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B.D. Cooke & Partners Limited v. Certain Underwriters at Lloyd's

March 9, 2010

B.D. COOKE & PARTNERS LIMITED, AS ASSIGNEE OF CITIZENS CASUALTY COMPANY OF NEW YORK (IN LIQUIDATION), PLAINTIFF,
v.
CERTAIN UNDERWRITERS AT LLOYD'S, LONDON, DEFENDANTS.



The opinion of the court was delivered by: Richard J. Holwell, District Judge

MEMORANDUM OPINION AND ORDER

Plaintiff B.D. Cooke & Partners Ltd. ("B.D. Cooke") brought an action in New York state court to recover money as the assignee of rights under certain reinsurance contracts with the defendants. After defendants removed the case to this Court, the plaintiff moved to remand the action to state court. Defendants cross-moved to compel arbitration pursuant to the contracts. By Memorandum Opinion and Order dated March 31, 2009, B.D. Cooke & Partners Ltd. v. Certain Underwriters at Lloyd's, London, 606 F. Supp. 2d 420 (S.D.N.Y. 2009) ("B.D. Cooke I"), this Court granted defendants' motion and denied plaintiff's motion. On April 15, plaintiff filed a motion for reconsideration. For the reasons given below, that motion is denied.

BACKGROUND*fn1

The genesis of the current dispute lies in the liquidation of a now-defunct reinsurance company, Citizens Casualty Insurance Company ("Citizens"). Citizens indemnified other insurers for losses they suffered on policies they had issued. In turn, other reinsurers, including certain underwriters at Lloyd's, London (the "defendants" or the "Underwriters"), provided reinsurance to Citizens. Some 40 years ago, a state court declared Citizens insolvent and, pursuant to New York insurance law, appointed the Superintendent of Insurance of the State of New York (the "Superintendent") as liquidator, vesting the Superintendent with "title to all property, contracts and rights of action of Citizens." Over the next several decades, the Superintendent acted as liquidator. But because claims were still being filed as late as the mid-1990s against Citizens, the estate never closed. So, in 1996, the Superintendent agreed to assign the estate's remaining claims to a group of Citizens' largest creditors, represented by B.D. Cooke; in return, B.D. Cooke agreed to surrender its claims against the estate. In 1998, following state court approval of the plan, the Citizens liquidation proceeding finally terminated.

In 2008, B.D. Cooke sued the Underwriters in New York Supreme Court, acting as assignee of the rights previously held by Citizens' liquidator. It asked for a declaration that the assignment entitled it to pursue Citizens' claims against the Underwriters "without limitation." It also sued for breach of contract and account stated. Defendants then removed the case to this Court. B.D. Cooke moved to remand; Underwriters cross-moved to compel arbitration. In B.D. Cooke I, the Court found that the arbitration clause was still in effect, could be invoked by the Underwriters against B.D. Cooke, and had not been waived. It granted Underwriters' motion and denied B.D. Cooke's. This motion for reconsideration followed.

DISCUSSION

Under Local Civil Rule 6.3, a party may move for reconsideration, "setting forth concisely the matters or controlling decisions which counsel believes the court has overlooked." Loc. Civ. R. 6.3. The moving party must show "that the Court overlooked controlling decisions or factual matters that were put before the Court on the underlying motion." Akhenaten v. Najee, LLC, No. 07-970, 2010 WL 305309, at *1 (S.D.N.Y. Jan. 26, 2010) (internal quotation marks and citation omitted). It "may not advance new facts, issues or arguments not previously presented to the Court." Hamilton v. Garlock, Inc., 115 F. Supp. 2d 437, 439 (S.D.N.Y. 2000) (internal quotation marks and citation omitted). Nor is this a chance "to reargue those issues already considered when a party does not like the way the original motion was resolved." In re Houbigant, Inc., 914 F. Supp. 997, 1001 (S.D.N.Y. 1996). "The decision to grant or deny a motion such as the one before the Court is within the sound discretion of the Court." Davey v. Dolan, 496 F. Supp. 2d 387, 389 (S.D.N.Y. 2007).

I. Timeliness

At the outset, defendants argue that B.D. Cooke's motion for reconsideration should be denied as untimely filed. A motion for reconsideration under Local Civil Rule 6.3 must be served within "ten (10) days after the entry of the court's determination of the original motion, or in the case of a court order resulting in a judgment, within ten (10) days after the entry of the judgment." Loc. Civ. R. 6.3. Plaintiff's motion was filed on April 15, 2009-within ten days of April 1 but not of March 31.*fn2 Plaintiff argues that April 1 is the relevant date, because it says that is the date on which a judgment was entered. The Court cannot agree. Its order, which was entered on March 31, 2009, did not result in a judgment; it simply resolved the original motion. Specifically, the Court granted defendants' motion to compel arbitration and stay the action, and it denied plaintiff's motion to remand the case. That should not have caused the case to be closed, but it apparently did. The opinion itself only stated that defendants' motion was granted-it did not explicitly state that the action would be stayed. This omission evidently caused some confusion for the Clerk of the Court, who interpreted the opinion as a final judgment. The Clerk dutifully entered a judgment [31] on April 1, 2009 and, on the same day, terminated the case. The Court now corrects that administrative error. The case will be reopened on the ground that the Court's original order both compelled arbitration and stayed the action in this Court.

Even though the motion was technically filed a day late, the late filing is wholly excusable in light of the docket entry that purported to enter judgment. Accordingly, the Court exercises its discretion to consider the merits of the motion. See Kargo, Inc. v. Pegaso PCS, S.A. DE C.V., No. 05-10528, 2009 WL 1289259, at *5 (S.D.N.Y. May 11, 2009) (exercising discretion to consider the merits of a potentially untimely motion for reconsideration, where consideration did not prejudice the other side); Cartier, a Division of Richemont North America, Inc. v. Samo's Sons, Inc., No. 04-2268, 2006 WL 213090, at *2 (S.D.N.Y. Jan. 26, 2006) (noting that movant should "provide a compelling reason to ignore the time limit"); Darby v. Societe des Hotels Meridien, No. 88-7604, 1999 WL 642877, at *2 (S.D.N.Y. Aug. 24, 1999) (plaintiff should offer "sufficient justification for her failure to meet the time limit").

B.D. Cooke moved for reconsideration on three grounds: that no arbitration agreement exists between these two parties; that, even if it did, the parties' contracts waived the right to remove from state to federal court; and, finally, that the parties' disputes fall outside the scope of the relevant arbitration clause. The Court finds that reconsideration is unwarranted on any of these grounds.

II. Enforceability of Arbitration Clause Against B.D. Cooke

B.D. Cooke argues that no agreement to arbitration exists between it and Underwriters. (Pltf.'s Mem. 5--10.) Its logic is that the relevant arbitration clauses were between Citizens and Underwriters; that the liquidator of Citizens' estate could not be compelled to arbitrate under New York law; and, thus, that B.D. Cooke, as the liquidator's assignee, has the same right to refuse arbitration. The plaintiff has made this argument before, in precisely the same form, and it has already been rejected. See B.D. Cooke, 606 F. Supp. 2d at 425 (reasoning that "[d]efendants' inability to compel the liquidator to arbitrate... does not imply an inability to compel plaintiff to arbitrate"). Indeed, as the Court noted in that opinion, B.D. Cooke cites not a single case for the proposition that the liquidator's right to reject ...


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