UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 06-1854
FIRST CENTRUM CORPORATION; FIRST CENTRUM OF
VIRGINIA, INCORPORATED; FOREST HILL APARTMENTS
LIMITED PARTNERSHIP, a/k/a The Arbors, a/k/a
Forest Hill Apts LP,
Plaintiffs - Appellants,
versus
LANDMARK AMERICAN INSURANCE COMPANY; ACORDIA
OF ILLINOIS, INCORPORATED, d/b/a Acordia,
Incorporated, d/b/a Acordia Corporation
Service Company; EDWARD GOESEL; LIMIT
UNDERWRITING LIMITED,
Defendants - Appellees.
Appeal from the United States District Court for the Eastern
District of Virginia, at Richmond. Henry E. Hudson, District
Judge. (3:05-cv-00152-HEH)
Argued: May 23, 2007 Decided: June 20, 2007
Before WILKINSON and SHEDD, Circuit Judges, and Frank D. WHITNEY,
United States District Judge for the Western District of North
Carolina, sitting by designation.
Affirmed by unpublished per curiam opinion.
ARGUED: Glenn Hugh Silver, SILVER & BROWN, Fairfax, Virginia, for
Appellants. Paul L. Fields, Jr., FIELDS, HOWELL, ATHANS &
MCLAUGHLIN, L.L.P., Atlanta, Georgia; Barbara I. Michaelides,
CLAUSEN & MILLER, P.C., Chicago, Illinois, for Appellees. ON
BRIEF: C. Thomas Brown, SILVER & BROWN, Fairfax, Virginia, for
Appellants. Andrew Jacobson, CLAUSEN & MILLER, P.C., New York,
New York, Robert Tayloe Ross, Robert S. Reverski, MIDKIFF, MUNCIE
& ROSS, P.C., Richmond, Virginia, for Appellee Landmark American
Insurance Company; Matthew Lee, HUDGINS LAW FIRM, Alexandria,
Virginia, Terry R. Howell, Jonathan D. Kramer, FIELDS, HOWELL,
ATHANS & MCLAUGHLIN, L.L.P., Atlanta, Georgia, for Appellee Limit
Underwriting Limited.
Unpublished opinions are not binding precedent in this circuit.
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PER CURIAM:
This dispute involves the scope of coverage of insurance
policies issued by a primary insurer and an excess insurer for
various properties owned by First Centrum Corp. First Centrum
claims that the insurers owe additional payments for a fire at a
covered property under the policies’ Ordinance or Law provision.
Because it is clear that the policies are scheduled policies and
that the Ordinance or Law coverage is a sub-limit to the primary
limit, we affirm the district court’s grant of summary judgment to
the insurers.
I.
Plaintiffs First Centrum Corp. and its subsidiaries First
Centrum of Virginia, Inc., and Forest Hill Limited Partnership
(collectively “First Centrum”) obtained 2004 insurance coverage for
over 150 properties from primary insurer Limit Underwriting Ltd.
(“Limit”) and excess insurer Landmark American Insurance Co.
(“Landmark”). The policies renewed coverage provided by other
carriers in 2003. On January 6, 2004, one of the insured
properties, a Richmond, Virginia apartment complex known as The
Arbors, was destroyed by fire. At that time, binders had issued
for the 2004 coverage, but the policies themselves had not.
The parties agree that the binders provided coverage pending the
issuance of the policies and that, because the 2004 policies were
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renewals, terms not set forth in the binders may be inferred from
the 2003 policies. The 2003 policies provided a $3,421,000
scheduled limit for the Arbors property and per-occurrence primary
insurer’s limit of $2.5 million. For the Arbors fire, Limit paid
First Centrum $2.5 million, and excess insurer Landmark paid
$916,000 -- e.g., the amount remaining on the Arbors’ $3,421,000
scheduled limit after Limit’s payment, minus a $5,000 deductible.
First Centrum initiated this diversity action for breach of
contract and declaratory judgment as to the terms of the policies.1
First Centrum claims that the insurers owe additional payments
under the primary policy’s “Ordinance or Law” coverage, which, in
the event of direct physical damage to an insured building,
provides $2.5 million for undamaged portions that an ordinance or
law requires to be demolished. First Centrum contends that the
Ordinance or Law coverage constitutes $2.5 million of additional
coverage, while the insurers argue that it is a sub-limit of the
primary insurance limit. The district court granted summary
judgment to the insurers.2 We now affirm.
1
The parties filed some motions with respect to jurisdiction.
We have reviewed the submissions and are satisfied that
jurisdiction exists.
2
This suit also included two defendants not involved in this
appeal: the insurance broker Acordia of Illinois, Inc. (“Acordia”)
and Edward Goesel, a Vice President of Acordia. Acordia worked
with plaintiffs to find 2004 insurance coverage. As an alternative
to the claims presented here, First Centrum sued Acordia and Goesel
for breach of contract, negligence, and misrepresentation. Because
a judgment against Limit and Landmark would obviate the claims
against Acordia and Goesel, the district court certified the grant
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II.
First Centrum’s numerous claims boil down to one central
assertion: that the Ordinance or Law coverage was an additional
amount of insurance on top of the primary insurance limit. This
contention rests primarily on language added to the Ordinance or
Law endorsement of the 2003 primary policy, which states, “These
[Ordinance or Law] sub-limits are included in the overall limit of
liability and are not an additional amount of insurance.” First
Centrum argues that this reference to the “overall” liability limit
means that the Ordinance or Law coverage is a sub-limit not of the
limit per occurrence for a given property, but of the total insured
value of all the insured properties, which for the 2003 policy was
$356,126,250.
Contrary to this contention, the unambiguous language of the
policy establishes that the Ordinance or Law limit is a sub-limit
of the occurrence liability limit provided by the primary policy,
not the total policy value. The 2003 policy states that the
Ordinance or Law coverage is a “sub-limit[]”; the 2004 Limit binder
similarly designates coverage of “$2,500,000 per
occurrence/Building Ordinance or Law” as a “sub-limit.” As is
typical of sub-limits, the Ordinance or Law sub-limit did not
increase the primary insurance limit. As stated by the very
of summary judgment to Limit and Landmark pursuant to Fed. R. Civ.
P. 54(b). The claims against Acordia and Goesel are still pending.
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language upon which First Centrum relies, the Ordinance or Law
coverage is “not an additional amount of insurance.” Yet plaintiff
argues that the endorsement actually doubles the amount of
insurance available from the primary insurer per occurrence. We
decline to adopt an interpretation so at odds with the clear intent
of the contract: to provide Ordinance or Law coverage as a sub-
limit to the primary limit, “not an additional amount of
insurance.”
Moreover, the logical consequence of plaintiff’s argument is
to undermine the entire nature of the policies. As the district
court noted, by claiming the Ordinance or Law coverage was a sub-
limit of the overall policy value of $356,126,250, First Centrum
essentially argues that the endorsement language “transformed the
policy from a scheduled policy to a blanket policy.” J.A. 2873.
As opposed to a scheduled policy, which states coverage limits for
each insured property, a policy that “allocates an overall limit to
the policy” is by definition a blanket policy. Monumental Paving
& Excavating, Inc. v. Pa. Mfrs. Ass’n Ins. Co., 176 F.3d 794, 798
(4th Cir. 1999). It is clear, however, that the policies in
question are scheduled, not blanket, policies. The 2003 primary
policy states that it provided coverage on a “per occurrence,
scheduled limits” basis, while the 2004 binders state that they are
“per occurrence/scheduled limits (NOT BLANKET).” The policies
included voluminous Limit Schedules setting forth the liability
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limit for each property. Thus plaintiff’s reading of the contracts
is contravened by their very language and architecture. It is, as
the district court stated, simply an “attempt to obfuscate the
clear language of the agreement.” J.A. 2873.
As to plaintiff’s remaining contentions, we find them to lack
merit. The insurers met the Arbors’ scheduled limit of $3,421,000,
with Limit as primary insurer paying its per occurrence limit of
$2.5 million and Landmark as excess insurer covering the balance
minus a contracted deductible. By doing so, the insurers satisfied
their liability under the policies.
The judgment of the district court is hereby
AFFIRMED.
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