ORITANI S & L v. Fidelity & Deposit

Citation744 F. Supp. 1311
Decision Date01 October 1990
Docket NumberCiv. A. No. 89-5355.
PartiesORITANI SAVINGS & LOAN ASSOCIATION, Plaintiff, v. FIDELITY & DEPOSIT COMPANY OF MARYLAND, Defendant.
CourtUnited States District Courts. 3th Circuit. United States District Courts. 3th Circuit. District of New Jersey

COPYRIGHT MATERIAL OMITTED

Andrew Fede, Contant, Schuber, Scherby & Atkins, Hackensack, N.J., for plaintiff.

James M. Mulvaney, McElroy, Deutsch & Mulvaney, Morristown, N.J., for defendant.

OPINION

HAROLD A. ACKERMAN, District Judge.

I. Introduction

This is a declaratory judgment action in which plaintiff, Oritani Savings & Loan Corporation, ("Oritani"), seeks a ruling that defendant, Fidelity & Deposit Company of Maryland, ("Fidelity"), is obligated to indemnify it under a Savings and Loan Blanket Bond. Presently before the Court is a motion by Fidelity for reconsideration of this Court's decision rendered on June 28, 1990 and order filed on July 9, 1990, (the "opinion and order").1 Previously, Fidelity moved for summary judgment arguing that plaintiff's complaint should be dismissed, because, as a matter of law, no coverage is afforded under the bond. In the opinion and order, this Court denied Fidelity's motion and held that Oritani is entitled to coverage subject to any additional defenses that might later be asserted by Fidelity, such as non-compliance with the contract provisions. In response to Fidelity's motion for reconsideration, Oritani has cross-moved for leave to amend its complaint and for summary judgment in its favor.

II. Fidelity's Motion for Reconsideration

"Rule 12I of the General Rules of this court requires a party moving for reconsideration to set forth concisely `the matters or controlling decisions which that party believes the Court has overlooked.'" Juzwin v. Amtorg Trading Corp., 718 F.Supp. 1233, 1234 (D.N.J.1989); see also Innovation Data Proc. v. Intern. Business Machines, 603 F.Supp. 646, 647 (D.N. J.1984) (matter required reconsideration in light of intervening United States Supreme Court decision on the same subject matter). A motion for reconsideration is improper when it is used "to ask the Court to rethink what is had already thought through — rightly or wrongly." Above the Belt v. Mel Bohannan Roofing, Inc., 99 F.R.D. 99, 101 (E.D.Va.1983). Each step of the litigation should build upon the last and, in the absence of newly discovered, non-cumulative evidence, the parties should not be permitted to reargue previous rulings made in the case. Johnson v. Tp. of Bensalem, 609 F.Supp. 1340, 1342 n. 1 (E.D.Pa.1985).

Fidelity asserts three grounds in support of its motion for reconsideration: (1) that a fair reading of the blanket bond precludes coverage; (2) that the court erred in deciding as matter of law that coverage is afforded, because a question of fact exists as to whether Oritani was a sophisticated purchaser; and (3) that the court erred in finding that a question of fact exists as to whether coverage is afforded under Section (A) of the blanket bond.

I reject Fidelity's first argument for reconsideration, because Fidelity has not satisfied the Rule 12 I standard. Fidelity has pointed to no controlling authorities which it claims this Court has overlooked in interpreting the blanket bond. This is understandable in light of the fact that Fidelity previously asserted, in connection with its summary judgment motion, that there were no controlling decisions on the issues before the Court.2

Likewise, Fidelity has pointed to no other "matter" which it claims the court has overlooked. The only matter to which Fidelity refers is an affidavit by Ray Britt, an employee of Fidelity from October, 1949 to April, 1987. Mr. Britt states that he participated in drafting the standard form of the blanket bond which is the subject of these proceedings. However, this Court did not and could not have "overlooked" this affidavit, as it was not submitted in connection with the previous motion, although Fidelity certainly could have submitted it. This is not newly discovered evidence such as would warrant reconsideration. This Court is not required to take into account belated evidentiary submissions on a motion for summary judgment. Compare Lujan v. Nat'l Wildlife Fed., ___ U.S. ___, 110 S.Ct. 3177, 111 L.Ed.2d 695 (1990) (district court did not abuse its discretion in declining to consider untimely affidavits submitted after arguments were heard on a motion for summary judgment). Moreover, the subjective intent of a person drafting a contract is not, by any means, determinative as to the meaning of the contract especially where, as here, the contract is one of adhesion. See Allen v. Metropolitan Life Ins. Co., 44 N.J. 294, 305, 208 A.2d 638 (1965). This principle is so well-settled it does not require further citation of authority.

I also reject Fidelity's second argument that this Court erred in deciding as a matter of law that there is coverage under the blanket bond. Fidelity asserts that this Court overlooked that a question of fact may exist as to whether Oritani was a "sophisticated purchaser." Fidelity relies upon Werner Indus. Inc. v. First State Ins. Co., 112 N.J. 30, 548 A.2d 188 (1988), for the proposition that the sophistication of the insured must always be considered. However, Fidelity's reliance upon Werner for this proposition is misplaced. The insurance policy before the court in Werner involved an unambiguous policy of insurance, (see 112 N.J. at 38-9, 548 A.2d 188), whereas I have found that the language of the insurance policy in this case is ambiguous. According to the Third Circuit, the rule that ambiguities are resolved against the insured is applicable in cases involving blanket bonds issued to banks. See Fidelity & Deposit Co. of Md. v. Hudson United Bank, 653 F.2d 766, 772 n. 8 (3d Cir.1981).3

Beyond this, Fidelity has come forward with no evidence to create a factual issue on the question of whether Oritani was a sophisticated purchaser. Mr. Charles M. Lindner, Jr., the president of plaintiff Oritani, has submitted an affidavit stating that "the Bond in question was not negotiated by the plaintiff as one would negotiate a contract. Instead, the Bond was presented to us just as any ordinary contract of insurance would be presented — on a take it or leave it basis." See Affidavit of Charles H. Lindner, Jr., August 2, 1990, ("Lindner Aff."), ¶ 2, p. 2. Fidelity has presented no record evidence to controvert this sworn statement or to support its position that Oritani was sophisticated. While Fidelity asserts that it has not conducted any discovery on the issue, this contention is unavailing. The pretrial scheduling order states that discovery shall remain open only through July 31, 1990, and that no discovery shall be engaged in after that date except upon good cause shown. See amended pretrial order, filed May 2, 1990, ¶ 1.4 Fidelity certainly has had an adequate opportunity to conduct discovery on this issue but has failed to come forward with a factual question regarding same. Thus, even if I were required to consider Oritani's sophistication, a finding of coverage would nevertheless be appropriate.

Finally, in support of its reconsideration motion, Fidelity asserts a third argument, namely, that the Court erred in finding that a question of fact exists on whether coverage is afforded under Section (A) of the blanket bond. Fidelity asserts that this Court should not have relied upon the case of Nat'l Newark & Essex Bank v. Am. Ins. Co., 76 N.J. 64, 385 A.2d 1216 (1978), in interpreting that section of the bond.5 Fidelity points out that the language of the bond at issue in this case differs from the language of the bond at issue in Nat'l Newark. In particular, the bond in this case defines the phrase "dishonest or fraudulent acts" to mean "only dishonest or fraudulent acts committed by such employee with the manifest intent (a) to cause the Insured to sustain such loss, and (b) to obtain financial benefit for the Employee or for any other person or organization...." See Db. at 28 (emphasis supplied).6

Both parties have presented a number of novel, legal arguments supporting their respective positions regarding the impact of the bond's definition of "dishonest or fraudulent acts" upon the applicability of Nat'l Newark. However, there is, apparently, no controlling authority to guide my decision on this issue. In light of the difficulty of the issue, the absence of any controlling authorities, and the fact that it is wholly unnecessary for me to decide it, (since I have already decided that there is coverage under Section (B)), I decline to rule on this issue at this time. Compare Hoxworth v. Blinder, Robinson & Co., Inc., 903 F.2d 186, 203 (3d Cir.1990) (deeming it prudent to defer resolution of an important and difficult question which is not necessary for the court to resolve).

Accordingly, for all the foregoing reasons, I deny Fidelity's motion for reconsideration.

III. Oritani's Cross-motion for Leave to Amend the Complaint

Oritani has moved for leave to amend its complaint in order to unambiguously state its claim under Section (A) of the bond. In its complaint, Oritani refers to Section (A) of the bond, (see complaint, ¶ 2); it specifically alleges that Fidelity denied coverage under that section of the bond, (id., ¶ 7); and it then generally demands coverage under the insurance contract as a whole, (see addendum clause, at p. 5), without reference to a particular provision. In light of these allegations, Fidelity was put on sufficient notice that coverage would be demanded under Section (A) of the bond. Rule 8 merely requires that the pleadings contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a). See also Rose v. Bartle, 871 F.2d 331, 355 (3d Cir.1989) ("under the modern federal rules, it is enough that a complaint put the defendant on notice of the claims against him. It is the function of discovery to fill in the details, and of trial to establish each element of the...

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