Republic Ins. Co. v. Banco De Seguros Del Estado
| Decision Date | 26 July 2013 |
| Docket Number | No. 10 C 5039,10 C 5039 |
| Parties | REPUBLIC INSURANCE COMPANY, now known as Starr Indemnity Liability Company, Plaintiff, Counter Defendant, v. BANCO DE SEGUROS DEL ESTADO and GROUP DES ASSURANCES NATIONALES, Defendants, Counter Plaintiffs. |
| Court | U.S. District Court — Northern District of Illinois |
Plaintiff Republic Insurance Company ("Republic"), n/k/a Starr Indemnity Liability Company, seeks a judgment for amounts allegedly due from defendants Banco De Seguros Del Estado ("Banco") and Group Des Assurances Nationales ("GAN") under a retrocession (reinsurance of reinsurance) known as the LMX Contract for account-year 1980. Defendants counterclaim for rescission. Republic is a Texas corporation with its principal place of business in New York City since 2007, but in Dallas, Texas prior to that. Banco is incorporated inUruguay and GAN in France, with each having its principal place of business in the country in which it is incorporated. The amount in controversy is in excess of $75,000. The court has jurisdiction of the parties and the subject matter. 28 U.S.C. § 1332(a)(2).
Presently pending are the parties' cross motions for summary judgment. Plaintiff contends defendants are liable based on an open account theory and also liable for prejudgment interest. Defendants contend there is no liability based on an open account; the retrocession is subject to rescission for plaintiff's failure to comply with a warranty or condition precedent; and plaintiff's claims are untimely. Alternatively, defendants contend the amount due should not include certain amounts and is not sufficiently established for purposes of summary judgment.
On a motion for summary judgment, the entire record is considered with all reasonable inferences drawn in favor of the nonmovant and all factual disputes resolved in favor of the nonmovant. Crawford v. Metro. Gov't of Nashville & Davidson Cnty., Tenn., 555 U.S. 271, 274 n.1 (2009); Malen v. MTD Prods., Inc., 628 F.3d 296, 303 (7th Cir. 2010); Stokes v. Bd. of Educ. of City of Chicago, 599 F.3d 617, 619 (7th Cir. 2010). The burden of establishing a lack of any genuine issue of material fact rests on the movant. Ponsetti v. GE Pension Plan,614 F.3d 684, 691 (7th Cir. 2010); Outlaw v. Newkirk, 259 F.3d 833, 837 (7th Cir. 2001). The nonmovant, however, must make a showing sufficient to establish any essential element for which it will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Montgomery v. Am. Airlines, Inc., 626 F.3d 382, 389 (7th Cir. 2010). The movant need not provide affidavits or deposition testimony showing the nonexistence of such essential elements. Celotex, 477 U.S. at 324; Freundt v. Allied Tube & Conduit Corp., 2007 WL 4219417 *2 (N.D. Ill. Nov. 29, 2007); O'Brien v. Encotech Constr., 2004 WL 609798 *1 (N.D. Ill. March 23, 2004). Also, it is not sufficient to show evidence of purportedly disputed facts if those facts are not plausible in light of the entire record. See Lorillard Tobacco Co. v. A & E Oil, Inc., 503 F.3d 588, 594-95 (7th Cir. 2007); Yasak v. Ret. Bd. of Policemen's Annuity & Benefit Fund of Chicago, 357 F.3d 677, 679 (7th Cir. 2004); Lampley v. Mitcheff, 2010 WL 4362826 *6 (N.D. Ind. Oct. 27, 2010). As the Seventh Circuit has summarized:
The party moving for summary judgment carries the initial burden of production to identify "those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact." Logan v. Commercial Union Ins. Co., 96 F.3d 971, 978 (7th Cir. 1996) (). The moving party may discharge this burden by "'showing'--that is, pointing out to the district court--that there is an absence of evidence to support the nonmoving party's case." Celotex, 477 U.S. at 325, 106 S. Ct. 2548. Once the moving party satisfies this burden, the nonmovant must "set forth specific facts showing that there is a genuine issue for trial." Fed. R. Civ. P. 56(e). "The nonmovant must do more, however, than demonstrate some factual disagreement between the parties; the issue must be 'material.'" Logan, 96 F.3d at 978. "Irrelevant or unnecessary facts do not preclude summary judgment even when they are in dispute." Id. (citation omitted). In determining whether the nonmovant has identified a "material" issue of fact for trial, we are guided by the applicable substantive law; "[o]nly disputes that could affect the outcome of the suit under governing law will properly preclude the entry of summary judgment." McGinn v. Burlington Northern R.R. Co., 102 F.3d 295, 298 (7th Cir. 1996) (citation omitted). Furthermore, a factual dispute is "genuine" for summary judgment purposes only when there is "sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S. Ct. 2505 (1986). Hence, a "metaphysical doubt" regarding the existence of a genuine fact issue is not enough to stave off summary judgment, and "the nonmovant fails to demonstrate a genuine issue for trial 'where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party . . . .'" Logan, 96 F.3d at 978 (quoting Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S. Ct. 1348 (1986)).
Each side requests to strike certain aspects of the other side's factual presentation. Defendants complain certain paragraphs of plaintiff's Local Rule 56.1 factual statement are not short and concise and cover multiple topics. It is within the court's discretion as to how strictly to enforce the Local Rules. See Trade Fin. Partners, LLC v. AAR Corp., 573 F.3d 401, 409 (7th Cir. 2009); Bordelon v. Chicago Sch. Reform Bd. of Tr., 233 F.3d 524, 527 (7th Cir. 2000); Zitzka v. Vill. of Westmont, 743 F. Supp. 2d 887, 897 (N.D. Ill. 2010). Regardless of whether any of the paragraphs actually violate Rule 56.1, each paragraph is understandable and defendants have not had a problem responding to them. No paragraph of plaintiff's statement will be stricken. Cf. Sklyarsky v. ABM Janitorial Servs., Midwest, 2012 WL 174647 *3 (N.D. Ill. Jan. 18, 2012), aff'd by unpublished order, 494 F. App'x 619 (7th Cir. 2012), cert. denied, 133 S. Ct. 1247 (2013); Morrow v. Potter, 2011 WL 663029 *2 (N.D. Ill. Feb.10, 2011).
Plaintiff objects that the declaration of Silvia Rocha (Def. Exh. 2) is not based on personal knowledge. Rocha is the Division Manager of Banco's Department of Reinsurance. She testifies as to Banco's record-keeping practices and also provides testimony as to what is in the records, including for example, the last date certain notices were sent or received; with whom correspondence existed,and that there is no record of a communication regarding certain specific subjects. Plaintiff contends Rocha cannot have personal knowledge because she only began working in the Reinsurance Department at the beginning of 2012. A custodian of records or other qualified witness, though, need not have personal knowledge of the entries in business records nor be the person who prepared the records. See United States v. LeShore, 543 F.3d 935, 941-42 (7th Cir. 2008); King v. Schieferdecker, 2011 WL 3273167 *3 (C.D. Ill. Aug. 1, 2011). Rocha may properly provide testimony as to what documents are in Banco's files. Her declaration will not be stricken.
Plaintiff also objects to the declaration of Ernesto Palomo (Def. Exh. 15), one of the attorneys representing defendant Banco in this case. Plaintiff again raises personal knowledge issues. Palomo testifies as to the contents of certain documents that were received from plaintiff in discovery. All the cited documents are also provided as exhibits. The documents speak for themselves regardless of what Palomo states in his declaration. Also, when presented by defendant, documents provided by plaintiff in discovery are deemed authentic. Marinov v. Trs. of Purdue Univ., 804 F. Supp. 2d 849, 862 (N.D. Ind. 2011); Rodriguez ex rel. Fogel v. City of Chicago, 2011 WL 1103864 *1 n.3 (N.D. Ill.March 25, 2011). Palomo's declaration establishes that the cited exhibits are documents provided in discovery and thus serves as a means of authenticating the documents. His declaration will not be stricken.
The following facts are taken as true for purposes of each side's motion for summary judgment. In 1972, Republic entered into a written "Syndication Agreement" with Pan Atlantic Group, Inc., Pan Atlantic Reinsurance Company Limited, its subsidiaries, and affiliates ("PAG"), an underwriting agent based in New York City. Under the Syndication Agreement and a later addendum, PAG was appointed as Republic's agent and authorized to issue reinsurance policies in Republic's name (as a so-called front company) and to procure retrocessional coverage for the reinsurance. The Syndication Agreement provides that PAG "may enter into similar or substantially similar agreements with any other insurance company or companies or other insurers; to that end exposures may be divided proportionally among various companies." It further provides that each contract "shall be on an account-year basis." Defendants are not parties to the Syndicate Agreement itself.
PAG obtained retrocessional coverage for 1977-80 insurance years for and on behalf of the Members of the Pan Atlantic Reinsurance Syndicate ("the Reinsured"). Among the retrocessional contracts entered into by PAG for the Reinsured were quota share contracts known as the "LMX Quota Share Treaty or the LMX Contract." LMX stands for London Market Excess. The LMX Contract states that the Reinsured accepts reinsurance policies and or contracts issued to Lloyd's Underwriters and the so-called London Market...
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