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Perini/Tompkins Joint Venture v ACE American Insurance Company

Case No. 12-2415 (C.A. 4, Dec. 16, 2013)

Perini/Tompkins Joint Venture (“PTJV” or “Appellant”) appeals the district court’s grant of summary judgment in favor of ACE American Insurance Co. (“ACE” or “Appellee”). PTJV filed suit, claiming coverage under primary and excess insurance policies with regard to a large-scale construction project in Oxon Hill, Maryland. The district court determined ACE was entitled to summary judgment because PTJV did not obtain ACE’s consent before settling the underlying dispute regarding property damage at the construction site and, pursuant to the insurance contract, PTJV was required to do so at the risk of relinquishing coverage. We hold that under Maryland and Tennessee law, PTJV violated the terms of both the primary and excess policies by not obtaining ACE’s consent before settlement, and as such, cannot now claim reimbursement under those policies. We thus affirm the district court.



The Project

In 2005, Gaylord National LLC (“Gaylord”) hired PTJV, a joint venture between the Perini Building Company and Turner Construction Company, to serve as manager in connection with the construction of a $900 million hotel and convention center in Oxon Hill, Maryland (the “Project”). As part of the construction contract between PTJV and Gaylord (the “Contract”), Gaylord agreed to purchase and maintain an Owner Controlled Insurance Program (“OCIP”), which was a program crafted and sold by ACE to insure only the Project and its participants.

Gaylord then purchased from ACE an OCIP Commercial General Liability Insurance Policy (the “Primary Policy”), providing a limit of $2 million per occurrence, and an OCIP Excess Liability Policy (the “Excess Policy”), providing a limit of $25 million per occurrence (collectively, the “Policies”). The Policies provided coverage for the period from May 23, 2005, to August 30, 2008. By endorsement, PTJV was added as a named insured on the Policies. The Project was also insured by a Builders Risk Policy through Factory Mutual Insurance Company (“FM Global”).


Judge(s): Stephanie Thacker
Jurisdiction: U.S. Court of Appeals, Fourth Circuit
Related Categories: Contracts , Insurance
Circuit Court Judge(s)
Clyde Hamilton
Dennis Shedd
Stephanie Thacker

Trial Court Judge(s)
Peter Messitte

Amicus Lawyer(s) Amicus Law Firm(s)
Patrick Wielinski Cokinos Bosien & Young
Joseph Kovars Ober Kaler Grimes & Shriver

Appellant Lawyer(s) Appellant Law Firm(s)
Gregory Podolak Saxe Doernberger & Vita PC
Tracy Saxe Saxe Doernberger & Vita PC

Appellee Lawyer(s) Appellee Law Firm(s)
Timothy Kevane Sedgwick LLP
Joseph Powers Sedgwick LLP



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which were present in anderson and lashlee-rich. thus, those the policies by assuming an obligation, voluntarily making a claim, the harm supporting the malpractice judgment was 4 of law rules follow the renvoi doctrine, an exception to the lex appeals held that section 19-110 should not be read to be interpreted like any other contract. if the policy’s language apply maryland substantive law to the issue before the present on the site when the collapse occurred. however, this insured has breached the policy by failing to the forum -- maryland -- governs.” lowry’s reports, inc. v. insurance policy on the ground that the insured or a app. 1988). amount of liability, as well as the issue of liability, must all. over ten months later, on february 23, 2010, ace issued a on august 17, 2012. the district court held oral argument on rights under the policies, and violated the terms of such is no statutory mandate that ace show prejudice, ace is still ------------------------------- phillips way contained a no-action clause which stated, in (quoting fed. r. civ. p. 56(c)). to settle complaints about these problems to the tune of affirmed. received by both gaylord and willis in tennessee and gaylord cooperate with the insurer or by not giving the our discretion, investigate any ‘occurrence’ and obtain consent before settlement. but the court of special the incident, claim, and lawsuit until after an trust, 879 a.2d 81, 88 (md. 2005) (“in interpreting an insurance baltimore, maryland; patrick j. wielinski, cokinos, bosien & race course, inc. v. regal constr. co., 333 a.2d 319, 327 (md. of the associated general contractors of america, insured failed to meet the condition precedent set forth in a amici supporting appellant. ptjv submits that ace did the following things, which 8 paid a settlement to the insured without notifying their errors b. appeal from the united states district court for the district of required. is clear and unambiguous, the court will assume the parties faith/implied covenant of good faith and fair the applicable limit of insurance in the payment of court. exclusive right to investigate, negotiate and defend claims right and duty to defend the insured against any [t]he insured has presented the insurer with a fait (1) right and duty to defend clause: “we will have the rod/clevis junctures on truss h4 to slowly erode. “voluntarily mak[ing] a payment, assum[ing] any obligation, or excess policies by not obtaining ace’s consent before unbeknownst to either gaylord or ptjv, one of the from the alleged overpayment. notably, ptjv did not notify ace policy, it is presumed that the insurer has been thereby divest state auto of its rights to oversee the handling were performed out of [the] nashville, tennessee office.” j.a. gaylord and ptjv settled the gaylord action on unwarranted delay tactics.” seeking damages against the insured.” 2013 wl 3215246 at *7. from the perspective of the insurer, one of the main . . . .”). estopped from asserting any other terms, conditions, exclusions the court held, “lashlee attempted to bypass the september 8, 2010 letter from ace offering to pay a certain part we review a district court’s grant of summary judgment no action shall be maintained against the company by show prejudice, we should infer prejudice as a matter of law ‘suit’ seeking [property] damages. . . . we may, at kentucky nat., 6 s.w.3d at 499; see also springfield tobacco phillips way broadly as holding that an insured’s failure to negotiations in any way to determine whether the and even arguably as to notice of claim. the acts amounting to an estoppel” (internal quotation marks of ace american insurance co. (“ace” or “appellee”). ptjv filed settlement negotiations to intervene, to see id. at 217-18. the contract between american equity and similarly, in state auto. ins. co. v. lashlee-rich, demonstrate prejudice.5 a voluntary payment clause in an insurance policy was precluded however, even if this were a correct statement of the law, prompt payment act. see perini/tompkins joint venture, et al. 7 pursuant to the primary policy or the excess oxon hill, maryland. the district court determined ace was accompli by delaying notice until after the judgment. rebut this presumption by proffering competent id. at 220-21 (internal quotation marks omitted). hosp. med. servs., inc., 589 a.2d 464, 466 (md. 1991) (internal erwin, 310 a.2d 555, 557 (md. 1973) (internal quotation marks impossible burden . . . of showing collusion or demonstrating, delays (including the collapse), the completion date was pushed directly vindicates this argument. indeed, it is undisputed payment, assume any obligation, or incur any expense, d. collapse and “lack of cooperation” in ptjv’s failure to notify decision under maryland law, regardless of whether prejudice is 25 on may 6, 2009, almost six months after the settlement 4 april 29, 2010, fm global denied ptjv’s claims. electric company. the insurance contract in that case, like in 22 expenses of litigation and investigation,” explaining that if obtain coverage, that is, “fact[s], other than mere lapse of we explained, “[b]y the time mlm received notice of a possible of litigation early on, but the insurer declined to get obtain the insurer’s prior consent to a settlement does not ever were preassembled on the ground and lifted via crane in the no-action clause (that is, it did not obtain consent dealing (ace “refused and/or neglected to pay any plaintiff – appellant, (“fm global”). md. 1992) (internal quotation marks, citations, and alteration [it] really is not disputed that 11 rules of the state in which it sits. see seabulk offshore, ltd. [t]he court is prepared to find that there is a suit, claiming coverage under primary and excess insurance gaylord, the sponsor of the policies, has its principal contends “ace consistently turned a blind eye to the atrium by ace to insure only the project and its participants. prejudice under maryland common law. as explained next, first decide the proper law to apply. a federal court id. at 98, 100.4 insurance contract, ptjv was required to do so at the risk of equity. once the project had been accepted by the university, forth, and this carrier clearly did not involve clause also states ptjv has no right to sue “unless all of [the after the project was completed, litigation ensued. against ace in the united states district court for the district cannot sue under the policies “unless all of its terms have been inc. v. first mercury syndicate, inc., 791 f. supp. 555, 558 (d. the coverage litigation itself. intended from the standpoint of ptjv. difficult to accomplish if an insured could disregard 982 s.w.2d 845, 856 (tenn. 1998). however, alcazar did not was required to show they were prejudiced by its failure to insurer’s right to “investigate, defend, control, or settle” a section 19-110 of the maryland code provides, (md. 2005). the court explained, rich notified state auto of the occurrence the following day, it appeals held that a trust, acting as an excess liability those policies. we thus affirm the district court. related to the collapse, ptjv intended to seek reimbursement the project electrical wire while doing construction work, putting a nearby precedent, whether express or implied, there is no duty of of tennessee has stated, “contracts of insurance, like other the court of appeals of tennessee held an insured that violated phillips way, a construction company, contracted to design and of maryland, alleging they had constructive knowledge through their on-site adverse judgment was entered. just like ptjv in this case, phillips way argued that (4th cir. 2013). we also review de novo a district court’s from ace. this letter was the first formal, written notice of a or has not yet begun, and being surprised with a claim for settling with gaylord. thus, ptjv cannot satisfy the conditions incur[ring] any expense,” at the risk of relinquishing coverage. is v. st. paul fire and marine ins. co., 566 f.3d 150, 154 (4th contractual rights constituted prejudice. we hold landmark case in which tennessee adopted the following policy: should survive summary judgment. appellant’s br. 56. it relevant part, at least, a substantial relationship with respect to issue “that the conduct constitutes an implied waiver.” 3 2 providing a limit of $2 million per occurrence, and an ocip hand. the no-action clause in this case states that the insured phillips way is directly applicable to the case at v. gaylord nat’l, llc, no. cae08-24316 (cir. ct. md. sept. 18, oxon hill, maryland (the “project”). as part of the building -- an 18-story, 2,400 ton glass atrium contractual dispute, we start with the relevant policy case, and the insurer did not consent to “fees and expenses” for the fourth circuit hand under anderson and lashlee-rich, without requiring ace to policies with regard to a large-scale construction project in address situations of fait accompli, which we have here and collusive or overly generous or unnecessary maryland law judge. (8:10-cv-03494-pjm) claim to ace, although ace concedes its representative was prejudice can be inferred as a matter of law. concessions that were being made by the . . . extremely illogical and unreasonably restrictive.” id. by rod/clevis junctures. [insured] nullified unilaterally all of the action clause. see id. at *2-3. 18 in insurance contract disputes, maryland follows the the delay vitiates the purpose of the contractual oct. 10, 2008) (the “gaylord action”). gaylord claimed ptjv we have also had occasion to address this issue in the 2) the state where the contract was entered into would by failing to notify the [insurer] of the incident, prejudiced by the breach. the insured, however, may and notice clauses from no-action clauses because cooperation before shedd and thacker, circuit judges, and hamilton, senior . . . the excess policy likewise contains similar duty to defend, cooperation, the condition precedent would still have been parties with the written consent of the company. conclude ace was prejudiced as a matter of law. in prince j.a. 21.1 insured on the policies. the project was also insured by a case. see rouse v. fed. ins. co., 991 f. supp. 460, 465 (d. md. from claiming coverage under that policy. see no. 02a01-9703- omitted)). case, we apply the choice of law rules of the forum state (3) count three: bad faith under tennessee law only when a difference in law will make a difference to the position and, on or about august 31, 2007, certain the project and such damages were neither expected nor b. 12 becomes necessary . . . only if the relevant laws of the a. insurance program (“ocip”), which was a program crafted and sold time, which, unless executed, must exist or occur before a duty insurer] of the intended settlement and gave the latter its full 2. thacker, circuit judge: under certain circumstances, however, maryland choice back to gaylord. crucial to this appeal, ptjv never sought to 2 between ptjv and ace, on december 13, 2010, ptjv filed suit what’s clear is that the defendant was not given action and voluntary payment clauses, which as explained above, the underlying litigation reimbursement of approximately $65 million in damages resulting we see no reason why this case -- wherein the entitled to summary judgment because ptjv did not obtain ace’s an insurer may disclaim coverage on a liability lashlee-rich did all of the foregoing to their own peril.” id. jurisdiction where the contract was made. allstate ins. co. v. ace, in contrast, maintains that regardless of whether the e&o carrier because it violated the voluntary payment waiver the agreement a binding contract. typically, this is where the ptjv provided them with timely notice of the claim (or whether thereto, the insured shall have fully complied with de novo. see francis v. allstate ins. co., 709 f.3d 362, 366 “settlement and release of liability” is “signed by [ace].” id. no. 12-2415 clause. see 640 s.w.2d 556 (tenn. ct. app. 1982). the court before we proceed to the merits of this appeal, we cir. 2009) (“because we have diversity jurisdiction in this young, irving, texas, for amici supporting appellant. “applicable to any defense raised by the insurer.” 795 a.2d at outcome.”). as explained below, under either tennessee or plain, unambiguous language in the insurance contracts and 1304 (md. 1995). failure, ignored ptjv’s claim for unreasonably long periods of court is to apply the terms of the policy itself.”). reasonable dispute as to notice of the occurrence tennessee in connection with the procurement of the policies resolved. worth of the settled claim. to march 2008. are clear and unambiguous, their terms are to be taken and hand, but that case does not deal with a fait accompli united states court of appeals reimbursement from state auto, its insurer. although lashlee- of the project and required a temporary suspension of settlements by the insured at the expense of the that ptjv did not obtain ace’s consent to settlement before in its reply brief, ptjv cites a 2005 tennessee case for ace advances the same argument as the one in play in august 28, 2007 while truss h4 was lifted into smith & nephew, 2005 wl 3434819, at *3. as explained above, gaylord filed a motion to consolidate the ptjv action and meaning of the terms which the parties have used, and if they nonetheless, ptjv urges us to find that ace must yet show of contract, quantum meruit, and violation of the maryland perini/tompkins joint venture (“ptjv” or “appellant”) property damage at the construction site and, pursuant to the 1975). was dismissed by stipulation on january 23, 2009. 795 a.2d at 218 (even “if [the insured] had notified [the itself, the abrogation of all of the [insurer’s] in anderson v. dudley moore insurance co., the for appellee. joseph c. kovars, ober, kaler, grimes & shriver, (3) no-action clause: “no person or organization has a ptjv that it would pay the claim,” without reserving rights; and tennessee. and nearly two years after the collapse, ptjv sent a letter to policy and is in breach of its contractual decision on an issue of contract interpretation. see seabulk provide timely notice in accordance with the insurance an issue of fact that should survive summary judgment. appellant. timothy d. kevane, sedgwick llp, new york, new york, consent before settling the underlying dispute regarding 24 is an intentional relinquishment of a known right.”). ptjv insured to deny ptjv’s claim,” and “engag[ing] in the voluntary payment clause requires ace’s consent before required to do so under common law. we disagree and read a. addition, a closer examination of facts set forth in the earlier not ensure the “settlement and release of liability [was] signed legg mason, inc., 271 f. supp. 2d 737, 750 (d. md. 2003)); see therefore, because section 19-110 does not apply here, ptjv argues ace “waived [its] late notice/voluntary provisions.” appellee’s br. 1. ace’s consent before settlement, in violation of the voluntary . . . the settlement occurred without consent. are the relevant provisions to this appeal. in fact, in the at 217. during the course of the construction, several notified of a claim until after its resolution. see 879 a.2d 81 irreversible.” id. as for prejudice, ptjv points to alcazar v. hayes, a 13. the collapse caused damage to various components general liability insurance policy (the “primary policy”), understood in their plain, ordinary, and popular sense.” jones situation. see appellant's rep. br. 20 (citing smith & nephew they “attempt[ed] to settle” and “voluntarily ma[d]e a payment” hart, 611 a.2d 100, 101 (md. 1992). for choice of law purposes, highest court in tennessee would likewise resolve the case at cir. 2004). summary judgment is appropriate “only if . . . 2012, granting summary judgment for the reasons stated on the “without [ace’s] consent,” (voluntary payment clause) and did furthermore, “it would require that the express words contained fait accompli. . . . [insurer]’s rights and presented the [insurer] with a george’s county v. local gov’t ins. trust, the maryland court of common law v. am. home assurance co., 377 f.3d 408, 418–19 (4th cir. 2004). argued: october 30, 2013 decided: december 16, 2013 argued: gregory david podolak, saxe doernberger & vita, p.c., insurer. that last-mentioned purpose would be principle of lex loci contractus, which applies the law of the insured’s delay. liability signed by us, the insured and the claimant or j.a. 88-89, 92. a formal order issued the next day, october 23, (1) count one: breach of contract/bad recklessly t[aking] direction from another named person claiming the benefits of the policy through the obligations to ptjv.”); states that alcazar deals with a breach of a “notice provision.” upon the carrier for reimbursement without the carrier having because there were other claims going back and have been. the [insurer] need not speculate. by citations to the “j.a.” refer to the joint appendix filed 12. on september 5, 2007, the rod/clevis juncture on (4) ace “refused to pay, but not on the basis of late notice.” different states lead to different outcomes” and where the laws in which judge shedd and senior judge hamilton joined. hamden, connecticut, for appellant. joseph k. powers, sedgwick i. tennessee law as well. settlement, and as such, cannot now claim reimbursement under at 221. additional pressure and tension on truss h4, causing, “placed in the impossible position of having to prove a negative thus, in tennessee, there is a distinct difference between an right under this coverage part: . . . [t]o sue us on defendant . . . w[as] entitled to notice of the tennessee court of appeals held that when an insurance agency of the gaylord action. this statute and argues that ace’s denial of coverage centers on cir. june 27, 2013), we concluded that under maryland law, a affirmed by published opinion. judge thacker wrote the opinion, construct a clubhouse for the university of maryland. see id. ace’s consent as potential grounds for denial of coverage. on construction company (lashlee-rich) accidentally hit an liability insurer as a fait accompli, and obtain indemnification 1 tennessee law rich. here, ptjv took matters into its own hands, admittedly an opportunity to enter into settlement v. work. also int’l adm’rs, inc. v. life ins. co. of n. am., 753 f.2d investigate, to challenge[.]” construction of a glass roof atrium. the atrium was 14 may disregard the rule of lex loci contractus and apply maryland gaylord paid an additional $42,301,875 (for [o]nce it is determined that the insured has failed to the benefit of the insurer.” gov’t emps. ins. co. v. group based on, inter alia, ace “intentionally and/or of the atrium (the “collapse”). professional liability insurer was prejudiced when a law firm does not appear the motion was ever ruled upon. the ptjv action allegedly incurred due to gaylord’s late delivery of the project any input in the process. such a construction would be 9 issued to gaylord, whose address is listed on the policies as ptjv’s waiver argument fails. contract and breach of fiduciary duty. see gaylord nat’l, llc $79,656,098 under the contract and asked for damages plus the primary policy contains the following provisions: in the agreement be ignored.” id. forwarded payment for the policies’ premiums from its offices in a joint venture between the perini building company and turner gardner, 6 s.w.3d 493, 498-99 (tenn. ct. app. 1999) (“a waiver saxe doernberger & vita, p.c., hamden, connecticut, for or common law-based -- an insurer would always have “the made the ex parte payment to [the insured],” and this “was in law, if the claimant’s legal representative.” j.a. 314. regarding late notice to ace, including any corresponding in 2005, gaylord national llc (“gaylord”) hired ptjv, statutory law tenn. dec. 12, 2005)). first of all, the smith & nephew case (tenn. ct. app. 1956) (waiver must be proven by a “clear, purposes of a no action clause is to protect it from investigate, defend, or pay the claim until long after it had material fact: (1) ace “ignored” the atrium failure (i.e., did party is entitled to a judgment as a matter of law.’” id. now, the court feels as a matter of law, the claim.” id. at 57. id. at 216-17. at that insured’s own cost, voluntarily make a but even assuming ace were required to show prejudice failed to provide timely notice of a claim and mlm had “the 15 redryers corp. v. city of springfield, 293 s.w.2d 189, 199 voluntary payment and no-contest clauses are implicated by omitted). in this case, that state is tennessee.3 rendered certain by . . . agreement between the 1373, 1376 n.4 (7th cir. 1985) (“conflicts rules are appealed to “do not so conflict, the choice is immaterial, and the law of after several additional months of back-and-forth policies is willis of tennessee, inc., with an address in ace advising that, to the extent fm global did not pay the claim pursuant to the primary policy and the excess reasonable, whether there was any collusion of immediate performance of a promise arises.” chirichella v. builders risk policy through factory mutual insurance company inconsistent” with any intention to enforce the provision at the condition precedent is either performed or excused.” laurel a contract is made where “the last act is performed which makes countersued, filing a complaint against ptjv for breach of we would therefore affirm summary judgment under and omissions (“e&o”) carrier, the agency could not recover from states that ptjv can sue to recover on a settlement only if the we would also affirm the district court’s judgment recent past. in minn. lawyers mut. v. baylor & jackson pplc evidence that the insurer was not prejudiced by the insurer required notice only if the insurer establishes by a preponderance of the evidence that defense based on lack of notice,” and distinguishing cooperation subsequently, on october 10, 2008, gaylord ice cream toppings business in peril of losing its inventory. the policies 23 c. specifically, gaylord alleged it paid ptjv $802,085,712, when it should constitute waiver or at least raise a genuine issue of j.a. 314. these are conditions precedent to ptjv’s ability to ch-71, 1997 wl 781896 (tenn. ct. app. 1997). in that case, a the insurer is prejudiced as a matter of law. . . . should have only paid $737,091,338. thus, gaylord sought by [ace]” (no-action clause). j.a. 314, 378. the no-action gaylord then purchased from ace an ocip commercial not “take any action” after the collapse); (2) ace “failed to by the parties in this appeal. phillips way rightly rejected that argument. see phillips way, prejudice only if it raises a failure to cooperate defense or a time and even went so far as to tell ptjv it would pay the 2007, failed. that failure caused a loss of tension of its rights to investigate, defend, control, or we find phillips way, inc. v. american equity iv. v. fed. ins. co., no. 02-2455, 2005 wl 3434819, at *3 (w. d. appeals the district court’s grant of summary judgment in favor -- serious property damage occurred. the damage is described in place of business in nashville, tennessee. the policies were phillips way: because ptjv did not meet the condition precedent nashville, tennessee. all of the “services offered by willis of 10 omitted). “[w]here a contractual duty is subject to a condition 1998) (“it is axiomatic that an insurance contract is breached if [the insurer] failed to give its written consent to smith & nephew opinion reveals that the insured provided notice (2) count two: a declaratory judgment “to meant what they said . . . .” (citations omitted)). as with any insured actually paid a settlement, thereby cutting off the we agree with ace that “[t]he central issue in this 13 (“mlm”), --- f. app’x ----, no. 12-1581, 2013 wl 3215246 (4th maryland law, the outcome is the same. terms. explained above, ptjv did not comply with all of the policies’ payment and no-action clauses. ace argues prejudice is [the insured] put the [insurer] in a position of and the district court denied the motion in part on september 1, settle any claim or ‘suit’ that may result[.] . . . nor until the amount of such loss has been fixed or collusion or demonstrating, after the fact, the true fully complied with.” j.a. 314 (emphasis added). it also 17 (2) voluntary payment clause: “no insured will, except because “ace was left in the dark during the pendency of the truss h4, which began eroding no later than august 31, perini/tompkins joint venture, composed of numerous subsections, called trusses, that judgment or settlements . . . .” j.a. 305, 310. llp, new york, new york, for appellee. on brief: tracy a. saxe, under tennessee law. first and foremost, the court of appeals payment clauses separate from notice and cooperation clauses), we recognize, however, “[c]hoice of law analysis ace filed a motion to dismiss on february 15, 2011, failed to build a high-quality project at the agreed-upon price. determine the rights and duties of ptjv and ace the complaint as follows: doing, “undoubtedly, lashlee-rich violated the clear language of or provisions of this policy.” j.a. 2802. for these reasons, unequivocal and decisive act . . . showing such a purpose, or ptjv cites (a clarification order regarding fees) explicitly when the [insured] failed to notify the [insurer] of $260,000, without notifying its insurance carrier, american perform the necessary repairs and then sought to collect 16 offshore ltd. v. am. home assurance co., 377 f.3d 408, 418 (4th construction company, to serve as manager in connection with the under maryland and tennessee law, a waiver requires of the claim, it stated it “is not waiving, nor will it be nearly impossible burden on the latter of showing require prejudice, primarily because -- whether statutory-based holdings -- which did not even factor prejudice into the to august 30, 2008. by endorsement, ptjv was added as a named finalization of the settlement,” and otherwise, ace will be voluntary payment, and no-action clauses. see j.a. 377-378. provisions. see prince george’s cnty. v. local gov’t ins. policy, as with any contract, the primary task of the circuit proving a negative and speculating about what could during construction of the signature feature of the insurance co. to be particularly instructive in dissecting this iii. irrelevant in this instance, but even if ace were required to . . . .” appellee’s br. 19. a representative from ace was on site at the project the proposition that alcazar extends to cases such as the one at ace must show actual prejudice before denying coverage, which is . . . record at the hearing. this timely appeal followed. policy is delivered and the premiums are paid.” sting sec., failed to properly manage scheduling, costs, and budgets, and at 560. the court also rejected the notion that the voluntary relinquishment” of its right to invoke the provisions of the no- 879 a.2d at 98. scheduled to be completed in december 2007, but due to various the no-action clause, sue its insurer, and put the however, none of these facts shows ace’s “intentional of any claim.” lashlee-rich, 1997 wl 781896 at *4. in so policy”; and 1) maryland has the most significant relationship, or, prejudice. after discovery, ace filed a summary judgment motion construction defect case . . . , present the settlement to its november 26, 2008.2 without obtaining consent from ace, which divested ace of its 314. this case is similar to both anderson and lashlee- despite its blatant breach of clear and unambiguous policy equation -- still remain good law. therefore, we predict the outside the ambit of section 19-110, we would be obliged to not apply its own substantive law, but instead would at *5. associated general contractors of america; maryland chapter october 22, 2012, and orally granted summary judgment in favor being in nashville, tennessee. the broker who procured the circuit judge. that settlement.”); id. at 220 (stating, “an insurer must show both have been determined” (internal quotation marks omitted)); interest, costs, and fees. the claims were based on the costs 11. the atrium was under construction on or about ii. construction contract between ptjv and gaylord (the “contract”), exclusions, late notice, and voluntary payments made without ptjv and amici in this case argue that even if there md. code ann. § 19-110 (emphasis added). ptjv relies heavily on fully complied with. a person or organization may sue on september 18, 2008, ptjv filed a complaint against gaylord the contract issue presented; and demand, plaintiff never made any formal request that the carrier insurance policy unless, as a condition precedent all the terms and conditions of this insurance policy, 6 policies. construction of a $900 million hotel and convention center in 10. a significant portion of the project involved the appellant’s br. 55-59. the “intentional relinquishment of a known right existing for a total of almost $845 million) and ptjv credited $26,157,912 v. perini/tompkins joint venture, no. cae08-27201 (cir. ct. md. this were true, “an insured with ‘e&o’ coverage could determine settlement reimbursement after the matter has already been acknowledge ptjv’s claim for 10 months”; (3) ace “represented to maryland, at greenbelt. peter j. messitte, senior district did not mention that it had assumed an obligation to pay the other than for first aid, without our consent.” j.a. architectural and design defects arose, and phillips way decided insurer, was prejudiced as a matter of law when it was not “inapplicable when an insurer defends on the basis that its see am. motorists ins. co. v. artra group, inc., 659 a.2d 1295, 02-2455, 2005 wl 3134053, at *3 (w.d. tenn. nov. 23, 2005). suit -- commands a result different from prince george’s county. 1. our right and duty to defend end when we have used up before settlement), it cannot now sue ace. phillips way involved. after this notice was given, the insured settled the bears the burden of showing that ace’s conduct is “so clearly underlying litigation and the negotiations leading to the us to recover on an agreed settlement . . . . an the ‘no-action’ clause,” and in no-action clauses, usually “the 378 (excess policy, same). explained, “although [the e&o carrier] had notice of a potential payment defense,” or at least, this is an issue of fact that tennessee law, ptjv violated the terms of both the primary and notice requirement, as the insurer cannot exercise any the case at hand, contained a voluntary payment clause and a no- contracts, are to be construed according to the sense and incurred by the insured. smith & nephew v. fed. ins. co., no. for establishment and enforcement of a mechanic’s lien, breach loci contractus rule. under this exception, a maryland court the policies provided coverage for the period from may 23, 2005, lashlee-rich quickly contracted with an electric company to c. appeal is whether the insured . . . can unilaterally settle a 3 at the time of the collapse and thereafter. the project was 21 2008) (the “ptjv action”). ptjv alleged gaylord still owed section 19-110’s “lack of cooperation and notice” provisions, settle the suit. accordingly, courts have held that payment clause “relate[d] only to disbursements involving phillips way made a claim against american equity for $260,000. that substantially impaired the structural integrity what sums to pay when a claim is made and thereafter make demand for these reasons, the judgment of the district court components were added to the atrium that placed into place. each truss contained several components, 51. additionally, the policies were delivered to and were we would therefore affirm the district court’s md. code. ann. § 19-110 applied, and as such, american equity insurer being provided late notice while litigation is ongoing policies’] terms have been fully complied with,” and as of $25 million per occurrence (collectively, the “policies”). 219. specifically, it explained section 19-110 was designs and its alleged changes to the original scope of the gaylord agreed to purchase and maintain an owner controlled claim, and lawsuit until after the judgment, the agreed settlement means a settlement and release of no-action clause . . . .” id. at 221. it continued, letter did not mention the settlement or the gaylord action at the lack of cooperation or notice has resulted in 26 representative), there is no dispute that ptjv did not obtain and notice clauses “are contained in separate paragraphs from there is no statutory ground requiring ace to show prejudice. the gaylord action in circuit court on november 6, 2008, but it in essence, this is a simple contract interpretation relinquishing coverage. we hold that under maryland and of ace. the district court explained, including supportive tension rods that were connected performance and there can be no breach by nonperformance until published portion of the [c]laims [regarding the collapse] defendant – appellee. that the [insurer] was prejudiced as a matter of law 5 problem here is with the notice of settlement. actual prejudice to the insurer. obtain ace’s consent prior to entering into this settlement. 5 ace of the gaylord claim and settlement. as such, it contends, the insured to recover for any loss under this ptjv’s alleged “lack of notice” of the claim regarding the ace american insurance company, express violation of the [voluntary payment] provision[].” id. see also j.a. 314 (primary policy, no-contest and voluntary this coverage part unless all of its terms have been case. see 795 a.2d 216 (md. ct. spec. app. 2002). there, quotation marks omitted); see also kentucky nat. ins. co. v. excess liability policy (the “excess policy”), providing a limit 19 failed to process paperwork for a potential insured and then masonry, inc. v. w. am. ins. co., 768 s.w.2d 686, 687 (tenn. ct. applying maryland’s choice of law rules. see caci int’l, inc. j.a. 13-15. we also note that, to the extent ptjv argues the this case is about consent to settlement, not notice. in in this diversity action, the district court was correct in ‘there is no genuine issue of material fact and that the moving plaintiff in this case were in any way payment and incurring an expense without state auto’s consent. precedent of the voluntary payment and no-action clauses, as reservation of rights letter, citing “[b]usiness [r]isk” exercising diversity jurisdiction must apply the choice of law after the fact, the true worth of the settled claim.” 795 a.2d 2011, but ordered that limited discovery be conducted on issues 20

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