LOR, Inc. v. Allied World National Assurance Company

Background

The court had previously granted LOR, Inc.’s motion to partially dismiss Allied World National Assurance Company’s declaratory-judgment counterclaim. In that earlier ruling, the court concluded that the insurance policy did not exclude coverage for the “2010 Litigation.” Allied moved for reconsideration under Federal Rule of Civil Procedure 59(e) and Local Civil Rule 6.3. LOR then moved for partial summary judgment—a procedure allowing judgment without a trial when no material facts are genuinely disputed—on three affirmative defenses in Allied’s answer.

Motion for Reconsideration

The court explained that reconsideration is an extraordinary remedy available only when there has been a controlling change in the law, new evidence, a clear error, or a need to prevent manifest injustice. Allied argued that the court had misdescribed the relief Allied sought, failed to apply controlling Georgia law, and interpreted the policy exclusion unreasonably.

The court rejected those arguments. It found that Allied’s earlier briefing had acknowledged that its proposed interpretation required several changes to the policy’s formatting, numbering, and punctuation. The court also stated that it had already considered the Georgia cases and statutes Allied cited. Applying Georgia law, the court had strictly interpreted the policy exclusion against the insurer, including despite acknowledged typographical errors. Finally, the court determined that Allied’s challenge to the policy interpretation merely repeated arguments already considered and did not establish a basis for reconsideration.

Allied alternatively asked the court to certify the earlier ruling for an immediate appeal. The court declined, finding that the ruling did not involve a controlling legal question with substantial disagreement and that an immediate appeal would not materially advance the end of the litigation.

Partial Summary Judgment

Allied asserted ten affirmative defenses. LOR sought summary judgment on Allied’s ninth defense, which requested reformation of the policy, and on the fourth and eighth defenses, which argued that the policy should be interpreted to exclude coverage for the “2010 Litigation.”

The court held that the reformation defense was time barred. Because the case was based on diversity jurisdiction, the court applied New York’s choice-of-law rules and statutes of limitations. New York provides a six-year limitations period for reformation claims based on an alleged drafting error, running from the date of the error. Allied admitted that it issued the policy no later than July 31, 2010, but did not seek reformation until 2020.

Allied argued that New York’s revival statute made the defense timely because it arose from the same transactions as LOR’s breach-of-contract claims. The court rejected that argument, explaining that a claim to enforce a contract as written does not revive an otherwise untimely effort to change the contract’s terms. The court therefore granted LOR summary judgment on the reformation defense and dismissed that defense.

The court also granted LOR summary judgment on Allied’s fourth and eighth affirmative defenses. Those defenses relied on interpretations of the policy that the court had already considered and rejected in its earlier opinion. The court dismissed both defenses.

Disposition

The court denied Allied’s motion for reconsideration and granted LOR’s motion for partial summary judgment. The Clerk of Court was directed to close the motions at Docket Numbers 25 and 31.