Arch Specialty Insurance Company v. TDL Restoration, Inc.
- Kenneth Karas
- 7:18-cv-06712
- U.S. District Court · Southern District of New York
- 5
In Arch Specialty v. TDL Restoration, Judge Karas ordered more evidence before deciding Arch’s summary-judgment motion on insurance premiums.
Arch must provide a supplemental affidavit explaining the additional-premium and tax-and-fee calculations. TDL may reply. The court’s decision on Arch’s summary-judgment motion remains unresolved.
What happened
Arch Specialty Insurance Company sued TDL Restoration, Inc. over an additional insurance premium and asked the court to grant summary judgment on its breach-of-contract claim. In Arch Specialty Insurance Company v. TDL Restoration, Inc., Arch supported its motion with the insurance policy, an audit report, an audit endorsement, and an affidavit.
The court found that these materials did not clearly show how Arch calculated the additional premium. The court could trace some figures but could not determine the source of others or identify the formula used to calculate the final amounts, including $6,476.61 in taxes and fees.
The court did not decide the summary-judgment motion. Judge Kenneth M. Karas ordered Arch to file a supplemental affidavit explaining the calculations by January 20, 2021, and allowed TDL to reply by January 27, 2021.
The detailed version
- Arch Specialty Insurance Company v. TDL Restoration, Inc. · No. 7:18-cv-06712
- Kenneth Karas
- Jan. 12, 2021
Background
Arch Specialty Insurance Company moved for summary judgment on its first cause of action, a breach-of-contract claim concerning an additional premium under Commercial General Liability Policy No. AGL 003546500, issued to TDL Restoration, Inc. Arch submitted the policy, an audit report, an audit endorsement showing audit results and adjustments, and a declaration from Sal A. Pellitteri, who was responsible for collecting debts owed to Arch.
Court’s Analysis
The court explained that an insurer seeking payment of premiums on an audited policy generally must provide evidence that the policy was issued and show how the earned premium was calculated through an audit of the insured’s records. Submitting documents without explaining how their figures relate to the calculation is not enough to establish entitlement to summary judgment.
The court found Arch’s materials difficult to understand. It recognized that the figures in the “Premium” column of the audit endorsement added up to the additional premium and that some “Rate” figures appeared in the policy. But the source of other rate figures was unclear. The court also could not identify the source of a $404,752 “Audit Exposure” figure or determine the formula used to calculate the final premium figures. The audit report’s brief comments about variances did not explain how those variances affected the additional-premium calculation.
Order
The court reserved decision on whether to grant or deny Arch’s summary-judgment motion. Judge Kenneth M. Karas ordered Arch to submit, by January 20, 2021, a clear and detailed supplemental affidavit explaining precisely how it calculated the additional premium, using the policy, audit report, and audit endorsement already submitted. Arch also had to provide documentation and an explanation for its calculation of $6,476.61 in state taxes and fees. TDL could file a reply by January 27, 2021. The opinion does not state a final ruling on the summary-judgment motion.
Read the full 5-page opinion on CourtListener, the free public archive maintained by the Free Law Project.