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Catlin Speciality Insurance Co. v. QA3 Financial Corp.

United States District Court, S.D. New York

July 2, 2014

CATLIN SPECIALITY INSURANCE COMPANY, Plaintiff,
v.
QA3 FINANCIAL CORP., Defendant

Page 337

[Copyrighted Material Omitted]

Page 338

For Catlin Specialty Insurance Company, Plaintiff, Counter Defendant: Lisa Lynn Shrewsberry, LEAD ATTORNEY, Jonathan Robert Harwood, Michael A. Turschmann, Richard Joseph Rogers, Traub Lieberman Straus & Shrewsberry LLP, Hawthorne, NY.

For QA3 Financial Corp., Defendant, Counter Claimant: Christine Ann Gudaitis, Stephen Anthony Marino, Jr., Ver Ploeg & Lumpkin, P.A., Miami, FL.

Page 339

ORDER & OPINION

LORNA G. SCHOFIELD, UNITED STATES DISTRICT JUDGE.

Catlin Specialty Insurance Company (" Catlin" ) brought this declaratory judgment action against QA3 Financial Corporation (" QA3" ), seeking resolution of the parties' insurance coverage dispute. QA3 brought counterclaims, alleging breach of contract and bad faith refusal to cover. On December 19, 2012, District Judge Jesse M. Furman, then assigned to the case, dismissed QA3's counterclaim for bad faith. On July 19, 2013, the Court denied the parties' cross-motions for summary judgment, holding that the terms of the parties' insurance policy were ambiguous. A four-day jury trial was held from September 30, 2013 to October 3, 2013. The parties presented extrinsic evidence regarding the terms of the policy, including emails, past versions of similar policies, and testimony from various witnesses.

Before charging the jury, QA3 asked the Court to instruct the jury 1) to apply the doctrine of contra proferentem, which requires construing ambiguous provisions in a contract against the drafter and 2) to hold Plaintiff, Catlin, to the burden of proving that the exclusionary language was " stated in clear and unmistakable language" and was " subject to no other reasonable interpretation." At the charging conference on October 2, 2013, the Court read an opinion to counsel explaining that it would not instruct the jury to apply the doctrine of contra proferentem, and that QA3's requested charge on the burden of proof was merely a restatement of the contra proferentem doctrine.[1]

The jury returned a verdict in favor of Catlin, finding that the parties agreed, in relevant part, to a $1,000,000 limit on the insurance coverage provided by Catlin to QA3. QA3 now brings this motion for a new jury trial pursuant to Federal Rule of Civil Procedure 59, arguing that the Court improperly instructed the jury on 1) the application of contra proferentem to the insurance policy in dispute and 2) the

Page 340

Plaintiff-insurer's burden of proof regarding the parties' intent when they agreed to the ambiguous terms of the contract. Because the jury was properly instructed, Defendant's motion for a new trial is denied. QA3 also moves the Court to amend the judgment pursuant to Rule 59(e). For the following reasons, that motion is also denied.

LEGAL STANDARD

A motion for a new trial pursuant to Rule 59 on the basis of an erroneous jury instruction should be granted if an instruction was erroneous, unless the error was harmless. See Velez v. City of New York, 730 F.3d 128, 134 (2d Cir. 2013). A jury instruction is erroneous if it " misleads the jury as to the correct legal standard or does not adequately inform the jury on the law." Altria Grp., Inc. v. United States, 658 F.3d 276, 286 (2d Cir. 2011) (internal quotation marks and citation omitted). In determining whether a jury instruction was erroneous, the Court must ask " whether considered as a whole, the instruction[] adequately communicated the essential ideas to the jury." United States v. Schultz, 333 F.3d 393, 414 (2d Cir. 2003) (internal quotation marks and citations omitted). " [A] jury instruction will be deemed adequate if the charge . . . is correct and sufficiently covers the case so that ...


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