Robert L. Ferguson, Jr. and Ann D. Ware won another appeal argued before the United States Court of Appeals for the Fourth Circuit. This is their second successful 4th Circuit appeal in the span of a few months. In this most recent matter, Mr. Ferguson argued that a Crew Provision in a marine insurance policy was unambiguous and that a reasonably prudent layperson construing the policy would conclude that there was no coverage for the Appellant. In an unpublished opinion, the Fourth Circuit agreed with Mr. Ferguson and affirmed the United States District Court for the District of Maryland’s grant of summary judgment in favor of Northern Assurance Company of America (“Northern”). See Brawner Builders, Inc. v. Northern Assurance Company of America, — Fed. Appx. —, 2015 WL 8758068 (December 15, 2015).
The facts of the case were undisputed. Northern insured Appellant Brawner Builders, Inc. (“Brawner”) for personal injury claims arising aboard Brawner’s insured vessels, subject to several endorsements and conditions, one of which was a special condition to the Policy that required that crew members who would be operating vessels be specifically named on the Policy in order to be covered under the Policy. The Crew Provision was as follows: “3. Crew. It is a condition of this Policy that the named crew members covered under this policy are ……..”. Six crew members names were listed in this provision. A crew member not listed on the policy was injured while on a Brawner vessel and sued Brawner. Brawner submitted the claim to Northern and Northern denied coverage for the claim because the crew member was not listed as covered crew on the policy. Brawner filed suit in the United States District Court for the District of Maryland alleging that Northern breached its duty to defend and indemnify the claim and lawsuit. Northern filed a Motion for Summary Judgment because there were no disputes of material fact and the policy was clear and unambiguous that coverage was not provided for the crew member who was injured. The Untied States District Court for the District of Maryland granted Northern’s motion for summary judgment. 2014 WL 3421535 (July 9, 2014)
In affirming the lower court’s ruling, the Fourth Circuit emphasized our arguments and interpretation of Maryland law. The Court noted that a word’s ordinary meaning is determined “by what a reasonably prudent layperson could attach to the term” and may be deduced by consulting dictionaries. If a reasonably prudent layperson would attach only one meaning, then the contract is unambiguous, and the Court may construe it as a matter of law. Brawner tried to argue that that a latent ambiguity existed in the Policy because the Crew Condition could be read with other provisions in the Policy that afforded coverage, thereby rendering these other provisions superfluous. The Court was quick to disagree with this interpretation. The Court held: “[o]ur task is to construe the language of the Crew Condition in accordance with the plain meaning evidenced as the parties agreed to it, not to go in search of language in other provisions of the Policy describing other coverages and other risks.” The policy clearly and unambiguously set forth the names of the crew members who were covered and the injured Brawner employee was not listed.
This demonstrates the necessity of having clear and unambiguous language in an insurance policy. Insurers should take note and make sure that the language of their policies are clear and unambiguous.