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UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
August Term, 2000
(Argued: February 21, 2001) (Decided:
September 28, 2001 )
Docket Nos. 00-7825(L), 00-7855(XAP),
00-7903(XAP), 00-7933(XAP)
-------------------------------------------------------
NEW YORK MARINE & GENERAL INSURANCE
COMPANY,
Plaintiff-Appellee-Cross-Appellee-Cross-Appellant,
v.
TRADELINE (L.L.C.),
Defendant-Appellee-Cross-Appellant-Cross-Appellee,
DEEPAK FERTILISERS and PETROCHEMICALS
CORP., LTD.,
Defendant-Appellant-Cross-Appellee.
-------------------------------------------------------
TRADELINE (L.L.C.),
Third-Party-Plaintiff-Appellee-Cross-Appellant,
v.
MUTUAL MARINE OFFICE, INC.,
Third-Party-Defendant-Appellee-Cross-Appellee.
-------------------------------------------------------
NEW YORK MARINE & GENERAL INSURANCE
COMPANY,
Second-Third-Party-Plaintiff-Appellee-
Cross-Appellant,
v.
FRENKEL & CO., INC.,
Second-Third-Party-Defendant-Appellee-
Cross-Appellant.
-------------------------------------------------------
BEFORE: MESKILL, PARKER, and KATZMANN,
Circuit Judges.
Appeal and cross-appeals from the
judgment of the United States District Court for the Southern
District of New York (Harold Baer, Jr., Judge) entered
on June 29, 2000, following a bench trial, principally concluding
that Plaintiff- Appellee-Cross-Appellee-Cross-Appellant New York
Marine & General Insurance Company was partially liable under
a marine insurance policy to Defendant- Appellant-Cross-Appellee
Deepak Fertilisers and Petrochemicals Corporation, Ltd. for loss
sustained to its shipment of diammonium phosphate from Mexico
to India.
AFFIRMED in part, REVERSED and REMANDED
in part.
JOHN A.V. NICOLETTI, Nicoletti,
Hornig, Campise & Sweeney, New York, New York, for Defendant-Appellant-Cross-Appellee
Deepak Fertilisers and Petrochemicals Corp., Ltd.
TIMOTHY G. HOURICAN, Brown Gavalas
& Fromm LLP, New York, New York (David H. Fromm, on the brief),
for Plaintiff-Appellee-Cross-Appellee-Cross-Appellant
New York Marine & General Insurance Company and Third-Party-Defendant-
Appellee-Cross-Appellee Mutual Marine Office, Inc.
ANTHONY J. PRUZINSKY, Hill Rivkins
& Hayden LLP, New York, New York, for Defendant-Appellee-Cross-Appellant-Cross-Appellee
Tradeline (L.L.C.).
BARBARA A. SHEEHAN, Peterson &
Ross, New York, New York, for Second-Third- Party-Defendant-Appellee-Cross-Appellant
Frenkel & Co., Inc.
PARKER, Circuit Judge:
This admiralty case requires us
to interpret a marine insurance policy, Open Cargo Policy No.
10490MC594 ("the Policy") issued by Mutual Marine Office,
Inc. ("MMO") for New York Marine & General Insurance
Company ("New York Marine") and certificates of insurance,
Special Marine Policies ("SMPs"), issued under the
Policy by Tradeline (L.L.C.) ("Tradeline") to Deepak
Fertilisers and Petrochemicals Corp., Ltd. ("Deepak")
to cover two shipments of diammonium phosphate ("DAP")
aboard the M/V Sea Guardian. Deepak incurred a loss when a cyclone
struck the port of Kandla, India, during the discharge of the
DAP in early June 1998.
Plaintiff New York Marine brought
suit, seeking to disclaim liability under the Policy for any
of Deepak's loss. On June 29, 2000, the district court awarded
Deepak partial recovery. For the reasons set forth below, we
affirm in part, and reverse and remand in part.
I. BACKGROUND
A.The Parties
New York Marine & General Insurance
Company is an insurance company that does business in New York
through its managing general agent, Mutual Marine Office, Inc.
MMO issued to Tradeline the marine insurance policy at issue
in this litigation. Tradeline is a United Arab Emirates corporation
engaged in the business of supplying and shipping various commodities.
Frenkel & Co. ("Frenkel"), an insurance broker
with an office in New York, acted as an intermediary for Tradeline
in obtaining the insurance policy by negotiating with New York
Marine through MMO. Frenkel, however, is not an agent of either
New York Marine or MMO.
Deepak Fertilisers and Petrochemicals
Corp., Ltd. is a corporation organized under the laws of India,
engaged in importing fertilizer for sale in the Indian market.
A.The Policy
In May 1994, MMO, on behalf of New
York Marine, issued to Tradeline Open Cargo Policy No. 10490MC594,
effective May 9, 1994 ("the Policy"). The Policy remained
in effect until it was canceled around November 1, 1998, and
therefore was in effect during the incidents giving rise to this
litigation. The Policy contained 50 typed or manuscripted clauses,
several typed endorsements, and several attached pre-printed
forms, including the industry standard Institute Cargo Clauses
(C) ("ICC(C)"),1 which were referenced in the typed
clauses or endorsements. Tradeline is the named insured under
the Policy.
Clause 43 of the Policy authorized
Tradeline to issue to its customers "evidence of insurance"
in the form of Certificates or Special Policies of Insurance.
This clause provides that "[t]he clauses appearing in this
form shall be deemed to be included in Certificates and/or Special
Policies of Insurance when issued under the authority granted
in this clause." These Certificates or Special Policies
were intended to provide Tradeline's customers with a way to
make direct claims against New York Marine for loss or damage
to insured cargo. Shortly after the Policy became effective,
MMO forwarded to Tradeline pre-printed Certificates for issuance
to its customers.
A.The Tradeline-Deepak Contract
In April 1998, Deepak purchased
two shipments of diammonium phosphate from Tradeline, in the
amounts of 28,000 metric tons ("MT") and 21,509.155
MT. Both shipments were to be carried from Mexico to the sole
port of discharge at Kandla, India aboard the M/V Sea Guardian,
a vessel chartered by Tradeline.
The DAP was purchased on "CIF"
(cost, insurance and freight) terms for $220 per metric ton,
for a total price of $10,892,014.10. Tradeline was bound by the
terms of its contract with Deepak to maintain insurance on the
cargo on a warehouse to warehouse basis and to sell insurance
to Deepak for the risks associated with the transit. Therefore,
Tradeline delivered to Deepak Special Marine Policies ("SMPs")
367 and 368 as evidence of the insurance on the DAP shipments,
issued pursuant to its power under Clause 43 of the Policy. In
addition to the preprinted provisions, both SMPs contained a
typed provision that stated, "[n]otwithstanding anything
contained herein to the contrary: Average Terms & Conditions:
London ICC Clauses (C), London War Clauses (cargo), London Strikes
Clauses (cargo)." Deepak fulfilled its obligation to Tradeline
under the contract, having paid to Tradeline the full purchase
price of the DAP.
A.The Voyage and Request for
Rainwater Coverage
On or about April 18, 1998, the
two shipments of DAP were loaded aboard the M/V Sea Guardian
at the port of Lazaro Cardenas, Mexico, under two Bills of Lading.
The port of Kandla, India was agreed upon by Deepak and Tradeline
as the sole port of discharge.
On May 28 or 29, 1998, the M/V Sea
Guardian arrived at the Port of Kandla, and, because of draft
restrictions at the berth, began to load the DAP onto lightering
barges for transit to the wharf at Kandla. The lightering process
continued through June 8, 1998, and the offloaded DAP was located
on the wharf or at other locations within the port trust area,
where the DAP was being bagged by Rishi Shipping ("Rishi"),
Deepak's handling and forwarding agent.
Meanwhile, on May 28, 1998, Deepak
was informed by Rishi that "weather is cloudy and we shouldn't
take risk of rain." The next day, Rishi again informed Deepak
by facsimile that insurance for rain was necessary. Deepak forwarded
this fax to Tradeline on that same day, with a handwritten note,
"please do the needful immediately." Deepak advised
Tradeline, shortly after this communication, that it did not
wish to insure for the more expensive all risks coverage under
Institute Cargo Clauses (A) ("ICC(A)"), but rather
wished to add rainwater coverage to the existing coverage. Deepak
also wished only to cover 21,000 MT of the entire shipment.
On June 1, 1998, Tradeline inquired
of Frenkel whether it could obtain an upgrade to include the
risk of rainwater. Specifically, Tradeline asked if ICC(A) terms
covering only rainwater damage could be obtained, whether rainwater
coverage could be added to the existing ICC(C) coverage, and
whether rainwater damage could be obtained for only part of the
total DAP shipment. On June 5, 1998, after various communications
between Tradeline and Frenkel, and Frenkel and MMO, MMO set the
rate for an upgrade of ICC(C) coverage to include risk of rainwater
damage at 1.5 cents per $100 of insured value. On June 8, 1998,
Deepak informed Tradeline that it accepted these quoted terms
and Tradeline issued new SMPs shortly thereafter. The new SMPs
contained a revised typewritten provision stating:
Notwithstanding anything contained
herein to the contrary: Average terms & conditions:
London ICC clauses (C)
London War Clauses (cargo)
London Strike Clauses (cargo)
including risks of rainwater damages,
with effect from 5th June 1998.
Claims payable in India.
Frenkel approved these SMPs 377
and 378 to replace SMPs 367 and 368, with the new coverage to
be effective June 5, 1998. Tradeline wrote "cancelled"
on SMPs 367 and 368.
On June 9, 1998, while the DAP was
still being discharged, a cyclone struck the port of Kandla,
involving cyclonic wind and rain forces, tidal waves and rising
waters. When the cyclone struck, approximately 12,500 MT had
been offloaded from the M/V Sea Guardian. About 5,000 MT were
already bagged and transported to other inland locations. The
M/V Sea Guardian, with approximately 36,500 MT of DAP still on
board, was diverted from the port of Kandla, which was closed
due to the cyclone, to the distress port of JNPT, India.
On June 12, 1998, Deepak gave notice
of loss stemming from the cyclone to New York Marine through
Frenkel. Shortly thereafter, MMO, on behalf of New York Marine,
retained Tata Marine Services, who in turn hired J.B. Boda Surveyors
Ltd. to assess the extent of the damage to the DAP shipment.
A.Undisputed Losses Incurred
by Deepak
Deepak suffered seven separate categories
of damages. First, 1,650 MT of DAP were lost as the result of
the sinking of lightering barges in the port of Kandla, amounting
to a claim of $399,300. Second, 1,054.06 MT of DAP were lost
in the shore area of the port of Kandla as a result of the cyclone
rains, rising tides, and tidal waves of 9 meters, resulting in
a claim of $255,082.52. Third, 2,672.92 MT of DAP were damaged
by the cyclone and resulting floods in the port trust area of
Kandla. The DAP had been deposited from the lightering barges
onto the shore area. The loss amounted to $471,978.24, which
represents the difference in insured value less the monies received
after a salvage sale. Fourth, Deepak incurred mitigation expenses
in segregating and reconditioning the damaged DAP, cost
of replacement bags, additional transportation costs and extra
overhead for the salvage operations amounting to $30,703.87.
Fifth, Deepak incurred forwarding, landing and storage costs
for diverting the cargo to the port of distress, JNPT, in the
amount of $280,754.89 ($247,463.39 for additional wharfage, statutory
port charges, demurrage, cost of excavators, customs overtime,
manual bagging charges statutorily imposed, additional supervision,
cost of transporting empty bags to JNPT and survey costs plus
$33,291.50 toward the cost of moving the vessel from Kandla to
JNPT). Sixth, 566.53 MT of DAP were damaged by rain water at
the port of JNPT, resulting in a loss of $100,454.48, the difference
in insured value less the monies received for the salvage sale.
Seventh, 47.85 MT of DAP was lost during the discharge of the
shipments at the port of distress, in the amount of $11,579,70.
Total losses claimed amount to $1,549,853.70. By letter dated
September 21, 1998, MMO declined Deepak's claim in its entirety.
A.Proceedings Below
Because this complex appeal raises
several issues among several parties, we set forth the claims,
counterclaims and third-party claims in some detail.
On October 30, 1998, New York Marine
brought a declaratory judgment action against Tradeline and Deepak,
seeking a declaration that the Policy was void ab initio.
New York Marine claimed that the defendants violated the duty
of utmost good faith when they sought to add rainwater coverage,
by failing to inform New York Marine that the DAP was in route,
that two DAP shipments were aboard the same vessel, and that
dire weather was predicted.
Tradeline and Deepak counter-claimed
against New York Marine, alleging that New York Marine breached
the Policy by failing to pay Deepak's claim and, in addition
to compensatory damages, prayed for punitive damages based on
New York Marine's alleged bad faith in denying the claims under
the Policy. Deepak filed a cross-claim against Tradeline for
breach of the CIF sales contract. Tradeline also filed a third-party
complaint against MMO, New York Marine's agent, alleging that
MMO breached its duty of good faith by causing Deepak's claim
to be wrongfully denied.
New York Marine filed a third-party
complaint against Frenkel, alleging that Frenkel misrepresented
or failed to disclose to New York Marine material facts regarding
the requested rainwater coverage upgrade and that it permitted
unauthorized SMPs to issue.
On motions for summary judgment
filed by Deepak, Tradeline, and Frenkel and on New York Marine's
motion to dismiss under Federal Rule of Civil Procedure 12(b)(6),
the district court dismissed Tradeline's and Deepak's claims
for punitive damages, but denied all the remaining motions because
disputed questions of material fact existed. SeeNew York Marine
& General Ins. Co. v. Tradeline (L.L.C.), No. 98 Civ.
7840(HB), 1999 WL 1277244, at *4-*6 (S.D.N.Y. Nov. 29, 1999)
("New York Marine I").2 In deciding the parties' motions
for summary judgment, the district court concluded that, despite
the choice of law provision in the Policy calling for application
of English law, New York law applied. See New York
Marine I, 1999 WL 1277244, at *3. The parties do not dispute
this conclusion and have set forth their arguments on appeal
based on New York law.
Following a bench trial, the district
court rejected New York Marine's claim that the Policy was void
ab initio. SeeNew York Marine & General Ins. Co.
v. Tradeline (L.L.C.), No. 98 Civ. 7840(HB), 2000 WL 739567,
at *9 (S.D.N.Y. June 7, 2000) ("New York Marine II").
The district court did conclude, however, that Tradeline and
Deepak would not get the benefit of the rainwater coverage evidenced
by SMPs 377 and 378 because they violated the duty of utmost
good faith by not disclosing the weather conditions to New York
Marine or MMO. Seeid. at *8-*10. Therefore, the district
court awarded to Deepak that part of its claim covered by the
Policy and the original SMPs (367 and 368), which, the district
court concluded, amounted to $410,879.70. Seeid. at *10-*11.
The district court dismissed New York Marine's third-party complaint
against Frenkel, as well as Deepak's cross-claim against Tradeline.
Seeid. at *12. Finally, the district court denied Deepak's
and Tradeline's requests for attorneys' fees, finding no evidence
of bad faith on the part of New York Marine and concluding that
Deepak was not "truly successful" in defending New
York Marine's declaratory suit, "having prevailed only to
a modest degree." See id.
The parties filed timely appeals.
II. DISCUSSION
On appeal, Deepak's principal argument
is that the district court misinterpreted the Policy, thereby
erroneously failing to accord it full recovery on its claim.
Deepak also contests other determinations made by the district
court regarding evidence, agency relationships between the parties,
dismissal of its contract claim against Tradeline, and the pre-judgment
interest rate to be applied to its recovery.
New York Marine and MMO cross-appeal,
contending, as they did below, that the Policy was void ab
initio. Tradeline likewise cross-appeals, and echoes Deepak's
principal argument.3
A.Jurisdiction, Standard of Review
and Choice of Law
Federal subject matter jurisdiction
exists pursuant to 28 U.S.C. § 1331, which provides federal
district courts with original jurisdiction over "any civil
case of admiralty or maritime jurisdiction." Federal admiralty
jurisdiction extends to cases involving marine insurance contracts.
See Advani Enters., Inc. v. Underwriters at Lloyd's,
140 F.3d 157, 161 (2d Cir. 1998).
Although we review a district court's
findings of fact for clear error, see Atlantic Mut.
Ins. Co. v. Balfour MacLaine Int'l Ltd. (In re Balfour MacLaine
Int'l Ltd.), 85 F.3d 68, 74 (2d Cir. 1996), we review a district
court's construction of an insurance policy de novo, see
Commercial Union Ins. Co. v. Flagship Marine Servs., Inc.,
190 F.3d 26, 30 (2d Cir. 1999). "Absent a specific federal
rule, federal courts look to state law for principles governing
maritime insurance policies . . . and apply federal maritime
choice of law rules to determine which state's law to apply."
Id. (citing Wilburn Boat Co. v. Fireman's Fund Ins.,
348 U.S. 310, 319-21 (1955) and Advani Enters., 140 F.3d
at 162). Here, as earlier indicated, the district court concluded
that New York law governed interpretation of the Policy, and
the parties do not contend otherwise.
A.The Status of the Policy
New York Marine's principal contention
below was that Deepak and Tradeline violated the doctrine of
uberrimaefidae, the duty of utmost good faith, by failing
to disclose to MMO or New York Marine the status of the DAP shipments
and the weather predictions when Deepak sought rainwater coverage.
Because of this failure to disclose, New York Marine argued,
the entire policy was void ab initio, and Deepak should
recover nothing on its claim. The district court agreed that
Deepak and Tradeline had violated this duty, but held that the
entire policy was not void; instead, only the SMPs issued with
rainwater coverage were void. See New York Marine II,
2000 WL 739567, at *7-*10.
On appeal, New York Marine again
urges that the entire policy is void. Deepak, on the other hand,
argues that it violated no duty, because it disclosed to Tradeline
the existence of bad weather at the port of Kandla and that any
knowledge possessed by Tradeline is imputed to New York Marine,
because Tradeline was acting as New York Marine's agent with
respect to the issuance of the SMPs. Because we agree with Deepak's
argument that Tradeline was acting as New York Marine's agent,
we reverse the district court's holding with respect to Deepak's
duty of utmost good faith.
1.Agency
New York common law provides that
an agency relationship "results from a manifestation of
consent by one person to another that the other shall act on
his behalf and subject to his control, and the consent by the
other to act." Meese v. Miller, 79 A.D.2d 237, 242,
436 N.Y.S.2d 496, 499 (4th Dep't 1981); see alsoPensee
Assocs., Ltd. v. Quon Indus., Ltd., 241 A.D.2d 354, 359,
660 N.Y.S.2d 563, 566-67 (1st Dep't 1997) (same). Under New York
law, knowledge acquired by an agent acting within the scope of
its agency is imputed to the principal, even if the information
was never actually communicated. See Christopher S.
v. Douglaston Club, 275 A.D.2d 768, 769, 713 N.Y.S.2d 542,
543 (2d Dep't 2000).
Clause 43 of the Policy explicitly
grants authority to Tradeline to issue "Special Policies
of Insurance" for shipments covered by the Policy, manifesting
New York Marine's consent to Tradeline acting on its behalf.
When Tradeline issued, upon Deepak's request, SMPs 377 and 378,
which included rainwater coverage, it consented to act as New
York Marine's agent with respect to this transaction. There is
no question that Tradeline was under New York Marine's control
in issuing the SMPs - Tradeline communicated with New York Marine's
managing general agent, MMO, in acquiring and setting the premium
for the coverage. Therefore, Tradeline acted as New York Marine's
agent in issuing both the original SMPs (367 and 368) and the
rainwater coverage SMPs (377 and 378). Knowledge possessed by
Tradeline regarding the location of the vessel and the weather
predictions will thus be imputed to New York Marine.
Perzy v. Intercargo Corp., 827 F. Supp. 1365 (N.D. Ill. 1993) is
instructive. Perzy involved a marine insurance dispute
between Edwin Perzy, a manufacturer and seller of snowball paperweights,
and Intercargo Corporation, an insurance company. See
id. at 1368-69. A customer of Perzy in California sought
to return unsold snowball paperweights to Perzy in Vienna, and
enlisted a freight forwarder to arrange for shipment and insurance
of the paperweights. See id. at 1368. The freight
forwarder sent to Perzy a "Certificate of Marine Insurance"
stating that it covered the shipped cargo. See id.
at 1369. When the paperweights arrived in Vienna in a frozen
and damaged condition, Perzy filed an insurance claim which Intercargo
denied. See id. In addressing the parties' motions
for summary judgment, the district court noted that the freight
forwarder was likely acting as Intercargo's agent in the original
placement of the insurance coverage. See id. at
1374. Intercargo contended that the freight forwarder was acting
as Perzy's agent, to which the district court responded,
it is beyond dispute that even if
[the freight forwarder] may also have been serving as Perzy's
agent when she purchased insurance, in all events she was surely
Intercargo's agent in that respect. Before Perzy had ever
entered the picture Intercargo had given [the freight forwarder]
the authority to write insurance policies with Intercargo as
insurer.
Id.
at 1377 (emphasis in original). The court further noted that
Intercargo controlled the policy's terms, and that the freight
forwarder worked on Intercargo's behalf in writing certificates
for it. See id.
Here, too, the relationship between
Tradeline and New York Marine commenced prior to Deepak's DAP
shipments. As we noted earlier, Tradeline was authorized under
Clause 43 to issue "Special Policies of Insurance,"
but New York Marine generally controlled the terms of the Policy
and set the premiums. We therefore conclude that Tradeline was
acting as New York Marine's agent when it sought the price for
rainwater coverage and subsequently issued the updated SMPs.
Any knowledge possessed by Tradeline in issuing the SMPs will
be imputed to New York Marine, as the principal.
1.Application of the Doctrine
of Uberrimae Fidae
"[P]arties to a marine insurance
contract are held to the highest degree of good faith. Under
this obligation, called uberrimaefidae, the party seeking
insurance is required to disclose all circumstances known to
him which materially affect the risk." Puritan Ins. Co.
v. Eagle Steamship Co. S.A., 779 F.2d 866, 870 (2d Cir. 1985).
Uberrimaefidae, the duty of utmost good faith, requires
an assured to disclose any information that materially affects
the risk being insured, because the assured is more likely to
be aware of such information. SeeKnight v. U.S. Fire Ins.
Co., 804 F.2d 9, 13 (2d Cir. 1986). A non-disclosed fact
is material if it would have affected the insurer's decision
to insure at all or at a particular premium. See Mutual
Benefit Life Ins. Co. v. JMR Elecs. Corp., 848 F.2d 30, 32-33
(2d Cir. 1988).
The district court found, and we
agree, that the prediction of severe rainy weather in the Kandla
area is a material fact that would have affected New York Marine's
decision whether to issue the extended coverage at all or to
do so at a higher premium. SeeNew York Marine II, 2000
WL 739567, at *7-*8. Deepak, therefore, had a duty to disclose
this information when seeking the rainwater coverage.
The record includes a letter sent
by fax from Deepak to Tradeline which references the impending
rainy weather at Kandla. Tradeline does not dispute that it received
this letter. Tradeline was therefore aware of the material weather
information, and this knowledge is imputed to New York Marine.
Deepak fulfilled its duty of utmost good faith by informing Tradeline,
as New York Marine's agent, of the material circumstances. We
therefore conclude that uberrimae fidae does not
void SMPs 377 and 378, and that Deepak can recover any loss covered
by those SMPs. As we conclude below, however, Deepak is not entitled
to full recovery, even under SMPs 377 and 378.4
A.Deepak's Recovery under Open
Cargo Policy No. 10490MC594
1.The Governing Terms of the
Policy
Both the original and the rainwater
SMPs contain the phrase, "[n]otwithstanding anything contained
herein to the contrary: Average terms & conditions: London
ICC Clauses (C)." The district court concluded that this
phrase "is unambiguous and resolves all potential conflicts
[between Policy and ICC(C) provisions] in favor of the provisions
outlined in the ICC(C) clauses." New York Marine II,
2000 WL 739567, at *6. On appeal, Deepak challenges this conclusion
and contends that the Policy's manuscripted clauses, along with
the attached endorsements, trump the pre-printed ICC(C) clauses
referenced in the SMPs. We reject Deepak's challenge and conclude
that the ICC(C) provisions govern Deepak's claim under the Policy.5
In support of its argument, Deepak
invokes several of the Policy's provisions. The first, Clause
48, provides that "[i]t is further agreed that the terms,
conditions and limits contained herein (clauses 1 to 47 inclusive)
shall supersede those of the printed policy to which this form
is attached wherever the same may conflict." Second, Clause
11(G) provides that "[i]n the event that broader terms or
conditions appear in a policy, special policy, [or] certificate
. . . which has been accepted by this Assurer, then such terms
and conditions shall be applicable." Third, Clause 43, which
authorizes Tradeline to issue SMPs, provides that the "clauses
appearing in this form shall be deemed to be included in Certificates
and/or Special Policies of Insurance when issued under the authority
granted in this clause." Finally, the SMPs were issued "subject
to conditions of Open Policy No. 10490MC594." Deepak contends
that the combined effect of these clauses demonstrate that the
parties intended, where any conflict in terms arise, the broader
terms and conditions to govern coverage. Additionally, Deepak
cites rules of insurance policy interpretation, which require
conflicts to be interpreted against the insurer and which require
courts to afford broader coverage where the policy contains conflicting
clauses. Therefore, Deepak argues that the manuscripted Policy
clauses are given effect over the ICC(C) clauses.
We reject this contention. Although
it is true, as a general rule, that "where a certificate
states expressly that it is subject to the terms and conditions
of the policy, the language of the policy controls," Taylor
v. Kinsella, 742 F.2d 709, 711 (2d Cir. 1984), the certificates
(SMPs) at issue here include typewritten, not pre-printed, provisions
limiting the terms of the coverage to ICC(C) clauses. Typewritten
statements in an insurance policy will prevail over stock or
pre-printed forms. See, e.g., Perth Amboy Drydock
Co. v. N.J. Mfrs. Ins. Co., 26 A.D.2d 517, 517-18, 270 N.Y.S.2d
819, 820-21 (1st Dep't 1966); see also 2 Lee R.
Russ & Thomas F. Segalla, Couch on Insurance §
22:4 n.34 (3d ed. 1996) ("Couch on Insurance")
("Written or typed portion of a policy must be taken as
more immediate or deliberate expression of intention than the
printed portion if there is any repugnancy or conflict between
them; written or typed portion prevails."). The typewritten
statements in the SMPs, adopting the ICC(C) provisions as governing
terms, control where there are conflicts.
We agree with the district court
that these typewritten provisions modify both the "average
terms and conditions" paragraph contained in the SMPs and
Clause 11 of the Policy, also entitled "average terms and
conditions." See New York Marine II, 2000
WL 739567, at *5. First, the SMPs were issued pursuant to Tradeline's
authority under the Policy, and the SMPs specifically state that
they are subject to the conditions of the Policy. Clause 11(A),
modified by Endorsement Nine, contemplates that the Assured will
choose either ICC(C) coverage or ICC(A) coverage:
All goods and/or merchandise . .
. are insured:
Cement clinker, sulphur, rock phosphate,
bentonite, barytes, scrap metal, ammonia, diammonium phosphate,
urea, silicon sand, salt, soyabean and rice in bulk are insured:
I. Institute Cargo Clause (C) and
all claims for shortage and/or leakage are subject to a deductible
of one-half of one percent (? of 1%) of the insured value.
or, if declared by the Assured prior
to know [sic] or reported loss.
II. Per Institute Cargo Clauses
(A). All claims subject to a deductible of 2% of the insured
value.
The original, unamended Clause 11(A)
provided for no such choice, and dictated the level of coverage.
When Tradeline and Deepak chose ICC(C) coverage in the CIF sales
contract, and Tradeline incorporated this choice into the SMPs,
it incorporated the ICC(C) terms into the Policy to govern coverage.
Clauses 11(G) and 48 do not require
the opposite result. Clause 11(G) states that "[i]n the
event that broader terms . . . appear in a policy, special policy,
[or] certificate. . . then such terms and conditions shall be
applicable." Clause 11(G) contemplates the situation where
the SMPs contain broader terms than the Policy and states that
the broader terms control. Here, the Policy itself contains broader
terms than the SMPs. The SMPs' additional "notwithstanding
anything contained herein" language plainly supersedes the
broader Policy provisions. Also, as the district court recognized,
if Clause 11(G) required that the Policy's broader terms were
always applicable, Tradeline could never insure any shipment
for less than all-risks coverage. See New York Marine
II, 2000 WL 739567, at *5. As noted earlier, such an outcome
directly contravenes Endorsement Nine, which allows the assured
to choose the level of coverage.
Deepak's argument for broader coverage
based on Clause 48, which provides that clauses 1 through 47
of the Policy supersede clauses contained in the "printed
policy" in cases of conflict, fails for the same reason.
If the phrase "printed policy" refers either to the
SMPs issued pursuant to Clause 43 or to the ICC(C) pre-printed
provisions which were attached to the open policy, then the Policy
would, in effect, always provide one level of coverage, notwithstanding
the choices later made by the insured party with respect to a
specific shipment. This result would ignore both Clause 11(G),
which allows, for an additional premium, broader coverage than
that provided in the Policy, and Endorsement Nine, which allows
the insured to choose between either ICC(C) or ICC(A) coverage.
We refuse to interpret a contractual term in such a way as to
nullify other provisions. Cf. 2 Couch on Insurance
§ 21:19 ("[T]he expressed intent of the parties is
to be ascertained by examining the . . . policy as a whole. .
. . [T]he policy must be construed in its entirety, with each
clause interpreted in relation to others contained therein. All
its words, parts, and provisions must be construed together as
one entire contract, each part interpreted in the light of all
the other parts[.]") (footnotes omitted).
We therefore conclude that the terms
governing the DAP shipments are contained in the ICC(C) provisions,
with the addition of rainwater damage as a covered risk. We now
examine those provisions to determine what portion of Deepak's
claim is covered by the Policy.
1.Deepak's Recovery under the
Policy
Thus far, we have concluded that
the ICC(C) provisions contain the governing terms of the Policy
with respect to the DAP shipments at issue here. Additionally,
contrary to decision of the district court, we have concluded
that, because Tradeline was acting as New York Marine's agent
in issuing SMPs 377 and 378 and Deepak fully informed Tradeline
of the circumstances surrounding the request for rainwater coverage,
Deepak did not violate its duty of uberrimae fidae
owed to New York Marine. Therefore, we will now ascertain which
aspects of Deepak's claim are covered by the Policy as amended
by SMPs 377 and 378.
Deepak asserts that it is an assured
under the Policy, and New York Marine does not dispute this assertion.
We agree that Deepak is an assured. Clause 1 of the Policy provides
the Policy is "[f]or account of whom it may concern."
"Insurance carried for the account of `whom it may concern'
covers anyone having an insurable interest in the insured property
at the time of the happening of the loss." The John Russell,
68 F.2d 901, 902 (2d Cir. 1934). Endorsement Nine of the Policy
specifically lists diammonium phosphate as a good covered by
the Policy. Coverage of the DAP attached automatically to the
two shipments upon commencement of transit, as provided by Clause
4 of the Policy which states "[t]his policy attaches to
all shipments made on or after May 9, 1994."
The district court awarded to Deepak
$399,300 in connection with the DAP lost due to the sinking of
the lightering barge in the port of Kandla. Additionally, the
district court awarded $11,579.70 in connection with the DAP
lost during discharge at JNPT, the port of distress. SeeNew
York Marine II, 2000 WL 739567, at *10-*11. New York Marine
concedes that, if Deepak was entitled to insurance coverage,
the district court was correct in awarding these two categories
of damages under the Policy.
Our focus, therefore, is whether
Deepak is entitled to recover for any other losses incurred.
Clause 1 delineates the risks covered, which include loss or
damage due to (a) fire or explosion; (b) a stranded, grounded,
sunk or capsized vessel; (c) collision of the vessel with "any
external object;" or (d) discharge of cargo at a port of
distress. SMPs 377 and 378 modify this clause by adding the risk
of rainwater damage. Clause 8 of the ICC(C) terms outlines the
duration of insurance coverage. This Clause provides that the
insurance coverage commenced from the time the DAP left Tradeline's
warehouse and "continue[d] during the ordinary course of
transit" and terminated either (1) on delivery to the final
warehouse or storage site at the named destination; or (2) on
delivery to any other warehouse or storage site,
whether prior to or at the destination
named herein, which the Assured elect[ed] to use either for storage
other than in the ordinary course of transit or for allocation
or distribution or on the expiry of 60 days after completion
of discharge overside of the goods hereby insured.
Deepak seeks to recover $255,082.52
for 1,056.06 MT of DAP that had been deposited from the lightering
barges onto the shore area and was washed away as a result of
rising tides and tidal waves. Additionally, Deepak claims $471,978.24
for DAP that was damaged by the cyclone on the shore of Kandla.
The district court concluded that these two claims were not covered.
See New York Marine II, 2000 WL 739567, at *10.
We agree.
Although the SMPs 377 and 378 amended
Clause 1 of the ICC(C) provisions to include the risk of rainwater
damage, the SMPs did nothing to alter Clause 8, the duration
clause, which terminates coverage upon delivery to any site,
either prior to or at the named destination, used for storage
or distribution allocation. Therefore, once the DAP had been
offloaded from the M/V Sea Guardian onto the shore area into
the custody of Rishi Shipping, Deepak's clearing and forwarding
agent, the DAP had been delivered to "any other warehouse
of place of storage" and was no longer in the "ordinary
course of transit" under Clause 8. At that point, the insurance
coverage terminated, and any loss or damage at that point cannot
be recovered under the Policy. See Jomark Textiles,
Inc. v. Int'l Fire and Marine Ins. Co., Ltd., 771 F. Supp.
577, 580 (S.D.N.Y. 1989) (interpreting policy provision virtually
identical to Clause 8 and holding that where the insured "exercised
dominion and control over the goods, they were no longer in-transit
as a matter of law, and therefore, were no longer covered by
the . . . policy"); see also Lumber &
Wood Prods., Inc. v. N.H. Ins. Co., 807 F.2d 916, 919-20
(11th Cir. 1987) (same).
Clause 12 of the Policy, which provides
for broader "warehouse to warehouse" coverage does
not affect our determination of Deepak's coverage with respect
to these two claims, because, as we concluded earlier, where
there are conflicts between ICC(C) provisions and the Policy
provisions, the ICC(C) provisions control. Similar reasoning
defeats Deepak's arguments for coverage which invoke Clause 17
of the Policy, entitled "Shore Coverage," providing
that "where this insurance covers on goods while on any
land conveyance and/or while on docks, wharves, quays, or elsewhere
on the shore, the perils insured against include . . . cyclone,
. . . flood, [and] rising waters." This clause does not
apply here, because such shore coverage was not included
in the insurance covering the DAP shipments, as demonstrated
by the SMPs' adoption of ICC(C) terms. We therefore agree with
the district court that New York Marine is not liable under the
Policy, as amended by the SMPs, for either the approximately
1056 MT of DAP washed away on the shore of Kandla or the approximately
2672 MT of DAP damaged while at the shore area at Kandla.
The next category of loss claimed
by Deepak amounts to $30,703.87 in salvage and reconditioning
costs for the DAP damaged at the shore of Kandla. The district
court concluded that, because the damage itself was not covered
under the Policy, the costs incurred in salvage efforts were
likewise not covered. See New York Marine II, 2000
WL 739567, at *11. Deepak challenges this conclusion on appeal,
and contends that Clause 41 of the Policy allows it to recover
these costs. Clause 41 requires the assured to undertake mitigation
efforts without jeopardizing the insurance coverage and provides
that the mitigation costs are recoverable.6 We reject Deepak's Clause 41 argument.
The costs incurred by Deepak in salvage efforts are not covered
under the Policy, because the DAP itself was not covered when
the damage occurred. As we outlined earlier, the DAP was ashore
at that point and, therefore, this damage was not covered by
virtue of ICC(C) Clause 8.
Next, Deepak claims that it should
have been awarded recovery for forwarding, landing and storage
expenses incurred at the port of distress, JNPT and for rainwater
damage to 566.53 MT of DAP caused by a leak in a silo at JNPT.
The district court concluded that these costs were not covered
under the Policy and that, under ICC(C) terms, Deepak could instead
recover only for loss of or damage to the DAP itself at the port
of distress. See New York Marine II, 2000 WL 729567,
at *11. On appeal, Deepak invokes Clause 12 of the ICC(C) provisions.
Clause 12 of the ICC(C) terms states:
Where, as a result of the operation
of a risk covered by this insurance, the insured transit
is terminated at a port or place other than that to which the
subject-matter is covered under this insurance, the Underwriters
will reimburse the Assured for any extra charges properly and
reasonably incurred in unloading[,] storing and forwarding the
subject-matter to the destination to which it is insured hereunder.
This Clause 12, which does not apply
to general average or salvage charges, shall be subject to the
exclusions contained in Clauses 4, 5, 6 and 7 above, and shall
not include charges arising from the fault[,] negligence[,] insolvency
or financial default of the Assured or their [sic] servants.
(Emphasis added.)
To determine the import of this
Clause, we must first ascertain whether the DAP was forwarded
to JNPT, the port of distress, "as a result of the operation
of a risk covered by this insurance." Clause 1 of the ICC(C)
terms includes as a covered risk "loss of or damage to the
subject-matter insured reasonably attributable to discharge of
cargo at a port of distress." Additionally, SMPs 377 and
378 adds rainwater damage as a covered risk. Deepak therefore
argues that the movement of the M/V Sea Guardian, because of
heavy rainfall, from Kandla to JNPT as a port of distress triggered
coverage under Clause 12.7
We do not agree that Clause 12 of
the ICC(C) terms provides coverage to Deepak for those "extra
charges properly and reasonably incurred in unloading[,] storing
and forwarding the subject-matter to the destination to which"
the DAP was insured. As New York Marine contended at oral argument,
the expenses incurred by Deepak in diverting the DAP to JNPT
were not incurred as a result of loss or damage to the
DAP "reasonably attributable to discharge of cargo at a
port of distress." Neither was the vessel diverted to JNPT
as a result of rainwater damage to the DAP. Instead, the expenses
were incurred as a result of the closure of the port at Kandla
due to the cyclonic weather. Risks covered under the Policy include
neither port closure nor cyclones. Therefore, we cannot conclude
that the expenses incurred in the diversion to JNPT occurred
as a "result of the operation of a risk covered." New
York Marine is therefore not liable to Deepak for these costs.
Next, Deepak claims that it should
recover for the rainwater damage to approximately 566 MT of DAP
that occurred during storage in a silo at JNPT. As we noted earlier,
SMPs 377 and 378 cover rainwater damages. Because we cannot ascertain,
however, whether this DAP was still "in transit" under
ICC(C) Clause 8, we remand to the district court for a determination
regarding whether this DAP was covered under the Policy given
this clauses duration limitations. Deepak contends that this
DAP was damaged in part because of the negligence of the stevedores
or of the port facilities at JNTP. Such a contention raises questions
concerning whether, at that point, the DAP was in "the ordinary
course of transit" or had instead been stored, at Deepak's
direction, "other than in the ordinary course of transit."
We distinguish this claim for damage from the damage which occurred
at the port of Kandla, because in the latter instance, the offloaded
DAP was being handled by Rishi Shipping, a clearing and forwarding
agent hired by Deepak. This fact clearly shows that the DAP was
damaged in the shore area at Kandla outside the duration described
in ICC(C) Clause 8. Therefore, on remand the district court must
ascertain if coverage had indeed terminated because the DAP in
the JNPT silo was delivered to "any other warehouse or place
of storage, whether prior to or at the destination named herein,
which [Deepak] elect[ed] to use either for storage other
than in the ordinary course of transit or for allocation or distribution."
A.The Tradeline-Deepak CIF Sales
Contract
Deepak contends on appeal, as it
did below, that Tradeline breached the CIF sales contract by
improperly writing the SMPs and thereby limiting Deepak's insurance
coverage to the ICC(C) clauses. The district court rejected this
claim, and concluded that Tradeline fulfilled its obligations
under the CIF contract. We agree with the district court.
"[U]nder a CIF contract []
the seller fulfills his obligation simply by loading the cargo
and forwarding to the buyer a bill of lading and insurance certificate."
Nat'l Am. Corp. v. Fed. Republic of Nigeria, 597 F.2d
314, 321 (2d Cir. 1979). Ferromontan, Inc. v. Georgetown Steel
Corp., 535 F. Supp. 1198, 1211 (D.S.C. 1982), cited by Deepak,
provides no support for Deepak's position. In Ferromontan,
the plaintiff, a steel broker, was contractually obligated to
procure cargo insurance covering the interests of the defendant,
a steel manufacturer and shipper, but failed to provide insurance
which named the defendant as an assured or to provide insurance
coverage of the defendants' risks. Seeid. at 1203. The
district court in Ferromontan concluded that the plaintiff
had breached its contract with the defendant. Seeid. at
1211.
Here, Tradeline loaded the DAP shipments
aboard the M/V Sea Guardian, issued two bills of landing and
issued two certificates of insurance, the SMPs 367 and 368 (later
replaced by SMPs 377 and 378). Tradeline apparently fulfilled
all its obligations under the CIF contract. Examination of the
terms of the specific CIF contract at issue reveals that Tradeline
provided exactly the type of insurance outlined in the contract.
Clause 8 of the CIF contract states that Tradeline is to
cover insurance and give details
to [Deepak] prior to commencement of loading. The insurance cover
shall be provided by a reputed international insurance firm to
cover 110% of C.I.F. value of the ordered cargo covering the
following risks: a) London ICC Clauses (C)[;] b) London War Clauses
(Cargo)[;] c) London Strikes Clauses (Cargo).
Under the contract, Tradeline was
obligated to supply insurance providing ICC(C) coverage and,
under either set of SMPs, it did so. We affirm the district court's
dismissal of Deepak's breach of contract claim against Tradeline.
A.Attorneys' Fees
Deepak appeals the district court's
denial of attorneys' fees, contending that it is entitled to
full reimbursement because it was "dragged halfway around
the world and . . . cast in a defensive posture by the insurer
[New York Marine] simply because [New York Marine] did not wish
to live up to its contractual obligations."
Generally, attorneys' fees awards
in admiralty suits are discretionary and based on a finding of
bad faith. SeeIngersoll Milling Machine Co. v. M/V Bodena,
829 F.2d 293, 309 (2d Cir. 1987). Additionally, "[u]nder
New York law, it is well settled that an insured cannot recover
his legal expenses in a controversy with a carrier over coverage,
even though the carrier loses the controversy and is held responsible
for the risk." Employers Mut. Cas. Co. v. Key Pharms.,
75 F.3d 815, 824 (2d Cir. 1996). "[A] policyholder may recover
attorney's fees, when he has been cast in a defensive posture
by the legal steps an insurer takes in an effort to free itself
from its policy obligations." Id. (internal quotation
marks and citation omitted). This "exception arises when
a policyholder has been cast in a defensive posture by its insurer
in a dispute over the insurer's duty to defend." Id.
The district court refused to award
attorneys' fees to Deepak and Tradeline, reasoning that (1) New
York Marine did not act in bad faith in denying the claim or
instituting the declaratory action; and (2) Deepak was not "truly
successful" in defending this suit, because it only recovered
a fraction of its claim. See New York Marine II,
2000 WL 739567, at *12. Although we conclude that Deepak may,
on remand, be somewhat more successful in defending New York
Marine's suit than did the district court, we will not disturb
the district court's conclusions regarding attorneys' fees. The
district court was well within its discretion in making this
determination.
A.Punitive Damages
Deepak alleges that New York Marine
breached the Policy in bad faith, and therefore is liable to
Deepak for punitive damages. The district court dismissed this
claim, New York Marine I, 1999 WL 1277244, at *4, and
we affirm the district court's dismissal.
Under New York law, punitive damages
in a breach of contract claim are available if the plaintiff
demonstrates (1) that the defendant's conduct is "actionable
as an independent tort; (2) the tortious conduct must be of [an]
egregious nature; (3) the egregious conduct must be directed
to plaintiff; and (4) it must be part of a pattern directed at
the public generally." New York Univ. v. Cont'l Ins.
Co., 87 N.Y.2d 308, 316, 662 N.E.2d 763, 767, 639 N.Y.S.2d
283, 287 (1995).
The district court noted that Deepak's
claim for punitive damages alleged no facts regarding the fourth
prong, and Deepak alleges none on appeal. We therefore conclude
that Deepak's punitive damages claim must fail.
A.Pre-Judgment Interest Rate
The district court applied the United
States Treasury Bill rate as provided in 28 U.S.C. § 1961(a).
Deepak contends that this was error, and that the district court
should have applied a 17% interest rate, representing what Deepak
would have earned had it invested the money in India.
"[T]he rate of pre-judgment
interest is within the broad discretion of the district court."
Mentor Ins. Co., Ltd. v. Brannkasse, 996 F.2d 506, 520
(2d Cir. 1993). Interest is intended to make the injured party
whole, see Mitsui & Co., Ltd. v. Am. Export Lines,
Inc., 636 F.2d 807, 824 (2d Cir. 1981), and generally "should
be measured by interest on short-term, risk-free obligations."
Indep. Bulk Transport, Inc. v. Vessel "Morania Abaco",
676 F.2d 23, 27 (2d Cir. 1982).
United States Treasury Bills are
such short-term, risk-free obligations. See Ingersoll
Milling Machine Co. v. M/V Bodena, 829 F.2d 293, 311 (2d
Cir. 1987). Deepak fails to demonstrate how its proffered 17%
interest rate could be earned on similarly short-term and risk-free
obligations. Further, and most importantly, Deepak has not demonstrated
that the district court abused its broad discretion in applying
the United States Treasury Bill rate in determining pre-judgment
interest. We therefore affirm the district court's pre-judgment
interest rate decision.
III. CONCLUSION
For the foregoing reasons, we affirm
the district court's dismissal of Deepak's breach of contract
claim against Tradeline and the claims for punitive damages.
We also affirm the district court's decisions with respect to
attorneys' fees and pre-judgment interest. We reverse the district
court's conclusion that Tradeline was not New York Marine's agent
with respect to the Special Marine Policies issued to Deepak
and that SMPs 377 and 378 were void, and remand for a determination
of New York Marine's liability for the rainwater damage to the
DAP stored in the silo at JNPT.
FOOTNOTES
[1]
The Institute Cargo Clauses
(C), along with several other types of clauses, were developed
in 1983 by the Institute of London Underwriters to replace the
old Lloyd's S.G. (ship and goods) Policy. See 2 Thomas
Schoenbaum, Admiralty and Maritime Law § 19-4 (3d
ed. 2001).
[2]
The district court also dismissed
Tradeline's claim of deceptive acts and practices under N.Y.
Gen. Bus. Law § 349, concluding that the statute was inapplicable.
SeeNew York Marine, 1999 WL 1277244, at *5. Tradeline
does not appeal this decision.
[3]
Frenkel filed a cross-appeal
as well, asserting that New York Marine's third-party complaint
against it should have been dismissed on its motion for summary
judgment. At oral argument, Frenkel conceded that, because New
York Marine had abandoned its claim against Frenkel, there was
nothing for this Court to address with respect to Frenkel's cross-appeal.
[4]
The district court concluded
that "even if a principal-agent relationship between Tradeline
and New York Marine was created by Clause 43 of the Open Policy,
Tradeline violated its duty of utmost good faith . . . by failing
to disclose the weather conditions . . . ." New York
Marine II, 2000 WL 739567, at *9. We do not reach this issue
here, because Deepak, the insured with respect to the DAP shipments,
did disclose the relevant information. Because Tradeline was
acting as New York Marine's agent, the issue is whether Tradeline
fulfilled its obligations as New York Marine's agent, an issue
not before this Court.
[5]
Additionally, we reject Deepak's
contention that the district court, in construing the insurance
policy, improperly admitted parol evidence, specifically the
testimony of Anna Abruzzese, an underwriting secretary at MMO.
While it is true that parol evidence is admissible only when
an insurance policy is ambiguous, seeIn re Prudential Lines
Inc., 158 F.3d 65, 77 (2d Cir. 1998), it is also true that
this Court generally assumes that "improper evidence and
comments have been rejected [by the trial court] when the trial
is to the Court alone, at least absent a showing of substantial
prejudice," United States v. Weldon, 384 F.2d 772,
774 (2d Cir. 1967); cf.McGregor- Doniger Inc. v. Drizzle Inc.,
599 F.2d 1126, 1138 n.7 ("[I]t is for the district court
to decide what evidence will aid its decision of the case before
it, and determinations as to relevance, probative weight, and
credibility will not be disturbed unless this discretion has
been abused."). Deepak has not made the requisite showing
in this case. The district court's decision indicates that it
did not rely on Abbruzzese's interpretation of the Policy provisions.
[6]
Clause 41 states:
In case of any imminent or actual
loss or misfortune, it shall be lawful and necessary to and for
the Assured, his or their factors, servants and assigns, to sue,
labor and travel for, in and about the defense, safeguard and
recovery of the goods and merchandise, or any part thereof without
prejudice to this insurance; nor shall the acts of the Assured
or this Assurer in recovering saving and preserving the property
insured in case of disaster be considered a waiver or an acceptance
of abandonment; to the charges whereof, this Assurer will contribute
according to the rate and quantity of the sum hereby insured.
[7]
Deepak also invokes Clause
21 of the Policy, which echoes Clause 12 of the ICC(C) terms,
and provides recovery for landing, warehousing, forwarding expenses
and damage to cargo "reasonably attributable to transhipment
or to discharge of cargo at port of distress." The Policy's
Clause 21, however, provides broader coverage than does ICC(C)'s
Clause 12. Because we determined earlier that where conflicts
arise between the Policy's and ICC(C)'s terms, the ICC(C) terms
prevail, we look only to ICC(C)'s Clause 12 to determine coverage.
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