United States District Court, E.D. Pennsylvania
March 1, 2004.
COLONIAL ASSURANCE COMPANY et al.
THE MERCANTILE AND GENERAL REASSURANCE COMPANY Ltd. et al
The opinion of the court was delivered by: ANITA BRODY, District Judge
MEMORANDUM AND ORDER
On December 11, 2003, I issued a Memorandum and Order granting M
& G's motion to dismiss with respect to all claims (Docket #30). On
December 22, 2003, Colonial filed a Petition for Reconsideration (Docket
#31).*fn1 Colonial requests that I reconsider my order as to Colonial's
claim for unjust enrichment.
Colonial makes the following claims in its Petition for
2. This Honorable Court held that the Plaintiff's
claims for Unjust Enrichment expired in the
late 1980s, but in rendering this holding the
Court overlooked the following:
a. That reinsurance agreement has been declared
in 1993 to void back to the date of its
b. The right to make the claim for the return
premium accrued in 1993 when the New York
Court that (sic) rescinded the residual value
guarantee line of insurance of insurance back
to its inception;
c. The internal provision in the Liquidation
statute relating to a two-year
limitations is not applicable to the
collection of unearned premiums; and
d. Alternatively, as the right to the cause of
action did not exist at the time of the
liquidation, the second portion of the
"actions by and against the liquidator"
provision applies that provides a basis for
this Honorable Court to deem the claim for
Unjust Enrichment timely (sic).
3. Furthermore, this Honorable Court considered
matters outside the record in ruling upon the
Defendant's motion to dismiss, but this
Honorable Court did not take into account that
a stay had been entered into the underlying
matter on behalf of Colonial as against the
Defendant on May 17, 1988.
The facts of this case are laid out in my previous order and I need
not re-state them here.
II. STANDARD FOR MOTION FOR RECONSIDERATION
"The purpose of a motion for reconsideration is to correct manifest
errors of law or fact or to present newly discovered evidence."
Harsco Corp. v. Zlotnicki, 779 F.2d 906, 909 (3d Cir. 1985). A
motion for reconsideration is only appropriate where: (1) there has been
an intervening change in controlling law; (2) new evidence is available;
or (3) there is need to correct a clear error of law or prevent manifest
injustice. N. River Ins. Co. v. Cigna Reinsurance Co.,
52 F.3d 1194, 1218 (3d Cir. 1995) (citation omitted). "Because federal courts
have a strong interest in the finality of judgments, motions for
reconsideration should be granted sparingly." Continental Casualty
Co. v. Diversified Indus., Inc., 884 F. Supp. 937, 943 (E.D.
Pa. 1995). "Motions for reconsideration should not relitigate issues already
resolved by the court and should not be used `to put forward additional
arguments which [the movant] could have made but neglected to make before
judgment." Reich v. Compton, 834 F. Supp. 753, 755 (E.D.
Pa. 1993) (citing Dodge v. Susquehanna Univ., 796 F. Supp. 829, 830
(M.D. Pa. 1992)). For this reason, I will deny the motion for
reconsideration. I will respond to the new issues raised for purposes of
Colonial argues that the recovery of reinsurance premiums by the
statutory liquidator is governed by 40 P.S. § 221.35 (2003), which
has no applicable statute of limitations, rather than
40 P.S. § 221.26(b), which tolls the applicable statute of
limitations as of the filing date of the petition for liquidation and
grants the liquidator two more years to bring the cause of action.
Section § 221.35 states:
(a) An insured, agent, broker, premium finance
company or any other person responsible for the
payment of a premium shall be obligated to pay any
unpaid premium for the full policy term due the
insurer at the time of the declaration of
insolvency whether earned or unearned as shown on
the records of the insurer. The liquidator shall
also have the right to recover from such person
any part of an unearned premium that represents
commission of such person. Credits and/or setoff
shall not be allowed to an agent, broker or
premium finance company on account of any credits
volunteered by such person.
As is obvious from the text, this statute applies to insureds,
agents, brokers, and finance companies, in other words, persons who are
responsible for the payment of premiums. M&G was Colonial's insurance
company. M&G did not pay premiums, but instead was paid premiums.
Therefore, this statute does not apply in the instant case. Colonial's
action for unjust enrichment is subject to the statute of limitations set
out in 221.26(b).
Colonial argues that the cause of action for the return of premiums
accrued in 1993 when the New York Court declared the reinsurance
agreement void. Colonial offers no support for this contention. Under
Pennsylvania law, a cause of action for unjust enrichment accrues as of
the date the relationship between the parties is terminated. Cole v.
Lawrence, 701 A.2d 987, 989 (Pa. Super. 1997). An attempted
rescission qualifies as a termination of the relationship between the
parties because a rescission is "indisputably" a method of terminating
a contract." Metro. Prop. &Liab. Ins. Co. v. Commonwealth,
509 A.2d 1346, 1349 (Pa. Commw. 1986). Thus, the cause of action
accrued in 1982 when M&G terminated its relationship with Colonial by
seeking rescission. As this claim is subject to the statute of
limitations as set out in 221.26(b), this claim is time-barred. Even had
the cause of action accrued in 1993, the claim would still be
The stay imposed by Judge Baer in 1988 does not change this conclusion.
Judge Baer stayed the actions against Colonial. The stay did not limit
Colonial's right to take legal action against another.
Colonial's claim against M&G for unjust enrichment is time-barred.
Accordingly, M&G's motion to dismiss was appropriately granted.
AND NOW, this ___ day of March 2004, plaintiff's motion for
reconsideration (Docket #31) is DENIED.