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PITTSTON WAREHOUSE v. AMERICAN MOTORISTS INS.

June 15, 1990

PITTSTON WAREHOUSE CORPORATION, PLAINTIFF
v.
AMERICAN MOTORISTS INSURANCE COMPANY AND C.A. SHEA & COMPANY, INC., DEFENDANTS.



The opinion of the court was delivered by: Sweet, District Judge.

OPINION

Defendants American Motorist Insurance Company ("Amico") and C.A. Shea & Company, Inc. ("Shea") have moved for reconsideration of the opinion issued on June 13, 1989 in which Amico was granted summary judgment dismissing Counts Two and Three and granted time to submit further information. 715 F. Supp. 1221. Plaintiff, Pittston Warehouse Corporation ("Pittston"), who was granted summary judgment, sua sponte, on Count One of the complaint, has cross-moved for reconsideration of the dismissal of Counts Two and Three. For the reasons set forth below, both motions are denied.

Prior Proceedings

The opinion also granted Pittston summary judgment on Count One of the complaint, conversion, but allowed Amico twenty days to submit further materials to avoid prejudice of the sua sponte granting of summary judgment in favor of Pittston on Count One.

By order of October 3, 1989, Amico was granted another extension to December 15, 1989 by which to submit further material with respect to the conclusions reached in the June 13 opinion. By letter of November 6, 1989 Amico requested a reconsideration of the June 13 decision on the basis of a November 2, 1989 letter from Customs and a computer printout from the surety allegedly indicating open violations by Pittston. Pittston also moved for reconsideration of the dismissal of Counts Two and Three of the complaint on the basis that they should have been permitted additional discovery prior to the dismissal and that these counts stated a cause of action for recovery. Both motions for reconsideration were argued and considered submitted as of February 16, 1990.

Pittston's Motion for Reconsideration is Untimely

Pursuant to Local Rule 3(j) of the Uniform Civil Rules for the Southern and Eastern Districts, a motion for reargument must be made within ten (10) days after the docketing of the court's determination of the original motion.

The opinion on the underlying motion was filed June 13, 1989. Pittston did not make this motion for reconsideration until over five months later. Although the opinion granted Amico opportunity to present additional material, Pittston was not granted a similar opportunity and the material presented by Amico does not affect either Counts Two or Three dismissed in that opinion. Pittston's motion is untimely and, moreover, presents no new issues of fact or law upon which a motion for reargument would be necessary.

Amico's Supplemental Materials Do Not Provide a Basis for Reconsideration of Count One

At dispute in Count One for conversion is a warehouse bond identified as Bond III. As stated in the June opinion, on December 12, 1985, Customs decided to increase the bond requirements and demanded an issuance of a bond of $100,000. Amico, surety for Pittston, issued Bond III on January 13, 1986 and Pittston provided Amico a standby letter of credit as security for that obligation. Pittston was, in turn, required to post a cash collateral with its bank to secure the letter of credit. That letter of credit automatically extended for one year periods unless thirty days before the expiration date Pittston notified Amico that they chose not to renew the letter. Pittston's failure to renew without the consent of Amico could lead to a draw on the letter of credit in the full amount.

Amico has refused to authorize cancellation of the letter of credit and, therefore, Pittston's funds are still held in escrow at its bank. The letter of credit has been renewed annually.

The June opinion held that to secure a release of the collateral, Pittston was required to establish Amico's lack of liability by showing not only that there was no likelihood of a claim, but that there is no future liability. On the basis of the court's interpretation of the September 21, 1989 letter from the Customs Service, it was found that Amico was unambiguously relieved from any possible liability for any claims made under the bond after August 12, 1987, regardless of when the claims arose or were discovered.

To dispute the interpretation given to the September 21, 1987 letter, Amico has submitted a November 2, 1989 letter of information within the meaning of 19 C.F.R. § 177.1(d)(2), from William G. Rosoff, Chief of Entry Rulings Branch at the U.S. Customs Service. The letter, however, does no more than reiterate the information that was available to the court ...


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