SELECTIVE WAY INS. CO., Plaintiff,
NAT'L FIRE INS. CO. OF HARTFORD, Defendant.
JAMES K. BREDAR, District Judge.
Plaintiff Selective Way Insurance Company ("Selective") has sued Defendant National Fire Insurance Company of Hartford ("National Fire") after National Fire denied Selective's insurance claim under a builder's risk policy issued by National Fire for the construction of a new College of Liberal Arts building at Towson University in Maryland. (Compl. ¶¶ 1, 3, 9, ECF No. 1.) Pending before the Court are the parties' cross-motions for summary judgment, which have been thoroughly briefed. (ECF Nos. 26, 27, 28, 29.) No hearing is required. Local Rule 105.6 (D. Md. 2011). Selective's motion will be granted, and National Fire's motion will be denied.
II. Standard for Summary Judgment
"The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (citing predecessor to current Rule 56(a)). The burden is on the moving party to demonstrate the absence of any genuine dispute of material fact. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970). If sufficient evidence exists for a reasonable jury to render a verdict in favor of the party opposing the motion, then a genuine dispute of material fact is presented and summary judgment should be denied. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). However, the "mere existence of a scintilla of evidence in support of the [opposing party's] position" is insufficient to defeat a motion for summary judgment. Id. at 252. The facts themselves, and the inferences to be drawn from the underlying facts, must be viewed in the light most favorable to the opposing party, Scott v. Harris, 550 U.S. 372, 378 (2007); Iko v. Shreve, 535 F.3d 225, 230 (4th Cir. 2008), who may not rest upon the mere allegations or denials of his pleading but instead must, by affidavit or other evidentiary showing, set out specific facts showing a genuine dispute for trial, Fed.R.Civ.P. 56(c)(1). Supporting and opposing affidavits are to be made on personal knowledge, contain such facts as would be admissible in evidence, and show affirmatively the competence of the affiant to testify to the matters stated in the affidavit. Rule 56(c)(4).
When a court is called upon to decide cross-motions for summary judgment, it must review each motion separately on its own merits to decide whether either party deserves judgment as a matter of law. Rossignol v. Voorhaar, 316 F.3d 516, 523 (4th Cir. 2003). Thus, as with any motion for summary judgment, the court must review the facts and reasonable inferences therefrom in the light most favorable to the party opposing the motion. Id.
III. Undisputed Facts
The parties agree that the facts are undisputed. (Pl.'s Mot. Summ. J. 1, ECF No. 26; Def.'s Cross-Mot. Summ. J. Supp. Mem. 27, ECF No. 27.) As National Fire has stated, "The parties do not dispute the circumstances surrounding the incident. Nor do the parties disagree on the policies to be reviewed by this Court. The only dispute is whether the National Fire builder's risk policy is applicable to the loss paid by Selective." ( Id. ) This question of law is best resolved after recitation of some of the underlying facts.
Whiting-Turner Contracting Company ("Whiting-Turner") was selected to be general contractor on the construction of a new building at Towson University ("University"). The construction contract between Whiting-Turner and the University required Whiting-Turner to purchase and maintain a builder's risk insurance policy naming as additional insureds not only Whiting-Turner and the University, but also the State of Maryland and "any subcontractor, or anyone directly or indirectly employed by any of them." (Pl's Mot. Ex. 1, Contract, section 6.06.A.) Further, the construction contract provided:
Insurance should be against all risks of direct physical loss of or damage to the insured property including theft; earthquake; flood; and settling, shrinkage or expansion of buildings or foundations other than normal settling shrinkage or expansion. Any fault, defect, error or omission exclusion should not apply to damage resulting from such fault, defect, error or omission in the design plans or specifications. Any faulty or defective workmanship or internal exclusion clause should not apply to damage resulting therefrom.
( Id. section 6.06.D (emphasis added).)
Accordingly, Whiting-Turner obtained from National Fire a builder's risk policy ("Policy") that named as insureds "all contractors and subcontractors of every tier as their interests may appear at the insured project...." (Pl.'s Mot. Ex. 2, p. 5, Policy, Add'l Named Insured Sched.) Within the Policy, National Fire provided the following general statement of "coverage": "Subject to the Limits of Liability in the Declarations, and all other policy provisions we will pay for direct physical loss or damage to covered property and/or interests described herein from any Covered Cause of Loss." ( Id. Section A (p. 3 of 28).) Further, the Policy states, "Covered Causes of Loss means all causes of direct physical loss or damage except those causes of loss listed in Section B. Exclusions." ( Id. Section A.4 (p. 8 of 28).)
Turning to the Exclusions in the Policy, the parties have drawn the Court's attention to certain exclusionary provisions:
2. We will not pay for loss or damage caused by or resulting from any of the following:
m. Neglect of an insured to use all reasonable means to save and preserve property from further damage at and after the time of loss.
3. We will not pay for loss or damage caused by or resulting from any of the following, 3.a. through 3.c. But if an excluded cause of loss that is listed in 3.a. through 3.c. results in a Covered Cause of Loss, we will pay for the loss or damage caused by that Covered Cause of Loss.
b. Acts or decisions, including the failure to act or decide, of any person, group, ...