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Select Insurance Co. v. Excalibur Reinsurance Corp.

United States District Court, D. Connecticut

May 10, 2016



Joan Glazer Margolis, United States Magistrate Judge

On May 12, 2015, plaintiff Select Insurance Co. commenced this diversity action against defendant Excalibur Reinsurance Corporation for breach of a reinsurance contract. (Dkt. #1). Fourteen days later, plaintiff filed a Motion for Pre-Pleading Security (Dkts. ##11-13; see also Dkts. ##14, 31-33, 36), and extensive motion practice followed, familiarity with which is presumed. (Dkts. ##25-26, 35, 41). On January 12, 2016, U.S. District Judge Jeffrey A. Meyer referred the Motion for Pre-Pleading Security, and a Motion to Strike Answer to this Magistrate Judge. (Dkt. #45). On March 10, 2016, this Magistrate Judge issued a Ruling on Plaintiff's Motion for Pre-Pleading Security and on Plaintiff's Motion to Strike, granting the Motion for Pre-Pleading Security, such that a hearing date would be set to determine the amount of such security, and denying the Motion to Strike, without prejudice to renew at a future time, if appropriate. (Dkt. #46 ["March 2016 Ruling"]).

In accordance with the March 2016 Ruling, a telephonic scheduling conference was held before this Magistrate Judge on March 23, 2016 (Dkt. #48; see Dkt. #47), during which the parties agreed to April 6, 2016 as the date for the evidentiary hearing at which the amount of pre-pleading security would be determined. (See Dkt. #49). The very next day, defendant Excalibur filed the pending Motion for Reconsideration, with affidavit and brief in support (Dkts. ##50-52), as well an Objection to the March 2016 Ruling, which is pending before Judge Meyer. (Dkt. #53; see also Dkts. ##57, 59). On April 14, 2016, plaintiff filed its brief in opposition to defendant's Motion for Reconsideration (Dkt. #56), [1] and on April 28, 2016, defendant filed its reply brief. (Dkt. #58).

In light of the pending Motion for Reconsideration and Objection, on March 31, 2016, this Magistrate Judge postponed the evidentiary hearing to a date to be determined in the future. (Dkt. #55).

For the reasons stated below, defendant's Motion for Reconsideration (Dkt. #50) is granted in limited part to clarify the Court's analysis of the relevancy of plaintiff's citizenship, and denied in large part with this Court adhering to its previous decision.


In the current motion, defendant contends that the March 2016 Ruling is erroneous and contrary to law because the Court erred in concluding that Select is a citizen of Connecticut entitled to invoke the Connecticut Pre-Pleading Security Statute, Conn. Gen. Stat. § 38a-27(a), when in fact, under Connecticut law, it is clear that Select is a "foreign" corporation. (Dkt. #52, at 2-3, 4-12). Defendant also contends that the Court erred in concluding that the statute applies even though Select is a foreign corporation, not licensed to write insurance in Connecticut. (Id.).[2]

In response, plaintiff asserts that this motion for reconsideration is yet another delay tactic by defendant[3] (Dkt. #56, at 1-5); the motion is procedurally unsound (id. at 5-6); under the Security Statute, plaintiff's citizenship is irrelevant and immaterial (id. at 6-10); under the Security Statute, the state in which the underlying contracts were issued is irrelevant and immaterial (id. at 10); New York law is not properly raised on reconsideration (id. at 10-14); and a hearing on the amount of security to be posted should be scheduled promptly. (Id. at 14-15).


A party moving for reconsideration of a Court's ruling must set "forth concisely the matters or controlling decisions which [the movant] believes the Court overlooked in the initial decision or order." D. Conn. L. Civ. R. 7(c)1. "The major grounds justifying reconsideration are 'an intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or prevent manifest injustice.'" Virgin Atl. Airways Ltd. v. Nat'l Mediation Bd., 956 F.2d 1245, 1255 (2d Cir.), quoting 18 C. Wright, A. Miller & E. Cooper, Federal Practice & Procedure § 4478 (additional citation omitted), cert. denied, 506 U.S. 820 (1992). As the Second Circuit has explained, the standard is "strict, " and reconsideration should only be granted if "the moving party can point to controlling decisions or data that the court overlooked - matters, in other words, that might reasonably be expected to alter the conclusion reached by the court." Shrader v. CSX Transp., Inc., 70 F.3d 255, 257 (2d Cir. 1995)(citations omitted). Accordingly, if the moving party "seeks solely to relitigate an issue already decided[, ]" the motion for reconsideration should denied, and the court should adhere to its prior decision. Id.


As this Court held in the March 2016 Ruling, Section 38a-27(a)

. . . is directed to the "unauthorized . . . insurer[, ]" the purpose of which is to "ensure that any insurer, domestic or foreign, selling insurance or reinsurance to a person in this state will have sufficient assets in this state to satisfy any judgment." Hartford Acc.[ & Indem. Co. v. ACE Am. Reins. Co., Nos. X02 CV 030178122S, X02 CV 030179514S, ] 2008 WL 4635451, at *2 [(Conn. Super. Ct. Sept. 19, 2008)["Hartford Acc."]]. There is nothing in the statute regarding the citizenship of the party initiating the action.

(At 5). Defendant does not cite to the Security Statute, [4] nor could it as the statute is silent regarding the citizenship of the party initiating the action. As explained in the March 2016 Ruling, the pre-pleading requirement in the Security Statute "'target[s] a specific subset of insurance companies that do not maintain adequate reserves and surplus in this state to satisfy licensure requirements and are alleged by a policyholder to have defaulted on their obligations under the terms of the policy.'" (At 3, quoting Hartford Acc., 2008 WL 4635451, at ...

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