to recall whether he turned the telex over to Yerkes is not dispositive of the issue whether there was a discussion concerning the cancellation. Given the current record, the Court finds that here exists a disputed issue of material fact concerning communication of the prior cancellation to Yerkes. Thus, although the weight of the evidence points to the conclusion that Yerkes was not informed of the cancellation, the existence of a factual dispute on this issue precludes a grant of summary judgment.
Given the history of this litigation, the Court also takes this opportunity to warn the various parties to this action against relying on perjured testimony in an attempt to prevail at trial. "Perjured testimony is an obvious and flagrant affront to the basic concepts of judicial proceedings. Effective restraints against this type of egregious offense are therefore imperative." United States v. Mandujano, 425 U.S. 564, 576, 48 L. Ed. 2d 212, 96 S. Ct. 1768 (1976) (Burger, C.J.); see also United States v. Jacobs, 547 F.2d 772, 775 (2d Cir. 1976) ("We abhor perjury . . ."), cert. dismissed, 436 U.S. 31, 98 S. Ct. 1873, 56 L. Ed. 2d 53 (1978); 18 U.S.C. § 1621 (five years imprisonment and/or $ 2,000 fine upon conviction for perjury).
b. Availability of Insurance Coverage
Yerkes also argues that it did not breach any duty that was owed to Knight because procurement of effective coverage for the Buddha was impossible in light of the cancellation of the London policy. In support of this position, Yerkes refers to the decisions in Knight I and Knight II and claims that they mandate a finding that Knight "will not be able to demonstrate at trial that any reasonable insurer would have provided insurance coverage in the amount of $ 30 million for the Thai statuary." Memorandum of Law in Support of Motion for Summary Judgment of Defendant H.E. Yerkes and Associates, Inc. ("Yerkes Motion"), at 23.
To support his position, Yerkes quotes Judge Motley's conclusion, which was adopted by the Second Circuit, that
no reasonable juror could conclude, under the facts of this case, that defendants would not have declined to embrace plaintiff's requested thirty million dollar policy had they known of the prior London cancellation and of the incriminating contents of the telex from the London broker . . .
Knight II, supra, 804 F.2d at 13 (quoting Knight I, supra, 651 F. Supp. at 483). However, in drawing from these Opinions, Yerkes omits relevant language which casts the quotation in a different light. Thus, Judge Motley finished her sentence with the observation that coverage would not have been provided, "at least not without subsequent opportunity for [the insurers] to make their own investigation and perhaps adjust . . . the amount insured." Id. Similarly, the Second Circuit observed that a reasonable insurer "would not take on the risk or maintain the same premium without at least investigating the prior cancellation, if informed of it and the stated reasons therefor." Id.
It is thus beyond cavil that there has been no finding that the coverage sought by Knight was unavailable. In fact, while Knight has produced affidavits of insurance experts indicating that coverage could have been procured despite the prior cancellation, Yerkes has provided absolutely no legal or factual support for its claim that coverage was unavailable as a matter of law. Compare Knight Response, Ex. A-C (affidavits of insurance experts) with Reply Memorandum of Law in Further Support of Motion for Summary Judgment of defendant H.E. Yerkes and Associates, Inc., at 19-22.
Although Yerkes argues that the Court should not consider the affidavits supplied by Knight, because the affiants do not qualify as experts and do not have personal knowledge of the case, these arguments must be rejected. Fed. R. Civ. P. 56(e) requires that "affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein." See Sellers v. M.C. Floor Crafters, Inc., 842 F.2d 639, 643 (2d Cir. 1988) (affidavit must be based on personal knowledge). Thus, "affidavits of an expert submitted on a motion for summary judgment . . . should show knowledge of the opposing contentions of fact developed during discovery and deal with those contentions." Granoff v. Merrill Lynch & Co., 775 F. Supp. 621, 628 (S.D.N.Y. 1991); see Dardaganis v. Grace Capital Inc., 889 F.2d 1237, 1240 (2d Cir. 1989) (relying on experts' affidavits); International Salt Co. v. Geostow, 878 F.2d 570, 575 (2d Cir. 1989) (same).
In the case at bar, it is clear that the challenged affidavits can be considered by the Court. The experts that have provided affidavits in support of Knight's motion have read Yerkes' briefs and are familiar with the case. Moreover, the Court finds that the affiants have sufficient "knowledge, skill, experience, training, or education" to be qualified as experts for the purposes of this motion. See Fed. R. Evid. 702. Considering these affidavits, the Court finds that there exists a disputed issue of fact concerning the availability of insurance for the Buddhas.
Before proceeding, however, the Court pauses to stress that an insurance broker's liability for breach of the duty to procure effective insurance is limited to the amount of coverage that would have been provided by the insurer. See Island Cycle Sales, supra, 510 N.Y.S.2d at 639; American Motorists, supra, 476 N.Y.S.2d at 900. Thus, were a jury to find that Yerkes agreed to procure insurance for Knight, that O'Leary communicated the cancellation of the London policy to Yerkes and that some form of insurance coverage was available, it is altogether possible that the recovery for Knight's loss will be limited to $ 65,000 -- the initial purchase price of the Buddhas.
4. Equitable Estoppel
The Court next turns to consider Yerkes' assertion that Knight's action should be dismissed under the doctrine of equitable estoppel. Defendant asserts that plaintiff should be equitably estopped from pursuing this action because "Yerkes willingly acquiesced to Knight's request for assistance in [Knight's] action against his insurers, without reasonable apprehension that Knight would claim in a later action that the insurers were unaware of the prior cancellation of coverage." Yerkes Motion, at 34.
Under New York law, the doctrine of equitable estoppel provides "'that where one of two innocent persons must suffer by the acts off a third, he who has enabled such third person to occasion the loss must suffer it.'" Bunge Corp. v. Manufacturers Hanover Trust Co., 31 N.Y.2d 223, 228, 335 N.Y.S.2d 412, 415, 286 N.E.2d 903 (1972) (quoting National Safe Deposit Savings & Trust Co. v. Hibbs, 229 U.S. 391, 394, 57 L. Ed. 1241, 33 S. Ct. 818 (1913)). "Characteristically, the doctrine is invoked successfully against a party who has occasioned a loss through an obvious lack of care or an affirmative act fairly identified as the cause of the loss." Societe Generale v. Federal Ins. Co., 856 F.2d 461, 466-67 (2d Cir. 1988) (citing cases).
Asserting that equitable estoppel is "a special tool to do justice in individual cases," Yerkes calls upon the Court to apply the doctrine to the facts of the instant case. Yerkes Motion, at 33; see also Ayer v. Board of Education, 69 Misc.2d 696, 330 N.Y.S.2d 465, 468 (Sup. Ct. Monroe Co. 1972) ("'An equitable estoppel rests largely on the facts and circumstances of the particular case; consequently any attempted definition usually amounts to no more than a declaration under those facts and circumstances.'" (quoting 21 N.Y. Jur., Estoppel, Ratification and Waiver § 15)); Kaneb Servs., Inc. v. Federal Sav. and Loan Ins. Corp., 650 F.2d 78, 82 n.11 (5th Cir. 1981) ("The doctrine of estoppel is based on fair dealing and good conscience and prohibits the assertion of a position that would be contrary to equity for a party to allege.").
However, Yerkes' argument must fail. To prevail on an equitable estoppel argument, the movant must establish that it has detrimentally relied on a representation by the party being estopped, suffering injury. See Triple Cities Constr. Co. v. Maryland Casualty Co., 4 N.Y.2d 443, 176 N.Y.S.2d 292, 295, 151 N.E.2d 856 (1958); Travelers Indemnity Co. v. Swanson, 662 F.2d 1098, 1101 (5th Cir. 1981). Nevertheless, no injury has been shown in the instant case. Yerkes alleges that it gave Knight access to its files and submitted to a deposition in reliance on Knight's stance in the U.S. Fire litigation. However, there has been no claim that Yerkes could have avoided being deposed in this action or that the information turned over to Knight was privileged. Moreover, Yerkes has not alleged that any information from its files or from the deposition is being used improperly to its detriment in the instant action. In the absence of any legal support for the proposition that being the subject of a lawsuit is an injury sufficient to raise the bar of equitable estoppel, Yerkes' argument must be rejected.
For the foregoing reasons, defendant's motion for summary judgment is denied. The parties are hereby ordered to appear, on March 20, 1992, at 11:30 A.M., for a pretrial conference in Courtroom 361 United States Courthouse, New York, New York.
Dated: February 18, 1992
New York, New York
Peter K. Leisure