Onebeacon America Ins. Co. v. Commercial Union Assurance Co. of Canada, Civil Action No. 10–10164–JLT.

• Decision Date: 18 August 2011
• Docket Number: Civil Action No. 10–10164–JLT.
• Citation: 804 F.Supp.2d 77
• Parties: ONEBEACON AMERICA INSURANCE COMPANY, Plaintiff, v. COMMERCIAL UNION ASSURANCE COMPANY OF CANADA, Defendant.
• Court: U.S. District Court — District of Massachusetts

804 F.Supp.2d 77

ONEBEACON AMERICA INSURANCE COMPANY, Plaintiff,

v.COMMERCIAL UNION ASSURANCE COMPANY OF CANADA, Defendant.

Civil Action No. 10–10164–JLT.

United States District Court, D. Massachusetts.

Aug. 18, 2011.

Benjamin L. Hincks, Wynter N. Lavier, Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, PC, Boston, MA, for Defendant Commercial Union Assurance Company of Canada.

Jennifer L. Noe, Kevin J. O'Connor, Hermes, Netburn, O'Connor & Spearing, Boston, MA, for Plaintiff OneBeacon America Insurance Company.

MEMORANDUM

JOSEPH L. TAURO, District Judge.I. Introduction

This case concerns various insurance and reinsurance agreements made by the Parties in the early 1980s. Presently at issue are Defendant's Motion to Strike [# 33], Plaintiff's Motion to Strike Affidavit of Edwin M. Millette [# 38], Plaintiff's Motion for Summary Judgment [# 20], and Defendant's Motion for Summary Judgment [# 25]. For the following reasons, Defendant's Motion to Strike is ALLOWED; Plaintiff's Motion to Strike is ALLOWED IN PART and DENIED IN PART; Plaintiff's Motion for Summary Judgment is DENIED; and Defendant's Motion for Summary Judgment is ALLOWED.

II. BackgroundA. The Insurance Policies

In the early 1980s, Plaintiff OneBeacon America Insurance Company (“OneBeacon”), formerly known as Commercial Union Insurance Company,¹ and Defendant Commercial Union Assurance Company of Canada (“Aviva”), now known as Aviva Insurance Company of Canada,² were affiliated members of the Commercial Union group of insurance companies. At that time, Harrisons & Crosfield (America) Inc. and Harrisons & Crosfield (Pacific) Inc. (collectively, “Harrisons US”) conducted the U.S. operations for Harrisons & Crosfield (Canada) Ltd. (“Harrisons Canada”), a Canada-based corporation. ³

Plaintiff issued policy number C8–9101–002 to Harrisons US, effective March 28, 1980 through April 1, 1981 (“1980 OneBeacon Policy”).⁴ The 1980 OneBeacon Policy contains “Endorsement Number 4,” which provides:

It is understood and agreed that this policy or any renewal thereof is 100% reinsured by Commercial Union Assurance Company of Canada policy number 6687287 effective 3/28/80 to 4/1/81.

It is further agreed that cancellations of either this policy C8–9101–002 or any renewal thereof or policy 6687287 or any renewal thereof shall be reason for automatic cancellation of the other policy.⁵

The premium listed on the 1980 OneBeacon Policy is “Canadian $45,530.” ⁶ The “Producer” code for the 1980 OneBeacon Policy is “02–20211.” ⁷ Plaintiff's premium records state that Plaintiff received $4252 for the 1980 OneBeacon Policy.⁸

Also on March 28, 1980, Defendant issued policy No. 6687287 (the “1980 Aviva Policy”) to Harrisons Canada.⁹ The 1980 Aviva Policy contains a “Difference in Conditions Endorsement,” which states:

In consideration of the premium charged, the Insurer agrees that this policy is placed in conjunction with and reinsures Policy No. CL C8–9101–002 issued by Commercial Union Insurance Company, or any renewal thereof, in respect of:

Insured: Harrisons & Crosfield (America) Inc., Harrisons & Crosfield (Pacific) Inc.

...

Exceptions: This insurance differs from the policy which it follows in the following particulars:

(a) Premium: $45,530.00 (Canadian Funds—Deposit)

The Limit of Liability under either or both policies shall not exceed $1,000,000.00 as set forth in Policies 6687287 and CL C8–9101–002 or any renewal policies issued by this Insurer.¹⁰

On or about November 26, 1980, Defendant issued Reinsurance Certificate No. 9009419 (“Facultative Certificate” ¹¹) to Plaintiff for the period March 28, 1980 to April 1, 1981.¹² The Facultative Certificate is the only contract between Plaintiff and Defendant in the record. ¹³ The Facultative Certificate states that it reinsures policy number C8–9101–002 ¹⁴—that is, the 1980 OneBeacon Policy. The reinsurance premium listed on the Facultative Certificate is “$45,530.00 Canadian.” ¹⁵ When Defendant mailed the Facultative Certificate to Plaintiff, Defendant enclosed a cover letter, the Facultative Certificate, and a check in the amount of $4553 Canadian.¹⁶ The letter, dated November 26, 1980, states: “Further to yours of July 1st, 1980. Attached is our Reinsurance Certificate along with our cheque in the amount of $4,553.00 Canadian being your override commission of 10% of the premium which was $45,530.00 Canadian.” ¹⁷

Plaintiff issued policy number C8–9138–002 to Harrisons US, effective April 1, 1981 to April 1, 1982 (the “1981 OneBeacon Policy”).¹⁸ The named insureds on the 1981 OneBeacon Policy are Harrisons U.S. and Harcros Inc, ¹⁹ and the “Additional Insureds” are Harrisons & Crosfield Ltd. and Wilkinson Linatex.²⁰ The Producer code for the 1981 OneBeacon Policy is “02–20020.” ²¹ On the 1981 OneBeacon Policy, above the phrase “renewal of or previous no.,” is the policy number C8–9101–002.²² The premium amount listed on the 1981 OneBeacon Policy is “$24,000.” ²³ The 1981 OneBeacon Policy does not contain Endorsement Number 4 or any similar provision.²⁴

On or about March 28, 1981, Defendant issued an endorsement to the 1980 Aviva Policy that extended the policy period to the period from March 28, 1981 to March 28, 1982 (the “1981 Endorsement”).²⁵ The 1981 Endorsement states:

It is further understood and agreed that the following Corporations are specifically excluded from this policy which shall not inure to their benefit in any way:

....

Harrisons & Crosfield (America) Inc.

....

Harcros Inc.

....

Harrisons & Crosfield (Pacific) Inc.²⁶

Plaintiff issued policy number C8–9138–007 to Harrisons U.S. effective March 28, 1982 through March 28, 1983 (the “1982 OneBeacon Policy”).²⁷ Plaintiff has not located a copy of the 1982 OneBeacon Policy,²⁸ although the policy number was C8–9138–007 ²⁹ and the Parties agree that the 1982 OneBeacon Policy was a renewal of the 1981 OneBeacon Policy. ³⁰

On or about March 28, 1982, Defendant issued an endorsement to the 1980 Aviva Policy that extended the policy period to the period from March 28, 1982 to March 28, 1983 (the “1982 Endorsement”).³¹ The 1982 Endorsement extended the 1981 Endorsement for an additional year, and “[a]ll other terms and conditions remain[ed] unchanged.” ³²

B. The Harrisons U.S. Claims

In 1998, Plaintiff received notice of lawsuits filed against Harrisons U.S. for bodily injuries relating to asbestos exposure for which Harrisons U.S. was allegedly responsible (the “Harrisons U.S. Claims”).³³ On November 9, 2007, Plaintiff requested that Defendant fully indemnify Plaintiff for the amounts that it had incurred in connection with the Harrisons U.S. Claims. ³⁴ On November 13, 2007, Defendant responded that it would reimburse Plaintiff for only one third of the defense expenses and indemnity payments. ³⁵

C. The Hurley Deposition and Affidavit

On January 25, 2011, Defendant deposed Paul Hurley Jr., a senior reinsurance analyst with Plaintiff.³⁶ Hurley was deposed as both a fact witness and as a Rule 30(b)(6) representative of Plaintiff.³⁷ Specifically, Hurley was designated to testify on behalf of Plaintiff concerning (1) the negotiation, underwriting, and issuance of the 1980 Aviva Policy and (2) Plaintiff's handling of the reinsurance claim against Defendant at issue in this case.³⁸

During his deposition, Hurley was asked about his involvement in the dispute between the Parties.³⁹ According to Hurley, other than sending copies of the policies to Defendant in response to their inquiry and fixing a OneBeacon system coding error, his involvement began in 2007 and has been limited to “the task of reporting the claims reserves, the payments, billing the claim to Aviva Canada.” ⁴⁰ He did not contact any current or former employees of Plaintiff or any broker who may have been involved in the underwriting of the OneBeacon Policies.⁴¹ In addition, Hurley never reviewed any underwriting files for the OneBeacon Policies ⁴² nor completely read the OneBeacon Policies.⁴³

Additionally, Hurley testified that he has no personal knowledge about the payment of a premium to Defendant.⁴⁴ Indeed, he testified that Plaintiff itself did not know whether any premium was ever paid to Defendant. ⁴⁵

Hurley submitted an affidavit (“Hurley Affidavit”) dated June 24, 2011 in support of Plaintiff's Motion for Summary Judgment. Paragraph 6 of the Hurley Affidavit states:

OneBeacon issued policy No. C8–9101–002, to Harrisons US, effective March 28, 1980 through April 1, 1981, which was renewed in 1981 by policy No. C8–9138–002, and again in 1982 by policy No. C8–9138–006 (the “US Policy”). A true and accurate copy of policy No. C8–9101–02 is attached hereto as Exhibit A. A true and accurate copy of policy No. C8–9138–002 is attached hereto as Exhibit B. ⁴⁶

Paragraph 8 of the Hurley Affidavit states:

Aviva received a premium in exchange for its agreement to reinsure OneBeacon for policy No. CL C8–9101–002, and its renewal policies, C8–9138–002 and C8–9138–006.⁴⁷

D. The Millette Affidavit

On June 24, 2011, Edwin M. Millette submitted an affidavit (“Millette Affidavit”) in support of Defendant's Motion for Summary Judgment. In that affidavit, Millette opines that “there is nothing to indicate that Aviva agreed to reinsure the 1981 OneBeacon Policy nor 1982 OneBeacon Policy and ... neither the 1981 OneBeacon Policy, nor the 1982 OneBeacon Policy constitutes ... a renewal of the 1980 OneBeacon Policy.” ⁴⁸ III. DiscussionA. Defendant's Motion to Strike

Defendant moves, pursuant to Federal Rule of Civil Procedure 56, to strike portions of the Hurley Affidavit.⁴⁹

An affidavit “must be made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant or declarant is competent to testify on the matters stated.” ⁵⁰ In considering a motion to strike, a court must “ ‘disregard only those portions of an affidavit that are inadequate and consider the rest.’ ” ⁵¹ “[P]ersonal knowledge is the touchstone” in this process.⁵² To that end, “mere[ ] conclusory reiterations...