The opinion of the court was delivered by: HAROLD BAER, JR., District Judge
SUPPLEMENTAL OPINION & ORDER
Defendant Republic Insurance Co. ("Republic") moves (1) pursuant to
Federal Rule of Civil Procedure ("Fed.R. Civ. P.") 56(c), for summary
judgment against plaintiff Folksamerica Reinsurance Co. ("Folksamerica")
on the issue of whether Republic violated the Definitive Statement of
Loss ("DSOL") provisions of the J.T. Thorpe Co., Inc. ("Thorpe")
Certificates; (2) to strike the Declaration of I. Davis Jessup, II
("Jessup Declaration") and certain portions of Folksamerica's 56.1
Opposition;*fn1 and (3) to voluntarily dismiss, without prejudice, its counterclaims for bad faith and unjust enrichment, pursuant to Fed.
R. Civ. P. 41(a); and Folksamerica brings a separate motion for partial
summary judgment against Republic, to dismiss Republic's bad faith
counterclaim (with prejudice). Third party defendants Aon Re Worldwide,
Inc. and Aon Specialty Re, Inc. (collectively "Aon") join in support of
Republic's motion for summary judgment. For the following reasons, (1)
Republic's motion for summary judgment, on the DSOL issue, is granted;
(2) Republic's motion to strike is granted-in-part and denied-in-part;
(3) Folksamerica's motion for summary judgment, dismissing Republic's bad
faith counterclaim, is granted; and (4) Republic's motion to voluntarily
dismiss, without prejudice, its counterclaims for bad faith and unjust
enrichment, is denied.
This declaratory judgment action involves a reinsurance coverage
dispute between Folksamerica (the reinsurer), Republic (the insurer), and
Aon (the reinsurance broker) stemming from alleged late "notice"
to Folksamerica of claims under several reinsurance Certificates
involving two insureds Clemtex, Ltd. ("Clemtex"), a supplier
and/or manufacturer of sandblasting equipment, and Thorpe, a masonry and
insulation contractor. Late last year, all three entities submitted
extensive summary judgment motions, and after argument, this Court made
the following determinations:
Republic's violations of any notice provisions
contained within the Certificates do not relieve
Folksamerica of its obligation to indemnify
Republic. Further . . . with regard to Clemtex,
Republic did not violate the DSOL provision.
However, summary judgment on the following issues
of fact, with regard to the Thorpe Certificates,
is inappropriate: (a) whether Republic violated
the DSOL provision in the Thorpe Certificates, due
to untimely submission, (b) whether the
untimeliness, if any, of Republic's submission of
the DSOL under Thorpe was unreasonable, and (c)
whether, if such violations are deemed
unreasonable, Republic's proffered excuse that Aon
is the party at fault or that Folksamerica had
constructive notice as a result of GLARC [a
Treaty], or any other defense, will be credited. Folksamerica Reins. Co. v. Republic Ins. Co., 03 Civ.
0402, 2003 U.S. Dist. LEXIS 21584, at *53 (S.D.N.Y. Dec. 2, 2003).
Because the parties had been unable to complete discovery, due to the
illness of an important witness, the record did not contain the evidence
necessary for the Court to resolve whether Republic had violated the DSOL
under the Thorpe Certificates, and if so, whether such violation was
reasonable. Subsequently, this needed discovery was completed, and, in
order to streamline the proceedings, at Republic's request, the Court
authorized a second round of summary judgment on this open issue, in
order to provide the parties with an additional opportunity to obviate
the need for a trial.*fn2
Therefore, this Opinion begins where the prior left off. For a complete
discussion of the factual and procedural background of this case,
reference to the First Amended Opinion & Order, is advised.
Folksamerica Reins. Co., 2003 U.S. Dist. LEXIS 21584, at *53.
A. Summary Judgment Standard of Review
Pursuant to Fed.R.Civ.P. 56(c), a district court must grant summary
judgment if the evidence demonstrates that "there is no genuine issue as
to any material fact and [that] the moving party is entitled to judgment
as a matter of law." Anderson v. Liberty Lobby Inc.,
477 U.S. 242, 250 (1986). "Summary judgment is properly regarded not as a
disfavored procedural shortcut, but rather as an integral part of the
Federal Rules as a whole, which are designed to `secure the just, speedy
and inexpensive determination of every action.'" Celotex Corp. v.
Catrett, 477 U.S. 317, 327 (1986), quoting Fed.R.Civ.P. 1.
In determining whether there is a genuine issue of material fact, a
court must resolve all ambiguities and draw all inferences against the
moving party. See United States v. Diebold, Inc., 369 U.S. 654,
655 (1962) (per curiam); Donahue v. Windsor Locks Bd. of
Fire Comm'rs, 834 F.2d 54, 57 (2d Cir. 1987). However, the mere
existence of disputed factual issues is insufficient to defeat a motion
for summary judgment. Knight v. United States Fire Ins. Co.,
804 F.2d 9, 11-12 (2d Cir. 1986), cert. denied, 480 U.S. 932 (1987). The
disputed issues of fact must be "material to the outcome of the
litigation" (id. at 11), and must be backed by evidence that
would allow "a rational trier of fact to find for the non-moving party."
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,
587 (1986). The non-movant "must do more than simply show that there is
some metaphysical doubt as to the material facts." Id. With
respect to materiality, "substantive law will identify which facts are
material. Only disputes over facts that might affect the outcome of the
suit under the governing law will properly preclude entry of summary
judgment. Factual disputes that are irrelevant or unnecessary will not be
counted." Anderson, 477 U.S. at 248. "Summary judgment is
particularly appropriate in resolving insurance coverage disputes,
because the interpretation of an insurance policy presents a question of
law." Constitution Reins. Corp. v. Stonewall Ins. Co.,
980 F. Supp. 124, 127 (S.D.N.Y. 1997), aff'd without opinion,
182 F.3d 899 (2d Cir. 1999) (citation omitted). See also Flair Broad. Corp. v.
Powers, 733 F. Supp. 179, 184 (S.D.N.Y. 1990).
"Ascertaining whether or not a writing is ambiguous is a question of
law for the trial court." Sayers v. Rochester Tel. Corp. Supplemental
Mgmt. Pension Plan et al., 7 F.3d 1091, 1094 (2d Cir. 1993)
(citations omitted). Although it is true that "a motion for summary
judgment may be granted only where the agreement's language is
unambiguous and conveys a definite meaning" (id.) (internal
quotations and citations omitted), "a court may not  find ambiguity"
in a reinsurance ...