_________________________________________________________________
OPINION
PER CURIAM:
Wm. C. Vick Construction Company brought this declaratory judg-
ment action against Great American Insurance Company, which
insured Vick from July 1986 through July 1987, and Pennsylvania
National Mutual Casualty Insurance Company, which insured Vick
from July 1987 through July 1994. Vick seeks a declaration that both
the insurers breached their respective duties to defend Vick in an arbi-
tration proceeding and subsequent appeal arising out of a construction
project on which Vick was the general contractor. The district court
adopted the magistrate judge's report and recommendation and
granted summary judgment to the insurers. We affirm.
I.
In 1986, Vick contractually agreed to construct an office building
addition for the North Carolina Farm Bureau Federation. During con-
struction, beginning in January 1987, one of Vick's subcontractors
applied a waterproofing membrane to a portion of the plaza deck. The
membrane leaked and numerous repairs were attempted, but the prob-
lem was not resolved.
In January 1991, the Farm Bureau initiated an arbitration proceed-
ing against Vick. The arbitrator rendered judgment against Vick in the
amount of $90,000, plus attorney's fees and various costs and fees.
Vick appealed, asserting that the arbitrator was unfairly biased against
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it. The trial court refused to vacate the arbitration award, but in 1996
the North Carolina Court of Appeals did vacate the award, and the
Supreme Court of North Carolina denied discretionary review of that
decision.
After being denied indemnification for expenses incurred in the
arbitration claim and appealed by the insurers, Vick initiated this
action in August 1997. The magistrate judge recommended that the
district court grant summary judgment to both insurers. The judge
reasoned that Vick's failure to notify Penn National of the arbitration
claim and award until August 19, 1994, barred recovery against Penn
National for the costs it had incurred in the arbitration proceeding and
subsequent appeal. In his comprehensive memorandum, the judge fur-
ther reasoned inter alia that the arbitration claims brought by the
Farm Bureau against Vick did not constitute "property damage" under
either insurer's policy, and that there had been no"occurrence" within
the meaning of the policies. The district court adopted the magistrate
judge's memorandum and recommendation and granted summary
judgment to the insurers.
II.
After having the benefit of oral argument and carefully reviewing
the parties' briefs, the record, and controlling legal authority, we con-
clude that the magistrate judge correctly resolved the issues before
him, and that the district court properly adopted the magistrate
judge's recommendation. Accordingly, we affirm on the basis of the
reasoning of the magistrate judge. See Wm. C. Vick Construction Co.
v. Pennsylvania National Mutual Casualty Insurance Company, No.
5:97-CV-692-BR(l) (E.D.N.C. Feb. 12, 1999).
AFFIRMED
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