The opinion of the court was delivered by: Cannella, District Judge:
Plaintiff's motion for reargument is granted. Local Civil
Rule 3(j); Fed.R.Civ.P. 59(e). Upon reconsideration, the
judgment is vacated and defendants' motion for summary judgment
is denied. Fed.R.Civ.P. 56.
Plaintiff, The Travelers Insurance Company ["Travelers"],
commenced the instant action for a declaration of rights under
certain facultative reinsurance contracts issued by defendants
Buffalo Reinsurance Company, Fremont Syndicate, Inc., Maiden
Lane Syndicate, Inc., Pan Atlantic Investors, Ltd., Republic
Insurance Company, and South Place Syndicate, Inc.
[collectively, the "Reinsurers"]. In a Memorandum and Order
dated February 9, 1990, the Court granted defendants' motion
for summary judgment and directed the Clerk of the Court to
enter judgment for defendants. See The Travelers Ins. Co. v.
Buffalo Reinsurance Co., et al., 735 F. Supp. 492 (S.D.N Y
1990) [the "February 9 Order"]. Familiarity with the February 9
Order is assumed.
Pursuant to Rule 3(j) of the Civil Rules of the United States
District Courts for the Southern and Eastern Districts of New
York ["Local Civil Rule 3(j)"] and Rule 59(e) of the Federal
Rules of Civil Procedure, Travelers now moves for an order: (1)
vacating the judgment; (2) granting leave for reargument; and
(3) denying defendants' motion for summary judgment.
I. Standards for Reargument
The standards governing motions for reargument are well
established and do not require extensive discussion.*fn1 Local
Civil Rule 3(j) provides that on a motion for reargument the
moving party shall "set forth concisely the matters or
controlling decisions which counsel believes the court has
overlooked." Local Civil Rule 3(j) (emphasis added). Thus, in
order to prevail on a motion for reargument, the moving party
must demonstrate that the court has overlooked controlling
decisions that may have influenced the earlier result had they
been considered by the court. See Morser v. AT & T Information
Sys., 715 F. Supp. 516, 517 (S.D.N.Y. 1989); Adams v. United
States, 686 F. Supp. 417, 418 (S.D.N.Y. 1988); Bozsi Ltd.
Partnership v. Lynott, 676 F. Supp. 505, 509 (S.D.N.Y. 1987).
Alternatively, the moving party may establish that the court
failed to consider "factual matters that were put before the
court on the underlying motion." Ashley Meadows Farm, Inc. v.
American Horse Shows Ass'n, Inc., 624 F. Supp. 856, 857
(S.D.N.Y. 1985). However, Local Civil Rule 3(j) precludes a
party from advancing new facts, issues, or arguments not
previously presented to the court. See Weissman v. Fruchtman,
124 F.R.D. 559, 560 (S.D.N.Y. 1989). Therefore, on a motion for
reargument, it is improper to present new material because by
definition material not previously presented cannot have been
"overlooked" by the court. Consolidated Gold Fields, PLC v.
Anglo American Corp. of South Africa Ltd., 713 F. Supp. 1457,
1476 (S.D.N.Y. 1989).
While the standard on a motion for reargument is "strict in
order to dissuade repetitive arguments on issues that have
already been considered fully by the court," Caleb & Co. v.
E.I. DuPont de Nemours & Co., 624 F. Supp. 747, 748 (S.D.N Y
1985), the record supports reargument and a determination that
summary judgment is not proper. Travelers bases its motion for
reargument upon deposition testimony that it believes might
reasonably have altered the entry of summary judgment had it
been considered by the Court. In particular, Travelers contends
that the Court overlooked important deposition testimony that
reflects the custom and usage of the reinsurance industry with
respect to the normal time ceding insurance companies provide
reinsurers with notice of claims. The February 9 Order
inadvertently failed to consider the custom and usage argument
based on the deposition testimony in question. Therefore, on
the basis of factual matters overlooked by the Court,
reargument is granted.
II. Summary Judgment on Reargument*fn2
Travelers asserts that the deposition testimony of the
defendant reinsurers illustrates that prolonged delays are
inherent in the reinsurance industry because of the manner in
which notice is transmitted. Travelers points to the deposition
testimony of Bessette, Stevens, and Foran to establish that it
is normal custom and usage in the reinsurance industry for
notice to pass from a ceding company to a reinsurance
intermediary and then through an insurance exchange before
finally arriving at the reinsurer's office. See Deposition of
Richard Bessette, at 31, 147, 86 Civ. 3369 (JMC) (S.D.N Y
Sept. 21, 1988); Deposition of Katherine Foran, at 109-10, 86
Civ. 3369 (JMC) (S.D.N.Y. Sept. 23, 1988); Deposition of Albert
Stevens, at 39-41, 86 Civ. 3369 (JMC) (S.D.N.Y. Sept. 19,
1988). In further support of its position that reinsurers
commonly get initial knowledge of a claim many months and even
years after the claim occurs, Travelers focuses on the
following deposition testimony of Mr. Mosgrove:
Q: In your experience, have you noticed what
period of time has elapsed from the date of the
notice of loss from the ceding company and the
date of ...