premium figure would not contain an EMF rings hollow.
Finally, by October 17, 1990, just two days into the policy period and eight days after they had applied for insurance using an EMF of 1.687 to estimate the premium, the Paolinos knew that the EMF for the policy period would be 2.357. Thus, they should have realized that their premium would be substantially higher than they had estimated, and could not have reasonably relied on the lower figure to calculate their bids. For these reasons, we conclude that the Paolinos' reliance on the $ 100,587 figure was unjustified. As a result, we must reject their estoppel defense and award judgment to the Travelers in the amount of $ 269,266, representing the $ 455,007 earned premium minus the $ 185,741 in payments made by the Paolinos.
The Travelers also ask us to award it $ 149,673, which constitutes the estimated annual premium for the 1991-92 policy. As we found above, the Travelers canceled the 1991-92 policy on January 16, 1992 for non-payment of the premium. The notice of cancellation noted that the premium would be appropriately adjusted. Moreover, the Travelers points to no provision in the contract that entitles it to payment of the full premium in the event it cancels the policy during the policy term. Accordingly, we will award the Travelers a portion of the annual premium to compensate it for the 93 days of coverage it provided the Paolinos. Since no audit was conducted, we use the estimated figure as a baseline, and arrive at a figure of $ 38,031.65. Accordingly, we will enter judgment in favor of the Travelers in the total amount of $ 307,297.65, plus pre-judgment interest at the statutory rate. Benefit Trust Life Ins. Co. v. Union Nat'l Bank, 776 F.2d 1174, 1179 (3d Cir. 1985).
B. The Paolinos' Counterclaim
The Paolinos' counterclaim is premised on its argument that it owes the Travelers no more than $ 100,587 for the 1990-91 policy, and that it is entitled to either a rebate for the funds it paid to the Travelers in excess of that amount or a set-off for the premiums charged in excess of the amount they paid. Since we have concluded that the Paolinos' basic argument is meritless, however, we must necessarily reject their counterclaim. Accordingly, judgment will be entered in favor of the Travelers with respect to the Paolinos' counterclaim.
CONCLUSIONS OF LAW
1. The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1332, in that the parties are of diverse citizenship and the amount in controversy exceeds $ 50,000.
2. By a preponderance of the evidence, the Travelers demonstrated that the Paolinos breached the insurance contract when it failed to make the required premium payments.
3. The Paolinos failed to establish an equitable estoppel defense.
4. The Travelers demonstrated that it incurred damages in the amount of $ 307,297.65 as a result of the Paolinos' breach.
5. The Paolinos failed to demonstrate that they are entitled to relief on their counterclaim.
An appropriate order follows.
AND NOW, this 6th day of November, 1995, following a non-jury trial in this matter and careful consideration of the parties' proposed findings of fact and conclusions of law, and for the reasons set forth in the preceding Decision, it is hereby ORDERED that:
1. VERDICT and JUDGMENT are entered in favor of Plaintiff and against Defendants in the total amount of $ 307,297.65, plus pre-judgment interest at the statutory rate.
2. VERDICT and JUDGMENT are entered in favor of Counterclaim Defendant in no amount on Defendants' Counterclaim.
BY THE COURT:
J. Curtis Joyner, J.
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