Fleet Nat. Bank v. Export-Import Bank of the US
| Citation | 612 F. Supp. 859 |
| Decision Date | 25 June 1985 |
| Docket Number | Civ. A. No. 83-2693. |
| Parties | FLEET NATIONAL BANK, Plaintiff, v. EXPORT-IMPORT BANK OF THE UNITED STATES and Foreign Credit Insurance Corporation, Defendants. |
| Court | U.S. District Court — District of Columbia |
Robert J. Hickey, Barbara Urquhart, Washington, D.C., for plaintiff.
Henry A. Hubschman, Richard H. Wyron, Fried, Frank, Harris, Schrieber & Kampelman, Delilah Brummet, Deborah Kasper, Dept. of Justice, Patricia L. Maskell, Export-Import Bank of the U.S., Washington, D.C., for defendants.
The above-captioned case arises out of the refusal of the defendants to pay various claims submitted by plaintiff under export credit insurance policies issued by the defendant Foreign Credit Insurance Association ("FCIA") on behalf of the defendant Export-Import Bank of the United States ("Eximbank") and other member companies. The Court presently has before it a plethora of motions and accompanying memoranda of varying degrees of merit and significance. These matters will be considered seriatim beginning with the parties' cross-motions for summary judgment.
The insurance policies underlying the claims in the action were issued to Fleet National Bank ("Fleet") by FCIA1 on behalf of Eximbank2 and FCIA's member insurance companies. Fleet obtained the policies to insure against nonpayment of loans extended by Fleet to certain Guatemalan buyers for the purchase of agricultural equipment. Simply stated, the policies provide that in the event of non-payment, FCIA will make payment to the insured (Fleet) and, through subrogation, seek recovery against the foreign buyer. In each of the five counts3 in the present case, FCIA refused payment under the policies because of Fleet's alleged noncompliance with the terms and conditions of recovery under the insurance contract. Defendants' arguments for summary judgment may be considered in three steps: 1) the effect of the contractual period of limitation; 2) the requirement of "shipment" as a condition precedent to coverage; and 3) the requirement that the insured maintain a policy of hull insurance as a condition precedent to coverage.
The "Medium Term-Comprehensive Export Credit Insurance Policy"4 issued to Fleet by FCIA sets forth in detail the procedural requirements and limitations for filing a claim.
Article VI of the policy provides that proof of loss forms must be submitted to the company within "eight months from the date of default." Article IX provides that no civil action shall be commenced until ninety (90) days from the filing of the proof of loss forms. Article IX also states that:
No action shall lie against the Insurers or any of them unless, as a condition precedent thereto, there shall have been full compliance with all the terms of this policy, nor until 90 days after the required proofs of loss have been filed with the Insurers, nor at all unless commenced prior to the expiration of eighteen months from the date of default.
Medium Term-Comprehensive Export Credit Insurance Policy, Exhibit 1 to Plaintiff's Statement of Material Facts as to Which There is No Genuine Issue. ("Plaintiff's Exhibit 1")
"Default" is defined, in relevant part as "non-payment, in whole or in part, of the amount of principal or interest due on a note in accordance with the terms thereof." Article III, Medium Term-Comprehensive Export Credit Insurance Policy, Plaintiff's Exhibit 1.
The material facts relevant to the application of this contractual provision are not in dispute. Each count of the complaint alleges that a transaction occurred in which Fleet financed the sale of certain goods. Repayment of the loans was to be made in biannual installments. Set forth below are the installment numbers and the due dates as claimed by Fleet on its proof of loss form.
Installment
Number Due Date
1 9/9/79
2 3/9/80
3 9/9/80
4 3/9/81
5 9/9/81
6 3/9/82
7 9/9/82
8 3/9/83
9 9/9/83
10 3/9/84
See Defendants' Exhibit 3. Fleet indicated to FCIA that Font had paid installment 1 only, and Fleet claimed reimbursement for installments 2 through 10.
Installment
Number Due Date
1 12/18/79
2 6/18/80
3 12/18/80
4 6/18/81
5 12/18/81
6 6/18/82
7 12/18/82
8 6/18/83
9 12/18/83
10 6/18/84
See Defendants' Exhibit 4. Fleet claimed for installments 2 through 10 after Font apparently paid installment 1.
Installment
Number Due Date
1 12/14/79
2 6/14/80
3 12/14/80
4 6/14/81
5 12/14/81
6 6/14/82
See Defendants' Exhibit 5. Fleet claimed for part of installment 2 and all of installments 3 through 6.
Installment
Number Due Date
1 10/10/78
2 4/10/79
3 10/10/79
4 4/10/80
5 10/10/80
6 4/10/81
7 10/10/81
8 4/10/82
9 10/10/82
10 4/10/83
See Defendants' Exhibit 6. Fleet claimed for installments 6 through 10 only.
Count 5 (Loans to Mr. Guillermo Spross for purchase of Caterpillar tractor and pay-loader. The note for the Caterpillar pay-loader provided for repayment under the following schedule:
Installment
Number Due Date
1 6/1/79
2 12/1/79
3 6/1/80
4 12/1/80
5 6/1/81
6 12/1/81
See Defendants' Exhibit 7. The note for the Caterpillar tractor provided for repayment as follows:
Installment
Number Due Date
1 6/29/79
2 12/29/79
3 6/29/80
4 12/29/80
5 6/29/81
6 12/29/81
See Defendants' Exhibit 8.
This lawsuit was filed on September 13, 1983. Applying the eighteen month period of limitations to the undisputed factual record, the Court holds that any default which occurred prior to March 13, 1982 is barred.
Plaintiff has submitted in an attempt to avoid this outcome. Plaintiff argues that a single, missed installment does not constitute a default and that the limitation period does not begin to run until the final installment is in default. Given the statutory definition of default, as any "non-payment, in whole or in part," the Court must hold that any missed installment constitutes a default.
Plaintiff next argues that the contractual limitation for filing claims is internally inconsistent, unlawful and contrary to public policy. The Court finds these arguments completely without merit. The system of claims filing established in the policy is perfectly clear and simple in its operation. All claims must be filed with FCIA within eight months of any missed payment or other default. FCIA is then allowed a three month grace period to consider and, if necessary, examine the claim. If FCIA refuses payment, the claimant has another seven months, a total of eighteen months from the time of default, to file a civil action.
The purpose of the contractual provision is obvious: by shortening the time for the filing of claims (both judicial and administrative), FCIA increases its chances of collecting from absconding debtors. Because of the difficulties of overseas collection, such a provision is entirely reasonable. Of course, the limitations period also serves the time-honored purposes of providing repose, avoiding stale claims, and presenting the litigation within the realistic life-expectancy of the evidence. See e.g., United States v. Kubrick, 444 U.S. 111, 117, 100 S.Ct. 352, 356, 62 L.Ed.2d 259 (1979); Bell v. Morrison, 1. Pet. 351, 360, 26 U.S. 351, 360, 1 L.Ed. 174 (1828). Because the provisions are reasonable, there is no public policy conflict and the limitation may be enforced. See United States v. Eastern Airlines, Inc., 366 F.2d 316 (2d Cir.1966).
The plaintiff also argues that defendants are estopped from enforcing the limitation or that defendants have otherwise waived their protections because defendants granted plaintiff's requests for extension of the eight month claim administrative limitations period. But, as defendants point out, the distinction between the administrative claim provision and the judicial claim limitation is clear and well understood by Fleet. In fact, Fleet counsel requested, but did not obtain, an extension of the contractual time period for filing suit, thus demonstrating both Fleet's awareness of the limitation and the absence of any waiver. See Defendants' Exhibit 35 (July 13, 1983 letter from Robert Hickey to Joseph Piepul, Senior Counsel, FCIA).5 Any suggestion that an organization such as Fleet could not understand or otherwise comply with these simple contractual provisions is incredible.
Plaintiff finally suggests that the limitation provisions are: 1)...
To continue reading
Request your trial
-
Moore v. Hartman
...in the grand jury room, in order or preserve the freedom and integrity of the deliberative process.’ ” Fleet Nat'l. Bank v. Exp.-Imp. Bank of the U.S., 612 F.Supp. 859, 868 (D.D.C.1985) (quoting In re Grand Jury Investigation (N.J. State Comm'n of Investigation), 630 F.2d 996, 1000 (3d Cir.......
-
Hamilton Bank v. Export-Import Bank of US
...documentation did not, by the very fact it was produced, create insured transactions. See Fleet National Bank v. Export-Import Bank of the United States, et al., 612 F.Supp. 859 (D.C. D.C.1985) (reading of contract as requiring actual shipment of goods "has considerable We are also unpersua......
-
H.L. Hayden Co. of New York, Inc. v. Siemens Medical Systems, Inc.
...work product. See United States v. Interstate Dress Carriers, Inc., 280 F.2d 52 (2d Cir.1960); Fleet National Bank v. Export-Import Bank of the United States, 612 F.Supp. 859, 867-68 (D.D.C.1985); Capitol Indemnity Corp. v. First Minnesota Construction Co., 405 F.Supp. 929, 930-31 (D.Mass.1......
- Sleichter v. Monsanto Co., 83-2338C(C).