The opinion of the court was delivered by: BONSAL
Plaintiff General Reinsurance Corporation instituted this diversity action against defendants Plymouth Mutual Life Insurance Company (Plymouth) and George Washington Life Insurance Company (George Washington) alleging in the first claim of its amended complaint that plaintiff and Plymouth entered into a Retrocessional Agreement (the Plymouth Retrocessional Agreement); that under this agreement, sums of money in the amount of $388,000 are due and owing by Plymouth to plaintiff; and that Plymouth has not paid to plaintiff the amount due, as required by the agreement. In the third claim of its amended complaint, plaintiff alleges that George Washington and Plymouth entered into a Reinsurance Treaty and Assumption Agreement (George Washington Assumption Agreement); that in this agreement George Washington agreed to pay all claims or liabilities arising out of policies reinsured with or assumed by Plymouth, including the claims arising out of the Plymouth Retrocessional Agreement; and that George Washington has not paid any of the money due and owing plaintiff under the Plymouth Retrocessional Agreement.
Plaintiff moves pursuant to Rule 56, F.R.Civ.P., for summary judgment against Plymouth on the first claim of the amended complaint for the amount therein alleged to be due plaintiff;
or, in the alternative, for an order pursuant to Rule 56(d), F.R.Civ.P., specifying facts "that appear without substantial controversy." Plaintiff further moves for an order: 1) enjoining Plymouth from transferring or assigning any assets to George Washington; 2) directing Plymouth to procure the return of its assets from George Washington; and, 3) enjoining Plymouth from being dissolved. George Washington moves pursuant to Rule 12(b), F.R.Civ.P., for an order dismissing the amended complaint against it for lack of personal jurisdiction and for an order quashing service of process upon it on the ground that service was improper.
By agreement dated May 21, 1965, effective August 1, 1965, Central National Life Insurance Company of Omaha (CNL) appointed Loyalty Life Insurance Agency, Inc. (Loyalty), of Philadelphia, Pa., as its Manager of Student Accident Insurance and Student Athletic Insurance (Student Insurance business). Under this agreement, Loyalty was to write student insurance policies for CNL and to handle and pay claims.
By Agreement No. 3418 dated April 14, 1965, effective August 1, 1965 (the CNL Reinsurance Agreement), plaintiff reinsured CNL for 100% of the losses and adjustment expenses on the Student Insurance business written by CNL through Loyalty. CNL agreed to pay plaintiff 100% of the net premiums actually collected by CNL from Loyalty. Any balance due either party was to be remitted on a monthly basis. By an endorsement dated November 4, 1965, retroactive to August 1, 1965, Central National Insurance Company of Omaha (CN), the parent of CNL, was added as a party to the CNL Reinsurance Agreement.
In the Plymouth Retrocessional Agreement, dated June 21, 1965 and effective August 1, 1965, as amended by an endorsement dated December 10, 1965, retroactive to August 1, 1965, Plymouth agreed: 1) to reinsure 60% of plaintiff's reinsurance liability to CNL and CN under the CNL Reinsurance Agreement; 2) to "reimburse [the plaintiff] promptly for 60% of all losses, claims and adjustment expenses that [plaintiff] pays or allows under the terms and conditions of the [CNL Reinsurance Agreement]." Plaintiff agreed to pay Plymouth 60% of the premiums collected by plaintiff less a commission of 27 1/2% and less 60% of the premium taxes allowed under the CNL Reinsurance Agreement. By agreement effective September 1, 1965, plaintiff agreed to pay Plymouth the losses on any accident covered by the CNL Reinsurance Agreement in excess of $15,000 but not more than $250,000.
In the George Washington Assumption Agreement, dated December 12, 1966 and effective January 1, 1967, George Washington reinsured 100% of every policy previously issued by or reinsured with or assumed by Plymouth, and Plymouth agreed to transfer substantially all its assets to George Washington.
Plaintiff's Motion for Summary Judgment
Plaintiff contends that it is entitled to summary judgment as to liability because Plymouth has admitted execution of the Plymouth Retrocessional Agreement, plaintiff's demand for payment, and Plymouth's non-payment. Plymouth concedes only that under the agreement it agreed to reinsure plaintiff to the extent of 60% of plaintiff's reinsurance liability to CNL and CN under the CNL Reinsurance Agreement.
Presumably, from figures received from Loyalty, CNL prepared and sent to plaintiff monthly statements showing losses and expenses paid and premiums collected, from the inception of the CNL Reinsurance Agreement. Plaintiff made payments to CN and CNL on the basis of these statements and plaintiff claims there is due and owing from Plymouth the sum of $400,095.10.
CNL sent copies of these monthly statements to Loyalty, but not to Plymouth.
Plymouth contends the figures are unsubstantiated, and disputes their accuracy. Plymouth denies that it owes anything to plaintiff under the Plymouth Retrocessional Agreement.
Plaintiff states that Plymouth is bound by the figures contained in the monthly statements. Various grounds for this are asserted. Plaintiff says this is the customary practice in the reinsurance field. Moreover, plaintiff states that Plymouth and Loyalty occupied the same offices and had some common officers, and that Plymouth used the figures in the monthly statements during the course of its correspondence with plaintiff in connection with the agreement. However, the weight to be accorded these contentions can only be determined after the facts are fully developed and it is ascertained whether CNL's monthly statements properly reflected the figures received from Loyalty and were limited to the business covered by the CNL Reinsurance Agreement. The only evidence of acceptance by Plymouth of the figures contained in these monthly statements is a letter dated July 29, 1966 from Schervone, Vice President of Plymouth, to an officer of plaintiff, to which is annexed what would appear to be a report as of July 29, 1966 indicating a balance in Plymouth's favor.
Therefore, the liability of Plymouth as well as the amount thereof, if any, must await trial. However, it seems clear that Plymouth's Retrocessional Agreement covers Student ...