13-2606-cv (L)
Arizona Premium Finance Co., Inc. v. Employers Insurance of Wausau, of Wausau Am Mutual Company

                              UNITED STATES COURT OF APPEALS
                                  FOR THE SECOND CIRCUIT

                                        SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO
A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS
GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S
LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH
THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING
A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY
COUNSEL.

      At a stated term of the United States Court of Appeals for the Second Circuit, held at the
Thurgood Marshall Courthouse, 40 Foley Square, in the City of New York, on the 17th day of
September, two thousand fourteen.

Present:
              ROBERT A. KATZMANN,
                         Chief Judge,
              ROBERT D. SACK,
              GERARD E. LYNCH,
                         Circuit Judges.

________________________________________________

ARIZONA PREMIUM FINANCE CO., INC.,

              Plaintiff-Appellant-Cross-Appellee,

                     v.                                             Nos.     13-2606-cv (Lead)
                                                                             13-2798-cv (XAP)

EMPLOYERS INSURANCE OF WAUSAU, OF
WAUSAU AM MUTUAL COMPANY,
                                           *
         Defendant-Appellee-Cross-Appellant.
________________________________________________

For Plaintiff-Appellant-Cross-Appellee:             STEVEN G. LEGUM, Mineola, NY.


        *
            The Clerk is directed to amend the caption as set forth above.
For Defendant-Appellee-Cross-Appellant:          WILLIAM B. POLLARD, III (Amy C. Cross, on
                                                 the brief), Kornstein Veisz Wexler & Pollard,
                                                 LLP, New York, NY.


      Appeal from the United States District Court for the Eastern District of New York
(Tomlinson, Mag. J.).

       ON CONSIDERATION WHEREOF, it is hereby ORDERED, ADJUDGED, and

DECREED that the judgment of the district court is AFFIRMED.

       Plaintiff-Appellant-Cross-Appellee Arizona Premium Finance Co. (“APF”) appeals from

a June 24, 2013 judgment of the United States District Court for the Eastern District of New

York (Tomlinson, Mag. J.), and Defendant-Appellee-Cross-Appellant Employers Insurance of

Wausau, of Wausau Am Mutual Company (“Wausau”) cross-appeals from the same judgment.

This case arises out of an insurance program whereby Wausau provided commercial auto

insurance for livery vehicles, whose premiums APF financed. APF asserted claims against

Wausau under New York Banking Law § 576 and New York Insurance Law § 3428 for the

return of unearned insurance premiums, in which APF held a security interest. Wausau asserted

counterclaims against APF, alleging that Wausau’s managing general agent, Willis of New York,

Inc. (“Willis”), had mistakenly overpaid APF on Wausau’s behalf for certain unearned

premiums. As relevant here, the district court, after assessing the various claims and

counterclaims, granted judgment to APF in the amount of $28,697.10, awarded prejudgment

interest to APF in the amount of $34,349.01, and denied Wausau’s motion to dismiss for failure

to prosecute under Federal Rule of Civil Procedure 41(b).

       In its appeal, APF challenges the district court’s grant of summary judgment to Wausau

on certain claims and counterclaims, as well as two magistrate judges’ interpretation of the


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district court’s summary judgment decision under the doctrine of the law of the case. In its cross-

appeal, Wausau challenges the district court’s award of prejudgment interest to APF and its

denial of Wausau’s motion to dismiss for failure to prosecute. We assume the parties’ familiarity

with the relevant facts, procedural history of the case, and the issues presented for review.

       Turning first to APF’s challenge to the district court’s summary judgment decision,

issued by Judge Seybert before the case was reassigned to Judge Townes, “[w]e review de novo

a district court’s ruling on cross-motions for summary judgment, in each case construing the

evidence in the light most favorable to the non-moving party.” Fund for Animals v. Kempthorne,

538 F.3d 124, 131 (2d Cir. 2008) (quoting White River Amusement Pub, Inc. v. Town of

Hartford, 481 F.3d 163, 167 (2d Cir. 2007)).

       The district court granted summary judgment to Wausau on some of Wausau’s

counterclaims on the ground that, based on the effective dates on which the relevant policies had

been cancelled, Willis had mistakenly overpaid APF on Wausau’s behalf for certain unearned

premiums. APF contends that this ruling was erroneous for various reasons, including (1) that

the district court improperly calculated the cancellation dates, (2) that Wausau’s counterclaims

are barred by the voluntary payment doctrine, (3) that the district court erred in failing to draw

an adverse inference against Wausau based on Willis’s shoddy recordkeeping, (4) that Wausau’s

counterclaims lie not against APF but against the relevant insureds, and (5) that somehow the

district court’s ruling benefits some insureds at the expense of others. But we need not consider

these arguments, as APF failed to raise any of them in its summary judgment papers below. See

Bogle-Assegai v. Connecticut, 470 F.3d 498, 504 (2d Cir. 2006) (“[I]t is a well-established

general rule that an appellate court will not consider an issue raised for the first time on appeal.”


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(quoting Greene v. United States, 13 F.3d 577, 586 (2d Cir. 1994) (alteration in original)).

Indeed, APF failed to articulate its final two arguments until its reply brief on appeal. See United

States v. Yousef, 327 F.3d 56, 115 (2d Cir. 2003) (“We will not consider an argument raised for

the first time in a reply brief.”).

        The district court granted summary judgment to Wausau on certain additional

counterclaims, as well as on some of APF’s claims, on the ground that APF had failed to adduce

evidence that it had ever paid premiums to Wausau on behalf of 52 insureds, preventing APF

from seeking the return of unearned premiums for those insureds. APF challenges this ruling on

four grounds, but each is unavailing.

        First, with respect to Wausau’s counterclaims, APF contends that Wausau failed to meet

its burden of adducing evidence to show that APF did not pay the premiums for these insureds.

But Wausau presented two affidavits from Luis Velez, one accompanying its principal brief

below and one on reply. After reviewing and comparing various records produced by APF and

obtained from Willis, Velez initially stated that there was no evidence to show that APF had ever

paid premiums for 78 insureds, and then revised that number downward to 52 on reply. APF now

raises various objections to the accuracy and adequacy of Velez’s affidavits, but because APF

did not make these objections in its summary judgment papers below, we need not consider

them. See Bogle-Assegai, 470 F.3d at 504.

        Second, with respect to both APF’s claims and Wausau’s counterclaims, APF contends

that it in fact presented evidence of payment. In particular, APF contends that the fact that

Wausau issued policies to the relevant insureds gives rise to a presumption, or at least a

reasonable inference, that Wausau received the required premiums, such that summary judgment


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for Wasau was not warranted. But while the issuance of a policy may give rise to an inference

that the insurer received at least an initial premium payment, the undisputed evidence here shows

that Wausau received a premium down payment from each insured before issuing a policy. In

that context, Wausau’s mere issuance of the policies does not indicate that APF paid the balance

of the premiums due after the down payments.

       Third, APF contends that it also presented evidence of payment in the form of an

affidavit from APF President Jay Rosenblum. But the only relevant portion of that affidavit is a

conclusory statement that “[e]ach and every . . . account was funded by payment as directed to

either Willis . . . or Wausau.” J.A. 1071. The law is clear that “reliance upon conclusory

statements or mere allegations is not sufficient to defeat a summary judgment motion.” Davis v.

New York, 316 F.3d 93, 100 (2d Cir. 2002).

       Fourth, APF contends that it presented evidence of payment as to 38 of the 52 insureds in

scattered pages of a more-than-80-page exhibit attached to Rosenblum’s affidavit. But while

these pages were part of the summary judgment record, APF failed to point them out to the

district court.“While the trial court has discretion to conduct an assiduous review of the record in

an effort to weigh the propriety of granting a summary judgment motion, it is not required to

consider what the parties fail to point out.” Monahan v. N.Y.C. Dep’t of Corr., 214 F.3d 275, 292

(2d Cir. 2000) (quoting Downes v. Beach, 587 F.2d 469, 472 (10th Cir. 1978)).

       Turning to APF’s argument regarding the law of the case doctrine, we review a district

court’s application of that doctrine for abuse of discretion. See Devilla v. Schriver, 245 F.3d 192,

198 (2d Cir. 2001). As the Supreme Court has explained, the law of the case doctrine “posits that

when a court decides upon a rule of law, that decision should continue to govern the same issues


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in subsequent stages of the same case.” Arizona v. California, 460 U.S. 605, 618 (1983).

       Here, APF contends that Magistrate Judge Lindsay, to whom the case was referred on the

parties’ consent, ran afoul of this doctrine when she ruled that Judge Seybert’s earlier summary

judgment decision had resolved all disputed issues in the case except for prejudgment interest

and a timing issue later resolved by the parties’ stipulation. APF explains that, in an order issued

after Judge Seybert’s but before Magistrate Judge Lindsay’s, Judge Townes set the case down

for a hearing on damages. In APF’s view, Judge Townes thereby implicitly ruled that additional

disputed issues remained open in the case. That implicit ruling then supposedly became the law

of the case and bound both Magistrate Judge Lindsay and Magistrate Judge Tomlinson, to whom

the case was later reassigned after Magistrate Judge Lindsay’s recusal.

       But Judge Townes’s order did not “decide upon a rule of law” in any relevant sense.

Rather, the order merely set forth the procedure by which the court intended to resolve the

parties’ various arguments—including Wausau’s argument that all issues except the timing issue

and prejudgment interest had already been resolved in Judge Seybert’s summary judgment

decision. Moreover, even if the order had triggered the law of the case doctrine, that doctrine “is

discretionary and does not limit a court’s power to reconsider its own decisions prior to final

judgment.” Aramony v. United Way of Am., 254 F.3d 403, 410 (2d Cir. 2001) (quoting In re

Crysen/Montenay Energy Co., 226 F.3d 160, 165 n.5 (2d Cir. 2000)). That power of

reconsideration was not altered by the referral to a magistrate judge, who stood in the shoes of

the district judge for all relevant purposes. See 28 U.S.C. § 636(c); Fed. R. Civ. P. 73(a).

       In addition, to the extent that APF challenges Magistrate Judge Lindsay’s ruling directly,

this Court will not disturb a district court’s interpretation of its own prior order “absent a clear


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abuse of discretion.” Truskoski v. ESPN, Inc., 60 F.3d 74, 77 (2d Cir. 1995) (per curiam)

(quoting Hastert v. Ill. State Bd. of Election Comm’rs, 28 F.3d 1430, 1438 (7th Cir. 1993)). We

see no abuse of discretion in Magistrate Judge Lindsay’s ruling, much less clear abuse.

       Turning to Wausau’s cross-appeal, Wausau first argues that Magistrate Judge Tomlinson

erred in awarding APF prejudgment interest. “We review a district court’s award of prejudgment

interest for an abuse of discretion.” Fed. Ins. Co. v. Am. Home Assurance Co., 639 F.3d 557, 566

(2d Cir. 2011). “Since federal jurisdiction in this case is premised on diversity and the right to

interest on a cause of action qualifies as a substantive right, we must look to New York law.”

Adams v. Lindblad Travel, Inc., 730 F.2d 89, 93 (2d Cir. 1984). The relevant New York statute,

N.Y. CPLR § 5001(a), mandates that “[i]nterest shall be recovered” in non-equitable contract

and property cases like this one.

       Despite this clear statutory command, Wausau contends that the trial court should have

cut off interest before the entry of judgment based on APF’s delay in litigating the case. But in

Spector v. Mermelstein, 485 F.2d 474 (2d Cir. 1973), we expressly rejected the argument that

interest under § 5001(a) may be limited based on the plaintiff’s delay, reversing a district court

that had ruled otherwise. See id. at 482. And since Spector, this Court and the New York Court

of Appeals have repeatedly reiterated the mandatory nature of prejudgment interest under

§ 5001(a) in non-equitable contract and property cases. See, e.g., New Eng. Ins. Co. v.

Healthcare Underwriters Mut. Ins. Co., 352 F.3d 599, 607 (2d Cir. 2003); D’Addario & Co., Inc.

v. Embassy Indus., Inc., 980 N.E.2d 940, 942 (N.Y. 2012).

       In the alternative, Wausau contends that, even if prejudgment interest was mandatory

under state law, the trial court nevertheless had authority to limit interest as an exercise of its


                                                   7
inherent equitable powers. Wausau points out that in Gibbs v. Hawaiian Eugenia Corp., 966

F.2d 101 (2d Cir. 1992), we affirmed a denial of a motion to dismiss for failure to prosecute, but,

based on the plaintiffs’ delay, directed the district court on remand, “in an exercise of its

equitable powers,” to “determine the portion of time for which interest should be allowed.” Id. at

109. However, Gibbs is distinguishable in that, unlike the case at bar, it was not a diversity case

governed by state law, but rather a maritime case governed by federal common law. Under that

latter body of law, the award of prejudgment interest rests in the sound discretion of the district

court, which may deny or limit interest based on, among other things, “the plaintiff’s

responsibility for ‘undue delay in prosecuting the lawsuit.’” City of Milwaukee v. Cement Div.,

Nat. Gypsum Co., 515 U.S. 189, 196 (1995) (quoting Gen. Motors Corp. v. Devex Corp., 461

U.S. 648, 657 (1983)). Wausau’s reliance on Gibbs is thus misplaced.

       Finally, Wausau also challenges Judge Townes’s denial of its motion to dismiss for

failure to prosecute. We review a district court’s ruling on such a motion for abuse of discretion.

See In re World Trade Ctr. Disaster Site Litig., 722 F.3d 483, 486 (2d Cir. 2013). In performing

this review, we consider five principal factors:

       (1) the duration of the plaintiff’s failures; (2) whether plaintiff had received notice
       that further delays would result in dismissal; (3) whether the defendant is likely to
       be prejudiced by further delay; (4) whether the district judge has taken care to
       strike the balance between alleviating court calendar congestion and protecting a
       party’s right to due process and a fair chance to be heard; and (5) whether the
       judge has adequately assessed the efficacy of lesser sanctions.

Martens v. Thomann, 273 F.3d 159, 180 (2d Cir. 2001) (quoting Shannon v. Gen. Elec. Co., 186

F.3d 186, 193–94 (2d Cir. 1999)). “[D]ismissal for failure to prosecute is a ‘harsh remedy to be

utilized only in extreme situations.’” United States ex rel. Drake v. Norden Sys., Inc., 375 F.3d

248, 254 (2d Cir. 2004) (quoting Minnette v. Time Warner, 997 F.2d 1023, 1027 (2d Cir. 1993)).

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        Below, the district court considered these factors and concluded that none favored

dismissing the action. Upon our review of the record, although the district court would have been

well within its discretion to view the factors differently and grant Wausau’s motion, we cannot

say that the district court acted improperly in ruling as it did.

        We have considered all of the parties’ remaining arguments and find them to be without

merit. Accordingly, for the foregoing reasons, the judgment of the district court is AFFIRMED.

                                            FOR THE COURT:
                                            CATHERINE O’HAGAN WOLFE, CLERK




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