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M.Z. DISCOUNT CLOTHING CORP. v. MEYNINGER

September 17, 1998

M.Z. DISCOUNT CLOTHING CORP., Plaintiff, against DR. RITA MEYNINGER, Director of Federal Emergency Management Agency, an agency of the United States Government, and THOSE CERTAIN UNDERWRITERS AT LLOYDS' ISSUING POLICY NUMBER L947020, Defendants.


The opinion of the court was delivered by: DEARIE

MEMORANDUM & ORDER

 DEARIE, District Judge.

 The plaintiff, M.Z. Discount Clothing Corporation, ("M.Z. Discount") has moved for reargument pursuant to Local Rule 3(j) of this Court's decision of November 12, 1997. For the reasons given below, the motion to reargue is denied in part and granted in part.

 1. Prior Proceedings

 M.Z. Discount commenced this action to recover insurance policy proceeds arising out of a burglary. Defendant, Underwriters at Lloyds ("Lloyds") filed a motion to dismiss, which the Court, having relied on materials beyond the pleadings, treated as a motion for summary judgement. By an opinion dated November 12, 1997, this Court granted Lloyds' motion for summary judgment. M.Z. Discount filed this motion for reargument on December 1, 1997.

 2. The Facts

 On December 21, 1994, Lloyds issued M.Z. Discount an excess mercantile open stock burglary insurance policy. M.Z. Discount had obtained this insurance policy by contacting its insurance broker, Gheith Agency, Inc. ("Gheith"), who in turn contacted Morstan/LMG/Brisco Group Inc. ("Morstan") to place the risk. Morstan in turn, placed the risk with Insurance Innovators Agency ("Insurance Innovators"), Lloyds' authorized representative in the United States. Having placed the risk, Morstan issued a binder to M.Z.Discount. The Lloyds policy required M.Z. Discount: "immediately to report to [Insurance Innovators] any occurrence likely to result in a claim," and stated that, "failure by the insured to report the said loss or damage . . . shall invalidate any claim under this insurance."

 On January 20, 1995 M.Z. Discount's store was allegedly burglarized. M.Z. Discount immediately retained a public adjuster, Federal Adjusters, Inc. ("Federal"). On January 25, having determined that the loss was in excess of the coverage provided by M.Z. Discount's primary insurer, Federal faxed a notice of loss to Morstan. On February 9, 1995 Federal sent a second fax to Morstan regarding M.Z. Discount's loss. This fax Morstan forwarded to Insurance Innovators, twenty days after the burglary occurred. *fn1"

 3. Standard for a Motion to Reargue

 To be entitled to reargument under Local Rule 3(j), the moving party must demonstrate that the Court overlooked controlling decisions or material factual matters that were before the Court on the underlying motion. Violette v. Armonk Assoc., 823 F. Supp. 224, 226 (S.D.N.Y. 1994); Ades v. Deloitte & Touche, 843 F. Supp. 888, 891 (S.D.N.Y. 1994). The standard for review is strict, as the provision for reargument is not designed to allow wasteful repetition of arguments already briefed, considered and decided. Morgan Guaranty Trust Co. v. Garrett Corp., 625 F. Supp. 752, 756 (S.D.N.Y. 1986).

 M.Z. Discount seeks reargument on the issue of whether there exists a legally recognized excuse for its failure to immediately notify Insurance Innovators of the burglary. In addition, M.Z. Discount draws the Court's attention to the fact that, at the time summary judgment was sought, M.Z. Discount had not had discovery of Morstan's records or files to ascertain whether Morstan had forwarded Federal's fax of January 25 to Insurance Innovators.

 4. Delay in Notification

 In granting Lloyd's motion for summary judgment, the Court held that timely notification of the wrong entity was not a legally recognizable excuse for delay in notifying the correct entity when the insurance policy required "immediate notification." On reargument, M.Z. Discount asserts that the Court overlooked Universal Underwriters Insurance Co. v. Patriot Ambulette, Inc., 149 A.D.2d 500, 539 N.Y.S.2d 981 (1989) and Mighty Midgets v. Centennial Ins. Co., 47 N.Y.2d 12, 416 N.Y.S.2d 559, 389 N.E.2d 1080. *fn2"

 The insured in Universal owned three vehicles, two of which were covered by Liberty Mutual and one of which was covered by Universal. Universal's insurance policy required notification of any occurrence "as soon as practicable." Following an accident involving the vehicle covered by Universal, the insured notified its broker who then mistakenly notified Liberty Mutual. The error was not discovered and Universal was not provided with written notice of the accident until five ...


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