New York Federal Court Denies Reinsurer’s Motions for New Trial and Judgment as a Matter of Law, Modifies Accrual Date for Prejudgment Interest

In a matter previously covered in this blog, the Northern District of New York was asked to determine whether Clearwater Insurance Co. (the reinsurer) was entitled to a new trial, a judgment as a matter of law, or an amendment to the judgment rendered in favor of Utica Mutual Insurance Co. (the cedent).

At trial, the jury agreed with Utica’s interpretation of the parties’ reinsurance contract and found that an underlying settlement between Utica and insured Gould’s Pumps was negotiated in good faith. As a result, the jury awarded Utica $10 million in damages under the reinsurance treaty, and a judgment was entered consistent with this verdict.

Among several post-trial motions filed by the parties, Clearwater moved for a new trial or judgment as a matter of law, arguing that the verdict was not supported by sufficient evidence, that there were errors in the jury instructions and verdict form, and that a recent Second Circuit decision nullified the jury’s verdict as a matter of law. Clearwater also moved to amend the judgment, arguing that Utica was not entitled to prejudgment interest or, in the alternative, that prejudgment interest should accrue from a later date. The court denied Clearwater’s motion for a new trial, finding the jury’s verdict to be adequately supported and upholding the jury instructions used at trial. The court also denied Clearwater’s motion for a judgment as a matter of law, finding that the cited Second Circuit decision did not nullify the jury’s verdict.

However, the court granted Clearwater’s motion to amend the judgment in part, finding that the court’s calculation of prejudgment interest from the date Utica submitted its first unpaid reinsurance billing would result in a windfall for Utica. The court determined that the reasonable accrual date for prejudgment interest was the midpoint of the unpaid reinsured billings and modified its judgment accordingly.

Utica Mutual Insurance Co. v. Clearwater Insurance Co., No. 6:13-cv-01178 (N.D.N.Y. Mar. 18, 2022).