Gardner-Denver Co. v. Dic-Underhill Construction Co.

416 F. Supp. 934 (1976)

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Gardner-Denver Co. v. Dic-Underhill Construction Co.

United States District Court for the Southern District of New York
416 F. Supp. 934 (1976)

  • Written by Sheryl McGrath, JD

Facts

Gardner-Denver Co. (plaintiff) rented an air compressor to the Dic-Underhill Construction Co. (Dic-Underhill) (defendant) for construction of New York’s World Trade Center. The air compressor was stolen during construction in August 1973. The New York Port Authority (the Port Authority) (defendant) owned the World Trade Center. The Port Authority was insured by American Home Assurance Co. (American Home). The American Home insurance contract covered certain losses by the Port Authority’s building contractors, including Dic-Underhill. On or shortly after the date the air compressor was stolen in August 1973, Dic-Underhill notified American Home of the theft. Nearly two years later, in March 1975, American Home’s insurance adjuster informed Dic-Underhill that the American Home contract did not cover the theft. The following month, in April 1975, Dic-Underhill notified its own insurance company, St. Paul, of the theft. The St. Paul insurance contract stated that Dic-Underhill must notify St. Paul of a loss as soon as practicable. St. Paul declined to cover the theft. Gardner-Denver Co. sued Dic-Underhill and the Port Authority for the loss of the air compressor. St. Paul sought summary judgment on the ground that Dic-Underhill and subrogee the Port Authority failed to comply with the notice requirement in the St. Paul insurance contract.

Rule of Law

Issue

Holding and Reasoning (Motley, J.)

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Casebooks

Insurance Law

Key Terms

  • Summary JudgmentA final ruling that there is no genuine issue of material fact in dispute and that the moving party is entitled to judgment as a matter of law. Summary judgment may also be called summary disposition.
  • SubrogationTheory of recovery where one party steps into the shoes of another party to assert rights that party has against another. This is common with insurance companies who may pay an insured for a loss and then seek to recover the amount paid by asserting claims the insured has against a third party.
  • Condition PrecedentIn the contracts context, an event that must occur before a party's promised performance is due. The party may avoid performance if the condition has not occurred and the nonoccurrence is not excused. In the conveyances context, an event specified in a conveyance that must occur before title or other rights to the property actually transfer and vest in the recipient. Until the event occurs, the conveyance remains contingent. A common example of a condition precedent in the conveyance context is a provision in a will that says someone will inherit only if that person reaches a certain age.
  • WaiverOccurs when an individual voluntarily forgoes one of his rights.
  • PrecedentA principle formed from an earlier decision that should lead to a similar outcome under similar circumstances.
  • Insurance ContractA contract whereby one party undertakes to pay or indemnify a third party on behalf of another in the case of loss resultant from certain risks.

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