United States Court of Appeals,Third Circuit.
INDIAN HARBOR INSURANCE CO v. F & M EQUIPMENT, LTD, f/k/a Furnival Machinery Company, Appellant.
Decided: October 15, 2015
Before AMBRO, FUENTES and ROTH, Circuit Judges. Thomas M. Peterson, Esquire, (Argued), Deborah E. Quick, Esquire, Morgan, Lewis & Bockius, One Market, Spear Street Tower, San Francisco, CA, Counsel for Appellant. Joel C. Hopkins, Esquire, (Argued), Saul Ewing, Harrisburg, PA, Counsel for Appellee.
This case concerns the contractual meaning of the word “renewal.” F & M Equipment, Ltd., f/k/a Furnival Machinery Company and Indian Harbor Insurance Company agreed to a ten-year insurance policy that included a promise by Indian Harbor to offer a renewal. At the end of the ten years, Indian Harbor offered a “renewal” contract with substantially different terms to Furnival, which rejected it. Indian Harbor sought a declaratory judgment that its contract offer constituted a renewal and Furnival counterclaimed for breach of the original contract. The District Court denied Furnival's summary judgment motion, holding that Indian Harbor's offer constituted a renewal because an insurance company need only notify the insured that a policy will change for the later offer of a contract to constitute a renewal. Furnival now appeals. For the foregoing reasons, we will vacate the judgment of the District Court. We conclude that, for a contract to be considered a renewal, it must contain the same, or nearly the same, terms as the original contract.
In December 2001, Furnival and Indian Harbor agreed to a Pollution and Remediation Legal Liability Policy. The Policy is a seventy-four page document detailing the terms and conditions of the insurance coverage offered by Indian Harbor. The terms and conditions include: (1) $10 million in liability protection; (2) insurance coverage for twelve specific Furnival locations; and (3) a ten-year period of coverage from the purchase date. One of the sites covered by the Policy is the Elizabethtown Landfill Site, which Furnival was obligated to clean up pursuant to a consent decree with the federal government. Indian Harbor knew about the consent decree at the time the Policy was issued. The Policy also includes a separate section for “Endorsements.” Endorsement No. 16 lists five reasons for which Indian Harbor may “refuse to offer a renewal extension of coverage,” and states that Indian Harbor “shall not cancel nor non-renew this Policy except for the reasons stated above.”1 It is undisputed that none of the listed reasons for non-renewal occurred.