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