Westchester Resco Co., L.P. v. New England Reinsurance Corp., 892
| Decision Date | 01 May 1987 |
| Docket Number | No. 892,D,892 |
| Parties | WESTCHESTER RESCO CO., L.P., Appellee, v. NEW ENGLAND REINSURANCE CORP., Appellant. ocket 86-9036. |
| Court | U.S. Court of Appeals — Second Circuit |
Peter W. Birkett, Mendes & Mount, New York City, for appellant.
Robert L. King, Stuart M. Sarnoff, Michael W. Galligan, Debevoise & Plimpton, New York City, for appellee.
Before OAKES and WINTER, Circuit Judges, and ZAMPANO, District Judge. *
New England Reinsurance Corporation ("New England") appeals from so much of a judgment and order of the United States District Court for the Southern District of New York, Robert W. Sweet, Judge, as granted the motion by Westchester Resco Company, L.P. ("Resco"), for partial summary judgment. We affirm substantially on the basis of Judge Sweet's opinion, 648 F.Supp. 842 (S.D.N.Y.1986), and write only to address the question whether New England validly cancelled Resco's completed operations insurance coverage.
Resco purchased umbrella insurance coverage from New England for the period during which it was constructing a solid waste disposal facility in New York State, and sought more limited "completed operations coverage" for a period of three years after construction was completed. Though the policy as endorsed in fact stated that completed operations coverage would extend only from the date of completion, December 15, 1984, until April 5, 1987, for the reasons given by the district court, 648 F.Supp. at 845-48, we hold that the district court properly reformed the contract to provide for a three-year completed operations extension, running from December 15, 1984, to December 15, 1987.
In May 1986, New England purported to cancel Resco's policy, effective June 9, 1986, pursuant to Condition N of the policy, which provided that This policy may be canceled by [New England] by mailing to [Resco] ... written notice stating when ... such cancellation shall be effective.... [T]he effective date of cancellation stated in the notice shall become the end of the policy period.
The effort to construe this provision in order to gauge the effectiveness of New England's cancellation of the policy is hampered, as Judge Sweet remarked, by the fact that the parties have provided here "an object lesson in how not to make a contract," 648 F.Supp. at 843. Indeed, determining the terms of the contract requires an examination of rounds of telegrams, binders, policy terms, and letters, not just between insurer and insured but also among their respective brokers.
The district court, in holding the cancellation ineffective, noted that the effect of a cancellation notice under Condition N was to accelerate the end of the policy period, and that the typed-in definition of "policy period" in Item 2 of this standard form policy was April 5, 1982, until April 5, 1985. The court reasoned that Condition N permitted cancellation during, but not after the end of, the defined policy period, since after April 5, 1985, a cancellation notice could not operate to accelerate the end of...
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