CX Reinsurance Company Limited v. B&R Management, Inc.
Filing
235
MEMORANDUM AND ORDER denying 197 Motion for Reconsideration. Signed by Magistrate Judge Stephanie A Gallagher on 11/13/2017. (hmls, Deputy Clerk)
UNITED STATES DISTRICT COURT
DISTRICT OF MARYLAND
CHAMBERS OF
STEPHANIE A. GALLAGHER
UNITED STATES MAGISTRATE JUDGE
101 WEST LOMBARD STREET
BALTIMORE, MARYLAND 21201
(410) 962-7780
Fax (410) 962-1812
November 13, 2017
LETTER TO COUNSEL
RE:
CX Reinsurance Company Limited, f/k/a CNA Reinsurance Company Limited v.
B&R Management, Inc., et al.; Civil Case No. ELH-15-3364
Dear Counsel:
Presently pending is Defendant Jessica-Carl, Inc.’s (“Defendant”) Motion for
Reconsideration [ECF No. 197] of the Court’s June 22, 2017 Letter Order [ECF No. 192] which,
inter alia, denied (in part) Defendant’s Motion to Compel responses to its document production
requests [ECF No. 87-3]. Defendant asks the Court to reconsider its opinion. For the reasons set
forth below, Defendant’s motion is DENIED.
Under Federal Rule of Civil Procedure 54(b), “any order or other decision, however
designated, that adjudicates fewer than all the claims or the rights and liabilities of fewer than all
the parties” may be revisited by the court at any time before an entry of final judgment. Fed. R.
Civ. P. 54(b). While Rule 54 does not elucidate the standard for reconsideration of interlocutory
orders, such as the discovery ruling here, the Fourth Circuit has held that a motion for
reconsideration under Rule 54 is not subject to the same “strict standards” applicable to motions
for reconsideration of a final judgment. Am. Canoe Ass’n v. Murphy Farms, Inc., 326 F.3d 505,
514 (4th Cir. 2003). Despite this relative leniency, “most courts have adhered to a fairly narrow
set of grounds on which to reconsider their interlocutory orders and opinions,” and will
reconsider an interlocutory order only where: “(1) there has been an intervening change in
controlling law; (2) there is additional evidence that was not previously available; or (3) the prior
decision was based on clear error or would work manifest injustice.” Cezair v. JPMorgan Chase
Bank, N.A., No. DKC-13-2928, 2014 WL 4955535, at *1 (D. Md. Sept. 30, 2014) (citations
omitted). None of these justifications is present here.
In its June 22, 2017 Order, the Court denied (in part) Defendant’s Motion to Compel
because it sought the production of documents which were not relevant. [ECF No. 192].
Specifically, Defendant requests the Court to reconsider its ruling with respect to document
Requests 7 and 8. [ECF Nos. 197, 219].1 Defendant’s Request No. 7 asks:
[i]n connection with any policy providing liability insurance for lead paint
1
Defendant does not ask the Court to reconsider its ruling that the documents sought in Requests Nos. 7 and 8 were
not “material” to CX Re’s issuance of a policy, but only to reconsider its ruling that the documents sought were not
relevant to its limitations, laches, and waiver defenses. See [ECF No. 192, 4-5]; [ECF Nos. 197, 219].
CX Reinsurance Company Limited, f/k/a CNA Reinsurance Company Limited v. B&R
Management, Inc., et al.
Civil Case No. ELH-15-3364
November 13, 2017
Page 2
coverage written by CXRe during the period January 1, 1997 through August 31,
1999, [for] all documents reflecting payment under such policy for expenses or to
resolve claims when CX Reinsurance was provided with evidence of lead paint
violation notice(s) for the applicable property before making such payment,
including but not limited to any notes, memoranda, and/or internal or external
communications.
[ECF No. 197, 1-2] (emphasis added). Defendant’s Request No. 8 asks:
[i]n connection with any policy providing liability insurance for lead paint
coverage written by CX Re during the period January 1, 1997 through August 31,
1999, [for] all documents reflecting CX Reinsurance’s refusal to make payment
under such policy for expenses or to resolve claims when CX Reinsurance was
provided with evidence of lead paint violation notice(s) for the applicable
property, including but not limited to any notes, memoranda, and/or internal or
external communications.
[ECF No. 197, 2] (emphasis added). Defendant believes that the Court’s ruling was “clear error”
and reiterates the argument it made in its Motion to Compel that the documents sought in
Requests 7 and 8 are relevant to CX Re’s receipt of evidence of lead paint violations and: (1)
whether it waived its right to rescission because “it had knowledge of a basis for rescission and
nevertheless made payment on the policy;” and (2) whether its claims are time-barred because it
knew or should have known of the alleged misrepresentations more than three years before filing
suit. [ECF No. 219, 2]; [ECF No. 197, 2]; [ECF No. 87-3, 10-14]. Defendant also contends that
in denying its Motion to Compel, the Court considered only its “materiality” argument and did
“did not address [its] laches / limitations/waiver argument.” [ECF No. 197, 3]. Defendant is
mistaken.
Request Nos. 7 and 8 seek information concerning any CX Re insured, including those
not party to this litigation. CX Re is correct that the “relevant inquiry [] is whether CX Re
promptly sought rescission of [B&R Management’s (“B&R”)] policies after it first acquired
‘sufficient proof’ that B&R had submitted a false Application.” [ECF No. 205, 8]. As stated in
the Court’s Opinion denying Defendant’s Motion to Compel (albeit in a different section), [ECF
No. 192, 3-4], in determining whether an insurance company promptly sought rescission, the
inquiry is “limited to the timing of Plaintiffs’ investigation into, and conclusions about, the facts
[the insured] allegedly misrepresented in its insurance applications.” Charter Oak Fire Ins. Co.
v. Am. Capital, Ltd., No. CIV.A. DKC 09-0100, 2013 WL 6844359, at *3 n.4 (D. Md. Dec. 24,
2013). Thus, the inquiries regarding the accrual of notice sufficient to trigger the running of the
statute of limitations and to justify rescission, and whether rescission was promptly sought, is
fact-specific to each insured. See Charter Oak Fire Co. v. Am. Capital, Ltd., No. CV DKC 090100, 2016 WL 827380, at *12 (D. Md. Mar. 3, 2016), on reconsideration in part, No. CV DKC
09-0100, 2016 WL 8669940 (D. Md. July 1, 2016) (quoting Monumental Life Ins. Co. v. U.S.
Fid. & Guar. Co., 94 Md. App. 505, 541 (1993)); William Rounds v. Md.-Nat’l Capital Park &
CX Reinsurance Company Limited, f/k/a CNA Reinsurance Company Limited v. B&R
Management, Inc., et al.
Civil Case No. ELH-15-3364
November 13, 2017
Page 3
Planning Comm’n, 109 A.3d 639, 658 (Md. 2015). Contrary to Defendant’s contention, then,
policies unrelated to B&R, including any payments or refusals to make payments under such
policies, are not relevant to Defendant’s laches/limitations defense. Recognizing, however, that
documents involving its insured, B&R, are relevant to such defenses, the Court Ordered CX Re
to produce “all documents pertaining to the underwriting review involving B&R” within fourteen
(14) days from its Order. [ECF No. 192, 4].
For the reasons discussed herein, Plaintiff’s Motion for Reconsideration is DENIED.
Despite the informal nature of this letter, it will be flagged as an Opinion and docketed as an
Order.
Sincerely yours,
/s/
Stephanie A. Gallagher
United States Magistrate Judge
cc: Judge Ellen L. Hollander
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