Liberty Mutual Insurance Company v. The Fairbanks Company

Filing 172

MEMORANDUM OPINION AND ORDER. The Court has considered all of the arguments of the parties. To the extent not specifically addressed above, the remaining arguments are either moot or without merit. For the foregoing reasons, Liberty's motion for the Court to certify the August 5 Order for interlocutory appeal is denied. The Clerk is directed to close Docket No. 167. SO ORDERED. re: 167 MOTION for Certificate of Appealability re: the Court's August 5, 2016 Memorandum Opinion and Order for Interlocutory Appeal filed by Liberty Mutual Insurance Company. (Signed by Judge John G. Koeltl on 9/22/2016) (rjm)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
────────────────────────────────────
LIBERTY MUTUAL INSURANCE COMPANY,
Plaintiff,
v.
THE FAIRBANKS COMPANY,
Defendant/Plaintiff,
v.
NATIONAL UNION FIRE INSURANCE OF
PITSSBURG, PA; LIBERTY MUTUAL
INSURANCE COMPANY; FIREMAN’S FUND
INSURANCE COMPANY; AXA ROYALE BELGE;
THE HARTFORD INSURANCE COMPANY;
TRAVELER’S CASUALTY & SURETY
COMPANY,
Defendants.
────────────────────────────────────

13-cv-3755 (JGK)
15-cv-1141 (JGK)
MEMORANDUM OPINION AND
ORDER

JOHN G. KOELTL, District Judge:
This case arises out of an insurance claim dispute between,
among others, Liberty Mutual Insurance Company (“Liberty”) and
The Fairbanks Company (“Fairbanks”).

In an Order dated March

21, 2016 (“March 21 Order”), this Court granted a motion by
Liberty for summary judgment on the issue of the allocation
method that should apply to Liberty’s insurance policies.
Fairbanks moved for reconsideration, arguing that under the
May 3, 2016, New York Court of Appeals decision in In re Viking
Pump, Inc., 27 N.Y.3d 244 (2016), all sums allocation rather
than pro rata allocation should apply to the Liberty umbrella
policies at issue.

Liberty opposed the motion for

reconsideration in part and moved for summary judgment seeking

declaratory relief with respect to the interpretation of the
non-cumulation clauses in the Liberty umbrella policies.
In an Order dated August 5, 2016 (the “August 5 Order”),
this Court acknowledged that there was no dispute that the all
sums allocation should apply to the Liberty umbrella parties as
a result of In re Viking Pump and granted Fairbanks’s motion for
reconsideration.

This Court also denied Liberty’s motion for

summary judgment on the interpretation of the non-cumulation
clauses because there remained substantial ambiguity as to how
these clauses in the umbrella policies operate. 1

Liberty now

moves for the Court to certify the Order for interlocutory
appeal pursuant to 28 U.S.C. § 1292(b).

Liberty’s motion is

denied.
A district court should certify an order for interlocutory
appeal if: (1) “such order involves a controlling question of
law,” (2) “there is substantial ground for difference of
opinion,” and (3) “an immediate appeal from the order may
materially advance the ultimate termination of the litigation.”
28 U.S.C. § 1292(b).

Only “exceptional circumstances justify a

departure from the basic policy of postponing appellate review
until after the entry of a final judgment.”

Coopers & Lybrand

1
The parties’ familiarity with the facts and arguments in the underlying March
21 Order, the August 5 Order, and the related briefs is presumed. See Liberty
Mut. Ins. Co. v. Fairbanks Co., Nos. 13-cv-3755, 15-cv-1141 (JGK), 2016 WL
1169511 (S.D.N.Y. Mar. 21, 2016); Liberty Mut. Ins. Co. v. Fairbanks Co.,
Nos. 13-cv-3755, 15-cv-1141 (JGK), 2016 WL 4203543 (S.D.N.Y. Aug. 5, 2016).

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v. Livesay, 437 U.S. 463, 475 (1978) (internal quotation marks
and citation omitted).

“The decision whether to grant an

interlocutory appeal from a district court order lies within the
district court’s discretion.”

King Cty., Wash. v. IKB Deutsche

Industriebank AG, 863 F. Supp. 2d 317, 320 (S.D.N.Y. 2012); see
also Two Farms, Inc. v. Greenwich Ins. Co., No. 12-cv-0050
(JGK), 2013 WL 1810770, at *1 (S.D.N.Y. May 1, 2013).
The Court declines to certify its prior August 5 Order for
interlocutory appeal.

There are no controlling questions of law

as to which there is a substantial ground for difference of
opinion.

See Aristocrat Leisure Ltd. v. Deutsche Bank Trust Co.

Americas, 426 F. Supp. 2d 125, 128 (S.D.N.Y. 2005) (“[A]
question of contract interpretation typically is not a
‘controlling question of law’ that serves as a basis for
interlocutory appeal.”); In re Flor, 79 F.3d 281, 284 (2d Cir.
1996) (“[T]he mere presence of a disputed issue that is a
question of first impression, standing alone, is insufficient to
demonstrate a substantial ground for difference of opinion.”).
Moreover, an immediate appeal would not materially advance
the ultimate termination of the litigation.

Discovery in this

case remains open, and it is currently unclear as a factual
matter whether the events triggering Fairbanks’s insurance
claims should be classified as a single or multiple occurrence,
whether Fairbanks has exhausted the limits on its excess

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policies, and what practical effect Liberty’s interpretation of
the non-cumulation clauses would have on the insurance coverage
available to Fairbanks.

As the court pointed out in its August

5 Order, Liberty’s interpretation of the non-cumulation clause
“potentially implicates the order in which policies should be
triggered, the effect of Liberty's practice of allocating
indemnity payments across policies, and speculation over what
will occur when Liberty has paid out the limit on an umbrella
policy, which has not yet occurred.”

Liberty Mut. Ins. Co. v.

Fairbanks Co., No. 13-cv-3755, 15-cv-1141 (JGK), 2016 WL
4203543, at *5 (S.D.N.Y. Aug. 5, 2016).
Upon the conclusion of discovery, either Liberty or
Fairbanks may advance its arguments upon a renewed summary
judgment motion; if the Court agrees with those arguments,
summary judgment on a complete record may be granted at that
time.

However, an interlocutory appeal would delay the case for

about a year, with no guarantee that the outcome would be
anything other than a remand to develop the record.

The most

efficient way to advance the ultimate termination of the
litigation is to have the parties conduct discovery and to
permit them to renew their motions for summary judgment on the
complete record.

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CONCLUSION
The Court has considered all of the arguments of the
parties.

To the extent not specifically addressed above, the

remaining arguments are either moot or without merit.

For the

foregoing reasons, Liberty’s motion for the Court to certify the
August 5 Order for interlocutory appeal is denied.

The Clerk is

directed to close Docket No. 167.
SO ORDERED.
Dated:

New York, New York
September 22, 2016
______________/s/____________
John G. Koeltl
United States District Judge

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