Employers Insurance Company of Wausau v. Certain Underwriters At Lloyds Of London et al

Filing 48

ORDER denying 44 Motion for Clarification. ; denying 44 Motion for Reconsideration. Signed by Chief Judge Barbara B. Crabb on 10/23/09. (vob)

IN THE UNITED STATES DISTRICT COURT FO R THE WESTERN DISTRICT OF WISCONSIN --------------------------------------------EM PLO YE R S INSURANCE COMPANY OF WAUSAU, ORDER Petitioner, 0 9 - cv -2 0 1 - b b c v. C ER TA IN UNDERWRITERS AT LLOYDS OF L O N D O N , QBE REINSURANCE (EUROPE) LIMITED, TRANSATLANTIC REINSURANCE C O M PA N Y , ST. PAUL REINSURANCE COMPANY L T D , and UNIONAMERICA INSURANCE C O M PA N Y LIMITED, R espo nd ents. --------------------------------------------O n September 28, 2009, I granted petitioner Employers Insurance Company of W au sau 's petition for appointment of a third arbitrator by appointing N. David Thompson as third arbitrator to preside over arbitration proceedings between petitioner and respondents Certain Underwriters at Lloyds of London, QBE Reinsurance (Europe) Limited, T ran satlan tic Reinsurance Company, St. Paul Reinsurance Company and Unionamerica Insura nce Company Limited. In the same opinion and order, I denied respondents' crosspetition for disqualification of petitioner's party appointed arbitrator and dismissal of the

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petition on the grounds of statute of limitations, laches and estoppel. Now before the court is respondents' motion for reconsideration and clarification of the court's September 28 opinion and order. Specifically, respondents request that the court make a declaration that "W isconsin law applies to the parties' contracts and such requires all three arbitrators to be im partial and disinterested." In the alternative, respondents request a declaration that "Irrespective of Wisconsin law or the [Federal Arbitration Act], the parties' contracts require all three arbitrators to be impartial and disinterested." Respondents base their request for relief on Fed. R. Civ. P. 59 and 60. T h e purpose of a Rule 59 motion to reconsider is to bring to the court's attention n ew ly discovered evidence or a manifest error of law or fact. Bordelon v. Chicago School R efo rm Board of Trustees, 233 F.3d 524, 529 (7th Cir. 2000). It is not intended as an op po rtunity to submit evidence that could have been presented earlier, Dal Pozzo v. Basic M achinery Co., Inc., 463 F.3d 609, 615 (7th Cir. 2006), or rehash previous arguments. Oto v. Metropolitan Life Insurance Co., 224 F.3d 601, 606 (7th Cir. 2000). V a catin g a judgment under Rule 60 is permissible for a variety of reasons including m istake, excusable neglect, newly discovered evidence and fraud. Fed. R. Civ. P. 60(b). H ow ever, Rule 60(b) relief is "an extraordinary remedy and is granted only in exceptional circum stances." Harrington v. City of Chicago, 433 F.3d 542, 546 (7th Cir. 2006) (internal qu otation omitted).

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R e sp o nd en ts have not identified an error of law or fact in the September 28 opinion and order, presented newly discovered evidence or identified which of the grounds in Rule 6 0 (b ) is applicable to their motion. Instead, respondents argue that the court should grant their motion for reconsideration and make a declaration that Wisconsin law or the parties' reinsuran ce contracts require all arbitrators to be impartial and disinterested because respondents sought these declarations in their cross-petition and the court failed to provide this relief. Respondents also argue that these declarations are necessary because (1) the three arbitrators need to know the correct standard in order to make proper disclosures at the outset of arbitration; (2) counsel needs to know the correct standard in order to conduct an effective examination as to possible partiality and/or interest at the outset of arbitration; and (3) a declaration would prevent petitioner from moving forward with its stated intent to treat its party appointed arbitrator as a non-neutral party advocate. T hese are not valid reasons to act under Rule 59 or 60. First, respondents'

characterization of the relief they sought in their cross-petition is inaccurate. Their crosspetition asked the court to disqualify petitioner's party appointed arbitrator and dismiss p etitio n er's petition on the grounds of the Wisconsin statute of limitations, estoppel and laches. Respondents did not seek a blanket declaration that Wisconsin law applied to the reinsurance contracts. Ultimately, resolving the question whether Wisconsin law applies was u nn ecessary to decide the questions respondents did raise. Op. and Order, dkt. #39, at 9.

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S eco n d, as petitioner points out in its response to respondents' motion for reco n sid eratio n , a declaration that "all arbitrators are required to be impartial and disinterested" is unnecessary because it is undisputed that the reinsurance contracts require all arbitrators to be impartial and disinterested, and the September 28 opinion already states that the reinsurance contracts require that "each arbitrator be `impartial and disinterested.'" Id. at 12. Finally, although respondents argue that reconsideration and clarification of the cou rt's order will be helpful as the arbitration process proceeds, "helpful" is not a proper gro un d for the relief they seek under Rule 59 or 60. The purpose of including an arbitration p ro visio n in the reinsurance contracts was to avoid having to rely on the court for in terp retatio n and enforcement of the contract. As I explained in the September 28 opinion and order, the proper way to proceed in arbitration "is for the parties to establish `an atm osp here of frankness at the outset' of arbitration, voluntarily disclose possible biases, im pro per ex parte communications or other conflicts or interest and determine, in co n ju nctio n with the arbitrators, whether an arbitrator violates the requirements of d isin terest and impartiality and should recuse himself." Id. at 10-11. B ecause I am not persuaded that the September 28, 2009 opinion and order was in erro r or that any grounds exist for relief under Fed. R. Civ. P. 60, respondent's motion for reconsideration will be denied.

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OR DER IT IS ORDERED that respondents Certain Underwriters at Lloyds of London's, Q BE Reinsurance (Europe) Limited's, Transatlantic Reinsurance Company's, St. Paul R e in su ran ce Company's and Unionamerica Insurance Company Limited's motion for reco nsideratio n and clarification is DENIED. E n tered this 23r d day of October, 2009. B Y THE COURT: /s/ _ _ _ __ _ _ __ _ _ __ _ _ __ _ _ __ _ _ __ _ _ __ _ _ __ _ B AR B AR A B. CRABB D istrict Judge

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