Reinsurance Claims

COURT DENIES MOTION FOR INTERLOCUTORY APPEAL IN ALLEGED INSURANCE KICKBACK SCHEME

October 27, 2015 by Carlton Fields

We have previously reported on a case styled Munoz v. PHH Corp., one of similar suits alleging putative class actions under the Real Estate Settlement Procedures Act arising from purported “sham” reinsurance transfers covering private mortgage insurance. Here, the California district court had granted PHH’s partial motion to dismiss and certified the remainder of the class. Plaintiffs subsequently filed for interlocutory appeal concerning whether a prior decision in the Ninth Circuit concerning equitable tolling and equitable estoppel disturbed the holdings in other California district court opinions. The court found that plaintiffs failed to satisfy the second of three prongs for certification—that there is substantial ground for difference of opinion among the courts. A “party’s strong disagreement with the court’s ruling is not sufficient for there to be a substantial ground for difference.” The court found that the appellate and district court opinions were not inconsistent, instead, “all assume that there are situations in which equitable tolling or equitable estoppel can apply to RESPA violations.” Even divergent application of settled law is not sufficient to show substantial ground for difference. Munoz v. PHH Corp., No 1:08-cv-00759-AWI-BAM (E.D. Cal. Oct. 1, 2015)

This post written by Matthew Burrows, a law clerk at Carlton Fields in Washington, DC.

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REINSURANCE DISPUTE VOLUNTARILY DISMISSED AFTER CEDENT FAILED TO ESTABLISH GOOD CAUSE TO SEAL

October 20, 2015 by John Pitblado

A reinsurance dispute we have covered previously was voluntarily dismissed shortly after the Western District of Michigan ordered that cedent’s amended motion for partial stay and accompanying memorandum, affidavits, and exhibits be unsealed. Plaintiff/counter-defendant Michigan Millers Mutual Insurance Company (MMMIC), the cedent, had filed its amended motion for partial stay and accompanying documents under seal. When the district court discovered this fact, the court directed MMMIC to “either file with the Court a notice informing the Court of the order authorizing the sealing of it’s [sic] motion and accompanying materials, or file a motion consistent with the provisions of Rule 10.6(b) establishing ‘good cause’ for sealing them.”

In response, MMMIC filed a motion to maintain under seal certain redacted passages in its motion for partial stay and accompanying exhibits. The court denied that motion and ordered the motion for partial stay and accompanying documents to be unsealed because MMMIC failed to establish either a need or good cause to seal these documents. Soon thereafter, the parties voluntarily dismissed the suit.

Michigan Millers Mut’l Ins. Co. v. Westport Ins. Corp., No. 1:14-cv-00151-PLM (USDC W.D. Mich.) (Aug. 21, 2015, denying motion to seal); (Sept. 18, 2015, stipulation of dismissal).

This post written by Whitney Fore, a law clerk at Carlton Fields in Washington, DC.

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DISTRICT COURT WON’T ALLOW INSURER TO “REPACKAGE” ITS BREACH OF UTMOST GOOD FAITH CLAIMS

September 10, 2015 by Carlton Fields

We previously reported on Old Republic National Title Insurance Co. v. First American Title Insurance Co., in which the court partially dismissed First American’s claim for breach of good faith and fair dealing to the extent the predicate breach of reinsurance contract claim alleged by First American failed to state a claim. The court has now denied First American’s motion to amend its answer. In the motion, First American attempted to demonstrate the predicate breach of reinsurance contract by contending that Old Republic failed to make payment under the contract based on false accusations and improper document requests. But the court agreed with Old Republic that the claims as pled did not support First American’s new allegations, and could not serve as a basis for a claim for the breach of the utmost duty of good faith. Old Republic Nat. Title Ins. Co. v. First American Title Ins. Co., No. 8:15-cv-126-T-30EAJ (USDC M.D. Fla. July 17, 2015).

This post written by Whitney Fore, a law clerk at Carlton Fields in Washington, DC.

See our disclaimer.

REINSURER’S MOTION FOR RECONSIDERATION OVER LIABILITY CAPS DENIED

August 20, 2015 by John Pitblado

In a case on which we previously reported, a federal court in New York recently denied plaintiff insurer’s motion to reconsider the court’s order granting defendant reinsurer’s motion for partial summary judgment. In that order, the court granted defendant Clearwater Insurance Company’s (Clearwater) motion for partial summary judgment because it found that the Liability Clauses in the facultative reinsurance certificates that Clearwater issued to plaintiff Utica Mutual Insurance Company (Utica) established limits on Clearwater’s liability. Specifically, these clauses capped Clearwater’s overall liability for losses (amounts an insurer pays to indemnify its policyholder) and expenses (amounts an insurer pays to defend its policyholder). Applying New York law, the court concluded that the contract was unambiguous and that the caps should be honored.

In its motion for reconsideration, Utica asked the court to deny Clearwater’s motion for partial summary judgment, arguing that a recent Second Circuit order represented an intervening change in controlling law. The court, however, denied Utica’s motion for three reasons: (1) because it was untimely; (2) because the order cited in Utica’s motion did not constitute an intervening change in controlling law; and (3) because even if the order were such an intervening change, it was distinguishable from the case at bar. Utica Mutual Ins. Co. v. Clearwater Ins. Co., No. 6:13-cv-01178 (USDC N.D.N.Y. July 23, 2015).

This post written by Whitney Fore, a law clerk at Carlton Fields in Washington, DC.

See our disclaimer.

CALIFORNIA COURT DISMISSES TOLLING SUBCLASS CLAIMS WITH PREJUDICE, FINDING ISSUES BARRED BY LAW OF THE CASE DOCTRINE

July 30, 2015 by Carlton Fields

Previously, the court granted the plaintiff-intervenor leave to file an amended complaint to cure deficiencies identified in the court’s order for partial judgment on the pleadings against the plaintiff-intervenor for failure to plead sufficient facts. In that August 2014 order, the court found that PHH’s loan disclosure documents had adequately placed the tolling subclass on notice of their claims, and that no extraordinary circumstances justified the late filing. The court also found that the plaintiff-intervenor failed to sufficiently plead a claim of fraudulent concealment apart from the underlying RESPA claim.

The court found that the allegations in the amended complaint would involve the re-litigation of these previously resolved issues. It reasoned that the amended complaint’s equitable estoppel and tolling claims “merely cloak[ed] the same facts or irrelevant facts in new legal theory, one amenable to the same defenses that have already prevailed” and were therefore barred under the law of the case doctrine. The court dismissed with prejudice because its previous order granted the intervenor one opportunity to amend, and the intervenor failed to cure the complaint’s deficiencies. Because the court had dismissed the claims with prejudice, it struck certain pleadings filed after the date of the order permitting the filing of an amended complaint as immaterial. Munoz v. PHH Corp., Case No. 08-00759 (USDC E.D. Cal. May 21, 2015).

This post written by Brian Perryman.

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