United States District Court,

D. Minnesota.

CARGILL, INC., Plaintiff,

v.

RON BURGE TRUCKING, INC. and National Interstate Insurance Corp., Defendants.

 

Civ. No. 11–2394 (PAM/JJK).

Feb. 19, 2013.

 

Cynthia P. Arends, Andrew J. Sveen, Benjamin J. Rolf, Nilan Johnson Lewis PA, Minneapolis, MN, for Plaintiff.

 

Jeffrey A. Muszynski, Mark A. Pilney, Andrew R. Brown, Reding & Pilney, PLLP, Lake Elmo, MN, Brian A. Wood, Christopher L. Goodman, Lind Jensen Sullivan & Peterson, PA, MPLS, MN, for Defendants.

 

MEMORANDUM AND ORDER

PAUL A. MAGNUSON, District Judge.

*1 This matter is before the Court on Plaintiff’s Motion for Partial Summary Judgment. For the reasons that follow, the Motion is denied.

 

BACKGROUND

In 2006, Plaintiff Cargill, Inc. and Defendant Ron Burge Trucking, Inc., entered into a Motor Transport Agreement for the hauling of certain Cargill products. The Motor Transport Agreement contained specific rules about what loads Burge could haul before hauling a load of food-grade salt, and how Burge had to wash its trucks before loading them with the salt.

 

In April 2010, Burge Trucking hauled a load of food-grade salt from Cargill’s facility in Akron, Ohio, to Cargill’s customer Leprino Foods Company in Remus, Michigan. Leprino used the salt to make a brine solution to “cure” batches of mozzarella cheese. Burge Trucking had, contrary to the Motor Transport Agreement, hauled roofing aggregate in the truck before loading the truck with Cargill’s salt. Leprino ultimately used the contaminated salt to produce nearly a million pounds of mozzarella cheese, which Leprino discarded. Leprino submitted a claim to Cargill in the amount of $2 .4 million for the allegedly ruined cheese, and also refused to order any products from Cargill for nearly two years.

 

Burge initially denied that it hauled roofing aggregate in the truck before hauling Cargill’s salt, and submitted to Cargill what purported to be the bill of lading for the previous load showing that the load was limestone, which was permitted under the Motor Transport Agreement. However, Burge eventually admitted that the truck involved here had hauled roofing aggregate before hauling Cargill’s salt. Apparently, part of the mistake was that Burge classifies all material from the supplier of the previous load as limestone, even though this supplier (ISP Minerals) supplies all kinds of different rocks and minerals, and despite the fact that ISP Minerals’s bill of lading for the previous load stated that the load was roofing aggregate.

 

Cargill ultimately settled Leprino’s claims against it for $1.6 million, including a provision that Cargill would become the exclusive supplier of Leprino’s salt nationwide. Cargill then brought this lawsuit, raising nine claims against Burge and three claims against National Interstate Insurance Corporation, Burge’s insurer. Cargill now seeks partial summary judgment on some of its claims against Burge: breach of contract, breach of express and implied warranties, negligence, misrepresentation, and a claim for common law or contractual indemnity. Cargill also seeks summary judgment on two of Leprino’s claims against Burge, for breach of warranty and negligence.FN1 The only claim against Burge on which Cargill does not ask for judgment is Count IX, for contribution.

 

FN1. The settlement agreement between Leprino and Cargill assigned to Cargill all of Leprino’s claims against Burge.

 

Burge tells a different story, pointing out that Cargill inspected the trailer before the salt was loaded into it and found no problems, and also that the salt delivered to Leprino was mixed with another load of salt before being used to make the cheese. (Cargill contends that this is not borne out by the record, which shows the salt hoppers at Leprino were empty when Cargill’s salt was unloaded from Burge’s truck.) In addition, Leprino discovered the rock granules in the brine five days before discontinuing production of the cheese, and in fact stopped production only when a magnet found a staple in the brine solution. Finally, when Burge tested the cheese, it found no rocks whatsoever in the cheese itself.FN2

 

FN2. The Court notes with some concern Magistrate Judge Steven E. Rau’s comments on the issue of discovery with respect to both the allegedly contaminated salt and cheese. (See Oct. 23, 2012, Order (Docket No. 126) at 5 n. 2.) Not only is the failure to produce the salt and cheese a likely violation of Cargill’s discovery obligations, but that failure also arouses suspicions about the merits of Cargill’s claims here.

 

DISCUSSION

*2 Summary judgment is proper if there are no disputed issues of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). The Court must view the evidence and the inferences that may be reasonably drawn from the evidence in the light most favorable to the nonmoving party. Enter. Bank v. Magna Bank, 92 F.3d 743, 747 (8th Cir.1996). However, “summary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed to secure the just, speedy, and inexpensive determination of every action.” Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986).

 

The moving party bears the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Id. at 323; Enter. Bank, 92 F.3d at 747. A party opposing a properly supported motion for summary judgment may not rest on mere allegations or denials, but must set forth specific facts in the record showing that there is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986).

 

A. Breach of Contract

Cargill contends that Burge breached the Motor Transport Agreement by hauling roofing aggregate immediately before hauling Cargill’s salt. Cargill seeks summary judgment only on Burge’s liability for breach of the parties’ agreement, not on the amount of damages Cargill suffered as a result of the alleged breach.

 

Burge argues that Cargill has failed to establish an essential element of its breach of contract claim, namely that any alleged breach actually caused Cargill’s losses. As Burge notes, Leprino did not stop using the allegedly contaminated salt for five days after first discovering the contamination. In addition, Burge points to Cargill’s inspection of the trailer as a potential intervening cause of damages. And finally, Burge notes that, at least in the cheese it tested, there were no granules found, so that the cheese was not itself affected by the alleged contamination in the brine.

 

While there is no question that Burge breached the contract, there are questions of fact as to whether that breach was the proximate cause of Cargill’s (and Leprino’s) damages. Indeed, Cargill’s statement at the hearing that Burge could argue causation to the jury admits that there are questions regarding causation. But causation is an essential element of Cargill’s breach of contract claim. In other words, if there are questions of fact as to causation, summary judgment on the breach of contract claim is not appropriate. Cargill’s Motion on this claim is denied.

 

B. Breach of Warranties

In the Motor Transport Agreement, Burge agreed that it would be responsible for loss or damage to any product it transported, and that it would provide trucks that were in “good, clean, and sanitary condition, free of contaminants and suitable for hauling Cargill’s products.” (Agreement § 4(E), (J).) In addition to these “warranties” in the Motor Transport Agreement, Cargill contends that Burge breached its implied warranty of fitness for a particular purpose. Again Cargill seeks judgment only as to Burge’s liability, not the amount of damages.

 

*3 Burge argues that express and implied warranties apply only in the sale-of-goods context, and this was a contract for services. In its reply, Cargill argues that even a contract for services includes “any implied duty to perform the work or services skillfully, carefully, and in a workmanlike manner.” (Pl.’s Reply Mem. at 14 (quoting Pioneer Enters., Inc. v. Edens, 216 Neb. 672, 674 (Neb.1984).) But even if Minnesota recognizes this supposed “duty,” a duty is not a warranty. Rather, this duty is a duty of care that goes to whether a negligence action, in addition to a breach-of-contract action, will lie.

 

Cargill’s argument with respect to this claim stretches the law too far. Cargill cites a Minnesota case as alleged support for the statement that “[t]he implied warranty of workmanlike performance requires the promisor to use due care.” (Id. (citing Arden Hills North Homes Ass’n v. Pemtom, Inc., 475 N.W.2d 495, 500 (Minn .Ct.App.1991).) But the Pemtom case does not ever mention the word “warranty,” and indeed discusses this duty of workmanlike performance in the context of a discussion of a negligence claim, not any breach of warranty claim.

 

Cargill has not established that there were any warranties, either express or implied, involved in this case. The Motion is therefore denied.

 

C. Negligence

Cargill next argues that the bailment relationship imposes duties of care that sound in negligence as well as the duty that arises by virtue of the parties’ contract. But all of the cases on which Cargill relies for this proposition were decided before the Minnesota Supreme Court’s recent pronouncement on the issue in Glorvigen v. Cirrus Design Corp., 816 N. W.2d 572 (2012). Glorvigen held that when a contract imposes the only duties between the parties, a negligence action will not lie. Thus, the question is whether there are duties imposed by law on Burge, separate from the duties imposed by contract, because “a party is not responsible for damages in tort if the duty breached was merely imposed by contract and not imposed by law.” Id. at 584.

 

In this case, the “duties” Cargill is claiming Burge breached are the same duties the Motor Transport Agreement imposed: to clean the trailer, not to haul unapproved loads immediately before hauling Cargill’s loads, and so on. Cargill has not pointed to any duty that is separate from those contained in the contract between the parties. As Cargill has framed its negligence claim, that claim is not cognizable under Minnesota law. Cargill’s Motion on its negligence claim is denied.

 

D. Misrepresentation

This claim arises out of Burge’s alleged failure to tell Cargill that the previous load contained roofing aggregate, instead reporting that it contained limestone. Burge contends that this tort claim is barred by the Glorvigen rule that negligence claims that arise out of the contract are not cognizable. But this is an overgeneralization of the law in Minnesota. Rather, whether a misrepresentation claim exists in the context of a commercial transaction depends on the facts of the case: “the presence of a governing commercial contract neither preempts nor eliminates the need for all fraud claims to which the parties’ dealings may give rise.” AKA Distrib. Co. v. Whirlpool Corp., 137 F.3d 1083, 1086 (8th Cir.1998) (discussing viability of fraud and misrepresentation in UCC Article 2 cases). Thus, a misrepresentation that is collateral to the contract may be actionable regardless of the existence of the contract. Id.

 

*4 Here, however, the misrepresentation at issue is not collateral to the contract. Instead, the misrepresentation is about the very basis for the breach-of-contract claim. Such a claim is not cognizable here, and Cargill’s Motion is denied.

 

E. Indemnity

The Motor Transport Agreement contains an express indemnity clause in which Burge agreed to indemnify Cargill for “injury, damages, or losses” arising from Burge’s performance or attempted performance of [the Motor Transport Agreement]; or “any negligent, reckless or willful misconduct” or “any act or omission” of Burge or its employees; or “the breach of any obligation” under the Motor Transport Agreement. (Agreement § 8.) Cargill’s argument on this point is that it has established that Burge breached the Motor Transport Agreement, and thus Burge is obligated to indemnify Cargill. But as discussed above, there are questions of fact as to whether Cargill can make out all of the elements of its breach-of-contract claim, and thus Cargill is not entitled to judgment at this stage on its indemnity claim.

 

F. Leprino’s Claims

As with the indemnity claim, Cargill’s arguments about Leprino’s claims are that, because Cargill is entitled to summary judgment on its claims for breach of warranties and negligence, Leprino’s claims are also a matter for summary judgment. But as discussed above, Cargill is not entitled to judgment on its warranty and negligence claims, so summary judgment is not appropriate on Leprino’s similar claims.

 

CONCLUSION

Cargill has not established that it is entitled to summary judgment at this stage of the litigation. Accordingly, IT IS HEREBY ORDERED that Plaintiff’s Motion for Partial Summary Judgment (Docket No. 128) is DENIED.

United States District Court,

S.D. New York.

CERTAIN UNDERWRITERS AT LLOYDS OF LONDON, Plaintiff,

v.

ILLINOIS NATIONAL INSURANCE COMPANY, et al., Defendants.

 

No. 09 Civ. 4418(LAP).

Jan. 25, 2013.

 

ORDER

LORETTA A. PRESKA, Chief Judge.

*1 Defendants Continental Casualty Company (“Continental”) and Insurance Company of the State of Pennsylvania (“ICSOP”) (“Defendants”) have moved for certification for interlocutory appeal pursuant to 28 U.S.C. § 1292(b) of both the March 3, 2011 Opinion denying Defendants motions for summary judgment and [dkt. No. 181] the November 27, 2012 Order denying Defendants motion for reconsideration of that summary judgment denial [dkt. no. 252].FN1 In order for a district court to certify one of its orders for interlocutory appeal, the party seeking certification must show that the order it seeks to appeal “involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal … may materially advance the ultimate termination of the litigation.” 28 U.S.C. § 1292(b); see, e.g., Dicola v. American Steamship Owners Mutual Protection and Indemnity Ass’n ( In re Prudential Lines, Inc.), 59 F.3d 327, 332 (1995); Klinghoffer v. S.N.C. Achille Lauro Ed Altri–Gestione Motonave Achille Lauro in Amministrazione Straordinaria, 921 F.2d 21, 23–25 (2d Cir.1990). Only “exceptional circumstances [will] justify a departure from the basic policy of postponing appellate review until after the entry of a final judgment.”   Klinghoffer, 921 F.2d at 25 (quoting Coopers & Lybrand v. Livesay, 437 U.S. 463, 475 (1978)); see also In re Prudential Lines, Inc., 59 F.3d at 332 (quoting Coopers & Lybrand ); In re Del–Val Fin. Corp. Sec. Litig., 874 F.Supp. 81, 83 (S.D.N.Y.1995) (stating that interlocutory appeal process “should be used sparingly”); McNeil v. Aguilos, 820 F.Supp. 77, 78 (S.D.N.Y.1993) (citing Klinghoffer ).

 

FN1. Defendants’ request was made via letters, and plaintiffs responded also via letter. Those letters are attached.

 

First, a question is a “controlling question of law” where “reversal of the district court’s order would terminate the action.” Klinghoffer, 921 F.2d at 24. The defendants argue that the issue sought to be certified-whether the insurance policy at issue should be analyzed under New York law as opposed to New Jersey law-is controlling. This issue indeed presents a controlling question in this case because if the Court of Appeals were to rule in Defendants’ favor, and New York law indeed applies, the Defendants will have no duty to provide coverage under the Norbet policy.

 

Second, there must be substantial ground for difference of opinion on the issue for which certification is sought. Substantial ground for difference of opinion may arise where an issue is difficult and of first impression. E.g., Klinghoffer, 921 F.2d at 25; In re Del–Val Fin. Corp. Sec. Litig., 874 F.Supp. at 83. However, “the order appealed from must concern something more than a novel and interesting issue about which there may be substantial disagreement.” In re Del–Val Fin. Corp. Sec. Litig., 874 F.Supp. at 83. Although I am confident of the ruling on these facts, I find that there is a substantial ground for difference of opinion of the interpretation of the decision in Worth Construction Co. v. Admiral Insurance Co., 836 N.Y.S.2d 155 (1st Dep’t 2007), as it relates to the choice-of-law analysis in this case.

 

*2 Finally, I find that immediate appeal will materially advance the ultimate termination of this litigation. If the Court of Appeals finds that I have misconstrued the applicable controlling question of law and that Defendants have no obligation to provide coverage under the Norbet policy, the issue of liability will have been resolved and no further litigation on that issue will be required. Plaintiffs would not be entitled to argue the extent of Defendants’ liability, and the great deal of time and expense of discovery and a trial would be avoided.

 

Accordingly, defendants’ motion for certification pursuant to § 1292(b) is hereby granted.

 

SO ORDERED.

 

CMK CARROLLMCNULTYKULL LLC

 

COUNSELLORS AT LAW

 

120 Mountain View Boulevard

 

Post Offfice Box 650

 

Backing Ridge. New Jersey 07920

 

908 848 6300 PHONE

 

909 848 6310 FAX

 

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New York, New York 10022

 

212 252 0004 PHONE

 

212 252 0444 FAX

 

January 2, 2013

VIA FACSIMINLE (212) 805–7941

 

Honorable Loretta A. Preska, Chief U.S.D.J.

 

United States District Court

 

Southern District of New York

 

United States Courthouse

 

500 Pearl Street

 

New York, New York 10007–1312

 

Re: Certain Underwriters at Lloyds of London v. Illinois Nat’l. Ins. Co. et al. Civil Action No.: 09–cv–04418

 

Dear Judge Preska:

 

This firm represents Defendant Continental Casualty Company (“Continental”) in connection with this matter. Pursuant to Your Honor’s Individual Practices, Continental submits this letter to request a pre-motion conference. In particular, Continental requests that it be permitted to file a Motion to Direct Entry of Judgment Pursuant to Rule 54(b) or, in the Alternative, for Certification of the March 3, 2011 and November 27, 2012 Orders for Interlocutory Appeal Pursuant to 28 U.S.C. § 1292(b), and for a Stay of Remaining Claims Pending Appeal.

 

As this Court is aware, Plaintiff Certain Underwriters at Lloyds of London (“Lloyds”) commenced this declaratory judgment action seeking a ruling that each of the defendant insurance companies had an obligation to provide coverage for the liability of DCM Erectors (“DCM”), Component Assembly Systems (“CAS”), Goldman Sachs, Battery Park City Authority and Tishman in connection with the personal injury claims of Robert Woo and Wilbert Rocco. The underlying claims arose from an accident occurring when metal studs fell from a crane at a construction site.

 

Each of the defendants moved for summary judgment on the issue of whether its respective insurance policy provided coverage for the Woo and Rocco claims. By Order and Opinion dated March 3, 2011, the Honorable Richard Holwell concluded that New York law applied to the policies issued by Hartford, Travelers and Arch but that New Jersey law applied to the primary trucking policy issued by Insurance Company of the State of Pennsylvania (“ICSOP”) and the umbrella policy issued by Continental. ICSOP and Continental had asserted that New York law applied to their policies under the “center of gravity” test and cited to the Appellate Division’s decision in a directly analogous case of Worth Construction Co. v. Admiral Insurance Co., 40 A.D. 423, 836 N.Y.S.2d 155 (1st Dep’t 2007). In Worth, the court applied New York law to an additional insured coverage dispute arising from construction site accident occurring in New York, despite the policy being issued to the named insured in New Jersey. Judge Holwell sought to distinguish Worth on the basis that the policy at issue there “contained a special endorsement insuring the company against liability incurred at the White Plains site where the loss at issue occurred.” (Doc. 181 at 6 .) As discussed below, this purported factual distinction was incorrect.

 

*3 Pursuant to the Court’s ruling, choice of law is an outcome-determinative issue. Under New York law, the Court concluded that Goldman Saihs, Tishman, DCM and CAS were not “using” a covered auto so as trigger coverage under the policies and, in any event, that the mechanical device exclusion would preclude coverage. Conversely, under New Jersey law, the Court concluded that DCM (but not CAS, Tishman or Goldman Sachs) was “using” a covered auto so as to trigger coverage and that the mechanical device exclusion was unenforceable under the New Jersey compulsory motor vehicle statute. Accordingly, the Court concluded that Hartford, Travelers and Arch had no duty to provide coverage but that ICSOP and Continental did have such an obligation. The Court granted partial summary judgment to Lloyds with respect to the ICSOP and Continental policies issued to Norbet Trucking.

 

On March 17, 2011, Continental filed a Motion for Reconsideration of the Court’s summary judgment ruling, which ICSOP joined. Judge Holwell heard oral argument on May 11, 2011, during which time Continental advised the Court that the Worth case did not involve a site-specific endorsement limiting coverage to New York. Judge Holwell requested supplemental submissions on the choice of law issue. That same day, Continental filed a copy of the insurance policy and briefing at issue in the Worth case reflecting the lack of a New York site-specific endorsement. On November 27, 2012, this Court entered an Order denying Continental’s Motion for Reconsideration.

 

Continental now requests that it be permitted to file a motion to certify a final judgment with respect to Lloyds’ claim for coverage under the Continental umbrella policy so as to allow for an immediate appeal of the coverage issue and the choice of law determination that underlies it. The Court has the discretion to direct entry of a partial final judgment that disposes of claims against fewer than all of the parties. See, e.g., Avondale Indus., Inc. v. Travelers Indent. Co., 123 F.R.D. 80, 82 (S.D.N.Y .1988). Entry of a final judgment is appropriate where the claim is “separable from the claims that survive” and there is “no just reason for delay.” Id.; FED. R. CIV. P. 54(b). In addition, a motion under Rule 54(b) should; be granted where it serves the interests of “sound judicial administration and efficiency” and where failure to enter a judgment “would likely result in the unnecessary trial” of issues that may be mooted by an appellate ruling. See U.S. Fid. & Guar. Co. v. Frosty Bites, Inc., 350 F.Supp.2d 508, 514 (S.D.N.Y.2004).

 

Here, the interests of judicial efficiency would be served by entering a partial final judgment against Continental under the Norbet policy. There is no just reason for delay of an appeal of the coverage/choice of law issue. Although all of the defendants remain parties to the lawsuit, the only issues left for determination under the current posture of the case involve Lloyds, ICSOP and Continental. In particular, there will need to be a determination of the extent of liability potentially covered under the ICSOP and Continental policies, which will require discovery and a trial, as well as the priority of coverage among the implicated carriers.

 

*4 Since Lloyds settled the underlying claims under its project-specific “wrap-up” policy on behalf of Battery Park City Authority, Goldman Sachs, Tishman, DCM, CAS and two other entities involved in the project, but the Court concluded that only DCM was “using” an auto covered by the ICSOP and Continental policies, there must be an allocation of liability attributable to DCM. Continental can have no obligation to provide coverage for an entity that does not qualify as an insured under its policy. Since the issue of liability among the various parties was not resolved in the underlying lawsuits, Lloyds, ICSOP and Continental will have to litigate those issues by way of the current coverage action. This Court also will have to make a determination of the priority of coverage among the Lloyds, ICSOP and Continental policies.

 

Thus, if Continental is not permitted to appeal the coverage determination at this time, the parties will have to engage in costly discovery and a trial to determine the scope of coverage available under Continental policy, which would not be necessary in the event Continental is successful on appeal. This would be an inefficient use of judicial and litigant resources. By contrast, an immediate appeal from the summary judgment ruling “would require little new briefing and would be more cost-effective for all parties .” See id. Continental and Lloyds both have submitted extensive briefing in connection with the summary judgment and reconsideration motions, which will form the basis of the appeal. The appellate issues are completely separable and distinct from those remaining to be litigated. To the extent the United States Court of Appeals for the Second Circuit reverses the Court’s finding that a coverage obligation exists under the Continental policy, there will be no need to delve into issues of allocation of liability among Battery City Park Authority, Goldman Sachs, Tishman, DCM and CAS or the priority of insurance among Lloyds, ICSOP and Continental.

 

Accordingly, Continental respectfully requests that it be permitted to file a Motion to Direct Entry of Judgment Pursuant to Rule 54(b) or, in the Alternative, for Certification of this Court’s March 3, 2011 and November 26, 2012 Orders for Interlocutory Appeal Pursuant to 28 U.S.C. § 1292(b), and for a Stay of Remaining Claims Pending Appeal.

 

Respectfully submitted,

 

CARROLL, McNULTY & KULL LLC

 

Christopher R. Carroll

 

cc: All Counsel (via-e-mail)

 

LIPSIUS–BENHAIM

 

LAW, LLP

 

IRA S. LIPSIUS

 

Direct Line 212.981.8442

 

Email: ilipsius@lipsiuslaw.com

 

80–02 Kew Gardens Road

 

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www.lipsiuslaw.com

 

January 8, 2013

 

VIA FACSIMILE (212–805–7941)

 

The Honorable Loretta A. Preska

 

United States District Court

 

SOuthern District of New York

 

500 Pearl Street, Room

 

New York, N.Y. 10007

 

Re: Certain Underwriters et al. v. Illlinois National Insurance Co. et al. Southern District Docket No. 09 Civ 4418(RJH)

*5 Dear Judge Preska:

 

Pursuant to Her Honor’s Individual Rules of Practice, the Plaintiffs, Certain Underwriters at Lloyds of London, Aspen Insurance UK Ltd, and Arch Insurance Company (Europe) Ltd (“Underwriters”), through their attorneys, submit their response to defendant Continental Casualty Company’s (“Continental”) request for the a pre-trial conference to permit it to move to direct entry of judgment pursuant to Rule 54(b) of the Federal Rules of Civil Procedure or for an order permitting an interlocutory appeal pursuant to 28 USC § 1292(b). It is respectfully submitted that Continental is not entitled to the relief requested.

 

28 USC § 1292(b);

The Supreme Court has stated that only “exceptional circumstances justify a departure from the basic policy of postponing appellate review until after the entry of a final judgment.” Coopers & Lybrand v. Livesay, 437 U.S. 463, 475, 57 L.Ed.2d 351, 98 S.Ct. 2454 (1978). This court has addressed, on numerous occasions, the issue of interlocutory appeal pursuant to 28 USC § 1292(b). In Stemcor UK LTD. v. Sesa Int’l LTD., 2009 U.S. Dist. LEXIS 63588, (S.D.N.Y.) this court addressed the standard to be applied in determining whether to permit an interlocutory appeal:

 

Under Section 1292(b), a district court may certify an immediate appeal of an interlocutory order if the order (1) involves a controlling question of law (2) as to which there is substantial ground for difference of opinion and (3) an immediate appeal from the order may materially advance the ultimate termination of the litigation. 28 U.S.C. § 1292(b)…. The Second Circuit has held that “use of this certification procedure should be strictly limited because only exceptional circumstances [will] justify a departure from the basic policy of postponing appellate review until after the entry of a final judgment,” In addition, the party seeking an interlocutory appeal has the burden of showing the existence of the exceptional circumstances that justify immediate appeal.

 

Continental has failed to meet its burden. The issue between Underwriters and Continental (and the Insurance Co. of the State Of Pennsylvania FN1 (“ICSOP”)) is an issue as to the interpretation of two insurance policy contracts; the Continental policy and the ICSOP policy. Continental challenges the interpretation of the contract and the law applied to the interpretation of the contract. This court found that the policies may be interpreted differently under New York law than New Jersey law. Continental asserts that the controlling issue of law is the choice of law and its application to the policies. This court in its decision cited numerous decisions including the decisions of the Court of Appeals in In re Allstate Ins. Co., 81 N.Y.2d 219, 223, 613 N.E.2d 936, 597 N.Y.S.2d 904 (1993), the Second Circuit in Md. Cas. Co. v. Cont’l Cos. Co., 332 F.3d 145, 153 (2d Cir.2003), as well as numerous other decisions in support of application of New Jersey law. Continental challenged the court’s interpretation of one decision, Worth Constr. Co. Inc. v. Admiral Ins, Co., 40 A.D.3d 423 (1st Dep’t 2007), which was distinguished by this court and did not involve a motor vehicle policy, the type of policy at issue in this action and analyzed in Allstate. Continental cannot show there is any substantial ground for difference of opinion other than its difference of opinion with this court’s interpretation of Worth, a decision that did not even address an automobile liability policy. In fact the principal applied by this court in a choice of law analysis, that, in grouping of contacts the jurisdiction with the most significant contacts is the location of the insured risk, here New Jersey, has been applied consistently subsequent to Allstate and subsequent to this court’s decsion, see, Matter of Liquidation of Midland Ins. Co., 16 N.Y.3d 536, 544 (2011); FC Bruckner Assoc., LP. v. Fireman’s Fund Ins. Co., 95 A.D.3d 556 (1st Dep’t 2012); Tudor Ins. Co. v. First Advantage Litig. Consulting LLC, 2012 U .S. Dist. LEXIS 120178 (S.D.N.Y.); Avrio Group Surveillance Solutions, Inc. v. Essex Ins. Co., 790 F.Supp.2d 89 (W.D.N.Y.2011); Feldman Law GroupP.C. v. Liberty Mut. Ins. Co., 819 F.Supp.2d 247, 256 (S.D.N.Y.2011). There is no controlling issue of law. Even if there was a controlling issue, there is no substantial ground for difference of opinion.

 

FN1. ICSOP has not requested similar relief, grounds alone to deny Continental the relief sought.

 

*6 Even if Continental had met the first two of the Stemcor three prong test, Continental fails to meet the third prong. As this court noted in Stemcor, “the party seeking an interlocutory appeal has the burden of showing the existence of the exceptional circumstances.” If the matter involves an interpretation of a contract, or involves a unique set of facts then the exceptional circumstances are not met. Aryai v. Forfeiture Support Assocs., LLC, 2012 U.S. Dist. LEXIS 125227, (S.D.N.Y). In re MW Rickmers Genoa Litig., 2011 U.S. Dist. LEXIS 154420, 9–11 (S.D.N.Y). Here, the legal issues involve an interpretation of a contract ahd involve the unique factual questions of this case; the application of a policy of insurance to a vehicle registered in New Jersey owned by a company domiciled in New Jersey insured under a New Jersey policy of insurance with the accident taking placing in New York. Continental has failed to meet the burden of showing exceptional circumstances.

 

Rule 54(b):

Continental, as an alternate remedy to interlocutory appeal, would like to move for a final judgment as to part of Underwriters claim. Rule 54(b) provides:

 

When an action presents more than one claim for relief-whether as a claim, counterclaim, crossclaim, or third-party claim-or when multiple parties are involved, the court may direct entry of a final judgment as to one or more, but fewer than all, claims or parties only if the court expressly determines that there is no just reason for delay.

 

This court has already ruled that the Continental and ICSOP policies provide coverage for the accident. Underwriters have asserted their policy, as well, provides coverage. What remains in this action is the allocation between the three policies of insurance. It is Underwriters’ position that there are no factual issues which must be decided to determine the allocation between policies. It appears that Continental believes that there is a need for a hearing to allocate liability. In any event this court cannot direct judgment as to Underwriters’ claim as the amount is yet to be determined. It was held in Cinerama, Inc. v. Sweet Music, S. A., 482 F.2d 66, 69 (2d Cir.1973) that there cannot be a final judgment pursuant to Rule 54(b) where the court “had not yet fixed the damages sought by the prevailing ones, even though the computation would now seem to be comparatively simple, if not ministerial in nature.” Accord, City of New York v. Milhelm Attea & Bros., 2012 U.S. Dist. LEXIS 149512 (E.D.N.Y.). Here there is far more than a ministerial calculation. The court must analyze the terms of the three policies (see Underwriters’ pre-motion letter dated January 7, 2013). Continental has even asserted that a full trial is needed prior to the entry of judgment in sum certain.

 

Even if the entry of a final judgment in the absence of a sum certain was permissible, Rule 54(b) is not applicable as Continental cannot meet the burdens imposed by Rule 54. Like 28 USC § 1292 Judgment under Rule 54(b) is an exceptional remedy to be used sparingly. The Second Circuit frowns upon such judgments. As the court noted in Novick v. AXA Network, LLC, 642 F.3d 304, 310 (2d Cir.N.Y.2011), “[t]he policy against piecemeal appeals ‘requires that the court’s power to enter such a final judgment before the entire case is concluded, thereby permitting an aggrieved party to take an immediate appeal, be exercised sparingly.’ “ Further, the Second Circuit has held that the power “should be used only in the infrequent harsh case” where there exists “some danger of hardship or injustice through delay which would be alleviated by immediate appeal.” LB. Foster Co. v. America Piles, Inc., 138 F.3d 81, 86 (2d Cir.N.Y.1998). Continental cannot show any hardship or danger in not permitting this, matter to go final judgment and cannot bear the burden necessary for the granting of the motion.

 

*7 Finally, “it is incumbent upon a party seeking immediate relief in the form of a Rule 54(b) judgment to show not only that the issues are sufficiently separable to avoid judicial inefficiency but also that the equities favor entry of such a judgment.” Novick In the instant matter the claims of ICSOP, which has not requested judgment under 54(b), or the right to interlocutory appeal, potentially will be in front of the court of appeals causing two panels to hear, and familiarize themselves with the same issues, grounds alone to deny Continental’s motion. Harriscom Svenska AB v. Harris Corp., 947 F.2d 627, 629 (2d Cir.1991).

 

For the reason stated herein, it is respectfully submitted that Continental’s motion, if made, should be denied.

 

Respectfully submitted,

 

LIPSIUS–BENHAIM LAW, LLP

 

Ira S. Lipsius

 

cc: VIA FACSIMILE

 

 

Antoony J. Zarillo, Jr., Esq.

908–753–8301

Christopher R. Carroll, Esq.

212–252–0444

Nicholas P. Calabria, Esq.

516–931–2641

Andrew M. Premisler, Esq.

212–888–0919

Richard P. Byme, Esq.

516–294–8202

John P. DeFilippis, Esq.

212–805–3939

Dominic M. Pisani, Esq.

516–294–8202