Utica Mut. Ins. Co. v. Am. Re-Ins. Co.

211 A.D.3d 1587

180 N.Y.S.3d 452

UTICA MUTUAL INSURANCE COMPANY, Plaintiff-Appellant,

v.AMERICAN RE-INSURANCE COMPANY, Now Known as Munich Reinsurance America, Inc., Defendant-respondent.

867

CA 21-00932

Supreme Court, Appellate Division, Fourth Department, New York.

Entered: December 23, 2022

HUNTON ANDREWS KURTH LLP, WASHINGTON, D.C. (SYED S. AHMAD, OF THE WASHINGTON, D.C. BAR, ADMITTED PRO HAC VICE, OF COUNSEL), AND FELT EVANS, LLP, CLINTON, FOR PLAINTIFF-APPELLANT.

RUBIN, FIORELLA, FRIEDMAN & MERCANTE LLP, NEW YORK CITY (BRUCE M. FRIEDMAN OF COUNSEL), FOR DEFENDANT-RESPONDENT.

PRESENT: SMITH, J.P., PERADOTTO, CURRAN, WINSLOW, AND MONTOUR, JJ.

MEMORANDUM AND ORDER

It is hereby ORDERED that the order so appealed from is unanimously modified on the law by vacating the fifth and sixth ordering paragraphs, denying defendant's motion for summary judgment dismissing the complaint as barred by collateral estoppel, granting defendant's motion for summary judgment dismissing the complaint insofar as it asserts a claim for defense costs, denying plaintiff's cross motion for summary judgment on the issue of defense costs, denying defendant's cross motion for summary judgment dismissing the complaint insofar as it asserts a claim for interest on allegedly late loss payments and reinstating the complaint to that extent and as modified the order is affirmed without costs.

Memorandum: Plaintiff issued primary and umbrella policies of insurance to nonparty Burnham Corporation (Burnham) covering, as relevant to this appeal, a period from 1977 to 1984. Plaintiff obtained from defendant reinsurance coverage for the same period related to the umbrella policies. Burnham was sued by individuals who were allegedly injured by exposure to equipment that was manufactured by Burnham and that contained asbestos (underlying actions). Plaintiff paid defense costs and losses under the primary policies and, when it allegedly exhausted the primary policies, it began to pay claims under the umbrella policies. Plaintiff sought reimbursement from defendant for defense costs under the reinsurance policies, but defendant refused to pay, contending that plaintiff was not obligated under the umbrella policies to pay such costs and that the reinsurance contracts thus were not triggered.

Plaintiff thereafter commenced this action, asserting, inter alia, a cause of action for breach of contract. In 2016, the parties entered a settlement as to certain sums defendant allegedly owed to plaintiff under the reinsurance policies. As part of that settlement, plaintiff retained its claim to what the parties

denominate loss interest, i.e., interest on the payment made under the settlement, which was allegedly untimely. Defendant moved for summary judgment dismissing the complaint on the ground of collateral estoppel and plaintiff cross-moved for summary judgment on its causes of action and dismissing defendant's counterclaims. In a separate set of motions, defendant moved for summary judgment dismissing the claim for defense costs and plaintiff cross-moved for summary judgment on the claim for defense costs and dismissing defendant's counterclaims. Lastly, plaintiff moved for partial summary judgment on the loss interest claim, and defendant cross-moved for summary judgment dismissing that claim. Plaintiff appeals from an order of Supreme Court that, inter alia, granted defendant's motion for summary judgment based on collateral estoppel, denied plaintiff's corresponding cross motion, declined to reach defendant's motion for summary judgment dismissing the claim for defense costs and plaintiff's corresponding cross motion, granted defendant's cross motion for summary judgment dismissing the loss interest claim, and denied plaintiff's corresponding motion.

As an initial matter, we agree with plaintiff that the court erred in granting defendant's motion for summary judgment dismissing the complaint as barred by collateral estoppel based on the decision in Utica Mut. Ins. Co. v. Munich Reins. Am., Inc. , 7 F.4th 50 (2d Cir. 2021), and we modify the order accordingly. The issue of the interpretation of the language of an insurance policy involves a pure question of law, and "the doctrine of collateral estoppel does not preclude [plaintiff] from litigating that issue again, despite the Federal court[’s] prior adverse determination on the point" ( American Home Assur. Co. v. International Ins....