PAUL A. ENGELMAYER, District Judge:
On November 12, 2013, plaintiff R & Q Reinsurance Company ("R & Q") moved for summary judgment against defendant Utica Mutual Insurance Company ("Utica"), seeking confirmation of an arbitration panel's Final Order (the "Award") issued on October 19, 2013. Dkt. 1-2. Utica opposes confirmation on the grounds that the Award is not a final judgment, but instead represents, effectively, an interim award in an arbitration that never reached completion. For the following reasons, R & Q's motion for summary judgment is granted.
In this lawsuit, R & Q seeks to confirm an arbitration Award, pursuant to the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq. ("FAA"). That Award was the outcome of an arbitration charged with resolving the extent to which R & Q was liable for amounts billed to it by Utica. Pet. ¶ 5; id. Ex. 1. These billings arose out of nine reinsurance certificates, all of which R & Q had issued to Utica between 1978 and 1982.
Over the past few decades, Goulds has suffered substantial asbestos-related losses. Id. As a consequence, Utica has had to pay out hundreds of millions of dollars under its umbrella policies with Goulds. Id. Utica has attempted to recoup some of those losses from its reinsurers, including R & Q. Under the reinsurance certificates
In May 2009, R & Q and Utica signed an Arbitration Protocol. Id. Ex. 1. The Protocol provided that:
Id. Ex. 1 ¶ B.5. In October 2009, the parties also executed a Confidentiality Agreement, which provided that:
Pet. Ex. 2 at 1; see also Pet. ¶ 8.
In July 2013, after the parties conducted discovery and resolved all preliminary matters, a seven-day evidentiary hearing was held. Pet. ¶ 9. Both sides in the arbitration agreed that Utica's billings to R & Q could be sorted into four categories: (1) indemnity payments; (2) defense costs; (3) orphan shares; and (4) declaratory judgment expenses. See Finnegan Aff. Exs. 5-7. The three-arbitrator panel was therefore tasked with resolving, at a category level, which, if any, of these four categories were ones as to which Utica could recover from R & Q. After the evidence was presented, the panel directed the parties to submit post-hearing briefs in lieu of closing arguments. Id.
On October 18, 2013, the arbitration panel deliberated in person. Id. On October 19, 2013, the panel issued its "Final Order," which read:
Pet. Ex. 4 ("Award") (emphasis added). The panel thus held, as among the four categories, that R & Q could be billed for indemnity costs, but not for defense costs,
Following the Award, Utica twice asked the panel for reconsideration and/or clarification. First, on November 5, 2013, Utica asked the Panel to reconsider "the part of its award denying Utica recovery of" defense costs. Finnegan Aff. Ex. 11. On November 18, 2013, R & Q opposed Utica's motion to reconsider, id. Ex. 12, and on November 22, 2013, Utica submitted a reply letter, id. Ex. 13. On December 3, 2013, the panel denied Utica's request "to reconsider and reverse a portion of the Panel's October 19, 2013 Final Order." Id. Ex. 14. Second, on December 9, 2013, Utica asked the Panel to clarify its ruling with respect to future billings. Id. Ex. 15. Utica argued that the panel's ruling that future billings must accord with both the certificates and the panel's order was ambiguous. Id. On December 10, 2013, R & Q submitted a letter, arguing that there was no ambiguity in the panel's final order — instead, it was clear that future billings would not include defense costs. Id. Ex. 16. On December 16, 2013, the panel sent a one-sentence e-mail, which read: "For the sake of clarification, the panel rules that all other requests for further relief were and are denied." Id. Ex. 17. Relevant here, in neither of these requests for reconsideration or clarification did Utica ask the Panel to modify its Award to set out a specific dollar amount owed to it. Nor did it indicate that its view was that such a task lay ahead before the panel's work was complete.
On November 12, 2013, R & Q filed a petition to confirm the panel's Award under the FAA, Dkt. 1, and an accompanying memorandum of law, Dkt. 2 ("Pl. Br."). On December 13, 2013, Utica opposed R & Q's petition. Dkt. 15 ("Def. Br."). On December 23, 2013, R & Q filed a reply brief. Dkt. 16 ("Pl. Rep. Br."). On January 23, 2014, Utica filed a surreply brief. Dkt. 28 ("Def. Rep. Br."). On January 29, 2014, the Court heard argument.
The FAA provides a "streamlined" process for a party seeking a "judicial decree confirming an award, an order vacating it, or an order modifying or correcting it." Hall St. Assocs. L.L.C. v. Mattell, Inc., 552 U.S. 576, 582, 128 S.Ct. 1396, 170 L.Ed.2d 254 (2008). "Normally, confirmation of an arbitration award is a summary proceeding that merely makes what is already a final arbitration award a judgment of the court, and the court must grant the award unless the award is vacated, modified, or corrected." D.H. Blair & Co. v. Gottdiener, 462 F.3d 95, 110 (2d Cir.2006). But "[a]rbitration awards are not self-enforcing." Hoeft v. MVL Grp., Inc., 343 F.3d 57, 63 (2d Cir.2003), overruled on other grounds by Hall St., 552 U.S. 576, 128 S.Ct. 1396. Rather, "they must be given force and effect by being converted to judicial orders by courts." D.H. Blair, 462 F.3d at 104.
Review of an arbitral award by a district court "is `severely limited' so as not unduly to frustrate the goals of arbitration — namely to settle disputes efficiently and avoid long and expensive litigation." Salzman v. KCD Fin., Inc., No. 11 Civ. 5865(DLC), 2011 WL 6778499, at *2 (S.D.N.Y. Dec. 21, 2011) (quoting Willemijn Houdstermaatschappij, BV v. Standard Microsystems Corp., 103 F.3d 9, 12
To prevail on a motion for summary judgment, the movant must "show[] that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R.Civ.P. 56(a). The movant bears the burden of demonstrating the absence of a question of material fact. In making this determination, the Court must view all facts "in the light most favorable" to the non-moving party. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); see also Holcomb v. Iona Coll., 521 F.3d 130, 132 (2d Cir.2008). To survive a summary judgment motion, the opposing party must establish a genuine issue of fact by "citing to particular parts of materials in the record." Fed. R.Civ.P. 56(c)(1); see also Wright v. Goord, 554 F.3d 255, 266 (2d Cir.2009). Only disputes over "facts that might affect the outcome of the suit under the governing law" will preclude a grant of summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In determining whether there are genuine issues of material fact, the Court is "required to resolve all ambiguities and draw all permissible factual inferences in favor of the party against whom summary judgment is sought." Johnson v. Killian, 680 F.3d 234, 236 (2d Cir.2012) (citing Terry v. Ashcroft, 336 F.3d 128, 137 (2d Cir.2003)).
There is no material issue of fact that would preclude the confirmation of the Award in this case. In opposing the Award's confirmation, Utica makes one argument — that the panel's Award is not final because it failed to specify the exact amount R & Q owed to Utica. See Def. Br. at 2 ("Here, the [Award] does not determine all claims submitted to the Panel since the Panel has not determined the particular amount that the parties dispute."); Def. Rep. Br. at 2 (the Award "is not final because the Panel did not finalize the parties' obligations with respect to the main issue submitted in the arbitration — the parties' disputes over the outstanding billings"). The Court rejects this argument.
For better or worse, the parties to this arbitration tasked the arbitral panel with resolving their dispute at a conceptual, rather than a mathematical, level. That is clear from the proposed orders both parties submitted to the panel with their post-hearing briefs. Utica's proposed order asked the panel to order R & Q to pay all outstanding billings under the certificates, which totaled, as of May 31, 2013, $21,703,305.77. Finnegan Ex. 6. Utica also asked for interest at 9% a year and reasonable attorneys' fees and costs. For its part, R & Q's proposed order gave the panel two choices: (1) no recovery by Utica and recovery by R & Q of the $1,691,903.15 it previously paid to Utica; or (2) recovery by Utica of indemnity payments under just the 1982 certificate, with no recovery by Utica of defense costs, orphan shares, or declaratory judgment expenses. Id. Ex. 8. Neither side, however, supplied the panel with concrete data or concrete evidence to enable the panel to tabulate, as to any particular category, what the amount R & Q owed Utica with
At argument, counsel for R & Q helpfully explained why, given the asbestos-related nature of the reinsurance billing dispute, it was unsurprising that both sides litigated, and the panel resolved, the dispute at a categorical level, rather than fixing a specific-sum monetary award. Counsel explained that reinsurance arbitrations in this area often arise in the middle of long-term reinsurance arrangements, where billings attributable to longtail claims may be destined to be made for years or decades to come. As a result, where an insurer and reinsurer disagree about which costs are covered by the reinsurer, they will often litigate, in midstream, the reinsurer's obligations at a concept level. See Tr. 18 ("It's very commonplace in reinsurance arbitration just to dispute concepts and then later on to [allow] the parties to work out how the chips will fall."). The parties then, in the course of their ongoing dealings, apply the arbitral panel's conceptual rulings to particular billing periods, retrospectively and prospectively. See id. at 10 (once "a conceptual framework" is in place, the accounting people on both sides can "sit down and hash it out and come up with a number").
Consistent with this paradigm, the parties pursued the arbitration here in a manner that made it impossible for the panel to calculate the exact amount R & Q owed to Utica. Utica did not present the panel with the evidence necessary for it to make such a calculation, and the parties did not stipulate as to these facts.
The specific open calculative issue, as the parties explained at argument, is as follows. In light of the arbitral panel's ruling that only indemnity costs are cognizable, the ceiling on Utica's recovery from R & Q, through May 31, 2013, is the amount of Utica's billings attributable to indemnity costs — $13,948,583.57.
Tr. at 24.
In light of this history, the Court agrees with R & Q that the panel's decision was clearly a final judgment. The parties did not ask the panel to calculate a precise damages figure; and Utica did not present the nuts-and-bolts records to the panel that would have permitted it to resolve, at a dollars-and-cents level, the monies it was owed by R & Q. The panel therefore understandably left to the parties the task of applying its categorical rulings, both retrospectively as to records of billings through May 31, 2013, and prospectively. The panel resolved the disputes the parties had queued up for it. There was nothing else for the panel to resolve on the evidence before it. Utica's rueful wish now that the arbitration had been litigated with an eye towards yielding an Award framed in concrete dollar terms, rather than as a conceptual ruling, does not make the panel's Award any less final.
Although not necessary to this ruling, the Court notes that Utica's conduct following the arbitral Award reinforced its finality. The Award stated that the panel would only "remain constituted for a period of 90 days" from the date of the Award. See Pet. Ex. 4. The Award was issued on October 19, 2013; this 90-day period therefore expired on approximately January 17, 2014. During this period, Utica did not ask the panel to remain constituted pending proceedings in this Court, nor did it ask this Court to stay the dissolution of the panel. Further, Utica did not suggest to this Court the prospect of a remand to the panel until its surreply brief was filed on January 23, 2014, six days after the panel had stated it would cease to exist. See Def. Rep. Br. at 10 n. 4.
Even resolving all ambiguities and drawing all permissible factual inferences in favor of Utica, Utica's claim that the panel's Award was other than final is unsustainable. Nor is there any other basis for not confirming the Award: Utica does not argue, for example, that the Award was "procured by corruption, fraud, or undue means," or that the arbitrators were partial or corrupt See 9 U.S.C. § 10.
For the foregoing reasons, R & Q's motion for summary judgment is granted. The Award issued by the arbitration panel on October 19, 2013 is hereby confirmed. Utica and R & Q are to each comply with the terms of the Award in every respect. The Clerk of Court is respectfully directed to terminate the motion pending at docket number 10, and to close this case.
SO ORDERED.
