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Fine v. Bellefonte Underwriters Insurance Co.

March 20, 1985


Appeal from a denial of Fed. R. Civ. P. 60(b) relief in the United States District Court for the Southern District of New York (Sweet, J.). The district court considered itself bound by the law of the case doctrine because a previous panel of this Court had handed down a decision in this case. Affirmed.

Oakes, Cardamone and Pierce, Circuit Judges.

Author: Cardamone

CARDAMONE, Circuit Judge:

On this appeal we must weigh the policy that seeks the final repose of litigation against a claim that this Court incorrectly decided a particular case. Appellants urge that this panel review and reverse what they claim is an incorrect determination of a previous panel. It is not inconceivable that on occasion a judgment of this Court may be in error. No proof is required to demonstrate the fallibility of this or any Court. Nonetheless, the rules of appellate procedure are specifically designed to catch those instances when a panel misapprehends or overlooks some point of law or fact. The rules are meant to assure a party on appeal that its argument has been comprehended and considered by the Court. If we ignore these established procedures in an attempt to remedy a perceived error, we will throw a wrench into the collegial workings of our Court that are essential to its institutional integrity.


After fire destroyed several New York City buildings owned by plaintiffs-appellants Martin Fine, William Becker and Philip Becker, d/b/a 649 Broadway Equities Co., they made claim under their fire insurance policies written by defendant-appellee, Bellafonte Underwriters Insurance Co. At a deposition conducted in connection with the claim some of the questions asked of appellants concerned the sprinkler system, which had failed to function and hence did not check the spread of the fire. Appellants' answers to the question were false. In particular, appellants were queried about the instructions given regarding thermostat settings for the furnace and inspection and maintenance of the system. Martin Fine, one of the owners, and George Peters, an agent for the owners, both testified that the nighttime thermostat setting for the furnace had been 40 degrees. After its investigation the fire insurance underwriter concluded that the owners had instructed the building superintendent to reduce the thermostat's nighttime setting so that the furnace would not turn on until the outside temperature was below 25 degrees. Appellee therefore concluded that appellants had falsely answered a material question and refused to pay the fire claim.

Appellants then instituted this diversity action in the United States District Court for the Southern District of New York (Sweet, J.). Although the trial court characterized appellants' statements as "mistaken" or "inaccurate and consequently false," it nonetheless found that the statements were not material because the lower thermostat setting was not responsible for the fire loss incurred during the near-zero temperatures existing at the time of this February 1980 blaze. Defendant Bellefonte appealed.

On appeal, a panel of this Court reversed as a plain error of law the finding by the district court that the false answers were not material. This Court set aside the verdict and voided appellants' insurance policy under the "concealment, fraud" provisions of section 168 of the New York Insurance Law. N.Y. Ins. Law ยง 168 (McKinney Supp. 1984); Fine v. Bellefonte Underwriters Insurance Co., 725 F.2d 179 (2d Cir.), cert. denied, 469 U.S. 874, 105 S. Ct. 233, 83 L. Ed. 2d 162 (1984). In its opinion, the panel stated that "false sworn answers are material ... if they may said to have been calculated either to discourage, mislead or deflect the company's investigation in any area that might seem to the company, at that time, a relevant or productive area to investigate." 725 F.2d at 184. The opinion did not purport to determine whether the false statements in the instant case were willfully made. Nor did it intimate that willfulness was not required.

Appellants thereafter filed petitions under Fed. R. App. P. 40 for rehearing, and under Fed. R. App. P. 35(b) for rehearing in banc. They argued in the petition that there had been no finding of willfullness [willfulness]. Both petitions were denied. Appellants then petitioned the 469 U.S. 874, 105 S. Ct. 233, 83 L. Ed. 2d 162. Later, appellants moved before Judge Sweet for an order pursuant to Fed. R. Civ. P. 59 and 60(b)(1) and (6), to set aside the judgment and grant a new trial on the issue of willfulness. The district court denied appellants' motion on the grounds that the decision by this Court was the law of the case. From the district court's denial of Rule 60(b) relief, appellants brought the instant appeal. At the same time they moved for leave to file a second petition for rehearing and to consolidate that petition with this appeal. This motion was denied. Appellants question on this appeal the district court's application of the "law of the case" doctrine. They also ask us to consider whether and under what circumstances a panel of the Court may recall its mandate. We turn to these issues.


I n July 1984, some months after the previous panel's decision the New York Court of Appeals reaffirmed, in Deitsch Textiles, Inc. v. New York Property Insurance Underwriting Ass'n, 62 N.Y.2d 999, 479 N.Y.S.2d 487, 468 N.E.2d 669 (1984), that in addition to materiality, an insurance company must prove willfulness to void a fire insurance policy. Appellee attempts to distinguish Deitsch Textiles on the ground that it involved false statements made in a proof of loss statement and not a false swearing on an examination under oath. The distinction is not supported by precedent. False swearing is "swearing knowingly and intentionally false and not through mere mistake." Black's Law Dictionary 725 (rev. 5th ed. 1979). There is no distinction between false statements made in proof of loss statements and false statements made under oath. See Sunbright Fashions, Inc. v. Greater New York Mutual Insurance Co., 34 A.D.2d 235, 236, 310 N.Y.S.2d 760 (2d Dep't 1970), aff'd, 28 N.Y.2d 563, 319 N.Y.S.2d 609, 268 N.E.2d 323 (1971). In Sunbright Fashions the Appellate Division reversed a denial of summary judgment upon determining that the facts supported only an inference of deliberate false testimony. In that case, the claimant admitted that he had lied under oath and had prepared false documents to support his false claim. 34 A.D.2d at 237. We accept the fact, therefore, that according to the law of New York, a false statement made on an examination under oath must be both material and willful in order to void a fire insurance policy.


Appellants contend that the district court erred as a matter of law in refusing to consider its motion under Rule 60(b). We disagree. Our previous ruling was the law of the case, and the district judge correctly found that it had no jurisdiction to review an appellate court's decision. Eutectic Corp. v. Metco Inc., 597 F.2d 32, 34 (2d Cir. 1979); United States v. Fernandez, 506 F.2d 1200, 1202 (2d Cir. 1974). See also Seese v. Volkswagenwerk A.G., 679 F.2d 336, 337 n.1 (3d Cir. 1982) ("the basis of the Rule 60(b)(6) motion was before this court and the Supreme Court, and thus could not be considered by the district court"). Judge Sweet correctly noted that the appellants cite no material change of ...

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