TIG INSURANCE CO. V. CENTURY INDEMNITY CO.
(CIVIL ACTION NO.: 08-CV-7322, April 8, 2009)
The cedent’s successor-in-interest filed this action against the reinsurer stating that the reinsurer breached the terms and conditions of several facultative reinsurance contracts. Specifically, the complaint alleges that the named reinsurance contracts specifically provided coverage to the cedent’s predecessor on a policy of excess liability insurance issued by the cedent’s predecessor to the insured. Upon settling the underlying action, cedent’s successor-in-interest is seeking coverage under the reinsurance contracts.
Cedent’s successor-in-interest filed a motion for leave to amend the complaint to allege that the reinsurer breached its terms and conditions of two new and independent reinsurance contracts. The reinsurer objected stating that the proposed amendment involves insurance claims that are unrelated to the named reinsurance contracts and would force the parties to "[squeeze] a separate and unrelated claim into the tight time frame set by the Court for the completion of discovery." Moreover, the reinsurer cited to
Ansam Assoc., Inc. v. Cola Pertroleum 760 F.2d. 442 as Second Circuit precedent for denying a motion to amend the complaint where the proposed claims involved "a different period of time and were derived from a different statute."
The District Court determined that pursuant to Federal Rule of Civil Procedure 18(a), courts regularly permit amendments of pleadings to join additional claims, even when the claims arise from different transactions. The District Court distinguished on procedural grounds stating that discovery is not complete and, thus, it would not be prejudicial to allow new causes of action to be asserted. It did not address the prejudicial effect of connecting separate and unrelated claims to this action. Therefore, the District Court granted the cedent successor-in-interest’s motion for leave to amend the complaint to assert these causes of action.
By Jeffrey L. Kingsley and Thomas F. Segalla