United States District Court, N.D. New York
AUSTIN LLP Attorneys for Plaintiff, DANIEL R. THIES, ESQ.
THOMAS D. CUNNINGHAM, ESQ. WILLIAM M. SNEED, ESQ.
WILLIAMS LOPATTO PLLC Attorneys for Defendant JOHN B.
WILLIAMS, ESQ. MARY A. LOPATTO, ESQ. FARA N. KITTON, ESQ.
MEMORANDUM-DECISION AND ORDER
N. HURD UNITED STATES DISTRICT JUDGE
Utica Mutual Insurance Company ("Utica" or
"plaintiff") filed this action on July 29, 2009
against defendant Fireman's Fund Insurance Company
("Fireman's Fund" or "defendant").
One breach of contract claim, and two counterclaims for
knowing or reckless misrepresentation or concealment and
negligent misrepresentation or nondisclosure, remain.
is scheduled for Monday, November 27, 2017, in Utica, New
York. The parties have now moved in limine for various
pre-trial rulings. Oral argument was held on Thursday,
November 2, 2017, in Utica, New York. A pre-trial conference
parties' familiarity with the facts and history of this
case is presumed, and only those facts necessary for the
disposition of the pending matters will be recited.
issued seven primary general liability policies to Goulds
Pumps Inc. which were in effect for annual periods between
July 1, 1966 and July 1, 1973 (the "primary
also issued seven umbrella liability policies to Goulds which
were in effect for annual periods between July 1, 1966
through July 1, 1973 (the "umbrella policies").
Fund issued seven facultative reinsurance policies to Utica
which were in effect for annual periods between July 1, 1966
through July 1, 1973 (the "certificates").
stated, Utica insured Goulds on the primary and umbrella
levels, and Fireman's Fund reinsured Utica. Fireman's
Fund also reinsured that reinsurance themselves.
claims in the late 1990s for bodily injury due to asbestos in
Goulds pumps, litigation ensued in California and New York to
determine the rights of Goulds and its insurers, including
Utica (the "coverage litigation"). Goulds and Utica
settled in February 2007 for $325 million (the
2008, Utica provided notice to Fireman's Fund of the
Goulds loss and submitted a reinsurance claim under the seven
certificates. As of July 2009, Fireman's Fund had not
paid the claims and Utica initiated this suit.
limited discovery, Utica moved (in two separate motions) for
partial summary judgment disposing of two of Fireman's
Fund's affirmative defenses: (1) its late notice defense,
and (2) its bad faith notice defense. On February 9, 2015, a
Memorandum-Decision and Order was issued denying both of
Utica's motions for partial summary judgment. It was held
that if, at trial, Fireman's Fund can establish that it
suffered actual prejudice from Utica's late notice (in
the form of lost commutations), it would be entitled to
complete relief from its duty to indemnify Utica. It was
further held that disputed issues of fact exist as to whether
Utica acted in bad faith in failing to provide timely notice,
but that if a jury found it did act in bad faith,
Fireman's Fund would be relieved of its duty to indemnify
continued and later, the parties filed a combined total of
eight additional motions. On February 24, 2017, a
Memorandum-Decision and Order was issued: (1) granting in
part and denying in part Fireman's Fund's motion for
judgment on the pleadings on Counts II and
III, and dismissing Count III as
duplicative of Count I; (2) denying Fireman's
Fund's motion for partial summary judgment on Count
I (Utica's "Aggregate Limits" contention),
finding that the contracts required to resolve that issue
were incomplete and not fully provided; (3) granting
Fireman's Fund's motion for partial summary judgment
on Count II, and dismissing the bad faith claim
(Count II) because on no set of facts could Utica
show that Fireman's Fund acted in bad faith and/or had no
arguable basis to challenge its claim, nor could Utica prove
that no reasonable carrier would, under the given facts,
challenge its claim; (4) denying Fireman's Fund's
motion for summary judgment to dismiss Count I on
the follow the settlement doctrine because factual disputes
remain; (5) denying Fireman's Fund's motion in limine
to preclude testimony of Utica expert Dennis R. Connolly; (6)
denying Utica's motion for partial summary judgment on
the follow the fortunes doctrine because factual disputes
remain; (7) denying Utica's motion for partial summary
judgment that FFIC is not entitled to rescission on its
counterclaims because factual disputes remain; and (8)
denying Utica's motion for partial summary judgment that
notice was not due before February 1999 because factual
pending motions in limine are now ripe for consideration.
plaintiff moved to preclude defendant's expert Garrett
Redmond. Defendant opposed and plaintiff replied.
defendant moved to preclude five specific evidentiary
matters. Plaintiff opposed and defendant replied.
plaintiff filed a letter advising of fourteen distinct
evidentiary matters expected to arise at trial and stated its
position on same. The letter was construed as an omnibus
motion in limine and briefing was ordered. Defendant opposed
and plaintiff replied.
Plaintiff Utica's Motion to Preclude Fireman's
Fund Expert Garrett Redmond
moves to preclude certain testimony of Garrett Redmond
("Redmond"). Redmond was employed by Fireman's
Fund from 1957 through 1975. It is undisputed that he did not
work on the specific insurance policies at issue in this
case. His proposed testimony relates to the existence of
aggregate limits on Utica's primary policies.
Specifically, Utica seeks to preclude Redmond from offering
testimony at trial on the following two propositions: (1)
that Utica misrepresented or omitted facts to Fireman's
Fund in 1966 through 1972 respecting whether the primary
policies it issued to Goulds for those policy years had
aggregate limits, and (2) that the primary policies Utica
issued to Goulds during that time period did not have
it is noted that the ruling made in the February 24, 2017
Memorandum-Decision and Order as to Redmond was under the
summary judgment standard and his testimony was not ruled
admissible or inadmissible per se at trial. It is undisputed
that Redmond lacks personal knowledge as to the above
specific propositions and therefore he cannot testify as to
those matters as a fact witness under Federal Rule of
Evidence ("FRE") 602. See, e.g., John
Hancock Prop. & Cas. Ins. Co. v. Universale Reinsurance
Co., 147 F.R.D. 40, 44-45 (S.D.N.Y. 2003) (rejecting
reinsurer's attempt to have a person not involved in the
underwriting testify as to what the actual underwriters knew,
intended, or would have done). He may however testify as a
fact witness as to what Fireman's Fund's standard
practices and policies were at the time, and based on that,
counsel is free to present the theory that those policies
were followed during the time in question. Opposing counsel
is free to point out that standard procedures may not always
be followed and may be modified, and that Redmond has no
knowledge as to whether those procedures were in fact
followed in this case.
Redmond testify as an expert witness, a hybrid fact/expert
witness, or render a lay opinion on those specific issues. He
was not designated as an expert witness under Federal Rule of
Civil Procedure ("FRCP") 26(a)(2)(B). He was
designated as a hybrid fact/expert witness pursuant to FRCP
26(a)(2)(C), but he still cannot offer an expert opinion
based on facts beyond his personal knowledge. His expert
opinion under FRCP 26(a)(2)(C) must be based on facts within
his personal knowledge. The typical scenario of a hybrid
fact/expert witness under that rule is a treating physician
who has personal knowledge of the facts, testifies to same,
and based on those facts, renders an expert opinion. That is
not the situation in this matter. Redmond's testimony on
those propositions likewise does not fit within FRE 701.
how much time has passed since these policies were issued,
there are no witnesses who were personally involved with
negotiating or writing the policies. As a result, both sides
will attempt to offer circumstantial evidence and testimony
regarding the usual practices at that time in order to
support their positions on the existence of aggregate limits.
They may also present traditional expert testimony on these
issues pursuant to FRE 702 and 703
plaintiff's motion to preclude Redmond's testimony
will be granted to the extent he will be prohibited from
testifying that Utica did in fact make misrepresentations to
Fireman's Fund in obtaining the reinsurance policies and
that the primary policies in question did in fact lack
aggregate limits. His testimony on other grounds will be
admitted subject to the laying of a proper foundation and
resolution of the pending objections to his deposition
Defendant Fireman's Fund's Motion to
Fund moves to preclude the following five pieces of evidence:
(1) plaintiff's constructive notice argument; (2)
evidence of other Utica legal decisions and/or settlements
regarding the Goulds loss; (3) evidence of its own
settlements and litigation with third parties; (4) reference
to Brian Gagan's expert testimony; and (5) Andrew
Maneval's late notice testimony.
Fund argues that Utica should be precluded from making the
argument that because Fireman's Fund was a direct insurer
of Goulds under other policies, it had constructive notice of
Utica's reinsurance claims prior to 2008.
the law in New York requires actual notice and not
constructive notice, any facts showing that Fireman's
Fund had prior knowledge of the Goulds loss are relevant to
Fireman's Fund's claimed prejudice (caused by
Utica's late notice).
Fireman's Fund's motion to preclude this evidence
will be denied, and the parties are reminded that the jury
will be instructed on the proper legal standard for notice.
Other Utica disputes
Fund argues that Utica should be precluded from introducing
judicial decisions involving other insurer's challenges
to Utica's aggregate limit position.
such as Goulds Pumps, Inc. v. Travelers Casualty and
Surety Co., No. B255439, 2016 WL 3564244 (Cal.Ct.App.
June 22, 2016) (unpublished decision) and Utica Mutual
Insurance Co. v. Clearwater Insurance Co., No.
613-CV-1178, 2016 WL 254770, (N.D.N.Y. Jan. 20, 2016)
(Sharpe, S.J.) are irrelevant in this matter. As explained in
the February 2017 Memorandum-Decision and Order, those cases
involve different years of coverage, with different policies,
between different parties, and no extrinsic evidence was
offered. That another court agreed or disagreed with
Utica's aggregate limit position in a factually distinct
matter does not dictate whether Fireman's Fund is
obligated to, pursuant to the follow the fortunes doctrine,
pay in this case. Disputes between Utica and other
reinsurers are irrelevant and inadmissible.
Fireman's Fund's motion to preclude evidence of other
Utica disputes will be granted.
Fireman's Fund's litigation with other
Fund moves to preclude evidence of its own settlements and
litigation with third parties. For example, Fireman's
Fund has a dispute with one of its own reinsurers.
Fund put Utica's proof of loss at issue by arguing that
the proof of loss Utica tendered was insufficient to pay.
However, what Fireman's Fund deemed sufficient proof
of loss in a wholly unrelated matter, under what can
only be assumed to be different policies, coverage, and
terms, is ...