Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Utica Mutual Insurance Co. v. Fireman's Fund Insurance Co.

United States District Court, N.D. New York

November 16, 2017

UTICA MUTUAL INSURANCE COMPANY, Plaintiff,
v.
FIREMAN'S FUND INSURANCE COMPANY, Defendant.

          SIDLEY 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

          DAVID N. HURD UNITED STATES DISTRICT JUDGE

         I. INTRODUCTION

         Plaintiff 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.

         Trial 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 followed.

         II. FACTS

         The 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.

         Utica 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 policies").

         Utica 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").

         Fireman's 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").

         Simply stated, Utica insured Goulds on the primary and umbrella levels, and Fireman's Fund reinsured Utica. Fireman's Fund also reinsured that reinsurance themselves.

         Following 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 "Settlement Agreement").[1]

         In July 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.

         III. PROCEDURAL HISTORY

         Following 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 Utica.

         Discovery 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 disputes remain.

         The pending motions in limine are now ripe for consideration.

         IV. DISCUSSION

         First, plaintiff moved to preclude defendant's expert Garrett Redmond. Defendant opposed and plaintiff replied.

         Next, defendant moved to preclude five specific evidentiary matters. Plaintiff opposed and defendant replied.

         Finally, 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.

         A. Plaintiff Utica's Motion to Preclude Fireman's Fund Expert Garrett Redmond

         Utica moves to preclude certain testimony of Garrett Redmond ("Redmond"). Redmond was employed by Fireman's Fund from 1957 through 1975.[2] 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[3] 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 aggregate limits.

         First, 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.

         Nor can 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.

         Due to 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

         Accordingly, 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 designations.

         B. Defendant Fireman's Fund's Motion to Preclude

         Fireman's 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.

         1. Constructive notice

         Fireman's 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.

         While 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).

         Therefore, 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.

         2. Other Utica disputes

         Fireman's Fund argues that Utica should be precluded from introducing judicial decisions involving other insurer's challenges to Utica's aggregate limit position.

         Matters 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.

         Accordingly, Fireman's Fund's motion to preclude evidence of other Utica disputes will be granted.

         3. Fireman's Fund's litigation with other parties

         Fireman's 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.

         Fireman's 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 ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.