National Credit Union Administration Board v. Cumis Insurance Society Inc.
Memorandum Opinion & Order. Plaintiff's 148 Motion in Limine to Preclude Defendant Cumis Insurance Society from Arguing Rescission is granted. Signed by Magistrate Judge Greg White on 11/2/2015. (S,S)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF OHIO
NATIONAL CREDIT UNION,
as Liquidating Agent of
St. Paul Croatian Federal Credit Union,
CUMIS INSURANCE SOCIETY, INC.,
CASE NO. 1:11 CV 1739
MAGISTRATE JUDGE GREG WHITE
MEMORANDUM OPINION & ORDER
This matter is before the Court upon Plaintiff National Credit Union Administration
Board, as Liquidating Agent of St. Paul Croatian Federal Credit Union’s (“Plaintiff”) Motion in
Limine to Preclude Defendant Cumis Insurance Society from Arguing Rescission (Doc. No.
148.)1 Defendant Cumis Insurance Society, Inc. (“Cumis”) filed a Brief in Opposition on
October 27, 2015. (Doc. No. 159.) For the following reasons, Plaintiff’s Motion is GRANTED.
In its Motion, Plaintiff asks the Court for an Order prohibiting Cumis from introducing
argument, testimony and/or evidence “to support its alleged defense that the CUMIS fidelity
bond issued to St. Paul be rescinded.” (Doc. No. 148 at 1.) Plaintiff notes the Court “has
already addressed this issue and held, in its ruling on the cross-motions for summary judgment
(ECF #102) that CUMIS is not entitled to rescind the bond.” Id. at 3. As such, Plaintiff
This case is before the Court upon consent of the parties entered November 28, 2011.
(Doc. No. 13.)
maintains allowing Cumis to continue arguing this issue would cause “unnecessary delay and
The Court agrees. On August 18, 2011, Plaintiff filed a one-count Complaint seeking a
declaratory judgment that Cumis owed coverage under a fidelity bond issued to St. Paul for
losses arising from employee or director dishonesty. (Doc. No. 1.) Cumis filed its Answer on
October 24, 2011, in which it raised various affirmative defenses including that “the complaint is
barred because the bond at issue has been rescinded.” (Doc. No. 4 at 5.) Thereafter, on October
29, 2014, the parties filed cross-motions for summary judgment on a number of issues, including
whether Cumis was entitled to rescind the fidelity bond based on Anthony Raguz’s material
misrepresentations in the bond applications. (Doc. Nos. 88, 90.) Both parties applied Ohio law
in arguing this legal issue. At no time in its summary judgment briefing did Cumis argue that the
Court should apply federal common law or the law of another jurisdiction in interpreting the
bond. Nor did it raise the argument that the bond had been mutually rescinded.
On April 7, 2015, this Court issued a Memorandum Opinion & Order denying the
parties’ summary judgment motions. (Doc. No. 102.) At the outset, the Court expressly noted
that “[i]t is undisputed that Ohio law applies to the instant dispute.” Id. at 13. The Court then
engaged in an extensive analysis of Ohio law, and concluded that Cumis “is not entitled to
summary judgment in its favor on the basis of rescission as a matter of law.”2 Id. at 37. Cumis
did not subsequently file a motion for reconsideration or motion to alter or amend judgment.
The matter was set for bench trial commencing December 1, 2015. In its Trial Brief
The Court further noted that “[w]hile the Court agrees with Plaintiff on this issue,
Plaintiff is not entitled to summary judgment on the ultimate issue of coverage under the bond as
Cumis raises three additional, independent grounds for denying coverage.” Id. at 37.
(filed less than two months before trial), Cumis argues for the first time that “[f]ederal common
law. . . governs the analysis here: whether, and under what circumstances, rescission is
available.” (Doc. No. 151 at 7.) Cumis also raises the entirely new argument that the bond was
mutually rescinded because “Cumis sent plaintiff a letter clearly indicating that it was rescinding
the bond and providing it the return of premiums” and “Plaintiff thereafter cashed the check.” Id.
The Court finds Cumis has waived these arguments by neglecting to raise them until after
the Court ruled on summary judgment. “A party is not entitled to reserve particular issues and
arguments until after a court rules against it.” Longs v. Wyeth, 621 F.Supp.2d 504, 512 (N.D.
Ohio March 20, 2009) reversed in part on other grounds in Wimbush v. Wyeth, 619 F.3d 632 (6th
Cir. 2010). Cumis had ample opportunity to raise its arguments regarding the applicability of
federal common law and mutual rescission as part of the summary judgment briefing in this case.
It chose not to do so, and has articulated no reason for this failure. In the absence of any
reasonable explanation for the delay, the Court is not inclined to allow Cumis to re-litigate the
issue of rescission now, four weeks before trial.
Accordingly, and for all the reasons set forth above, Plaintiff’s Motion in Limine
regarding Rescission (Doc. No. 148) is GRANTED. Cumis will not be permitted to introduce
argument, testimony and/or evidence at trial to support its alleged defense that the CUMIS
fidelity bond issued to St. Paul should be rescinded.
IT IS SO ORDERED.
/s/ Greg White
U.S. Magistrate Judge
Date: November 2, 2015
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