United States District Court, D. Maryland
CX Reinsurance Company Limited, f/k/a CNA Reinsurance Company Limited
B&R Management, Inc., et al.;
pending is Defendant Jessica-Carl, Inc.'s
(“Defendant”) Motion for Reconsideration [ECF No.
197] of the Court's June 22, 2017 Letter Order [ECF No.
192] which, inter alia, denied (in part)
Defendant's Motion to Compel responses to its document
production requests [ECF No. 87-3]. Defendant asks the Court
to reconsider its opinion. For the reasons set forth below,
Defendant's motion is DENIED.
Federal Rule of Civil Procedure 54(b), “any order or
other decision, however designated, that adjudicates fewer
than all the claims or the rights and liabilities of fewer
than all the parties” may be revisited by the court at
any time before an entry of final judgment. Fed.R.Civ.P.
54(b). While Rule 54 does not elucidate the standard for
reconsideration of interlocutory orders, such as the
discovery ruling here, the Fourth Circuit has held that a
motion for reconsideration under Rule 54 is not subject to
the same “strict standards” applicable to motions
for reconsideration of a final judgment. Am. Canoe
Ass'n v. Murphy Farms, Inc., 326 F.3d 505, 514 (4th
Cir. 2003). Despite this relative leniency, “most
courts have adhered to a fairly narrow set of grounds on
which to reconsider their interlocutory orders and opinions,
” and will reconsider an interlocutory order only
where: “(1) there has been an intervening change in
controlling law; (2) there is additional evidence that was
not previously available; or (3) the prior decision was based
on clear error or would work manifest injustice.”
Cezair v. JPMorgan Chase Bank, N.A., No.
DKC-13-2928, 2014 WL 4955535, at *1 (D. Md. Sept. 30, 2014)
(citations omitted). None of these justifications is present
June 22, 2017 Order, the Court denied (in part)
Defendant's Motion to Compel because it sought the
production of documents which were not relevant. [ECF No.
192]. Specifically, Defendant requests the Court to
reconsider its ruling with respect to document Requests 7 and
8. [ECF Nos. 197, 219]. Defendant's Request No. 7 asks:
[i]n connection with any policy providing liability
insurance for lead paint Management, Inc., et al.
Civil Case No. ELH-15-3364 November 13, 2017 Page 2 coverage
written by CXRe during the period January 1, 1997 through
August 31, 1999, [for] all documents reflecting
payment under such policy for expenses or to resolve claims
when CX Reinsurance was provided with evidence of lead paint
violation notice(s) for the applicable property before making
such payment, including but not limited to any notes,
memoranda, and/or internal or external communications.
No. 197, 1-2] (emphasis added). Defendant's Request No. 8
[i]n connection with any policy providing liability
insurance for lead paint coverage written by CX Re during the
period January 1, 1997 through August 31, 1999, [for]
all documents reflecting CX Reinsurance's
refusal to make payment under such policy for expenses or to
resolve claims when CX Reinsurance was provided with evidence
of lead paint violation notice(s) for the applicable
property, including but not limited to any notes, memoranda,
and/or internal or external communications.
No. 197, 2] (emphasis added). Defendant believes that the
Court's ruling was “clear error” and
reiterates the argument it made in its Motion to Compel that
the documents sought in Requests 7 and 8 are relevant to CX
Re's receipt of evidence of lead paint violations and:
(1) whether it waived its right to rescission because
“it had knowledge of a basis for rescission and
nevertheless made payment on the policy;” and (2)
whether its claims are time-barred because it knew or should
have known of the alleged misrepresentations more than three
years before filing suit. [ECF No. 219, 2]; [ECF No. 197, 2];
[ECF No. 87-3, 10-14]. Defendant also contends that in
denying its Motion to Compel, the Court considered only its
“materiality” argument and did “did not
address [its] laches / limitations/waiver argument.”
[ECF No. 197, 3]. Defendant is mistaken.
Nos. 7 and 8 seek information concerning any CX Re
insured, including those not party to this litigation. CX Re
is correct that the “relevant inquiry  is whether CX
Re promptly sought rescission of [B&R Management's
(“B&R”)] policies after it first acquired
‘sufficient proof' that B&R had submitted a
false Application.” [ECF No. 205, 8]. As stated in the
Court's Opinion denying Defendant's Motion to Compel
(albeit in a different section), [ECF No. 192, 3-4], in
determining whether an insurance company promptly sought
rescission, the inquiry is “limited to the timing of
Plaintiffs' investigation into, and conclusions about,
the facts [the insured] allegedly misrepresented in its
insurance applications.” Charter Oak Fire Ins. Co.
v. Am. Capital, Ltd., No. CIV.A. DKC 09-0100, 2013 WL
6844359, at *3 n.4 (D. Md. Dec. 24, 2013). Thus, the
inquiries regarding the accrual of notice sufficient to
trigger the running of the statute of limitations and to
justify rescission, and whether rescission was promptly
sought, is fact-specific to each insured. See Charter Oak
Fire Co. v. Am. Capital, Ltd., No. CV DKC 09-0100, 2016
WL 827380, at *12 (D. Md. Mar. 3, 2016), on
reconsideration in part, No. CV DKC 09-0100, 2016 WL
8669940 (D. Md. July 1, 2016) (quoting Monumental Life
Ins. Co. v. U.S. Fid. & Guar. Co., 94 Md.App. 505,
541 (1993)); William Rounds v. Md.-Nat'l Capital Park
& Planning Comm'n, 109 A.3d 639, 658 (Md. 2015).
Contrary to Defendant's contention, then, policies
unrelated to B&R, including any payments or refusals to
make payments under such policies, are not relevant to
Defendant's laches/limitations defense. Recognizing,
however, that documents involving its insured, B&R, are
relevant to such defenses, the Court Ordered CX Re to produce
“all documents pertaining to the underwriting review
involving B&R” within fourteen (14) days from its
Order. [ECF No. 192, 4].
reasons discussed herein, Plaintiff's Motion for
Reconsideration is DENIED. Despite the informal nature of
this letter, it will be flagged as an Opinion and docketed as
Stephanie A. Gallagher, United States Magistrate Judge.