ECB USA, Inc. v. Chubb Insurance Company of New Jersey
U.S. Court of Appeals for the Eleventh Circuit
ECB USA, Inc. v. Chubb Insurance Company of New Jersey, 109 F.4th 1367 (11th Cir. 2024)
ECB USA, Inc. v. Chubb Insurance Company of New Jersey
Opinion
USCA11 Case: 22-10811 Document: 64-1 Date Filed: 08/01/2024 Page: 1 of 28
[PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 22-10811
____________________
ECB USA, INC.,
a Florida Corporation,
ATLANTIC VENTURES CORP.,
a Florida Corporation,
G.I.E. C2B,
a French business entity, as assignees
of Constantin Associations LLP,
a New York limited liability partnership,
CONSTANTIN ASSOCIATES LLP,
Plaintiffs-Counter
Defendants-Appellants,
versus
CHUBB INSURANCE COMPANY OF
NEW JERSEY,
a New Jersey insurance company
USCA11 Case: 22-10811 Document: 64-1 Date Filed: 08/01/2024 Page: 2 of 28
2 Opinion of the Court 22-10811
corporation,
EXECUTIVE RISK INDEMNITY, INC.,
a Delaware Insurance corporation,
Defendants-Counter
Claimants-Appellees.
____________________
Appeal from the United States District Court
for the Southern District of Florida
D.C. Docket No. 1:20-cv-20569-RNS
____________________
Before JORDAN, BRASHER, and ABUDU, Circuit Judges.
BRASHER, Circuit Judge:
This case comes down to grammar and canons of construc-
tion. Chubb issued an insurance policy that covers claims against
Constantin arising from “services directed toward expertise in
banking finance, accounting, risk and systems analysis, design and
implementation, asset recovery and strategy planning for financial
institutions.” Constantin performed an audit for a food services
company; the audit went wrong and led to liability. Constantin
transferred its rights under the policy to the ECB parties. The ques-
tion for us is whether “for financial institutions” limits “account-
ing” such that there is no coverage under the policy for the audit of
a food services company.
USCA11 Case: 22-10811 Document: 64-1 Date Filed: 08/01/2024 Page: 3 of 28
22-10811 Opinion of the Court 3
Chubb and its related parties argue that the phrase “for fi-
nancial institutions” applies to everything in the list; ECB and its
related parties argue that “for financial institutions” applies only to
the last phrase in the series of covered services. We agree with
Chubb. The series-qualifier canon of interpretation suggests that a
postpositive modifier like “for financial institutions” modifies all
the terms in a list of parallel items. Chubb’s position is also sup-
ported by the surrounding language of the policy. Although ECB
argues that the last-antecedent canon and contra proferentem sup-
port its position, those canons are inapposite. Because the account-
ing at issue was not performed for a financial institution, the claim
is not covered by the professional services insurance contract that
Chubb issued. Therefore, we affirm the district court’s grant of
summary judgment to Chubb.
I.
Constantin is a sophisticated commercial entity that pro-
vides accounting services. In 2001, Constantin Control Associates
LP acquired professional services insurance from Executive Risk
Indemnity, Inc. (“ERI”), a subsidiary of Chubb Limited—the ulti-
mate parent company. Constantin’s application for insurance cov-
erage stated that it wanted insurance for “management consulting
for the financial community.” Dist. Ct. Doc. 155-17 at 2. Constan-
tin received professional liability insurance, which it renewed with
ERI over the years. The last policy period with ERI ended in De-
cember 2017. In December 2017, Constantin renewed the policy
USCA11 Case: 22-10811 Document: 64-1 Date Filed: 08/01/2024 Page: 4 of 28
4 Opinion of the Court 22-10811
for the 2017–18 policy period with Chubb Insurance Company of
New Jersey, another subsidiary of Chubb Limited.
For the relevant contract years of 2016–17 and 2017–18,
Constantin’s contract included Constantin Associates LLP as an in-
sured party either by express incorporation or through definitions
involving their corporate relationship. Also in both years, Constan-
tin’s “Professional Services” liability insurance covered services
Constantin performed for others for a fee that were listed in a spe-
cific cross-referenced list. The relevant cross-reference in the insur-
ance policies insured Wrongful Acts—which the contracts define—
in the performance of (1) “Computer Consulting including com-
puter system architecture and design”; (2) “Temporary Placement
Agency Services”; and, critically, (3) “Management consulting ser-
vices.” Dist. Ct. Doc. 155-16 at 6 (2016–17 Policy); Dist. Ct.
Doc. 155-37 at 23 (2017–18 Policy).
The contracts defined “[m]anagement consulting services
[to] mean[] services directed toward expertise in banking finance,
accounting, risk and systems analysis, design and implementation,
asset recovery and strategy planning for financial institutions.”
Dist. Ct. Doc. 155-16 at 6; Dist. Ct. Doc. 155-37 at 23.
Constantin performed an audit for Schratter Foods Incorpo-
rated. Schratter was a food company, not a financial institution; so
the parties do not dispute that Constantin’s provision of accounting
services was not to a “financial institution.” The audit allegedly did
not go well. After the audit, the ECB parties—the plaintiffs here—
sued Constantin for alleged wrongdoing in the professional audit
USCA11 Case: 22-10811 Document: 64-1 Date Filed: 08/01/2024 Page: 5 of 28
22-10811 Opinion of the Court 5
of Schratter’s financial statements in connection with the ECB par-
ties’ acquisition of Schratter. Constantin settled and assigned its
rights against ERI and Chubb Insurance Company of New Jersey
to the ECB parties.
In this case, the ECB parties sued to enforce Constantin’s as-
signed contractual rights to the insurance contract, alleging a
breach of contract based on a duty to defend or indemnify in the
earlier, settled lawsuit. After arguing that New Jersey law applies,
ECB argued in its summary judgment briefing that “for financial
institutions” did not apply to “accounting” because of the absence
of a comma before “for financial institutions.” This was explicitly
an argument about how Chubb did not win under the series-qual-
ifier canon.
Applying New Jersey law, the district court granted the
Chubb parties summary judgment in an omnibus order. The dis-
trict court decided that—contrary to Chubb’s argument—the au-
diting of financial statements was a “service[] directed toward ex-
pertise in . . . accounting.” This meant that auditing could be a type
of covered activity under the professional services insurance con-
tract. But the district court decided that Chubb nonetheless won at
the summary judgment stage because the accounting services must
be for a financial institution to be covered by the insurance con-
tract. The district court also granted reformation of the 2017–18
contract to ECB so that it included Constantin as a named insured,
among other decisions not challenged on appeal.
USCA11 Case: 22-10811 Document: 64-1 Date Filed: 08/01/2024 Page: 6 of 28
6 Opinion of the Court 22-10811
The Chubb parties moved to amend the order, and the ECB
parties requested reconsideration. At reconsideration, ECB raised
the last-antecedent and contra proferentem canons for the first time,
albeit without calling it the contra proferentem canon.
The district court granted the Chubb parties’ motion to
amend the order but denied the ECB parties’ motion for reconsid-
eration, stating that ECB’s new canon arguments had been waived
by not being made before the motion for reconsideration and that,
alternatively, they did not convince the district court that reconsid-
eration was warranted. The district court then entered an amended
omnibus order on February 25, 2022, clarifying the judgment of
reformation in favor of the ECB parties. Chubb does not challenge
the reformation here, and the summary judgment decisions on ap-
peal did not change in the amended omnibus order. The district
court then entered its judgment.
The ECB parties appealed.
II.
Before we can assess the merits, we must resolve two pre-
liminary issues: our standard of review and the district court’s sub-
ject matter jurisdiction. We conclude that our review is de novo and
that the district court had diversity jurisdiction over this dispute.
A.
We analyze de novo all the issues in this appeal. See Sweet Pea
Marine, Ltd. v. APJ Marine, Inc., 411 F.3d 1242, 1247 (11th Cir. 2005)
(diversity jurisdiction); Showan v. Pressdee, 922 F.3d 1211, 1223 (11th
USCA11 Case: 22-10811 Document: 64-1 Date Filed: 08/01/2024 Page: 7 of 28
22-10811 Opinion of the Court 7
Cir. 2019) (state law legal questions); Yusko v. NCL (Bahamas), Ltd.,
4 F.4th 1164, 1167 (11th Cir. 2021) (summary judgment). Chubb
argues that we should apply an abuse of discretion standard on two
points, but we disagree.
First, we do not defer to the district court’s conclusion that
ECB purportedly waived its New Jersey law arguments when we
are assessing waiver for appellate purposes. Although we review
for an abuse of discretion a district court’s determination that a
party waived an affirmative defense by not making it at the appro-
priate time or waived apportionment of damages by making an in-
consistent argument, whether a party has waived an issue for pur-
poses of appeal is a matter that we must assess de novo. Compare
Proctor v. Fluor Enters., Inc., 494 F.3d 1337, 1350 n.9 (11th Cir. 2007)
(affirmative defense), Smith v. R.J. Reynolds Tobacco Co., 880 F.3d
1272, 1280–82 (11th Cir. 2018) (apportionment of damages), and
Searcy v. R.J. Reynolds Tobacco Co., 902 F.3d 1342, 1359 (11th Cir.
2018) (apportionment of damages), with United States v. Riggs, 967
F.2d 561, 564–65 (11th Cir. 1992) (analyzing appellate waiver our-
selves when the party failed to make an argument in the district
court), and Am. Builders Ins. Co. v. Southern-Owners Ins. Co., 71 F.4th
847, 856 n.1 (11th Cir. 2023) (same).
Second, the district court’s denial of ECB’s motion for recon-
sideration does not change the standard of review we apply to its
decision to grant summary judgment. When we review a disposi-
tion after a denial of a motion for reconsideration, we review the
original disposition itself under whatever standard of review we
USCA11 Case: 22-10811 Document: 64-1 Date Filed: 08/01/2024 Page: 8 of 28
8 Opinion of the Court 22-10811
would normally use. See Blackburn v. Shire US Inc., 18 F.4th 1310,
1317 (11th Cir. 2021) (using an abuse of discretion standard when
reviewing a denial of leave to amend under Federal Rule of Civil
Procedure 15(a)(2) because that is the Rule 15(a)(2) standard, with-
out regard to the denial of the motion for reconsideration). To re-
verse a judgment, an appellant needs to establish an error in the
judgment, not an error in the judgment plus an error in the district
court’s denial of a motion to reconsider that judgment. Here, we
address the challenged summary judgment order without regard
to the unchallenged denial of the motion for reconsideration. See
Gulisano v. Burlington, Inc., 34 F.4th 935, 941–45 (11th Cir. 2022) (af-
firming an initial sanctions order despite separately deeming aban-
doned a challenge to the subsequent denial of a motion for recon-
sideration of that sanctions order).
B.
We have appellate jurisdiction over the district court’s final
judgment under 28 U.S.C. § 1291. But before addressing the merits,
we must first satisfy ourselves that the district court had subject
matter jurisdiction. We raised this issue sua sponte, the parties
briefed the issue, and, ultimately, the plaintiffs amended the com-
plaint. The parties argue that the district court had diversity juris-
diction under 28 U.S.C. § 1332(a). We agree.
For diversity jurisdiction, the citizenship of all parties must
be completely diverse, and the amount in controversy must exceed
$75,000. See Underwriters at Lloyd’s, London v. Osting-Schwinn, 613
F.3d 1079, 1085 (11th Cir. 2010) (citing Strawbridge v. Curtiss, 7 U.S.
USCA11 Case: 22-10811 Document: 64-1 Date Filed: 08/01/2024 Page: 9 of 28
22-10811 Opinion of the Court 9
(3 Cranch) 267, 267 (1806); Palmer v. Hosp. Auth. of Randolph Cnty.,
22 F.3d 1559, 1564(11th Cir. 1994); Tardan v. Cal. Oil Co.,323 F.2d 717
, 721–22 (5th Cir. 1963);28 U.S.C. § 1332
(a)). There is no mean-
ingful question that the matter in controversy is over $75,000. But
the face of the pleadings originally did not disclose the citizenship
of all the parties.
A corporation is a citizen of its state or foreign country of
incorporation and principal place of business. See 28 U.S.C.
§ 1332(c)(1). But we determine diversity jurisdiction for partner-
ships and nearly all other non-corporate entities based on the mem-
bers’ citizenships. Underwriters at Lloyd’s, London, 613 F.3d at 1086
(citing Puerto Rico v. Russell & Co., 288 U.S. 476, 480 (1933)); see also
Schiavone Constr. Co. v. City of New York, 99 F.3d 546, 548 (2d Cir.
1996) (joint ventures); Rolling Greens MHP, L.P. v. Comcast SCH Hold-
ings L.L.C., 374 F.3d 1020, 1022 (11th Cir. 2004) (LLCs).
We begin with the plaintiffs. Atlantic Ventures Corp. and
ECB USA, Inc. are Florida corporations with their principal places
of business in Florida. G.I.E. C2B (“C2B”) is a Groupement d’Inte-
ret Economique under French law, which resembles a joint ven-
ture (a type of partnership). See Union Carbide Corp. v. Exxon Corp.,
77 F.3d 677, 679(2d Cir. 1996); Phillips v. Kaplus,764 F.2d 807, 810
(11th Cir. 1985) (“joint venture partnership”). C2B has twenty-nine
shareholders: three are Florida corporations with their principal
places of business in Florida, nineteen are French corporations with
their principal places of business in France, and seven are French
LLCs (which are entirely made up of French citizen individuals or
USCA11 Case: 22-10811 Document: 64-1 Date Filed: 08/01/2024 Page: 10 of 28
10 Opinion of the Court 22-10811
French corporations with a principal place of business in France).
In sum, C2B’s members are citizens of France and Florida. Thus,
the plaintiffs are citizens of France and Florida. 1
Defendant Chubb Insurance Company of New Jersey is a
New Jersey corporation with its principal place of business in New
Jersey, so it is a citizen of New Jersey. Defendant ERI is a Delaware
corporation with its principal place of business in New Jersey, so it
is a citizen of Delaware and New Jersey. Thus, the defendants are
citizens of New Jersey and Delaware.
Because the plaintiffs are citizens of France and Florida, and
the defendants are citizens of Delaware and New Jersey, there is
complete diversity. Therefore, we agree with the parties that the
district court had diversity jurisdiction under 28 U.S.C. § 1332(a).
III.
Having resolved the standard of review and jurisdiction, we
now turn to the merits. Chubb insured Constantin against liability
arising from “services directed toward expertise in banking finance,
accounting, risk and systems analysis, design and implementation,
asset recovery and strategy planning for financial institutions.”
1 Constantin Associates, LLP was substituted and eliminated as a party to the
Fourth Amended Complaint under Federal Rule of Civil Procedure 17(a)(3).
We construe the Fifth Amended Complaint—amended at our order—to con-
tain the same party substitutions. Rule 17(a)(3) provides that “[a]fter . . . sub-
stitution, the action proceeds as if it had been originally commenced by the
real party in interest.” Fed. R. Civ. P. 17(a)(3). Therefore, we ignore Constan-
tin’s citizenship in our complete diversity analysis.
USCA11 Case: 22-10811 Document: 64-1 Date Filed: 08/01/2024 Page: 11 of 28
22-10811 Opinion of the Court 11
Constantin performed an allegedly negligent audit for a food ser-
vice company—not a financial institution. Whether the policy pro-
vides coverage turns on whether the phrase “for financial institu-
tions” modifies “accounting.”
The parties agree that New Jersey law governs our interpre-
tation of the policy, but there is nothing unusual or idiosyncratic
about New Jersey law as it pertains to principles of contract inter-
pretation. Like most state courts, the Supreme Court of New Jersey
has held that “[i]n attempting to discern the meaning of a provision
in an insurance contract, the plain language is ordinarily the most
direct route.” Chubb Custom Ins. Co. v. Prudential Ins. Co. of Am., 948
A.2d 1285, 1289(N.J. 2008) (citing Zacarias v. Allstate Ins. Co.,775 A.2d 1262, 1264
(N.J. 2001)). “If the language is clear, that is the end
of the inquiry. Indeed, in the absence of an ambiguity, a court
should not ‘engage in a strained construction to support the impo-
sition of liability’ or write a better policy for the insured than the
one purchased.” Id. (citation omitted) (quoting Progressive Cas. Ins.
Co. v. Hurley, 765 A.2d 195, 202 (N.J. 2001)).
The New Jersey courts have also recognized that linguistic
canons of construction may help a court determine the plain mean-
ing of a text. See, e.g., Gudgeon v. Ocean Cnty., 342 A.2d 553, 555 (N.J.
Super. Ct. App. Div. 1975) (describing grammar analysis using the
syntactic canons as merely “consideration of principles of gram-
matical construction”). The Supreme Court of New Jersey has long
applied the last-antecedent canon as it is commonly understood.
See State v. Gelman, 950 A.2d 879, 884 (N.J. 2008) (“[T]he doctrine
USCA11 Case: 22-10811 Document: 64-1 Date Filed: 08/01/2024 Page: 12 of 28
12 Opinion of the Court 22-10811
of the last antecedent . . . holds that, unless a contrary intention
otherwise appears, a qualifying phrase within a statute refers to the
last antecedent phrase.” (citing 2A Norman J. Singer & Shambie
Singer, Sutherland Statutes and Statutory Construction § 47.33 (7th ed.
2007))). And, although the Supreme Court of New Jersey has not
itself discussed the series-qualifier canon, other New Jersey appel-
late courts have relied on that canon. See In re Proposed Constr. of
Compressor Station (CS327), 302 A.3d 82, 89 n.10 (N.J. Super. Ct.
App. Div. 2023) (quoting Antonin Scalia & Brian A. Garner, Reading
Law: The Interpretation of Legal Texts 147–48 (2012)); see also id. at 89–
90.
Finally, New Jersey courts recognize contra proferentem. This
substantive canon provides that courts should read an ambiguous
contract to have the meaning that favors the non-drafting party,
which is generally the insured party with an insurance contract. See
Oxford Realty Grp. Cedar v. Travelers Excess & Surplus Lines Co., 160
A.3d 1263, 1270 (N.J. 2017) (“Ordinarily, our courts construe insur-
ance contract ambiguities in favor of the insured via the doctrine
of contra proferentem.” (citing Progressive Cas. Ins. Co., 765 A.2d at
201–02)). Effectively, contra proferentem gives weight to one party’s
interpretation if there is a true ambiguity.
Chubb argues that ECB cannot rely on the last-antecedent
or contra proferentem canons on appeal because it first raised these
canons in its motion for reconsideration under Federal Rule of Civil
Procedure 59—which the district court denied in part because the
canons had not previously been raised—and because ECB did not
USCA11 Case: 22-10811 Document: 64-1 Date Filed: 08/01/2024 Page: 13 of 28
22-10811 Opinion of the Court 13
challenge the district court’s denial of its motion for reconsidera-
tion on appeal. We disagree. As we have already explained, we are
reviewing the district court’s earlier summary judgment decision,
not its decision on ECB’s motion for reconsideration. In denying
ECB’s motion for reconsideration, the district court properly noted
that a Rule 59 motion is usually not a proper vehicle to raise new
arguments that could have been raised prior to the entry of judg-
ment. See Michael Linet, Inc. v. Village of Wellington, 408 F.3d 757, 763
(11th Cir. 2005). But the district court’s ruling on ECB’s Rule 59
motion does not control what arguments ECB may make on ap-
peal.
For purposes of appeal, ECB may raise the canons to support
its construction of the policy. Litigants can waive or forfeit posi-
tions or issues through their litigation conduct in the district court
but not authorities or arguments. See Nelson v. Adams USA, Inc., 529
U.S. 460, 469–70 (2000); Yee v. City of Escondido,503 U.S. 519, 534
(1992); Hi-Tech Pharms., Inc. v. HBS Int’l Corp., 910 F.3d 1186, 1194
(11th Cir. 2018); Black v. Wigington, 811 F.3d 1259, 1268 (11th Cir.
2016). So a party cannot usually argue that a legal text should be
read to mean something different on appeal than what it argued for
below (a new position) or raise a new legal ground as the reason it
should win (a new issue). But a party on appeal can always cite a
new authority—such as the canons of construction—in favor of
reading a legal text to mean what the party advocated for below.
Here, of course, ECB has consistently argued that the policy lan-
guage covers “accounting” consulting for businesses in any indus-
try, notwithstanding the phrase “for financial institutions.” The
USCA11 Case: 22-10811 Document: 64-1 Date Filed: 08/01/2024 Page: 14 of 28
14 Opinion of the Court 22-10811
canons merely provide additional authority to support that posi-
tion.
Although our caselaw has sometimes muddied the line be-
tween an issue (which can be waived or forfeited) and an argument
(which cannot be), we are nowhere close to the line here. A party
may always rely on a canon of construction to support the same
interpretation of a legal document that the party advanced in the
district court. A party can no more waive or forfeit the canons for
appellate purposes than it can waive or forfeit the existence of a
precedent or the words of a statute. See United States v. Dawson, 64
F.4th 1227, 1239 (11th Cir. 2023) (“Indeed, a party cannot waive
lenity any more than it can waive the plain meaning of a word or
the canon of noscitur a sociis.”). So even if ECB missed its chance to
cite these canons to the district court, ECB did not waive or forfeit
anything for purposes of appeal.
Against this backdrop, ECB argues that the policy covers all
accounting services, and Chubb argues that the policy covers only
accounting services for financial institutions. Chubb contends that
its position is supported by the series-qualifier canon and the sur-
rounding language in the agreement. ECB says that its position is
supported by the last-antecedent canon. To the extent the language
is ambiguous, ECB says that the principle of contra proferentem
means we must resolve any ambiguities in its favor. We think
Chubb has the better argument in all respects.
USCA11 Case: 22-10811 Document: 64-1 Date Filed: 08/01/2024 Page: 15 of 28
22-10811 Opinion of the Court 15
A.
We’ll start with the plain language of the agreement. The
object in contract interpretation is to identify the intent of the par-
ties, and the best evidence of the intent is the language of the agree-
ment itself. “The canons of construction often ‘play a prominent
role’ in [interpreting a text] . . . , serving as ‘useful tools’ to discern
th[e] ordinary meaning.” Heyman v. Cooper, 31 F.4th 1315, 1319
(11th Cir. 2022) (quoting Facebook, Inc. v. Duguid, 592 U.S. 395, 410
(2021) (Alito, J., concurring in the judgment)). The parties here rely
extensively—almost exclusively—on canons of interpretation as
evidence of plain meaning. So that is where we will turn.
1.
When a “provision includes a list of nouns followed by a
modifier,” the parties usually invoke two canons: the last-anteced-
ent canon and the series-qualifier canon. Id. And that is what
Chubb and ECB have done here.
The rule of the last antecedent in its purest form provides
that “[a] pronoun, relative pronoun, or demonstrative adjective
generally refers to the nearest reasonable antecedent.” Scalia &
Garner, supra, at 144. In grammar, an “antecedent” is “a substantive
word, phrase, or clause whose denotation is referred to by a pro-
noun that typically follows the substantive [word] (such as John in
‘Mary saw John and called to him’).” Antecedent, Merriam-Webster,
https://perma.cc/4896-M68J. “The last antecedent is the last
word, phrase, or clause that can be made an antecedent without
USCA11 Case: 22-10811 Document: 64-1 Date Filed: 08/01/2024 Page: 16 of 28
16 Opinion of the Court 22-10811
impairing the meaning of the sentence.” Kamienski v. State, Dep’t of
Treasury, 169 A.3d 493, 505 n.11 (N.J. Super. Ct. App. Div. 2017)
(internal quotation marks omitted) (quoting 2A Norman J. Singer
& Shambie Singer, Sutherland Statutes and Statutory Construction
§ 47.33 (7th ed., rev. 2014)). Unsurprisingly, ECB urges us to follow
that canon here, treating “asset recovery and strategy planning” as
the last antecedent—in a loose sense—of “for financial institu-
tions.”
The series-qualifier canon, on the other hand, provides that,
“[w]hen there is a straightforward, parallel construction that in-
volves all nouns or verbs in a series, a prepositive or postpositive
modifier normally applies to the entire series.” Scalia & Garner, su-
pra, at 147. It reflects the unremarkable convention that “[w]hen
several words are followed by a clause [that] [] is applicable as much
to the first and other words as to the last, the natural construction
of the language demands that the clause be read as applicable to
all.” Paroline v. United States, 572 U.S. 434, 447 (2014) (quoting Porto
Rico Ry., Light & Power Co. v. Mor, 253 U.S. 345, 348 (1920)). Unsur-
prisingly, Chubb urges us to apply the series-qualifier canon—treat-
ing “for financial institutions” as an adjective phrase that applies to
each preceding noun in the series, including “accounting.”
These two canons are sometimes referred to as “competing”
because they can both apply to words and phrases that come at the
end of a sentence. See Heyman, 31 F.4th at 1319. But they are more
accurately viewed as solving for different problems.
USCA11 Case: 22-10811 Document: 64-1 Date Filed: 08/01/2024 Page: 17 of 28
22-10811 Opinion of the Court 17
The series-qualifier canon helps us understand the meaning
of items in a list with a parallel construction that are modified by
an adjective, adverb, or qualifying phrase. The paradigmatic case
for the series-qualifier canon is “[a] state statute allow[ing] medical
professionals access to certain hospital records if they [are] ‘request-
ing or seeking through discovery data, information, or records re-
lating to their medical staff privileges.” Scalia & Garner, supra, at
149 (citing Amaral v. Saint Cloud Hosp., 598 N.W.2d 379 (Minn.
1999)). There are two ways to read “through discovery” in this stat-
ute. It either modifies both requesting and seeking or only seeking.
The leading treatise on the canons—Scalia and Garner—explains
that the Minnesota Supreme Court correctly determined that
“through discovery” modifies both terms. See id. at 150 (citing Am-
aral, 598 N.W.2d at 388).
The last-antecedent canon, on the other hand, is generally
used to help us understand to what a pronoun, relative pronoun,
or demonstrative adjective is referring. These are all words or
phrases that act as shorthand or substitutes for something else—
such as “she,” “that kind of activity,” or “such person.” See Pronoun,
Merriam-Webster, https://perma.cc/AW4D-5692; Scalia & Gar-
ner, supra, at 145 (relative pronouns); Demonstrative Adjectives, The
Mayfield Handbook of Technical & Scientific Writing,
https://perma.cc/TR99-XBHH. The paradigmatic example of this
canon is in Article II of the U.S. Constitution. It states that “In Case
of the Removal of the President from Office, or of his Death, Res-
ignation or Inability to discharge the Powers and Duties of the said
Office, the Same shall devolve on the Vice President.” U.S. Const.
USCA11 Case: 22-10811 Document: 64-1 Date Filed: 08/01/2024 Page: 18 of 28
18 Opinion of the Court 22-10811
art. II, § 1, cl. 6, amended by U.S. Const. amend. XXV. What is “the
Same” that devolves onto the Vice President: “the Powers and Du-
ties” of the President or the “Office” of President? The last-anteced-
ent canon resolves this issue in favor of office being the nearest rea-
sonable antecedent of same. See Scalia and Garner, supra, at 144.
To be clear, courts have gone further and applied the last-
antecedent canon to other parts of speech when the text and con-
text reinforce that reading. That is, some have recognized that, in
addition to pronouns and the like, “[r]eferential and qualifying
words and phrases, where no contrary intention appears, refer
solely to the last antecedent.” 2A Norman J. Singer & Shambie
Singer, Sutherland Statutes and Statutory Construction § 47.33 (7th ed.
2007) (collecting cases); see also, e.g., Lockhart v. United States, 577
U.S. 347, 350–52 (2016); Morella v. Grand Union/N.J. Self-Insurers
Guar. Ass’n, 917 A.2d 826, 831 (N.J. Super. Ct. App. Div. 2007), aff’d
sub nom. Morella v. Grand Union Co./N.J. Self-Insurers Guar. Ass’n, 939
A.2d 226 (N.J. 2008). When applying this canon beyond pronouns
and related words, “it is more accurate . . . to call it the nearest-
reasonable-referent canon” because, “[s]trictly speaking, only pro-
nouns have antecedents.” Scalia & Ganer, supra, at 152 (emphasis
omitted); see also Ray v. McCullough Payne & Haan, LLC, 838 F.3d
1107, 1111 (11th Cir. 2016). But the result is the same: this principle
suggests that “adjectives, adverbs, and adverbial or adjectival
phrases” normally modify the closest reasonable noun or verb,
“and it applies not just to words that precede the modifier, but also
to words that follow it.” Scalia & Garner, supra, at 152. But that
presumption does not apply when the nouns or verbs are in a
USCA11 Case: 22-10811 Document: 64-1 Date Filed: 08/01/2024 Page: 19 of 28
22-10811 Opinion of the Court 19
parallel series. See id. (“When the syntax involves something other
than a parallel series of nouns or verbs, a prepositive or postpositive
modifier normally applies only to the nearest reasonable referent.”
(emphasis added)).
Of course, all these canons—including the last-antecedent
and nearest-reasonable-referent canons—can be defeated by other
indicia of meaning because they are just one tool of textual analysis.
See Lockhart, 577 U.S. at 352 (“Of course, as with any canon of stat-
utory interpretation, the rule of the last antecedent ‘is not an abso-
lute and can assuredly be overcome by other indicia of meaning.’”
(quoting Barnhart v. Thomas, 540 U.S. 20, 26(2003))); Gelman,950 A.2d at 884
(“[U]nless a contrary intention otherwise appears, a quali-
fying phrase within a statute refers to the last antecedent phrase.”
(emphasis added)). Indeed, we have explained that “the canons are
not rules of interpretation in any strict sense.” Heyman, 31 F.4th at
1319 (internal quotation marks omitted) (quoting Scalia & Garner,
supra, at 51). They are just rules of thumb that reflect common
grammatical presumptions. See id.
2.
Having explained the applicable canons, we turn to the meat
of the parties’ dispute: Does “for financial institutions” modify “ac-
counting” in the phrase “services directed toward expertise in bank-
ing finance, accounting, risk and systems analysis, design and im-
plementation, asset recovery and strategy planning for financial in-
stitutions”? ECB argues that we should apply the last-antecedent
canon (or, more accurately, the nearest-reasonable-referent canon)
USCA11 Case: 22-10811 Document: 64-1 Date Filed: 08/01/2024 Page: 20 of 28
20 Opinion of the Court 22-10811
and hold that “for financial institutions” modifies only “asset recov-
ery and strategy planning.” Chubb argues that we should apply the
series-qualifier canon and construe “for financial institutions” to
modify all the items in the list, including “accounting.”
We believe that, as between the parties’ two ways of under-
standing the text, the better reading is provided by the series-qual-
ifier canon. The key to understanding any text—and to intelligently
applying the canons—is “logic, linguistics, and common sense.” Id.
at 1322. Considering this phrase in context, the best reading of the
policy language is that it covers “services directed toward expertise
in . . . accounting . . . for financial institutions.”
We believe this understanding is better for three reasons.
First, the relevant phrase here involves none of the parts of
speech to which the last-antecedent canon is most clearly useful.
The phrase “for financial institutions” isn’t standing in for another
phrase. It’s not a pronoun like “she” or “it,” a relative pronoun like
“that” in certain sentences, or a demonstrative adjective like “such”
or “these.” The canons are useful because they reflect “presump-
tions about what an intelligently produced text conveys.” Id. at
1319 (quoting Scalia & Garner, supra, at 51). But we are outside the
heartland of the last-antecedent canon’s most fundamental pre-
sumption—that a pronoun or other stand-in refers back to the clos-
est noun.
Of course, the last-antecedent principle goes beyond pro-
nouns, but even this more robust version of the principle as re-
flected in the nearest-reasonable-referent canon doesn’t do much
USCA11 Case: 22-10811 Document: 64-1 Date Filed: 08/01/2024 Page: 21 of 28
22-10811 Opinion of the Court 21
work here. The closest referent to “for financial institutions” in the
contract is “strategy planning”—“banking finance, accounting, risk
and systems analysis, design and implementation, asset recovery
and strategy planning for financial institutions.” But ECB concedes
that, at the very least, the phrase “for financial institutions” applies
to “asset recovery” too. That is, ECB concedes that the phrase ap-
plies to more than the nearest reasonable referent.
ECB’s concession is well taken. By conceding that “for finan-
cial institutions” cannot apply to only “strategy planning,” ECB rec-
ognizes that “asset recovery and strategy planning” are parallel
terms. And no version of the last-antecedent canon or nearest-rea-
sonable-referent canon applies when the syntax involves “a parallel
series of nouns or verbs.” Scalia & Garner, supra, at 152. In light of
its concession, ECB is not really arguing that the last-antecedent
canon or nearest-reasonable-referent canon solves the interpretive
problem here. Instead, it is arguing that we should apply a limited
version of the series-qualifier canon—viewing “asset recovery and
strategy planning” as a series that is separate from the rest of the
nouns in the phrase.
Second, as indicated by ECB’s concession, we are within the
heartland of the series-qualifier canon. To start, the parts of speech
to which the series-qualifier canon applies are present here. “When
there is a straightforward, parallel construction that involves all
nouns or verbs in a series, a prepositive or postpositive modifier
normally applies to the entire series.” Id. at 147. Here, we have a
parallel construction in a series that is followed by a postpositive
USCA11 Case: 22-10811 Document: 64-1 Date Filed: 08/01/2024 Page: 22 of 28
22 Opinion of the Court 22-10811
qualifier—“for financial institutions.” The contract has a list of
nouns separated only by commas, with no additional words like
prepositions, articles, or conjunctions within the middle of the list;
so these terms are in parallel. The parallel nature of the terms links
them together so that the postpositive modifier “for financial insti-
tutions” can naturally apply to every item in the list, not just the
last one or two.
We note that the New Jersey courts have applied the series-
qualifier canon when faced with a similar grammatical construc-
tion of a parallel list of nouns and a modifying word. See In re Pro-
posed Constr. of Compressor Station (CS327), 302 A.3d at 89 n.10 (quot-
ing Scalia & Garner, supra, at 147–48). In that case, the New Jersey
court interpreted a statute that said “routine maintenance and op-
erations, rehabilitation, preservation, reconstruction, repair, or up-
grade of public utility lines . . . .” See id. at 88 (quoting N.J. Stat.
Ann. § 13:20-28(a)(11)). The question was whether “routine” mod-
ified only “maintenance and operations” or other items in the list.
See id. The New Jersey court applied the prepositive modifier “rou-
tine” to all terms in the list. See id. at 89. Here, we have a postposi-
tive modifier, which has the same grammatical function but comes
after instead of before the terms it modifies. It follows that the same
principle should apply.
For its part, ECB argues that “asset recovery and strategy
planning” should be treated differently than the other items in the
list because there is no comma between “asset recovery” and “and
USCA11 Case: 22-10811 Document: 64-1 Date Filed: 08/01/2024 Page: 23 of 28
22-10811 Opinion of the Court 23
strategy planning” or between “strategy planning” and “for finan-
cial institutions.” We aren’t convinced.
Certainly, the presence of a comma before “for financial in-
stitutions” would establish with more certainty that it applies
across every term in the list. See, e.g., Facebook, Inc., 592 U.S. at 403–
04 (recognizing that the presence of a comma suggests a phrase ap-
plies across all terms); Gudgeon, 342 A.2d at 555–56 (“Where a
comma is used to set a modifying phrase off from previous phrases,
the modifying phrase applies to all the previous phrases, not just
the immediately preceding phrase.”); Morella, 917 A.2d at 831
(“[T]he use of a ‘comma’ to separate a modifier from an antecedent
phrase indicates an intent to apply the modifier to all previous an-
tecedent phrases.” (citations omitted)). But the absence of the
comma doesn’t necessarily mean that “for financial institutions”
fails to apply to every term. Although “commas at the end of series
can avoid ambiguity, . . . [the] use of such commas is discretion-
ary.” United States v. Bass, 404 U.S. 336, 340 n.6 (1971) (citing Bergen
Evans & Cornelia Evans, A Dictionary of Contemporary American Us-
age 103 (1957); Margaret Nicholson, A Dictionary of American-English
Usage 94 (1957); Roy H. Copperud, A Dictionary of Usage and Style
94–95 (1964); William Strunk & E.B. White, The Elements of Style 1–
2 (1959)).
Likewise, we can’t discern any meaning in the absence of a
comma between “asset recovery” and “and strategy planning.”
The comma before “asset recovery” is simply a serial comma, like
all the other commas in the phrase. The last serial comma that
USCA11 Case: 22-10811 Document: 64-1 Date Filed: 08/01/2024 Page: 24 of 28
24 Opinion of the Court 22-10811
should go between “asset recovery” and “and strategy planning”—
a so-called Oxford comma—is often dropped at the end of a list.
There isn’t any ambiguity about whether the “and” before “strat-
egy planning” indicates that “strategy planning” closes the list—it
does. So there’s no reason to believe that New Jersey courts would
import meaning into the absence of an Oxford comma in this sen-
tence. See Perez v. Zagami, LLC, 94 A.3d 869, 874 (N.J. 2014) (“Alt-
hough not to be entirely ignored, punctuation cannot be allowed
to control the meaning of the words chosen to voice the intention.”
(quoting Casriel v. King, 65 A.2d 514, 516 (N.J. 1949))); In re Proposed
Constr. of Compressor Station (CS327), 302 A.3d at 89.
Third, in addition to these canons, Chubb’s reading is more
consistent with the surrounding language. Recall that the insur-
ance policy covers liability arising out of “[m]anagement consult-
ing services.” Then, the contract defines “[m]anagement consult-
ing services [to] mean[] services directed toward expertise in bank-
ing finance, accounting, risk and systems analysis, design and im-
plementation, asset recovery and strategy planning for financial in-
stitutions.”
ECB’s reading does violence to the overall text in two key
respects. To begin, if “for financial institutions” doesn’t apply to
“accounting,” then it doesn’t really limit anything at all. All con-
sulting about asset recovery or strategy planning would presuma-
bly reflect at least some “expertise in . . . accounting.” Because any
consulting service that would be provided to a business could re-
flect expertise in “accounting,” ECB’s reading would defeat the
USCA11 Case: 22-10811 Document: 64-1 Date Filed: 08/01/2024 Page: 25 of 28
22-10811 Opinion of the Court 25
purpose of having a “financial institutions” limitation on any of the
terms. Moreover, if “for financial institutions” didn’t apply to the
whole list, certain consulting services like “banking finance,” “asset
recovery . . . for financial institutions,” and “strategy planning for
financial institutions” would be bounded by a relationship to fi-
nance and banks—but other services like “accounting” would be
completely unrelated to the industry of the firm’s client. Con-
versely, applying “for financial institutions” to all the terms gives
meaning to the “for financial institutions” limitation and makes
sense when the phrases are viewed together as a group.
***
Chubb’s view is far more likely to reflect the meeting of the
minds. Because applying “for financial institutions” across all terms
is consistent with the general rule of the series-qualifier canon—
which grammatically applies best here—and makes far more sense
in context, that is the plain meaning of the contract’s language.
“The two possible readings thus reduce to one . . . .” Pulsifer v.
United States, 144 S. Ct. 718, 737 (2024).
B.
In response to this reasoning, ECB argues that this contract
is ambiguous and that it should, therefore, win under the contra
proferentem canon. The contra proferentem canon provides that
courts should read an ambiguous contract to have the meaning
that favors the non-drafting party. See Oxford Realty Grp. Cedar, 160
A.3d at 1270. When an insurance company drafts an insurance
USCA11 Case: 22-10811 Document: 64-1 Date Filed: 08/01/2024 Page: 26 of 28
26 Opinion of the Court 22-10811
contract, the contra proferentem canon requires resolving ambigui-
ties in an insurance contract in favor of the insured. See id.
Although the contra proferentem canon is a well-established
part of New Jersey law, it doesn’t help ECB for two reasons.
First, this contract is not genuinely ambiguous. See Pacifico
v. Pacifico, 920 A.2d 73, 78 (N.J. 2007). Under New Jersey law, “only
genuine interpretational difficulties will implicate the doctrine that
requires ambiguities to be construed favorably to the insured.” Pro-
gressive Cas. Ins. Co., 765 A.2d at 202 (citing Am. White Cross Lab’ys,
Inc. v. Cont’l Ins. Co., 495 A.2d 152, 157 (N.J. Super. Ct. App. Div.
1985)). “A ‘genuine ambiguity’ arises only ‘where the phrasing of
the policy is so confusing that the average policyholder cannot
make out the boundaries of coverage.’” Id. (quoting Weedo v. Stone-
E-Brick, Inc., 405 A.2d 788, 795 (N.J. 1979)). Some difficulty in deter-
mining the answer to a legal question does not equate to ambigu-
ity. See Kisor v. Wilkie, 588 U.S. 558, 574–75 (2019).
ECB argues, and it is true, that some New Jersey precedents
say that “[i]f the terms of the contract are susceptible to at least
two reasonable alternative interpretations, an ambiguity exists.”
Chubb Custom Ins. Co., 948 A.2d at 1289 (citing Nester v. O’Donnell,
693 A.2d 1214, 1220 (N.J. Super. Ct. App. Div. 1997)). But there are
not two reasonable alternative interpretations of this contract lan-
guage. As the Supreme Court of New Jersey has recognized, “[a]n
insurance policy is not ambiguous merely because two conflicting
interpretations of it are suggested by the litigants.” Oxford Realty
Grp. Cedar, 160 A.3d at 1270 (internal quotation marks omitted)
USCA11 Case: 22-10811 Document: 64-1 Date Filed: 08/01/2024 Page: 27 of 28
22-10811 Opinion of the Court 27
(quoting Fed. Ins. Co. v. Campbell Soup Co., 885 A.2d 465, 468 (N.J.
Super. Ct. App. Div. 2005)). Instead, as we’ve explained, one reading
of this contract is superior to the other.
In short, we do not jump straight to contra proferentem if we
can determine the contract’s meaning without it. A court may ap-
ply that canon only “after a court has examined the terms of the
contract, in light of the common usage and custom, and considered
the circumstances surrounding its execution.” Pacifico, 920 A.2d at
78. Only “[i]f, at that time, the court is unable to determine the
meaning of the term, [may] contra proferentem [] be employed as a
doctrine of last resort.” Id. (emphasis added). Because we can read-
ily interpret this contract in light of its text, there is no genuine in-
terpretational difficulty, and we need not and cannot turn to contra
proferentem.
Second, even if there were a genuine interpretational dis-
pute such that the contra proferentem canon could apply to this con-
tractual text, it would not apply to an insurance contract between
these sophisticated commercial entities. The Supreme Court of
New Jersey has held that “the rules tending to favor an insured that
has entered into a contract of adhesion are inapplicable where, as
here, both parties are sophisticated commercial entities with equal
bargaining power.” Chubb Custom Ins. Co., 948 A.2d at 1294 (citing
Pacifico, 920 A.2d at 78–79) (stating that New Jersey case law “re-
quir[es] unequal bargaining power for application of contra
proferentem” (citing Pacifico, 920 A.2d at 78–79)); see also Oxford Re-
alty Grp. Cedar, 160 A.3d at 1270 (“Sophisticated commercial
USCA11 Case: 22-10811 Document: 64-1 Date Filed: 08/01/2024 Page: 28 of 28
28 Opinion of the Court 22-10811
insureds, however, do not receive the benefit of having contractual
ambiguities construed against the insurer.” (citing Chubb Custom
Ins. Co., 948 A.2d at 1294; Werner Indus., Inc. v. First State Ins. Co.,
548 A.2d 188, 192 (N.J. 1988))).
We have no doubt that Constantin—the accounting firm in-
sured under this contract—is a sophisticated commercial entity
that had many different options to purchase liability insurance. It
may be, as ECB argues, that the former New Jersey branch of Con-
stantin was a relatively small office with few employees, but size
does not necessarily equate to a lack of commercial sophistication.
Even that smaller office was composed of accounting professionals,
and those professionals specifically asked for an insurance policy
that would cover risks arising from “management consulting for
the financial community.” Because Constantin was offering its ser-
vices and expertise to help its clients manage risk, it stands to rea-
son that it was sophisticated enough to manage its own.
IV.
We AFFIRM the district court’s grant of summary judg-
ment.
Reference
- Status
- Published