DairyAmerica, Inc. v. New York Marine & General Insurance

MEMORANDUM **

Appellant DairyAmerica is a company engaged in the shipment of powdered milk. Appellee New York Marine and General Insurance Company (“NY Marine”) contracted with DairyAmerica to provide ocean marine cargo insurance, and appellee Crump Insurance Services d.b.a. Southern Marine & Aviation Underwriters (“Southern Marine”) was the underwriter for that insurance policy. The instant dispute involves DairyAmerica’s loss of fifty-nine loads of powdered milk stored at a warehouse in Mississippi, which occurred while a temporary insurance binder was in effect, but before the formal insurance policy from N.Y. Marine had issued.

The N.Y. Marine binder purports to cover “[ljawful goods and/or merchandise consisting principally of, but not limited to, milk powder of every kind and description and other goods incidental to the business of the assured ... and/or all other interests handled by the assured in the course of their business ... whether in transit or store or elsewhere anywhere in the world.” (Supplemental Excerpts of R. 266). However, the formal policy states: “This insurance attaches to all shipments commencing on or after August 11, 2005 and prior to October 1,…

dissenting.

In concluding that there is a genuine issue of material fact as to whether the insurance issued by N.Y. Marine to DairyAmerica covered shipments that commenced before the policy’s inception date, the majority ignores controlling California law. Insurance binders like the one issued by N.Y. Marine in this case are incomplete, informal, and temporary contracts that are “subject to the terms and conditions of the policy to be issued or of the policy ordinarily used by the company, or, if there is a standard policy in the jurisdiction, according to the terms and conditions of that policy, and it is presumed that the *177 parties contemplated such a policy, containing such conditions and limitations.” Parlier Fruit Co. v. Fireman’s Fund Ins. Co., 151 Cal.App.2d 6 , 311 P.2d 62, 71 (Cal.Ct.App.1957) (quoting 44 C.J.S. § 230, at 958); see also Chi. Title Ins. Co. v. AMZ Ins. Servs., Inc., 188 Cal.App.4th 401 , 115 Cal.Rptr.3d 707, 725 (Ct.App. 2010); Nat’l Emblem Ins. Co. v. Rios, 275 Cal.App.2d 70 , 79 Cal.Rptr. 583, 586-87 (Ct.App.1969); 16 Williston on Contracts § 49:53 (4th ed.2010).

Here N.Y. Marine’s formal policy stated that the “insurance attaches to all shipments…

FILED

NOT FOR PUBLICATION DEC 16 2010

MOLLY C. DWYER, CLERK

UNITED STATES COURT OF APPEALS U.S . CO U RT OF AP PE A LS

FOR THE NINTH CIRCUIT

DAIRYAMERICA, INC., a California No. 09-17368 Corporation, D.C. No.1:07-cv-00537-LJO-SMS Plaintiff - Appellant, Eastern District of California, Fresno v.

NEW YORK MARINE AND GENERAL

INSURANCE COMPANY and CRUMP MEMORANDUM * INSURANCE SERVICES d.b.a.

SOUTHERN MARINE & AVIATION

UNDERWRITERS et al.,

Defendants - Appellees.

Appeal from the United States District Court for the Eastern District of California Lawrence J. O'Neill, District Judge, Presiding

Argued November 1, 2010 Resubmitted December 3, 2010 San Francisco, California

Before: GOULD and IKUTA, Circuit Judges, and MAHAN,** District Judge.

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The Honorable James C. Mahan, United States District Judge for the District of Nevada, sitting by designation.

Page 1 of 5 Appellant DairyAmerica is a company engaged in the shipment of…