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R& Q Reinsurance Co. v. Utica Mut. Ins. Co.

United States District Court, S.D. New York

February 14, 2014

R& Q REINSURANCE COMPANY, Plaintiff,
v.
UTICA MUTUAL INSURANCE COMPANY, Defendant

For R& Q Reinsurance Company, Petitioner: David M. Raim, Chadbourne & Parke LLP (DC), Washington, DC; John Francis Finnegan, Chadbourne & Parke LLP (NY), New York, NY.

For Utica Mutual Insurance Company, Respondent: Robert Jeffrey Morrow, LEAD ATTORNEY, Hunton & Williams, LLP(NYC), New York, NY; Walter J. Andrews, LEAD ATTORNEY, PRO HAC VICE, Hunton & Williams(McLeanVA), McLean, VA.

OPINION

Page 390

OPINION & ORDER

Paul A. Engelmayer, United States District Judge.

On November 12, 2013, plaintiff R& Q Reinsurance Company (" R& Q" ) moved for summary judgment against defendant Utica Mutual Insurance Company (" Utica" ), seeking confirmation of an arbitration panel's Final Order (the " Award" ) issued on October 19, 2013. Dkt. 1-2. Utica opposes confirmation on the grounds that the Award is not a final judgment, but instead represents, effectively, an interim award in an arbitration that never reached completion. For the following reasons, R& Q's motion for summary judgment is granted.

I. Background[1]

In this lawsuit, R& Q seeks to confirm an arbitration Award, pursuant to the Federal Arbitration Act, 9 U.S.C. § § 1 et seq. (" FAA" ). That Award was the outcome of an arbitration charged with resolving the extent to which R& Q was liable for amounts billed to it by Utica. Pet. ¶ 5; id. Ex. 1. These billings arose out of nine reinsurance certificates, all of which R& Q had issued to Utica between 1978 and 1982.[2] Pet. ¶ 5. These nine certificates covered " umbrella policies" that Utica had written to cover losses suffered by Goulds Pumps Inc. (" Goulds" ), arising, at least in large part, out of long-term injuries suffered by employees' exposure to asbestos. See generally Finnegan Aff. Accordingly, the relevant business relationships were as follows: Utica was Goulds' primary insurer, and R& Q was Utica's reinsurer.

Over the past few decades, Goulds has suffered substantial asbestos-related losses. Id. As a consequence, Utica has had to pay out hundreds of millions of dollars under its umbrella policies with Goulds. Id. Utica has attempted to recoup some of those losses from its reinsurers, including R& Q. Under the reinsurance certificates

Page 391

referenced above, Utica has billed R& Q for losses that, as of May 31, 2013, total approximately $21.7 million. See id. Ex. 9. R& Q, however, has refused to pay. In November 2008, R& Q agreed to arbitrate its dispute over Utica's billings. Pet. ¶ ¶ 6-7.

In May 2009, R& Q and Utica signed an Arbitration Protocol. Id. Ex. 1. The Protocol provided that:

The decision of the majority of the arbitration panel shall be final and binding. The arbitration panel shall render its interim rulings, if any, and final award in writing, but a " reasoned award" shall not be required. Judgment upon any interim ruling or the final award may be entered in any court of competent jurisdiction to the extent permitted by law.

Id. Ex. 1 ¶ B.5. In October 2009, the parties also executed a Confidentiality Agreement, which provided that:

[A]ll briefs, depositions and hearing transcripts generated in the courts of [the] arbitration, documents created for the arbitration or produced in the proceedings by the opposing party or third-parties, final award and any interim decisions, correspondence, oral discussions and information exchanged in connection with the proceeding (hereinafter collectively referred to as " Arbitration Information" ) will be kept confidential. This Confidentiality Agreement will remain in effect even after conclusion of the arbitration proceedings.

Pet. Ex. 2 at 1; see also Pet. ¶ 8.

In July 2013, after the parties conducted discovery and resolved all preliminary matters, a seven-day evidentiary hearing was held. Pet. ¶ 9. Both sides in the arbitration agreed that Utica's billings to R& Q could be sorted into four categories: (1) indemnity payments; (2) defense costs; (3) orphan shares; and (4) declaratory judgment expenses. See Finnegan Aff. Exs. 5-7. The three-arbitrator panel was therefore tasked with resolving, at a category level, which, if any, of these four categories were ones as to which Utica could recover ...


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