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 Amended: December 28, 2010)

6 Docket No. 10-0799-CV

7 -------------------------------------

8 10 ELLICOTT SQUARE COURT CORPORATION and 5182 GROUP, LLC,

9 Plaintiffs-Appellees,

10 - v -

11 MOUNTAIN VALLEY INDEMNITY COMPANY,

12 Defendant-Appellant.

13 -------------------------------------

14 Before: SACK and RAGGI, Circuit Judges, and KOELTL, District 15 Judge.*

16 Appeal by the defendant from a summary judgment entered

17 in the United States District Court for the Western District of

18 New York (William M. Skretny, Chief Judge) in favor of the

19 plaintiffs. The district court's judgment rested on three

20 grounds relevant to this appeal: first, that a contract that had

21 not been signed on behalf of the parties to it nonetheless had

22 been "executed" within the meaning of the primary insurance

23 policy in issue and New York law; second, that the defendant was

24 bound to provide insurance coverage to the plaintiffs under an

* 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. We reverse the district

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 Affirmed in part, reversed in part, question certified

9 to the New York Court of Appeals in part, decision reserved in

10 part.

11 MAX GERSHWEIR, Hurwitz & Fine, 12 P.C.(Katherine A. Fijal, Esq., of 13 counsel), Buffalo, New York, for 14 Defendant-Appellant.

15 JUDITH TREGER SHELTON, Kenney 16 Shelton Liptak Nowak LLP, Buffalo, 17 New York, for Plaintiffs- 18 Appellees.

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. They contracted with a third firm, Ellicott

24 Maintenance, Inc., for the building's partial interior

25 demolition.

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. Ellicott Maintenance therefore purchased two

2 policies--one primary, the other "umbrella"--from the defendant

3 Mountain Valley Indemnity Company. The defendant, by its agent

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 The primary insurance policy required that the

9 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. Before anyone on behalf of either

14 Ellicott Maintenance or the plaintiffs signed the construction

15 agreement, a worker on the demolition project was injured. When

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. The

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. 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. The defendant

13 appeals.

14 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. Therefore, under its terms, the primary insurance

18 policy's additional insured coverage did not become effective

19 prior to the accident in question. We conclude, however, that

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 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." We therefore certify the following question to the New

6 York Court of Appeals:

7 In a case brought against an insurer in which 8 a plaintiff seeks a declaration that it is 9 covered under an insurance policy issued by 10 that insurer, does a certificate of insurance 11 issued by an agent of the insurer that states 12 that the policy is in force but also bears 13 language that the certificate is not evidence 14 of coverage, is for informational purposes 15 only, or other similar disclaimers, estop the 16 insurer from denying coverage under the 17 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 As amended by an

24 additional-insured endorsement, the Primary Policy covered not

1 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.'" Mountain Valley Indemnity Co. Commercial

9 Policy No. 331-0013567, Issued to Ellicott Maintenance, Inc.,

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). The Primary

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 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. Like the Primary Policy, the Umbrella Policy

25 guaranteed coverage for bodily injury resulting from an

26 occurrence, which it defined as "an accident . . . ," and

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"). Unlike the Primary Policy, the

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 "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. The agreement between Ellicott Maintenance and

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. The

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 obtain,

2 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." Agreement for

3 Construction, dated Sept. 12, 2003, at 10–11, Fijal Decl. Ex. G.

4 No one signed the Construction Agreement on behalf of either the

5 plaintiffs or Ellicott Maintenance until September 12, 2003.

6 Some three weeks earlier, on August 19, 2003, Mountain

7 Valley's agent, LRMP, Inc., had issued a certificate of insurance

8 (the "COI") identifying Mountain Valley as the issuer of the

9 Primary Policy and the Umbrella Policy, Ellicott Maintenance as

10 the named insured, and the plaintiffs as "additional insured with

11 respect to project: Graystone." Certificate of Liability

12 Insurance, dated August 19, 2003, Fijal Decl. Ex. L. The COI

13 listed the limits of liability described above--one million

14 dollars per occurrence under the Primary Policy and two million

15 dollars under the Umbrella Policy. The following language

16 appeared in the upper right-hand quadrant of the front of the

17 COI: "THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY

18 AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS

19 CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED

20 BY THE POLICIES BELOW." Id. (capitalization in original). The

21 COI also provided that "THE INSURANCE AFFORDED BY THE POLICIES

22 DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND

23 CONDITIONS OF SUCH POLICIES." Id. (capitalization in original).

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 The reverse side of the COI bore similar language under the

2 heading "DISCLAIMER": "The Certificate of Insurance . . . does

3 not constitute a contract between the issuing insurer . . . and

4 the certificate holder, nor does it affirmatively or negatively

5 amend, extend or alter the coverage afforded by the policies

6 listed thereon." Id. Ellicott Maintenance began work the day

7 after it received the COI.

8 On September 9, 2003, three days before Ellicott

9 Maintenance owner Theodore S. DiRienzo and EDC owner Carl P.

10 Paladino signed the construction agreement on behalf of the

11 parties to it, David DelPrince, an employee of S&A Rubbish and

12 Debris Removal--a subcontractor hired by Ellicott Maintenance--

13 was injured when a roof collapsed at the Graystone site.

14 The plaintiffs notified Mountain Valley's agent, LRMP,

15 of DelPrince's injury and potential claim by letter dated October

16 22, 2003, requesting that Mountain Valley defend and indemnify

17 them in any suit brought by DelPrince. Some six months later, by

18 letter dated April 13, 2004, Mountain Valley informed the

19 plaintiffs that it would not defend or indemnify them because,

20 inasmuch as the Construction Agreement had not been signed on

21 behalf of the parties before DelPrince was injured, "there was

22 not in existence on the date of loss a written contract executed

23 prior to the bodily injury," as required by the terms of the

24 Primary Policy. Letter from Susan Gabriele to 10 Ellicott Square

25 [Court] Corp., dated April 13, 2004, App. to Pls.' Local R. 56.1

26 Statement of Material Facts in Supp. of Pls.' Mot. for Summ. J.

9 1 Ex. 10, 10 Ellicott Square Court Corp. v. Mountain Valley Indem.

2 Co., No. 07-CV-0053 (W.D.N.Y. June 13, 2008). The letter further

3 stated that even if the plaintiffs qualified as additional

4 insureds under the Primary Policy as of the date of the accident,

5 Mountain Valley would deny coverage because the plaintiffs had

6 failed to timely notify Mountain Valley of DelPrince's injury and

7 possible claim, as required by the Primary Policy.

8 DelPrince filed suit against EDC, 5182 Group, and

9 Ellicott Maintenance in New York State Supreme Court, Erie

10 County, on October 28, 2004, alleging negligence and violations

11 of the New York Labor Law, and seeking to recover damages for the

12 injuries he sustained.3

13 The plaintiffs filed this declaratory judgment action

14 in the United States District Court for the Western District of

15 New York on January 30, 2007. They alleged that they were

16 additional insureds under the Primary Policy and therefore were

17 entitled to coverage by Mountain Valley in DelPrince's suit. The

18 plaintiffs further alleged that the COI bound Mountain Valley to

19 provide coverage despite the absence of a signed agreement

20 between EDC and Ellicott Maintenance. Finally, the plaintiffs

21 alleged that Mountain Valley should be precluded from relying on

22 the defense of untimely notice because Mountain Valley's response

23 disclaiming coverage was itself untimely. The plaintiffs later

24 amended their complaint to add a claim alleging entitlement to

3 The parties represented at oral argument before this Court that DelPrince's suit has been settled. 10 1 indemnification and defense as additional insureds under the

2 terms of the Umbrella Policy.

3 The district court (Richard J. Arcara, Judge4) referred

4 the case to Magistrate Judge Leslie G. Foschio. In June 2008,

5 the parties brought cross-motions for summary judgment before the

6 magistrate judge. Mountain Valley's motion principally relied on

7 the same arguments made in its April 2004 letter to the

8 plaintiffs disclaiming coverage. Mountain Valley also argued

9 that it was not bound by the Umbrella Policy because (1) the

10 Construction Agreement required that the insurance provided to

11 the plaintiffs be "primary," and the Umbrella Policy was

12 secondary; and (2) the Umbrella Policy was "subject to all the

13 limitations of [the Primary Policy]," including the execution

14 requirement, and that because the Construction Agreement was not

15 executed before DelPrince's injury, the plaintiffs "[we]re not

16 insureds on the underlying insurance [and we]re not insureds"

17 under the Umbrella Policy. Mem. of Law in Supp. of Mountain

18 Valley Indem. Co.'s Mot. for Summ. J. at 20–21, 10 Ellicott

19 Square Court Corp. v. Mountain Valley Indem. Co., No. 07-CV-0053

20 (W.D.N.Y. June 13, 2008); see Umbrella Policy at 7–8. In support

21 of their cross-motion, the plaintiffs contended that even though

22 the Construction Agreement had not been signed on behalf of the

23 parties at the time of the accident, it nonetheless had been

4 This case was originally assigned to Judge Arcara. When, following the reference of the case to the magistrate judge, Judge Arcara recused himself, the case was reassigned to Chief Judge William M. Skretny. 11 1 "executed" for purposes of the Primary Policy because of the

2 parties' partial performance and because the parties to the

3 contract understood its signing to be ministerial. The

4 plaintiffs further argued that even if the Agreement had not been

5 executed, the COI bound Mountain Valley to provide coverage under

6 the Primary Policy because "Mountain Valley's authorized

7 representative represented that such coverage was in place."

8 Mem. of Law in Supp. of Pls.' Mot. for Summ. J. at 17, 10

9 Ellicott Square Court Corp. v. Mountain Valley Indem. Co., No.

10 07-CV-0053 (W.D.N.Y. June 13, 2008). Finally, the plaintiffs

11 argued that the Umbrella Policy's own "blanket additional insured

12 provision" entitled them to that policy's coverage.

13 In a Report and Recommendation (the "R&R"), 10 Ellicott

14 Square Court Corp. v. Mountain Valley Indem. Co., No. 07-CV-0053

15 (W.D.N.Y. Sept. 22, 2009), the magistrate judge recommended

16 denying Mountain Valley's motion for summary judgment and

17 granting the plaintiffs'.5 With regard to whether the

18 Construction Agreement was "executed," the magistrate judge

19 concluded that "in light of 'common speech' and the reasonable

20 expectations of a businessperson"--and because Mountain Valley,

21 as the drafter of the policy, could have used the term "signed"

22 if it had intended to require a signature--the term "executed" as

23 used in the Primary Policy should not be interpreted to require

5 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 the parties' signatures to trigger coverage under that policy.

2 R&R at 12–13. On the question of whether the plaintiffs were

3 entitled to coverage based on the COI, the magistrate judge

4 recommended finding that the COI incorporated the terms of the

5 Primary and Umbrella Policies. Relying on Niagara Mohawk Power

6 Corp. v. Skibeck Pipeline Co.,

,

(4th Dep't 2000), the magistrate judge found that Mountain

8 Valley's agent, acting within the scope of its authority, "issued

9 the certificate of insurance naming [the plaintiffs] as

10 additional insureds, upon which [the plaintiffs] were entitled to

11 rely, regardless of the absence of a signing of the construction

12 contract at that time." R&R at 15. The magistrate judge

13 therefore recommended estopping Mountain Valley from denying

14 coverage to the plaintiffs. Finally, the magistrate judge

15 rejected Mountain Valley's argument that the plaintiffs had not

16 provided timely notice of DelPrince's injury.6

17 Mountain Valley filed written objections to the entire

18 R&R making essentially the same arguments it had presented to the

19 magistrate judge. Upon de novo review, the district court

20 adopted the R&R in its entirety and without further written

21 analysis. 10 Ellicott Square Court Corp. v. Mountain Valley

22 Indem. Co., No. 07-CV-0053,

,

14556 (W.D.N.Y. Feb. 19, 2010).

24 Mountain Valley appeals.

6 Mountain Valley does not challenge this conclusion on appeal. 13 1 DISCUSSION

2 I. Standard of Review

3 We review the district court's grant of summary

4 judgment de novo, "construing the evidence in the light most

5 favorable to the non-moving party and drawing all reasonable

6 inferences in its favor." Fincher v. Depository Trust & Clearing

7 Corp.,

(2d Cir. 2010). "Summary judgment is

8 appropriate where there exists no genuine issue of material fact

9 and, based on the undisputed facts, the moving party is entitled

10 to judgment as a matter of law." O & G Indus., Inc. v. Nat'l

11 R.R. Passenger Corp.,

(2d Cir. 2008), cert.

12 denied,

(2009) (brackets and internal quotation

13 marks omitted); see also Fed. R. Civ. P. 56(a) ("The court shall

14 grant summary judgment if the movant shows that there is no

15 genuine dispute as to any material fact and the movant is

16 entitled to judgment as a matter of law. The court should state

17 on the record the reasons for granting or denying the motion.").

18 II. Execution of the Construction Agreement

19 The plaintiffs argue, and the district court concluded,

20 that although no one on behalf of them or Ellicott Maintenance

21 had signed the Construction Agreement before DelPrince was

22 injured, the contract nevertheless was "executed" for purposes of

23 the Primary Policy. We disagree.

24 We must give "unambiguous provisions of an insurance

25 contract . . . their plain and ordinary meaning." Essex Ins. Co.

26 v. Laruccia Constr., Inc.,

,

,

14 1 559 (2d Dep't 2010) (internal quotation marks omitted). We

2 cannot disregard "the plain meaning of the policy's

3 language . . . in order to find an ambiguity where none exists."7

4 Empire Fire & Marine Ins. Co. v. Eveready Ins. Co.,

,

(2d Dep't 2008).

6 "[I]t is common practice for the courts of this State

7 to refer to the dictionary to determine the plain and ordinary

8 meaning of words to a contract." Mazzola v. Cnty. of Suffolk,

9

,

(2d Dep't 1988)

10 (citation omitted). The New York Court of Appeals recently did

11 just that in determining the meaning of New York State statutory

12 language. Giordano v. Market Am., Inc., --- N.Y.3d ----, ----, -

13 -- N.E.2d ----, ----, --- N.Y.S.2d ----, ----,

,

14

, at *10 (Nov. 18, 2010) (adopting a

15 dictionary definition of the word "latent" for purposes of N.Y.

16 C.P.L.R. 214-c(4)).

17 Black's Law Dictionary defines "executed" as: "1. (Of a

18 document) that has been signed <an executed will>. 2. That has

19 been done, given, or performed <executed consideration>."

7 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.,

(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.

(internal quotation marks omitted). As we will discuss below, we conclude that the term "executed" is not ambiguous. 15 1 Black's Law Dictionary 650 (9th ed. 2009).8 A note to the

2 definition warns that "[t]he term 'executed' is a slippery

3 word. . . . A contract is frequently said to be executed when

4 the document has been signed, or has been signed, sealed, and

5 delivered. Further, by executed contract is frequently meant one

6 that has been fully performed by both parties."

(quoting

7 William R. Anson, Principles of the Law of Contract 26 n.*

8 (Arthur L. Corbin ed., 3d Am. ed. 1919)) (brackets and internal

9 quotation marks omitted, emphasis in original).

10 New York courts employ the standard indicated by the

11 definition in Black's, requiring that a contract be either signed

12 or fully performed before it can be considered executed.9 For

13 example, in Burlington Insurance Co. v. Utica First Insurance

14 Co.,

,

(2d Dep't 2010),10 a case

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.,

(2d Cir. 2003) (ellipses and internal quotation marks omitted). 10 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 16 1 with facts remarkably similar to those of the case before us, a

2 construction manager contracted with a subcontractor to perform

3 work at a site in Manhattan. The agreement was memorialized in a

4 purchase order that required the subcontractor "to obtain

5 insurance in specified minimum amounts, and to name [the

6 construction manager] as an additional insured on the Certificate

7 of Insurance." Id. at 712,

. The policy's

8 additional insured endorsement provided, inter alia, that the

9 written contract or agreement between the manager and

10 subcontractor had to be "[c]urrently in effect or becoming

11 effective during the terms of this policy; and . . . [e]xecuted

12 prior to the 'bodily injury' [or] 'personal injury'."

at

13 713,

.

14 Before the purchase order was signed on behalf of

15 either party, and before work at the site was completed, a man

16 was injured when he fell through a sidewalk cellar door at the

17 construction site.

The injured man filed a personal injury

18 action against the construction manager and the subcontractor,

19 both of whom in turn sought coverage from the defendant insurance

20 company.

The defendant declined coverage "on the ground

21 that [the construction manager] was not an additional insured

22 pursuant to the terms of the policy's additional insured

23 endorsement" because "the purchase order was not signed at the

24 time of the underlying plaintiff's alleged injury and, therefore,

not have known when it decided the case at bar, as superseding the Supreme Court's view on the matter. 17 1 had not been 'executed' as of that time," as required by the

2 endorsement.

The plaintiffs argued that the contract had

3 been executed by virtue of their partial performance of their

4 duties thereunder.

5 The Appellate Division, Second Department, agreed with

6 the insurer, concluding that "the defendant demonstrated that the

7 contract was not 'executed' at the time of the alleged

8 accident . . . since it was both unsigned and had not been fully

9 performed at that time."

,

. The

10 court found "no support for the plaintiffs' contention that the

11 condition in the additional insured endorsement that the contract

12 be 'executed' prior to the bodily injury or personal injury could

13 be satisfied by partial performance."

14 In this case, the plaintiffs assert that although the

15 Construction Agreement was not signed, the "underlying contract"

16 requiring Ellicott Maintenance to procure insurance had been

17 fully performed in that Ellicott Maintenance had "obtained

18 insurance in favor of EDC/5182 Group by purchasing policies with

19 a blanket additional insured endorsement," and "delivered proof

20 of coverage in the form of" the COI. Appellees' Br. 20. But the

21 Construction Agreement was not comprised of many individual

22 contracts, as the plaintiffs' argument implies. Rather,

23 fulfilling the insurance procurement provision constituted

24 partial performance of the Construction Agreement--satisfaction

25 of one of the duties required of Ellicott Maintenance thereunder.

18 1 And as the district court correctly noted, partial performance

2 does not constitute execution.

3 The plaintiffs also argue that Burlington "appears to

4 be premised on a legal fallacy," Appellees' Br. 14, i.e., that

5 the Second Department's acknowledgment that the word "executed"

6 can have more than one meaning cannot be reconciled with its

7 conclusion that this "does not render the contract uncertain or

8 ambiguous," Burlington,

,

9 (internal quotation marks omitted). But the Burlington court

10 concluded that the contract before it had not been executed

11 because it had neither been signed nor fully performed.

12 Therefore, neither method of execution had been met.

,

13

. One cannot conclude from the fact that a

14 contract requirement can be satisfied in more than one way that

15 the contract for that reason alone "lack[s] a definite and

16 precise meaning." SUS, Inc. v. St. Paul Travelers Grp., 75

, 742,

(3d Dep't 2010). Neither

18 does it render the term ambiguous, nor create a triable issue of

19 material fact.

20 Because New York law unambiguously requires either the

21 signing of a contract or its full performance for it to be

22 "executed" within the meaning of an insurance policy requiring

23 such prior execution, and because neither occurred here, the

24 Construction Agreement was not executed as of the date of

25 DelPrince's injury. The district court's finding that it was and

19 1 its conclusion that for that reason the Primary Policy was in

2 effect at the time of the accident, are therefore in error.

3 III. Estoppel under the Certificate of Insurance

4 The plaintiffs contend that Mountain Valley is

5 nonetheless estopped from denying coverage to the plaintiffs

6 under the Primary Policy11 because Mountain Valley's agent issued,

7 and the plaintiffs relied upon, the COI. The district court

8 agreed. New York's intermediate appellate courts are divided on

9 the question.

10 New York contract law instructs that, as a general

11 matter, "[a] certificate of insurance is merely evidence of a

12 contract for insurance, not conclusive proof that the contract

13 exists, and not, in and of itself, a contract to insure." Horn

14 Maint. Corp. v. Aetna Cas. & Sur. Co.,

, 639

, 356 (1st Dep't 1996); see also Sevenson Envtl.

16 Servs., Inc. v. Sirius Am. Ins. Co.,

, 902

, 280 (4th Dep't 2010); Tribeca Broadway Assocs., LLC

18 v. Mount Vernon Fire Ins. Co.,

,

11, 13 (1st Dep't 2004). While a certificate "may be sufficient

20 to raise an issue of fact" on summary judgment, "it is not

21 sufficient, standing alone . . . , to prove coverage as a matter

22 of law."

11 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. See

8 Niagara Mohawk Power Corp. v. Skibeck Pipeline Co.,

,

, 460–61 (4th Dep't 2000)

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.,

, 210–11,

(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). But

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. See Am. Ref-

21 Fuel Co. of Hempstead v. Res. Recycling, Inc.,

,

22 423-24,

(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 1 under the policy").12 The First Department, too, has been

2 reluctant to find estoppel based on a certificate of insurance.

3 See Nicotra Grp., LLC v. Am. Safety Indem. Co.,

,

4 254,

(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.,

,

7 254-55,

(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

10 of an oral contract."); Moleon v. Kreisler Borg Florman Gen.

11 Constr. Co.,

,

(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 Ref- Fuel. 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.

,

. 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.

Mountain Valley's effort to distinguish Bucon is similarly unpersuasive, as is its reliance on Taylor v. Kinsella,

(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

.

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. At oral argument, counsel for both sides acknowledged that

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

10 request of the primary insured. Nor is there evidence in the

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. The

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. It is, after all, the

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 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. "[A]n

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." Nassau Trust Co. v. Montrose Concrete

6 Prods. Corp.,

,

, 451

7

, 667 (1982) (citation and internal quotation marks

8 omitted). That formulation may well correctly describe the facts

9 here. 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. Cf. Thomas J. Lipton, Inc. v. Liberty Mut.

15 Ins. Co.,

,

,

(1974). And such a distribution of responsibility may

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. See

22 Bucon,

,

.

23 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 In a case brought against an insurer in which 4 a plaintiff seeks a declaration that it is 5 covered under an insurance policy issued by 6 that insurer, does a certificate of insurance 7 by an agent of the insurer that states that 8 the policy is in force but also bears 9 language that the certificate is not evidence 10 of coverage, is for informational purposes 11 only, or other similar disclaimers, estop the 12 insurer from denying coverage under the 13 policy?

14 IV. Coverage Under the Umbrella Policy13

15 The plaintiffs argue that even if they are not covered

16 as additional insureds under the Primary Policy, they are covered

17 under the Umbrella Policy.14 Mountain Valley responds that the

18 Umbrella Policy is limited by the same unfulfilled "execution"

19 requirement as the Primary Policy. A finding that the plaintiffs

20 were covered by the Umbrella Policy, Mountain Valley asserts,

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.,

, at *2,

, 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: "Any

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 . . . ." Fijal Decl. Ex. K at 8 (§ 3(c)). Pursuant to

8 Section 3(d), "Each person or organization who is an 'insured' in

9 the 'underlying insurance' is an 'insured' under this insurance

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. The policy requires no more

15 than an agreement in writing. The New York Court of Appeals

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." Flores v. Lower E. Side Serv. Ctr., Inc.,

363, 368,

(2005). "[A]n unsigned contract

21 may be enforceable, provided there is objective evidence

22 establishing that the parties intended to be bound." Id. at 369,

23

.

24 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. And it is indisputable that

2 under that agreement, the general contractor was to procure

3 insurance for the plaintiffs. Nor is there any issue as to the

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 Mountain Valley argues that the Construction Agreement

9 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." But the

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. Fijal Decl. Ex. G at 10 (§ 7(A)(3)).

15 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. We find no language in the

20 Umbrella Policy to require such specificity.

21 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. We need not resolve

25 whether the Primary Policy's execution requirement would preclude

26 the plaintiffs from receiving coverage under Section 3(d) of the

27 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. Sections 3(c) and 3(d) of the Umbrella Policy,

4 which define who is an insured, provide alternative grounds

5 rather than compound requirements for qualification as an

6 additional insured. We will not read "and" into the policy to

7 conclude that the plaintiffs must qualify as insureds under both

8 Section 3(c) and Section 3(d). If they come within the terms of

9 either, they are insureds. "[C]ourts may not by construction add

10 or excise terms . . . under the guise of interpreting the

11 writing." Vt. Teddy Bear Co. v. 538 Madison Realty Co.,

,

,

(2004)

13 (citation and internal quotation marks omitted). We therefore

14 conclude that Mountain Valley is bound to provide coverage to the

15 plaintiffs under Section 3(c) of the Umbrella Policy.

16 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." Thyroff v. Nationwide Mut. Ins.

20 Co.,

(2d Cir. 2006). 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." 2d Cir. Local R. 27.2; see also Penguin

25 Grp. (USA) Inc. v. Am. Buddha,

(2d Cir. 2010).

26 "Although the parties did not request certification, we are

28 1 empowered to seek certification nostra sponte." Kuhne v. Cohen &

2 Slamowitz, LLP,

(2d Cir. 2009). Whether to

3 certify is discretionary, Am. Buddha,

, and is

4 principally guided by three factors.

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."

; see also

9 O'Mara v. Town of Wappinger,

, 698 (2d Cir. 2007);

10 Blue Cross & Blue Shield of N.J., Inc. v. Philip Morris USA Inc.,

11

(2d Cir. 2003); N.Y. Comp. Codes R. & Regs.

12 tit. 22, § 500.27(a) (2008). As discussed above, there is a

13 "split of authority," Blue Cross,

, regarding

14 whether a certificate of insurance can be enforced through

15 estoppel: "[T]wo competing lines of cases deal[] with the issue

16 here," and the New York Court of Appeals has not decided which is

17 correct. Am. Buddha,

. In the absence of

18 direction from the state's highest court, we "cannot harmonize"

19 the divergent intermediate court decisions. Carney v.

20 Philippone,

(2d Cir. 2003). Nor can we predict

21 any better than the Departments of the Appellate Division how the

22 Court of Appeals would resolve the question.

23 Second, the question on which we certify must be of

24 "importance . . . to the state," O'Mara, 485 F.3d at 698, and

25 its resolution must "require[] value judgments and important

26 public policy choices that the New York Court of Appeals is

29 1 better situated than we to make," Am. Buddha,

;

2 accord Bessemer Trust Co. v. Branin,

(2d Cir.

3 2010). We think that the New York Court of Appeals is better

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 Third, we may certify if the question is

9 "'determinative' of a claim before us." O'Mara, 485 F.3d at 698

10 (quoting

(a)); see

11 also Prats v. Port Auth. of N.Y. & N.J.,

, 150–51 (2d

12 Cir. 2002) (certifying "unsettled" question of state law). Here,

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 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 CONCLUSION

21 For the foregoing reasons, we certify the following

22 question to the New York Court of Appeals:

23 In a case brought against an insurer in which 24 a plaintiff seeks a declaration that it is 25 covered under an insurance policy issued by 26 that insurer, does a certificate of insurance 27 issued by an agent of the insurer that states 28 that the policy is in force but also bears 29 language that the certificate is not evidence 30 of coverage, is for informational purposes 30 1 only, or other similar disclaimers, estop the 2 insurer from denying coverage under the 3 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. See Am.

8 Buddha, 609 F.3d at 42–43; Kirschner v. KPMG LLP,

,

9 195 (2d Cir. 2009).

10 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. We

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. This panel will retain jurisdiction over the

19 appeal after disposition of this certification by the New York

20 Court of Appeals.

21 We affirm the district court's grant of summary

22 judgment to the plaintiffs with respect to coverage under the

23 Umbrella Policy. We reserve decision as to the district court's

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

31 1 certify, and if it decides to do so, until its judgment in the

2 matter is final.

32