GEICO Marine Ins. Co. v. Mandel

• Decision Date: 18 September 2020
• Docket Number: CV 19-3107 (SJF) (AKT)
• Parties: GEICO MARINE INSURANCE COMPANY, Plaintiff, v. LEE MANDEL, Defendant.
• Court: U.S. District Court — Eastern District of New York

GEICO MARINE INSURANCE COMPANY, Plaintiff, v. LEE MANDEL, Defendant.

CV 19-3107 (SJF) (AKT)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

September 18, 2020

REPORT AND RECOMMENDATION

A. KATHLEEN TOMLINSON, Magistrate Judge:

I. PRELIMINARY STATEMENT

Plaintiff GEICO Marine Insurance Company ("Plaintiff" or "GEICO") commenced this insurance coverage action against Defendant Lee Mandel ("Defendant" or "Mandel") seeking a declaratory judgment as to the rights and obligations of the parties under two successive marine yacht insurance policies issued by Plaintiff to Defendant. See generally Complaint ("Compl.") [DE 1]. Specifically, Plaintiff seeks a declaration that Defendant is not entitled to coverage under the policies for any claims or losses arising from damage to the engines of Defendant's vessel for which Plaintiff has not already indemnified Defendant. See id. Defendant has asserted counterclaims for breach of contract and bad faith. See generally Answer with Counterclaims ("Countercl.") [DE 7].

Pursuant to Rule 56 of the Federal Rules of Civil Procedure ("Fed. R. Civ. P."), Plaintiff now moves for partial summary judgment, which Defendant opposes. See generally Plaintiff's Memorandum of Law in Support of its Motion for Summary Judgment ("Pl.'s Mem.") [DE 13-1]; Defendant's Memorandum of Law in Opposition to Plaintiff's Motion for Summary Judgment ("Def.'s Opp'n") [DE 13-6]; Plaintiff's Reply Memorandum of Law in Further Support of its Motion for Summary Judgment ("Pl.'s Reply") [DE 13-31]. Judge Feuerstein referred Plaintiff's Motion for Partial Summary Judgment to this Court for a Report and Recommendation as to whether the motion should be granted. See Electronic Order dated December 6, 2019. For the reasons set forth below, the Court respectfully recommends to Judge Feuerstein that Defendants' motion for partial summary judgment be GRANTED in part and DENIED in part.

II. BACKGROUND

A. Preliminary Issue

In accordance with Rule 56.1 of the Local Rules of the United States District Courts for the Southern and Eastern Districts of New York, GEICO submitted a Statement of Material Facts ("Pl.'s SOMF") [DE 13-2], along with the declaration of Vincent Corteselli, a senior marine insurance claims adjuster for GEICO ("Corteselli Decl.") [DE 13-3], in support of its motion. In opposing GEICO's motion, the Defendant submitted a "response" to Plaintiff's Rule 56.1 Statement of Material Facts ("Def.'s 56.1(b) Resp."), and Counterstatement of Additional Material Facts ("Def.'s COMF")¹ [DE 13-7], with supporting exhibits. Both parties properly cite admissible evidence. See Rule 56.1(d) ("Each statement by the movant or opponent pursuant to Rule 56.1(a) and (b), including each statement controverting any statement of material fact, must be followed by citation to evidence which would be admissible.").

The Court notes that Rule 56.1 requires the nonmovant to "include a correspondingly numbered paragraph responding to each numbered paragraph in the statement of the moving party, and if necessary, additional ... statement of additional material facts as to which it is contended that there exists a genuine issue to be tried." Rule 56.1(b) (emphasis added). Defendant's Rule 56.1 Counterstatement of Additional Material Facts does not appear to assert any facts for which a genuine issue of material fact remains to be tried nor does it serve to dispute the material facts asserted by GEICO. Rather, Defendant's Counterstatement of Additional Material Facts recites in greater detail than GEICO does the events giving rise to the instant action and includes certain additional facts which were not asserted by GEICO. See generally Def.'s COMF. Nonetheless, instead of responding to Defendant's Rule 56.1 Counterstatement of Additional Material Facts, GEICO argues in its Reply that the Court should simply disregard these additional facts because they are not material to the instant motion. See Pl.'s Reply at 8-9.

Having reviewed Defendant's Counterstatement of Additional Material Facts and supporting exhibits, the Court finds that several of these additional facts are either material to the issues raised in the instant motion or provide necessary context for the resolution of these issues. See I.M. v. United States, 362 F. Supp. 3d 161, 190 (S.D.N.Y. 2019) ("On a motion for summary judgment, a fact is material if it might affect the outcome of the suit under the governing law."). As it relates to GEICO's failure to respond to these additional facts, the argument can be made that these facts should be deemed admitted by GEICO. See Rule 56.1(c) ("Each numbered paragraph in the statement of material facts set forth in the statement required to be served by the moving party will be deemed to be admitted for purposes of the motion unless specifically controverted by a correspondingly numbered paragraph in the statement required to be served bythe opposing party."); Genova v. Cty. of Nassau, No. 17-CV-4959, 2019 WL 8407451, at *1 (E.D.N.Y. Dec. 26, 2019), report and recommendation adopted, No. 17-CV-4959, 2020 WL 813160 (E.D.N.Y. Feb. 19, 2020) ("Because Plaintiff has failed to comply with Rule 56.1, the relevant facts, as set forth below, are deemed admitted by Plaintiff, and are therefore taken solely from Defendants' Rule 56.1 Statement."); Luizzi v. Pro Transport Inc., No. 02-CV-5388, 2009 WL 252076, at * 2 (E.D.N.Y. Feb. 2, 2009) ("Where the party opposing a motion for summary judgment fails to submit a proper counter-statement of material facts, controverting the moving party's statement, courts have deemed the moving party's statement of facts to be admitted and have granted summary judgment in favor of the moving party on the basis of the uncontroverted facts."). However, "[a] district court has broad discretion to determine whether to overlook a party's failure to comply with local court rules." Holtz v. Rockefeller & Co., 258 F. 3d 62, 73 (2d. Cir. 2001). "Rather than rely on the parties' respective Local Rule 56.1 statements, a court 'may in its discretion opt to conduct an assiduous review of the record.'" Chen v. Shanghai Cafe Deluxe, Inc., No. 17-CV-2536, 2019 WL 1447082, at *7 (S.D.N.Y. Mar. 8, 2019) (quoting Holtz., 258 F. 3d at 73); see also Pensionsversicherungsanstalt v. Greenblatt, 556 Fed. App'x 23, 25 (2d Cir. 2014) (Summary Order) (noting that "nothing requires a district court to deem evidence admitted, or grant summary judgment, simply because a non-movant fails to comply with local rules such as Local Rule 56.1").

Here, the Court has conducted an independent review of the record, including Plaintiff's Rule 56.1(a) Statements of Material Facts, Defendant's Rule 56.1(b) Responses to Plaintiff's Statement of Material Facts, Defendants' Counterstatement of Additional Material Facts, and affidavits submitted in connection with the instant motion, along with the exhibits attached to those affidavits. From these, the Court references what it considers to be the undisputed facts orfacts uncontroverted by admissible evidence. See Truitt v. Salisbury Bank & Tr. Co., No. 18-CV-8386, 2020 WL 4208452, at *1 (S.D.N.Y. July 21, 2020). In doing so, the Court construes the facts in the light most favorable to the party opposing the respective motion. See Beyer v. Cty. of Nassau, 524 F.3d 160, 163 (2d Cir. 2008); Capobianco v. New York, 422 F.3d 47, 50 (2d Cir. 2001); Coastal Pipeline Prod. of New York v. Gonzales, No. 04-CV-8252, 2006 WL 473883, at *4 (S.D.N.Y. Feb. 28, 2006).

B. The Undisputed Material Facts

Defendant resides in and has an actual place of business in the State of New York. Answer ¶¶ 5, 7. Defendant was the owner of a 52' SeaRay sedan bridge-model vessel bearing hull identification number SERP6372K405. Pl.'s SOMF ¶ 1. While Defendant owned the vessel, he obtained two successive one-year marine yacht insurance policies from Plaintiff GEICO (the "Yacht Policies"). Id. ¶ 2. GEICO was formerly named "Seaworthy Insurance Company" and assumed the name "GEICO Marine Insurance Company" in 2015. Id. ¶ 3. While known as Seaworthy Insurance Company, GEICO issued the first of the two successive Yacht Policies to Defendant for the one-year period running from February 6, 2015 to February 6, 2016, which was assigned policy number SYP1039106-00 (the "2015-2016 Yacht Policy"). Id. ¶ 4. GEICO and the Defendant renewed the coverage and GEICO issued the second of the two successive Yacht Policies for the period covering February 6, 2016 to February 6, 2017. The second policy was assigned policy number SYP1039106-01 (the "2016-2017 Yacht Policy"). Id. ¶ 5. Plaintiff delivered the Yacht Policies to Defendant in the State of New York. Answer ¶ 13. Both Yacht Policies include a "Legal Action Against Us" clause, which provides, in pertinent part as follows:

With respect to any claim or loss to insured property, the action must begin within one year of the date of loss or damage. With respect toany other claim or loss, no legal action may be brought against us until we agree in writing that the insured has an obligation to pay a specified amount, or until the amount of that obligation has been finally determined by judgment after trial.

Pl.'s SOMF. ¶ 7; see Corteselli Decl., Ex. 1 (2015-2016 Yacht Policy) [DE 13-4] at 11; Corteselli Decl., Ex. 2 (2016-2017 Yacht Policy) [DE 13-5] at 11.

On December 29, 2015, Defendant first notified and reported a claim under the Yacht Policies for damage sustained to the starboard engine of his vessel. Compl. ¶ 19; Answer ¶ 19. Between then and July 13, 2016, GEICO approved piecemeal repairs to the vessel's starboard engine and paid Defendant approximately $92,396.37 under the Yacht Policies for the costs incurred. Pl.'s SOMF ¶ 8-9; Countercl. ¶ 62. On July 13, 2016, Defendant reported a supplemental claim for damages to the starboard engine caused by a hairline crack in the cylinder that was missed during the initial repairs to the engine. Def.'s COMF ¶ 6.

On August 30, 2016, Defendant first...