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Indian Harbor Insurance Co. v. F&M Equipment Ltd.

United States District Court, Third Circuit

August 15, 2013

INDIAN HARBOR INSURANCE COMPANY, Plaintiff,
v.
F&M EQUIPMENT LTD., f/k/a FURNIVAL MACHINERY COMPANY, Defendant.

MEMORANDUM

PETRESE B. TUCKER, Chief District Judge.

Indian Harbor Insurance Company filed a Complaint seeking a declaratory judgment against F&M Equipment, Ltd. f/k/a Furnival Machinery Company in connection with a dispute surrounding the renewal of an insurance policy. Furnival filed a Counterclaim against Indian Harbor alleging breach of contract. Presently before the Court is Furnival's renewed motion for summary judgment on its breach of contract claim and Indian Harbor's claim for declaratory judgment, as well as all responses and reply briefs thereto. The motion is limited to the meaning of the term "renewal" as used in a particular endorsement of the insurance policy. Based on the following reasons, the Court will deny Furnival's motion for summary judgment.

I. Factual and Procedural Background

The facts of this case surround an insurance contract dispute between the two parties. Indian Harbor Insurance Company ("Indian Harbor" or "IHIC") provides insurance coverage to commercial businesses. F&M Equipment, Ltd. f/k/a Furnival Machinery Company ("Furnival") is a corporation that is primarily engaged in the distribution of construction machinery and equipment.

Indian Harbor contractually agreed to insure Furnival from December 13, 2001 through December 31, 2011 under a "Pollution and Remediation Legal Liability Policy" ("Policy"). The Policy is a seventy-four paged document which details the terms and conditions of the insurance coverage offered by Indian Harbor. The specific terms and conditions relevant to this case include: (1) the Policy provided $10 million in protection; (2) the Policy provided insurance coverage for twelve Furnival locations across the United States; and (3) the Policy was set to expire ten years from the purchase date.

Additionally, the Policy includes separate sections labeled "Endorsements, " which detail unique terms agreed upon by the parties. Endorsement No. 16 modifies the standard cancellation policy, outlining the circumstances that would warrant cancellation or non-renewal of the Policy. Endorsement No. 16 reads:

CANCELLATION AND NON-RENEWAL MODIFICATION

This endorsement modifies insurance provided under the following:

POLLUTION AND REMEDIATION LEGAL LIABILITY
Section IV. CONDITIONS, Item B. CANCELLATION is amended by the addition of the following:
I. The INSURED and the Company agree that the Company may cancel at any time or refuse to offer a renewal extension of coverage for the following reasons:
a. the INSURED has made a material misrepresentation which affects the Company's assessment of the risk of insuring the location(s) listed in the Pollution Legal Liability Schedule and/or Remediation Legal Liability Schedule.
b. the INSURED materially breaches any of its obligations under the Policy, fails to pay the premium or fails to pay any ...

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