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Volume X, Number 189

July 06, 2020

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Federal Court in Pennsylvania Denies Motion to Enjoin Reinsurance Dispute and Allows Reinsurer's Offset Argument to Remain


The action involved a reinsurance dispute where the two parties filed a number of motions and a cross-motion seeking injunctive relief and contempt of court regarding failure to pay monies owed. By way of background, AXA issued a reinsurance contract to Century during the 1970’s. In 2005, a claims documentation issue occurred requiring Century to arbitrate. The arbitration panel granted Century’s motion to require AXA to post a million dollar letter of credit. Ten years later, a final award stated that AXA indemnify Century for sums related to asbestos claims. In addition, Century was required to supply AXA with billing information and a proof of loss. A Pennsylvania court confirmed the final arbitration award. AXA asserted that it was entitled to a partial offset and moved the Southern District of New York to compel arbitration on the offset issue.
The district court in Pennsylvania denied plaintiff’s motions. First, the court held that plaintiff’s cross-motion to enjoin a separate action pending in a New York court based on the “first-filed” rule is without merit. In particular, the court held that this action is not duplicative of the New York action. The court also found no evidence for plaintiff’s second rationale for injunction that the New York action was brought in bad faith for the purpose of delaying this action. The court also denied plaintiff’s motion for contempt for failing to pay a judgment. Specifically, the court held that since there has not been a final judgment the defendant is not in contempt of any court order or ruling. Therefore, the court denied that the motion to quantify the prior arbitration award because it first must decide whether the offset issue is arbitrable.
IMPACT (REINSURANCE): Practitioners must be careful in confirming “final awards” without a definitive dollar amount. In this case, given that the offset issue was never resolved, the defendant was entitled to a new hearing on that issue which delayed a final monetary award.
All content © 2020 Goldberg Segalla LLPNational Law Review, Volume , Number 99


About this Author

Jeffrey L. Kingsley, Goldberg Segalla, Insurance attorney

Jeffrey Kingsley maintains an international practice that focuses on matters involving insurance and reinsurance coverage, commercial and regulatory issues, and extra-contractual liability arbitration and litigation. As a leader in Goldberg Segalla’s reinsurance practice he has extensive experience handling and consulting clients on complex reinsurance allocation issues, regulatory issues, arbitrations, transactional issues, and disputes involving the follow-the-fortunes doctrine.

Jeff provides comprehensive legal representation for Fortune 500 companies, insurers,...

Thomas F. Segalla, Insurance Attorney, Goldberg Segalla Law Firm

Thomas F. Segalla, is the co-author of the renowned insurance law treatise Couch on Insurance 3d and is one of the founding partners of the firm.  Mr. Segalla is a nationally recognized reinsurance and insurance expert who has been retained by numerous insurance carriers and policyholders.  His active practice focuses on the defense and insurance coverage aspects of matters involving bad faith; construction site personal injury accidents (Labor Law §§ 200, 240(1) and 241(6)); and toxic tort and environmental issues. As a member of the Defense Research Institute (DRI), he is the Past Chair of the Insurance Law Committee and served on the Board of Directors and is the past Chair of the Law Institute. In addition, as a member of the Federation of Defense and Corporate Counsel, he is integrally involved in the relationship between the Insurance Industry and defense counsel. He has published and lectured extensively for many professional organizations.  Mr. Segalla possesses an AV rating from Martindale-Hubbell and has been named to the Top 50 of the New York Super Lawyers.