Munich Reinsurance Am., Inc. v. Am. Nat'l Ins. Co., Civ. No.: 09-6435 (FLW)

MUNICH REINSURANCE AMERICA, INC., Plaintiff, v. AMERICAN NATIONAL INSURANCE COMPANY, Defendant.

Civ. No.: 09-6435 (FLW)

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

Date: May 27, 2014

*NOT FOR PUBLICATION

OPINION

WOLFSON, United States District Judge:

Two issues remain unresolved in this case involving complex retrocessional agreements between Plaintiff Munich Reinsurance America Inc. ("Munich") and Defendant American National Insurance Company ("ANICO"), in which, inter alia, Munich filed a Complaint alleging breach of contract for ANICO's refusal to pay certain claims under the "Retrocessional Agreements."¹ Following motion practice and a bench trial, the Court issued an Opinion on February 27, 2014, setting forth findings of facts and conclusions of law, the ultimate result of which was a determination that ANICO is liable to Munich on the nonpayment of certain claims covered by the Retrocessional Agreements and timely submitted by Munich, as well as pre- and post-judgment intereston those claims. In that Opinion, the Court further instructed the parties to submit a stipulated sum certain of damages, in accordance with the Court's decision. The parties have been unable to reach an agreement, and thus Munich has submitted an application for the amount of damages it believes appropriate, which ANICO opposes. Additionally, ANICO has filed a timely motion pursuant to Fed. R. Civ. P. 52(b) for additional findings related to this Court's decision. I address ANICO's motion and Munich's application in this Opinion, granting in part and denying in part ANICO's motion and granting in part and denying in part Munich's application.

I. OVERVIEW

The underlying facts and general claims at issue in this litigation have been thoroughly discussed in this Court's previous decisions. See Munich Reins. Am., Inc. v. Am. Nat'l Ins. Co., 893 F. Supp. 2d 686 (D.N.J. 2012); Munich Reins. Am., Inc. v. Am. Nat'l Ins. Co., 936 F. Supp. 2d 475 (D.N.J. 2013); Munich Reins. Am., Inc. v. Am. Nat'l Ins. Co., ___ F. Supp. 2d ___, 2014 WL 793129 (D.N.J. 2014). Because I write primarily for the benefit of the parties in this Opinion, I recite only that which is necessary to my decision.

In my decision dated February 27, 2014, I concluded that ANICO breached its payment obligations under the Retrocessional Agreements for claims that were properly ceded to ANICO via IOA Re ² before the expiration of certain "Sunset Provision" deadlines in the Retrocessional Agreements, but on which ANICO has failed to pay. Munich Reins. Am., Inc. v. Am. Nat'l Ins. Co., 2014 WL 793129, at *52. Accordingly, I concluded that Munich is entitled to damages in the form of payment of any and alloutstanding bills on properly ceded claims, as specifically identified in the Appendix of my February 27, 2014 decision (the "Appendix"). Id.; see also id. at App'x, as amended b Dkt. No. 167. I further found that Munich is entitled to prejudgment interest on the amounts billed for these claims beginning on the date of the billing, but no earlier than December 22, 2009, the date Munich filed its Complaint in the present action, at the annual rate identified in New Jersey Court Rule 4:41-11(a)(ii).³ Because certain information regarding payments, as well as the most current prejudgment interest rate, was lacking, I directed the parties to provide the Court with a proposed a sum certain of damages based upon the claims identified in the Appendix, including the appropriate amount of prejudgment interest, to be offset by any adjusted premium amounts.⁴ Finally,I issued a declaration that ANICO may not withhold future payment based on the defenses presented in this litigation for those claims that have been properly ceded to ANICO, as identified in Appendix, but for which Munich has yet to submit any bill for payment.

II. DISCUSSION

A. ANICO's Rule 52(b) Motion

ANICO's Rule 52(b) motion requests several additional findings.⁵ First, ANICO requests that this Court take judicial notice of alleged admissions that Munich made in a prior, and separate, litigation in state court in Illinois. Second, ANICO argues that this Court should find that Munich must provide "particulars and estimates," in line with Article X of the Retrocessional Agreements, prior to ANICO being obligated to pay on claims that I found were properly ceded to, but unpaid by, ANICO.⁶ Munich opposes each of these requested findings as improper and/or without merit.

ANICO requests the Court take judicial notice of certain alleged admissions Munich made in a prior litigation, American Re-Insurance Co. v. MGIC Investment Corp., Civ. No. 77CH1457 (Ill. Circ. Ct. Oct 20, 1987) (mem. op. and order).⁷ Specifically, ANICO argues that in the MGIC Investment decision, Munich (formerly known as American Re-Insurance Co.) admitted to taking positions regarding the duties a reinsured owes a reinsurer that are contrary to, or at least inconsistent with, the positions that Munich took in the present case. ANICO contends that the MGIC Investment decision is properly subject to judicial notice under Fed. R. Evid. 201, and further, that this Court must take such notice based on ANICO's request.

Rule 201 provides in relevant part that a court "may judicially notice a fact that is not subject to reasonable dispute because it . . . can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned." Fed. R. Evid. 201(b). The rule further provides that the court "must take judicial notice if a party requests it and the court is supplied with the necessary information." Id. 201(c)(2). In that connection, it is well established that a court "may take judicial notice of another court's opinion—not for the truth of the facts recited therein, but for the existence of the opinion, which is not subject to reasonable dispute over its authenticity." S. Cross Overseas Agencies Inc. v. Wah Kwong Shopping Group Ltd., 181 F.3d 410, 426 (3d Cir. 1999); see also Morrissey v. Luzerne Cnty. Cmty. Coll., 117 F. App'x 809, 815 (3d Cir. 2004) ("[F]acts adjudicated in a prior case fall short of this [Rule 201] standard." (Citing Werner v. Werner, 267 F.3d 288, 295 (3d Cir. 2001))). "Taking judicial notice of the truth of thecontents of a filing from a related action could reach, and perhaps breach, the boundaries of proper judicial notice." Werner, 267 F.3d at 295; see also Liberty Mut. Ins. Co. v. Rotches Pork Packers, Inc., 969 F.2d 1384 (2d Cir. 1992) ("Facts adjudicated in a prior case do not meet either test of indisputability contained in Rule 201(b): they are not usually common knowledge, nor are they derived from an unimpeachable source.").

Here, ANICO's request runs afoul of these limitations on the taking of judicial notice. ANICO does not seek a finding of the existence of the MGIC Investment decision, but rather a finding as to the "admissions" Munich made in that decision, as found by the Illinois court. This request falls outside the bounds of proper judicial notice taking.⁸ S. Cross Overseas Agencies Inc. 181 F.3d at 426. Moreover, regardless of the propriety of taking notice of the MGIC Investment decision, it is wholly irrelevant to the instant matter. That decision concerned the standard for disclosure of information by the reinsured to the reinsurer of the business of the underlying insured; in this case, the relevant dispute was over the reinsured's disclosure obligations to the reinsurer of the reinsured's own business. Thus, the "admissions" upon which ANICO bases its proposed additional findings are not relevant to resolving the present controversy. Finally, and perhaps most significantly, the MGIC Investment decision applied Illinois law; in this case, New York law governs. In other words, the reasoning—and Munich's arguments—in the MGIC Investment decision regarding the duties owed between thereinsured and reinsurer have little, if any, application to the duties in this case. Accordingly, for these reasons, I reject ANICO's request for additional findings based on the MGIC Investment decision.

ANICO also requests additional findings that Munich is obligated to supply "particulars and estimates" when it submits claims in accordance with the Retrocessional Agreements. Specifically, ANICO argues that Munich must provide updated case summaries on all claims, including updated medical information related to the underlying claim; merely providing a billing amount does not satisfy Munich's reporting obligations under Article X of the Retrocessional Agreements. In response, Munich contends that such a finding is not supported by the evidence because ANICO has previously paid on claims that were submitted without backup documentation.⁹

Article X of the Retrocessional Agreements provides in relevant part: "[Munich] agrees to advise [IOA Re for and on behalf of ANICO] promptly of all claims under this Agreement on being advised by [Everest National], and to furnish the Reinsurer with such particulars and estimates regarding the same as are in the possession of [Munich]." Pl.'s 1-2 (Art. X).¹⁰ At trial, Munich employee Michael Frantz, who currently manages Munich's reinsurance claim operations division, testified that he agrees that reporting of "particulars and estimates" is a requirement of Article X, which entails providing, when available, a description of the accident or injury that caused the loss. 6/17/13 Tr. at 110-11. Mr. Frantz further agreed that it was Munich's practice to also include such information as descriptions of the loss and the coverage; liability, damage, and reserve analyses; and the strategy being followed on the underlying claim; however, he did not believe that the Retrocessional Agreements required such detailed reporting, but rather that the "particulars and estimates" clause required "some more detail other than just numbers." Id. at 123-24. Employees at IOA Re testified that they expected to receive a similar amount of detail in order to determine whether the claim fell within the...