OneBeacon America Insurance Company v. Commercial Union Assurance Company of Canada
Filing
48
Judge Joseph L. Tauro: ORDER entered. MEMORANDUM AND ORDER.(Geraldino-Karasek, Clarilde)
UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
ONEBEACON AMERICA INSURANCE
COMPANY,
Plaintiff,
v.
COMMERCIAL UNION ASSURANCE
COMPANY OF CANADA,
Defendant.
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Civil Action No. 10-10164-JLT
MEMORANDUM
August 18, 2011
TAURO, J.
I.
Introduction
This case concerns various insurance and reinsurance agreements made by the Parties in
the early 1980s. Presently at issue are Defendant’s Motion to Strike [#33], Plaintiff’s Motion to
Strike Affidavit of Edwin M. Millette [#38], Plaintiff’s Motion for Summary Judgment [#20], and
Defendant’s Motion for Summary Judgment [#25]. For the following reasons, Defendant’s
Motion to Strike is ALLOWED; Plaintiff’s Motion to Strike is ALLOWED IN PART and
DENIED IN PART; Plaintiff’s Motion for Summary Judgment is DENIED; and Defendant’s
Motion for Summary Judgment is ALLOWED.
II.
Background
A.
The Insurance Policies
In the early 1980s, Plaintiff OneBeacon America Insurance Company (“OneBeacon”),
formerly known as Commercial Union Insurance Company,1 and Defendant Commercial Union
Assurance Company of Canada (“Aviva”), now known as Aviva Insurance Company of Canada,2
were affiliated members of the Commercial Union group of insurance companies. At that time,
Harrisons & Crosfield (America) Inc. and Harrisons & Crosfield (Pacific) Inc. (collectively,
“Harrisons US”) conducted the U.S. operations for Harrisons & Crosfield (Canada) Ltd.
(“Harrisons Canada”), a Canada-based corporation.3
Plaintiff issued policy number C8-9101-002 to Harrisons US, effective March 28, 1980
through April 1, 1981 (“1980 OneBeacon Policy”).4 The 1980 OneBeacon Policy contains
“Endorsement Number 4,” which provides:
It is understood and agreed that this policy or any renewal thereof is 100% reinsured by
Commercial Union Assurance Company of Canada policy number 6687287 effective
3/28/80 to 4/1/81.
It is further agreed that cancellations of either this policy C8-9101-002 or any renewal
thereof or policy 6687287 or any renewal thereof shall be reason for automatic
cancellation of the other policy.5
The premium listed on the 1980 OneBeacon Policy is “Canadian $45,530.”6 The “Producer” code
1
See OneBeacon America Insurance Company’s Mem. Law Supp. Its Mot. Summ. J., 1
[#21] [hereinafter Pl.’s Mem. Law Summ. J.]; Aviva’s Statement Undisputed Material Facts
Supp. Its Mot. Summ. J. ¶ 2 [#27] [hereinafter Def.’s Facts].
2
See Pl.’s Mem. Law Summ. J., 1 [#21]; Def.’s Facts ¶ 4 [#27].
3
Def.’s Facts ¶ 5 [#27] (citing Compl. ¶¶ 1, 9 [#1]).
4
OneBeacon Am. Ins. Co.’s Concise Statement Facts Supp. Its Mot. Summ. J. ¶ 3 [#24]
[hereinafter Pl.’s Facts]; Def.’s Facts ¶ 11 [#27].
5
Aff. Paul Hurley Jr., Ex. A, at 14 [#22] [hereinafter Hurley Aff.].
6
Hurley Aff., Ex. A, at 6, 7 [#22].
2
for the 1980 OneBeacon Policy is “02-20211.”7 Plaintiff’s premium records state that Plaintiff
received $4252 for the 1980 OneBeacon Policy.8
Also on March 28, 1980, Defendant issued policy No. 6687287 (the “1980 Aviva Policy”)
to Harrisons Canada.9 The 1980 Aviva Policy contains a “Difference in Conditions
Endorsement,” which states:
In consideration of the premium charged, the Insurer agrees that this policy is
placed in conjunction with and reinsures Policy No. CL C8-9101-002 issued by
Commercial Union Insurance Company, or any renewal thereof, in respect of:
Insured:
Harrisons & Crosfield (America) Inc.,
Harrisons & Crosfield (Pacific) Inc.
...
Exceptions: This insurance differs from the policy which it follows in the
following particulars:
(a) Premium: $45,530.00 (Canadian Funds – Deposit)
The Limit of Liability under either or both policies shall not exceed
$1,000,000.00 as set forth in Policies 6687287 and CL C8-9101-002 or any renewal
policies issued by this Insurer.10
On or about November 26, 1980, Defendant issued Reinsurance Certificate No. 9009419
(“Facultative Certificate”11) to Plaintiff for the period March 28, 1980 to April 1, 1981.12 The
Facultative Certificate is the only contract between Plaintiff and Defendant in the record.13 The
7
Aff. Benjamin L. Hincks, Ex. 6, at 6 [#28] [hereinafter Hincks Aff.]
8
Hincks Aff., Ex. 3, at 2 [#28]; see id. at Ex. 2, at 13; id. at Ex. 11, at 2.
9
Aff. Jennifer L. Noe Supp. OneBeacon Am. Ins. Co.’s Mot. Summ. J., Ex. A, at 33
[#23] [hereinafter Noe Aff.]; see Pl.’s Facts ¶ 1 [#24].
10
Noe Aff., Ex. A, at 33 [#23]; see Pl.’s Facts ¶ 2 [#24]; Def.’s Facts ¶ 46 [#27].
11
A “facultative certificate” is a “contract of reinsurance separately negotiated to cover
risks under a single insurance policy.” Black’s Law Dictionary 631 (8th ed. 2004).
12
See Hincks Aff., Ex. 10, at 2 [#28]; Hincks Aff., Ex. 11, at 2 [#28].
13
Def.’s Facts ¶ 49 (citing Hincks Aff., Ex. 2, at 28–29 [#28]).
3
Facultative Certificate states that it reinsures policy number C8-9101-00214—that is, the 1980
OneBeacon Policy. The reinsurance premium listed on the Facultative Certificate is “$45,530.00
Canadian.”15 When Defendant mailed the Facultative Certificate to Plaintiff, Defendant enclosed a
cover letter, the Facultative Certificate, and a check in the amount of $4553 Canadian.16 The
letter, dated November 26, 1980, states: “Further to yours of July 1st, 1980. Attached is our
Reinsurance Certificate along with our cheque in the amount of $4,553.00 Canadian being your
override commission of 10% of the premium which was $45,530.00 Canadian.”17
Plaintiff issued policy number C8-9138-002 to Harrisons US, effective April 1, 1981 to
April 1, 1982 (the “1981 OneBeacon Policy”).18 The named insureds on the 1981 OneBeacon
Policy are Harrisons US and Harcros Inc,19 and the “Additional Insureds” are Harrisons &
Crosfield Ltd. and Wilkinson Linatex.20 The Producer code for the 1981 OneBeacon Policy is
“02-20020.”21 On the 1981 OneBeacon Policy, above the phrase “renewal of or previous no.,” is
14
Hincks Aff., Ex. 10, at 2 [#28].
15
Hincks Aff., Ex. 10, at 2 [#28].
16
See Hincks Aff., Ex. 11, at 2 [#28].
17
Hincks Aff., Ex. 11, at 2 [#28].
18
Hincks Aff., Ex. 7, at 3 [#28]. The Parties dispute whether the 1981 OneBeacon Policy
is a renewal of the 1980 OneBeacon Policy.
19
Hincks Aff., Ex. 7, at 4 [#28]. In 1979, Harrisons Canada formed Harcros Inc., a
brokerage house that placed insurance for Harrisons US and Harrisons Canada between 1979 and
1986. Def.’s Facts ¶ 6 [#27].
20
Hincks Aff., Ex. 7, at 4 [#28] (explaining that the Additional Insureds are only insured
“in respect of their direct sales into the United States of America, its territories and possessions”).
21
Hincks Aff., Ex. 7, at 3 [#28].
4
the policy number C8-9101-002.22 The premium amount listed on the 1981 OneBeacon Policy is
“$24,000.”23 The 1981 OneBeacon Policy does not contain Endorsement Number 4 or any
similar provision.24
On or about March 28, 1981, Defendant issued an endorsement to the 1980 Aviva Policy
that extended the policy period to the period from March 28, 1981 to March 28, 1982 (the “1981
Endorsement”).25 The 1981 Endorsement states:
It is further understood and agreed that the following Corporations are specifically
excluded from this policy which shall not inure to their benefit in any way:
....
Harrisons & Crosfield (America) Inc.
....
Harcros Inc.
....
Harrisons & Crosfield (Pacific) Inc.26
Plaintiff issued policy number C8-9138-007 to Harrisons US effective March 28, 1982
through March 28, 1983 (the “1982 OneBeacon Policy”).27 Plaintiff has not located a copy of the
1982 OneBeacon Policy,28 although the policy number was C8-9138-00729 and the Parties agree
22
Hincks Aff., Ex. 7, at 3 [#28].
23
Hincks Aff., Ex. 7, at 3 [#28].
24
See Hincks Aff., Ex. 7 [#28].
25
Hincks Aff., Ex. 12, at 2 [#28].
26
Hincks Aff., Ex. 12, at 2 [#28].
27
Def.’s Facts ¶ 36 (citing Hincks Aff., Ex. 7, at 5 [#28]). As with the 1981 OneBeacon
Policy, the Parties dispute whether the 1982 OneBeacon Policy was a renewal of the 1980
OneBeacon Policy.
28
Def.’s Facts ¶ 37 (citing Hincks Aff., Ex. 7, at 5 [#28]).
29
Def.’s Facts ¶ 36.
5
that the 1982 OneBeacon Policy was a renewal of the 1981 OneBeacon Policy.30
On or about March 28, 1982, Defendant issued an endorsement to the 1980 Aviva Policy
that extended the policy period to the period from March 28, 1982 to March 28, 1983 (the “1982
Endorsement”).31 The 1982 Endorsement extended the 1981 Endorsement for an additional year,
and “[a]ll other terms and conditions remain[ed] unchanged.”32
B.
The Harrisons US Claims
In 1998, Plaintiff received notice of lawsuits filed against Harrisons US for bodily injuries
relating to asbestos exposure for which Harrisons US was allegedly responsible (the “Harrisons
US Claims”).33 On November 9, 2007, Plaintiff requested that Defendant fully indemnify Plaintiff
for the amounts that it had incurred in connection with the Harrisons US Claims.34 On November
13, 2007, Defendant responded that it would reimburse Plaintiff for only one third of the defense
expenses and indemnity payments.35
C.
The Hurley Deposition and Affidavit
On January 25, 2011, Defendant deposed Paul Hurley Jr., a senior reinsurance analyst
with Plaintiff.36 Hurley was deposed as both a fact witness and as a Rule 30(b)(6) representative
30
Mem. Law Supp. Aviva Ins. Co. Can.’s Mot. Summ. J., 15 [#26].
31
Hincks Aff., Ex. 13, at 2 [#28].
32
Hincks Aff., Ex. 13, at 2 [#28].
33
Pl.’s Facts ¶ 6 [#24].
34
Pl.’s Facts ¶ 9 [#24].
35
Pl.’s Facts ¶ 10 [#24].
36
Aff. Benjamin L. Hincks, Ex. 1 [#32] [hereinafter 2d Hincks Aff.].
6
of Plaintiff.37 Specifically, Hurley was designated to testify on behalf of Plaintiff concerning (1)
the negotiation, underwriting, and issuance of the 1980 Aviva Policy and (2) Plaintiff’s handling
of the reinsurance claim against Defendant at issue in this case.38
During his deposition, Hurley was asked about his involvement in the dispute between the
Parties.39 According to Hurley, other than sending copies of the policies to Defendant in response
to their inquiry and fixing a OneBeacon system coding error, his involvement began in 2007 and
has been limited to “the task of reporting the claims reserves, the payments, billing the claim to
Aviva Canada.”40 He did not contact any current or former employees of Plaintiff or any broker
who may have been involved in the underwriting of the OneBeacon Policies.41 In addition, Hurley
never reviewed any underwriting files for the OneBeacon Policies42 nor completely read the
OneBeacon Policies.43
Additionally, Hurley testified that he has no personal knowledge about the payment of a
premium to Defendant.44 Indeed, he testified that Plaintiff itself did not know whether any
premium was ever paid to Defendant.45
37
2d Hincks Aff., Ex. 1, at 4–5 [#32].
38
See 2d Hincks Aff., Ex. 1, at 4–5 [#32]; 2d Hincks Aff., Ex. 2, at 4 [#32].
39
See 2d Hincks Aff., Ex. 1, at 6–7, 11, 13 [#32].
40
2d Hincks Aff., Ex. 1, at 7 [#32]; see 2d Hincks Aff., Ex. 1, at 6, 11, 13 [#32].
41
See 2d Hincks Aff., Ex. 1, at 13–14 [#32].
42
See 2d Hincks Aff., Ex. 1, at 11–13 [#32].
43
See 2d Hincks Aff., Ex. 1, at 9–10 [#32].
44
See 2d Hincks Aff., Ex. 1, at 17 [#32].
45
See 2d Hincks Aff., Ex. 1, at 21 [#32].
7
Hurley submitted an affidavit (“Hurley Affidavit”) dated June 24, 2011 in support of
Plaintiff’s Motion for Summary Judgment. Paragraph 6 of the Hurley Affidavit states:
OneBeacon issued policy No. C8-9101-002, to Harrisons US, effective March 28, 1980
through April 1, 1981, which was renewed in 1981 by policy No. C8-9138-002, and again
in 1982 by policy No. C8-9138-006 (the “US Policy”). A true and accurate copy of policy
No. C8-9101-02 is attached hereto as Exhibit A. A true and accurate copy of policy No.
C8-9138-002 is attached hereto as Exhibit B.46
Paragraph 8 of the Hurley Affidavit states:
Aviva received a premium in exchange for its agreement to reinsure OneBeacon for
policy No. CL C8-9101-002, and its renewal policies, C8-9138-002 and C8-9138-006.47
D.
The Millette Affidavit
On June 24, 2011, Edwin M. Millette submitted an affidavit (“Millette Affidavit”) in
support of Defendant’s Motion for Summary Judgment. In that affidavit, Millette opines that
“there is nothing to indicate that Aviva agreed to reinsure the 1981 OneBeacon Policy nor 1982
OneBeacon Policy and . . . neither the 1981 OneBeacon Policy, nor the 1982 OneBeacon Policy
constitutes . . . a renewal of the 1980 OneBeacon Policy.”48
III.
Discussion
A.
Defendant’s Motion to Strike
Defendant moves, pursuant to Federal Rule of Civil Procedure 56, to strike portions of the
46
Hurley Aff. ¶ 6 [#22].
47
Hurley Aff. ¶ 8 [#22].
48
Aff. Edwin M. Millette ¶ 19 [#29] [hereinafter Millette Aff.]; see Millette Aff. ¶ 27
[#29] (“[I]t is my professional opinion . . . that . . . Aviva did not agree to reinsure the 1981
OneBeacon Policy or the 1982 OneBeacon Policy, and the 1981 OneBeacon Policy and the 1982
OneBeacon Policy do not constitute renewals of the 1980 OneBeacon Policy.”).
8
Hurley Affidavit.49
An affidavit “must be made on personal knowledge, set out facts that would be admissible
in evidence, and show that the affiant or declarant is competent to testify on the matters stated.”50
In considering a motion to strike, a court must “‘disregard only those portions of an affidavit that
are inadequate and consider the rest.’”51 “[P]ersonal knowledge is the touchstone” in this
process.52 To that end, “mere[] conclusory reiterations of the allegations of the complaint . . . .
are insufficient.”53
In addition, the First Circuit has articulated a “sham affidavit rule.”54 If “an interested
witness has given clear answers to unambiguous questions, he cannot create a conflict and resist
summary judgment with an affidavit that is clearly contradictory, but does not give a satisfactory
explanation of why the testimony is changed.”55
Here, Defendant seeks to strike a portion of Paragraph 6 and all of Paragraph 8 of the
49
Aviva Ins. Co. Canada’s Mot. Strike, 1 [#33] [hereinafter Def.’s Mot. Strike]. In
addition, Defendant requests that this court strike a portion of Paragraph 3 and all of Paragraph 5
of Plaintiff’s Concise Statement of Facts because those paragraphs depend entirely upon the
improper assertions in the Hurley Affidavit. Id. at 1 n.1; see Pl.’s Facts ¶¶ 3, 5 [#24].
50
Fed. R. Civ. P. 56(c)(4).
51
Perez v. Volvo Car Corp., 247 F.3d 303, 315 (1st Cir. 2001) (quoting Akin v. Q-L
Invs., Inc., 959 F.2d 521, 531 (5th Cir. 1992)).
52
Id.; see id. at 316–17 (striking statements that were “conclusory rather than factual”
because “[s]uch gauzy generalities are not eligible for inclusion in the summary judgment
calculus”).
53
Roslindale Coop. Bank v. Greenwald, 638 F.2d 258, 261 (1st Cir. 1981).
54
Mahan v. Bos. Water & Sewer Comm’n, 179 F.R.D. 49, 53 (D. Mass. 1998).
55
Colantuoni v. Alfred Calcagni & Sons, Inc., 44 F.3d 1, 5 (1st Cir. 1994).
9
Hurley Affidavit.
1.
Paragraph 6
Defendant seeks to strike the portion of Paragraph 6 that states: “which was renewed in
1981 by policy No. C8-9138-002, and again in 1982 by policy No. C8-9138-006 (the ‘US
Policy’).”56
This conclusory allegation is impermissible for at least three reasons. First, the statement
reiterates verbatim and without additional support an allegation in the Complaint.57 Second,
whether the 1981 and 1982 OneBeacon Policies are renewals of the 1980 OneBeacon Policy is a
question of law for this court.58
Finally, Hurley has no personal knowledge of whether the 1980 OneBeacon Policy was
renewed by the 1981 and 1982 OneBeacon Policies. By his own admission, Hurley never spoke
to anyone involved in the processes of underwriting or issuing the OneBeacon Policies, never
reviewed Plaintiff’s underwriting file, and never completely read the OneBeacon Policies. Indeed,
his involvement in the reinsurance claim was limited to “the task of reporting the claims reserves,
the payments, [and] billing the claim to Aviva Canada.”59
Because Hurley has no personal knowledge as to whether the 1981 and 1982 OneBeacon
Policies renewed the 1980 OneBeacon Policy, this phrase of Paragraph 6 of the Hurley Affidavit
56
Hurley Aff. ¶ 6 [#22].
57
See Compl. ¶ 10 [#1] (stating, in part, “which was renewed in 1981 by policy No. C89138-002, and again in 1982 by policy No. C8-9138-006”).
58
See, e.g., Cody v. Conn. Gen. Life Ins. Co., 387 Mass. 142, 146 (1982) (“The
interpretation of an insurance contract is not a question of fact for the jury.”); infra note 68.
59
2d Hincks Aff., Ex. 1, at 7 [#32].
10
is stricken.
2.
Paragraph 8
For the foregoing reasons, Hurley also lacks the personal knowledge necessary to support
his assertion in Paragraph 8.
In addition, Paragraph 8 violates the sham affidavit rule because it contradicts, without “a
satisfactory explanation,”60 Hurley’s prior deposition testimony. Hurley testified that he has no
personal knowledge regarding premium payments in this case, and he specifically testified that he
does not know whether any payments were ever made to Defendant.61 Hurley may not now
directly contradict, without explanation, his deposition testimony. Paragraph 8 is thus stricken.
Because this court strikes a portion of Paragraph 6 and all of Paragraph 8 of the Hurley
Affidavit, this court likewise strikes the corresponding portion of Paragraph 3 and all of
Paragraph 5 of Plaintiff’s Concise Statement of Facts, which depend entirely upon the improper
assertions in the Hurley Affidavit.
B.
Plaintiff’s Motion to Strike
Plaintiff moves to strike the Affidavit of Edwin M. Millette (“Millette Affidavit”) on the
ground that it contains inadmissible expert opinion testimony.
Expert testimony is admissible only “if (1) the testimony is based upon sufficient facts or
data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has
60
Colantuoni, 44 F.3d at 5.
61
See supra text accompanying notes 41–42.
11
applied the principles and methods reliably to the facts of the case.”62 A party’s intent or state of
mind is not the proper subject of expert testimony.63 In addition, expert testimony that amounts
to a statement of legal opinion or a conclusion of law is not admissible.64
To the extent that Millette opines that the 1981 and 1982 OneBeacon Policies are not
renewals of the 1980 OneBeacon Policy, those opinions are stricken. Similarly, to the extent that
Millette opines as to the intent of either Party, those opinions are stricken.
In all other respects, however, the Millette Affidavit may stand.
C.
Summary Judgment Standard
To prevail on a motion for summary judgment, the moving party must show “that there is
no genuine dispute as to any material fact” and that the moving party “is entitled to judgment as a
matter of law.”65 In deciding a motion for summary judgment, “a court is not authorized to make
findings of fact.”66 In ruling on a motion for summary judgment, a court must examine the record
“in the light most favorable to, and drawing all reasonable inferences in favor of, the nonmoving
62
Fed. R. Evid. 702; see Da Silva v. Am. Brands, Inc., 845 F.2d 356, 360–61 (1st Cir.
1988).
63
SEC v. Goldsworthy, No. 06-10012-JGD, 2008 U.S. Dist. LEXIS 62223, *13–24 (D.
Mass. January 3, 2008); see Williams v. Poulos, 11 F.3d 271, 282 n.20 (1st Cir. 1993).
64
See Chapman v. Bernards, Inc., 167 F. Supp. 2d 406, 421 (D. Mass. 2001) (citing
Nieves-Villanueva v. Soto-Rivera, 133 F.3d 92, 100 (1st Cir. 1997)).
65
Fed. R. Civ. P. 56(a); see Baltodano v. Merck, Sharp & Dohme (I.A.) Corp., 637 F.3d
38 (1st Cir. 2011) (citing Collazo v. Nicholson, 535 F.3d 41, 44 (1st Cir. 2008)).
66
Ross v. Framingham Sch. Comm., 44 F. Supp. 2d 104, 113 (D. Mass. 1999) (“[T]he
court must decide the motion on the basis of undisputed facts, and the motion must be denied if
the opposing parties have succeeded in identifying any factual issue that is genuinely in dispute
and material to [the] outcome under applicable law.”).
12
party.”67 If a court is presented with cross-motions for summary judgment, “it must view each
motion, separately,” in the light most favorable to the non-moving party.68
If the moving party does not have the burden of proof at trial, that party may merely make
a showing that the evidence is insufficient to support the case of the nonmoving party.69
D.
Contractual Interpretation of Insurance Policies
The First Circuit has been explicit that the “‘interpretation of an insurance contract and the
application of policy language to known facts present questions of law for the judge to decide.’”70
An insurance contract must be interpreted “‘according to the fair and reasonable meaning of the
words in which the agreement of the parties is expressed,’”71 and “[e]very word in an insurance
contract ‘must be presumed to have been employed with a purpose and must be given meaning
and effect whenever practicable.’”72
E.
Plaintiff’s Motion for Summary Judgment
Plaintiff moves for summary judgment in its favor that Defendant is obligated to reinsure
67
De La Cruz v. El Conquistador Resort & Country Club, 218 F.3d 1, 5 (1st Cir. 2000).
68
Estate of Hevia v. Portrio Corp., 602. F.3d 34, 40 (1st Cir. 2010) (citing Blackie v.
Maine, 75 F.3d 716, 721 (1st Cir. 1996)).
69
Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986) (“[T]he burden on the moving party
may be discharged by ‘showing’—that is, pointing out to the district court—that there is an
absence of evidence to support the nonmoving party’s case.”).
70
Sarsfield v. Great Am. Ins. Co. of N.Y., 335 Fed. Appx. 63, 65 (1st Cir. 2009) (quoting
Herbert A. Sullivan, Inc. v. Utica Mut. Ins. Co., 439 Mass. 387, 394 (2003)); see Allmerica Fin.
Corp. v. Certain Underwriters at Lloyd’s, London, 449 Mass. 621, 628 (2007).
71
Allmerica, 449 Mass. at 628 (quoting Cody, 387 Mass. at 146).
72
Id. (quoting Jacobs v. United States Fid. & Guar. Co., 417 Mass. 75, 77 (1994)).
13
each of the three OneBeacon Policies.73 Plaintiff argues that the insurance policy language is clear
“that Aviva is contractually obligated to reinsure OneBeacon one hundred percent for each of the
three policy periods of the [OneBeacon Policies].”74 According to Plaintiff, the 1981 and 1982
OneBeacon Policies are “clearly . . . renewal policies.”75 Plaintiff supports this contention with a
citation to Paragraph 6 of the Hurley Affidavit. Plaintiff further argues that this result represents
“the plain language of the policies.”76
With the relevant portion of Paragraph 6 of the Hurley Affidavit now stricken, Plaintiff’s
position finds no support in the record. Although the language of both the 1980 OneBeacon
Policy and the 1980 Aviva Policy is clear that Defendant reinsured any renewals of the 1980
OneBeacon Policy,77 the status of the 1981 and 1982 OneBeacon Policies as either renewals or as
separate policies is not clear on the face of those documents. Neither the 1981 or 1982
OneBeacon Policy states affirmatively that it is a renewal of the 1980 OneBeacon Policy.
(Indeed, Plaintiff has been unable to produce a copy of the 1982 OneBeacon Policy.)
For these reasons, Plaintiff has failed to demonstrate that it is entitled to judgment as a
matter of law, and its Motion for Summary Judgment is denied.
73
OneBeacon Am. Ins. Co.’s Mot. Summ. J., 1 [#20].
74
Pl.’s Mem. Law Summ. J., 7 [#21].
75
Pl.’s Mem. Law Summ. J., 9 [#21].
76
Pl.’s Mem. Law Summ. J., 7 [#21].
77
See Hurley Aff., Ex. A, at 14 [#22] (“It is understood and agreed that this policy or any
renewal thereof is 100% reinsured by [Defendant] . . . .” (emphasis added)); Noe Aff., Ex. A, at
33 [#23] (“[T]he Insurer agrees that this policy is placed in conjunction with and reinsures Policy
No. CL C8-9101-002 issued by Commercial Union Insurance Company, or any renewal
thereof . . . .” (emphasis added)).
14
F.
Defendant’s Motion for Summary Judgment
Defendant moves for summary judgment “because the undisputed facts show
unequivocally that Aviva did not reinsure OneBeacon’s insurance policies covering the periods
April 1, 1981 through April 1, 1982 . . . or April 1, 1982 to April 1, 1983.”78
The only contract between the Parties, the Facultative Certificate, is reason enough to
grant summary judgment for Defendant. The Facultative Certificate unambiguously states that the
term of reinsurance extended from March 28, 1980 until April 1, 1981.79 No such reinsurance
contract exists for any other policy period. In the absence of any other reinsurance contract, the
only reasonable interpretation of the Facultative Certificate is that Defendant reinsured only the
1980 OneBeacon Policy.
The record contains ample further evidence that Defendant reinsured only the 1980
OneBeacon Policy and not the 1981 nor the 1982 OneBeacon Policy. For instance, the 1980
Aviva Policy, which Defendant issued to Harrisons Canada, also insured Harrisons US.80 But at
the time that Defendant and Harrisons Canada extended, until 1982, the 1980 Aviva Policy,
Defendant issued the 1981 Endorsement, which unambiguously provided that Harrisons US was
excluded from coverage by stating that “the following Corporations are specifically excluded from
this policy which shall not inure to their benefit in any way: . . . . Harrisons & Crosfield (America)
78
Aviva Ins. Co. Can.’s Mot. Summ. J. ¶ 1 [#25].
79
Further, the reinsurance premium listed, $45,530.00 Canadian, is the exact same
premium listed on the 1980 OneBeacon Policy. A reasonable interpretation of this similarity is
that in exchange for one-hundred percent of the premium for the 1980 OneBeacon Policy, the
Facultative Certificate transferred one-hundred percent of the risk under the 1980 OneBeacon
Policy to Defendant.
80
See supra text accompanying note 10.
15
Inc. . . . . Harcros Inc. . . . . Harrisons & Crosfield (Pacific) Inc.”81 The “fair and reasonable”82
meaning of these words is that Defendant was not providing insurance coverage to any of the
Harrisons US entities.83
Additionally, there are clear indicators that the 1981 OneBeacon Policy was not a renewal
of the 1980 OneBeacon Policy. First, the policy number sequencing of the two Policies is
different. The 1980 OneBeacon Policy uses the policy number C8-9101; the 1981 OneBeacon
Policy uses a new policy number, C8-9138. In contrast, the 1982 OneBeacon Policy, which the
Parties agree was a renewal of the 1981 OneBeacon Policy, used the same policy number as the
1981 OneBeacon Policy, C8-9138. Because the 1982 OneBeacon Policy used the same policy
number as the policy that it renewed, this court sees no reason why the 1981 OneBeacon Policy
would not have used the same policy number as the 1980 OneBeacon Policy if it did, in fact,
renew the 1980 OneBeacon Policy.
Second, and similarly, the 1980 and 1981 OneBeacon Policies list different Producer
codes. The Producer code for the 1980 OneBeacon Policy is 02-20211, and the Producer code
for the 1981 OneBeacon Policy is 02-20020.
Third, the 1980 and 1981 OneBeacon Policies contain different premium information.
The premium for the 1980 OneBeacon Policy is listed in Canadian dollars, and the premium for
the 1981 OneBeacon Policy is listed in U.S. dollars. Such a change makes sense given this
81
See Hincks Aff., Ex. 12, at 2 [#28].
82
Sarsfield, 335 Fed. Appx. at 65.
83
The 1982 Endorsement left all “terms and conditions . . . unchanged,” Hincks Aff., Ex.
13, at 2 [#28], so Defendant did not provide direct insurance or reinsurance for Harrisons US in
the 1982 policy year, either.
16
court’s ultimate conclusion that Defendant, a Canadian entity, was ultimately responsible for the
risk in the 1980 policy year, but Plaintiff, an American entity, was ultimately responsible for the
risk in the 1981 policy year.
Finally, the 1981 OneBeacon Policy does not contain Endorsement Number 4.84 This
omission is consistent with the view that Defendant had terminated its reinsurance relationship
with Plaintiff and that Plaintiff was ultimately responsible for the risk in the 1981 policy year.
For these reasons, this court is persuaded that Defendant did not reinsure the 1981 and
1982 OneBeacon Policies. Defendant’s Motion for Summary Judgment is therefore allowed.
IV.
Conclusion
For the foregoing reasons, Defendant’s Motion to Strike [#33] is ALLOWED; Plaintiff’s
Motion to Strike Affidavit of Edwin M. Millette [#38] is ALLOWED IN PART and DENIED IN
PART; Plaintiff’s Motion for Summary Judgment [#20] is DENIED; and Defendant’s Motion for
Summary Judgment [#25] is ALLOWED.
AN ORDER HAS ISSUED.
/s/ Joseph L. Tauro
United States District Judge
84
Likewise, there is no evidence that the 1982 OneBeacon Policy contains Endorsement
Number 4 or any similar provision.
17
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