Contract Interpretation

Applied Underwriters Captive Risk Assurance Company, Inc. (Applied) defeated a motion for summary judgment filed by Beemac Driver Management, LLC (Beemac), in a lawsuit precipitated by Beemac’s alleged failure to pay either the $142,797.91 due under a “reinsurance participation agreement,” or the $253,287 early cancellation fee that resulted when Beemac refused to pay the amount due. The court stated it was “apparent that calculation of the amount due pursuant to the parties’ agreement is not [] simple … [nor was it] at all apparent from the pleadings and evidence how the plaintiff calculated the amount due – only that the plaintiff claims there is an amount due and owing.” The court noted that Beemac’s argument rested on the premise that miscalculating the amount due “was a prior material breach of the agreement, excusing their own subsequent failure to perform,” but that Beemac offered no authority to support that position. In addition, Beemac offered no calculation of the correct amount it contended was due under the contract. On these facts, the court could not conclude as a matter of law that Applied’s billing, even if inaccurate, was a material breach.

Beemac also sought to strike the affidavit of Applied’s chief actuary regarding the factors Applied used to determine the amount due under the reinsurance participation agreement. Beemac argued that Applied either failed to disclose the expert witness prior to the expert disclosure deadline or, if the witness was not an expert, that her testimony concerned contract interpretation, which is determined by the court as a matter of law. The court disagreed, stating that although Applied’s chief actuary might be an expert, in this particular matter she was not providing her opinions and conclusions based on her experience, skill and training, as an “expert witness” would testify. Rather, she was testifying regarding her personal knowledge of her employer’s business practices, rendering her a lay opinion witness. As a result, the motion to strike her affidavit was denied. Applied Underwriters Captive Risk Assurance Co., Inc. v. Beemac Driver Mgmt., LLC, Case No. 8:16-CV-382 (USDC D. Neb. Dec. 6, 2018).

This post written by Benjamin E. Stearns.

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The Northern District of New York declined to reconsider a September 2018 decision on competing motions for partial summary judgment we previously reported on in a long-running reinsurance dispute related to asbestos liability exposure. Subsequent to the court’s decision, Century Indemnity Co. moved for reconsideration of the court’s denial of summary judgment on its collateral estoppel defense and denial of its motion to dismiss for lack of standing because the court allegedly overlooked “controlling” evidence and decisions on these issues.

First, on the collateral estoppel claim, the court rejected Century’s argument that the court’s September decision improperly relied on a similar decision in a case involving Utica because that decision was issued after the summary judgment briefing was complete and the court cited the decision “without the benefit of briefing” on the decision’s impact. The court explained the September decision merely recognized the similar decision as involving a “similar estoppel argument” and did not improperly “adopt” the decision’s conclusions or impute a controlling effect to the decision.

Second, on standing, the court disagreed with Century’s contention that the September decision relieved Utica of its burden to establish standing. Harkening back to its September decision, the court emphasized Utica submitted evidence “tending to establish” standing and Century failed to “conclusively undermine” that showing.

Thus, the court denied the motion for reconsideration.

Utica Mutual Ins. Co. v. Century Indemnity Co., Case No. 13-995 (USDC N.D.N.Y. Nov. 30, 2018).

This post written by Thaddeus Ewald .

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