Summary
holding that tenant could not recover replacement proceeds for WTC improvements it erected because ownership had passed to lessor once improvements were affixed to WTC
Summary of this case from SR International Business Insurance v. World Trade Center Properties, LLCOpinion
03 Civ. 0682 (DAB) (AJP).
July 9, 2003.
REPORT AND RECOMMENDATION
This suit arises from identical insurance policies (the "Policy") that the Bank of Taiwan, Hua Nan Commercial Bank, and Taipei Bank (collectively, "the Banks") purchased from Granite State Insurance Company ("Granite") to cover the Banks' offices in the World Trade Center. (Dkt. No. 1: Compl. ¶¶ 1, 19-24.) After the World Trade Center was destroyed by the September 11, 2001 terrorist attacks (Compl. ¶ 27-28), the Banks submitted insurance claims and Granite compensated them for the actual cash value, but not the replacement cost, of the improvements made to their offices. (E.g., Compl. ¶¶ 1, 6, 9.) The Banks sued, seeking, inter alia, the replacement cost of the leasehold improvements pursuant to the Policy. (Compl. ¶ 4.) Granite refused to pay replacement cost on the ground that upon installation the improvements became the property of the lessor, the Port Authority, and therefore were not covered by the Policy's replacement cost provision. (Compl. ¶ 32 Ex. D.) Presently before the Court are the parties' cross-motions for summary judgment to interpret the unambiguous terms of the Policy. (Dkt. Nos. 13, 17-19, 21: Banks S.J. Papers; Dkt. Nos. 14-16, 20: Granite S.J. Papers.)
For the reasons set forth below, Granite's summary judgment motion should be GRANTED and the complaint dismissed.
FACTS
The Insurance Policy
Bank of Taiwan, Hua Nan Bank, and Taipei Bank each purchased a "Commercial General Liability Insurance Policy, including Commercial Property Coverage" (the "Policy") from Granite (Dkt. No. 1: Compl. ¶¶ 1-4 Exs. A-C), which reads, in relevant part:
The Banks had "substantially identical standard form insurance policies" from Granite. (Compl. ¶ 1; see also Dkt. No. 15: Granite Br. at 1.) Bank of Taiwan's policy period was April 4, 2001 to April 4, 2002 (Compl. ¶ 2 Ex. A); Hua Nan Bank's policy period was January 26, 2001 to January 26, 2002 (Compl. ¶ 3 Ex. B); and Taipei Bank's policy period was November 27, 2000 to November 27, 2001 (Compl. ¶ 4 Ex. C). The Court quotes from the Bank of Taiwan's policy, Exhibit A to the Complaint.
A. COVERAGE
We will pay for direct physical loss of or damage to Covered Property at the premises described in the Declarations caused by or resulting from any Covered Cause of Loss.
1. Covered Property
. . . .
b. Your Business Personal Property located in [the Premises] . . . consisting of the following . . .:
1) Furniture and fixtures;
2) Machinery and equipment;
3) "Stock";
4) All other personal property owned by you and used in your business;
. . . .
6) Your use interest as tenant in improvements and betterments. Improvements and betterments are fixtures, alterations, installations or additions:
a) Made a part of the building or structure you occupy but do not own; and
b) You acquired or made at your expense but cannot legally remove;
. . . .
c. Personal Property of Others that is:
1) In your care, custody or control; and
2) Located in or on [the Premises]. . . .
E. LOSS CONDITIONS
. . . .
7. Valuation
We will determine the value of Covered Property in the event of loss or damage as follows:
a. At actual cash value as of the time of loss or damage, except as provided in b., c., d., e. and f. below.
. . . .
e. Tenant's Improvements and Betterments at:
1) Actual cash value of the lost or damaged property if you make repairs promptly.
2) A proportion of your original cost if you do not make repairs promptly. We will determine the proportionate value as follows:
a) Multiply the original cost by the number of days from the loss or damage to the expiration of the lease; and
b) Divide the amount determined in (a) above by the number of days from the installation of improvements to the expiration of the lease.
If your lease contains a renewal option, the expiration of the renewal option period will replace the expiration of the lease in this procedure.
3) Nothing if others pay for repairs or replacement.
. . . .
G. OPTIONAL COVERAGES
If shown in the declarations, the following Optional Coverages apply separately to each item.
. . . .
2. Replacement Cost
a. Replacement Cost (without deduction for depreciation) replaces Actual Cash Value in the Loss Condition, Valuation, of this Coverage Form.
b. This Optional Coverage does not apply to:
1) Property of others;
. . . .
d. We will not pay on a replacement cost basis for any loss or damage:
1) Until the lost or damaged property is actually repaired or replaced; and
2) Unless the repairs or replacement are made as soon as reasonably possible after the loss or damage.
e. We will not pay more for loss or damage on a replacement cost basis than the least of:
1) The Limit of Insurance applicable to the lost or damaged property;
2) The cost to replace, on the same premises, the lost or damaged property with other property:
a) Of comparable material and quality; and
b) Used for the same purposes; or
3) The amount you actually spend that is necessary to repair or replace the lost or damaged property.
(Compl. Ex. A: "Building and Personal Property Coverage Form" Policy, emphasis added.)
The Banks' Lease with the Port Authority for the World Trade Center Premises
The Banks' lease with the Port Authority for World Trade Center office space included the following provisions:
The Bank of Taiwan — Port Authority lease was for a ten-year term from May 1, 1990 to April 30, 2000. (Dkt. No. 16: Jacobson Aff. Ex. 2: Bank of Taiwan — Port Authority Lease Agreement, ¶ 2.) Bank of Taiwan's lease term was "extended for a period ending on April 30, 2006, unless sooner terminated." (Id., Supplemental Agreement ¶ 2.) The other Banks had leases with the Port Authority containing virtually identical provisions about fixtures. (Dkt. No. 16: Jacobson Aff. Ex. 2; Granite Rule 56.1 Stmt. ¶ 5.).
Section 1. Letting
The Port Authority hereby lets to the Lessee [Bank] and the Lessee hereby hires and takes from the Port Authority, at the World Trade Center (sometimes hereinafter referred to as the "Facility"), in the Borough of Manhattan, City, County and State of New York, the space [as indicated on an exhibit to the lease], together with the fixtures, improvements and other property of the Port Authority located or to be located therein or thereon, the said space, fixtures, improvements and other property of the Port Authority being hereinafter collectively referred to as the "premises.". . . .
. . . .
Section 12. Construction by the Lessee
The Lessee [Bank] shall not erect any structures, make any modifications, alterations, additions, improvements, repairs or replacements or do any construction work on or to the premises, or install any fixtures in or on the premises (other than trade fixtures, removable without injury to the premises) without the prior consent of the Port Authority, and in the event any construction, improvement, alteration, modification, addition, repair or replacement is made or done with or without such consent and unless the consent of the Port Authority shall expressly provide otherwise, the same shall immediately become the property of the Port Authority and the Lessee shall have no right to change or remove the same either during the term or at the expiration thereof. Notwithstanding the forgoing, immediately upon notice from the Port Authority given at any time during the letting, the Lessee shall remove or change any of the same made or done by it without the Port Authority's consent, and in the case of any of the same made or done with the Port Authority's consent, the Lessee if so required by notice from the Port Authority, shall remove or change the same immediately upon the expiration or termination of the letting, or immediately upon receipt of such notice as may be given within sixty (60) days after such expiration or termination. With respect to any modifications, additions, alterations, improvements, installations or construction made or done by the Port Authority at the request of the Lessee either prior to or during the term of the letting, the Lessee shall have the same obligations as provided above with respect to that made or done by the Lessee with the Port Authority's consent.
(Dkt. No. 16: Jacobson Aff. Ex. 2: Bank of Taiwan — Port Authority Lease Agreement, §§ 1, 12.)
A Supplemental Agreement between the Port Authority and Bank of Taiwan made as of October 19, 1999 extended the lease term and further confirmed that:
Title to and property in the construction and installation work and to all fixtures, equipment and systems installed pursuant hereto and any replacement or replacements thereof shall vest in the Port Authority upon the construction, installation or replacement thereof and the Lessee shall execute such necessary documents confirming the same as the Port Authority may require.
(Dkt. No. 16: Jacobson Aff. Ex. 2: Bank of Taiwan — Port Authority Supplemental Agreement, ¶ 4(d).)
Granite Rejects The Banks' Claim for Replacement Cost
After the World Trade Center was destroyed by the September 11, 2001 terrorist attacks (Dkt. No. 1: Compl. ¶¶ 27-28), the Banks submitted insurance claims to Granite on a replacement cost basis. (E.g., Compl. ¶ 1.) The Banks claimed replacement costs of over $2.25 million. (Compl. ¶ 7). Bank of Taiwan claimed replacement costs of $744,663; Hua Nan Bank claimed $826,041; and Taipei Bank claimed $815,786. (Id.) Granite, however, compensated the Banks for the actual cash value, but not the replacement cost, of the improvements made to their offices. (E.g., Compl. ¶ 1.) The amount Granite paid as the actual cash value is not in the record.
Granite's adjusters sent each Bank a virtually identical letter dated June 18, 2002, explaining Granite's position that the Banks improvements were to be valued at actual cash value rather than replacement cost because they were Port Authority property:
Please be advised that we have concluded our evaluation of several elements of [the] claim asserted by [the Banks] and direct your attention to the enclosed Statement of Loss and accompanying schedules which we have prepared for discussion purposes only. . . .
. . . .
Concerning the Leasehold Improvements, AIG Technical Services [Granite's affiliated company] has obtained a legal opinion which confirms that the terms of the lease agreement between Port Authority and [the Banks] stipulate that all improvements upon installation shall become the property of the Port Authority. As you are aware, the Optional Coverage section of the policy contains a Replacement Cost feature. However, this feature does not apply to "Property of Others." Consequently, improvements and betterments are to be valued at actual cash value if the insured makes repairs promptly or a proportion of the original cost if the insured does not make repairs promptly.
(Compl. Ex. D; see also Compl. ¶¶ 8, 32.) The Banks' Complaint
"Granite State has agreed to pay the leasehold improvements claim at actual cash value." (Dkt. No. 8: Granite Motion to Dismiss Reply Br. at 2, citing Compl. Ex. D; accord, Dkt. No. 15: Granite Br. at 1 ("Pursuant to the terms of the Policies, Granite State has agreed to pay the Banks' leasehold improvements claims at actual cash value as delineated in the Policies.").).
The Banks' complaint asserts five causes of action. (Compl. ¶¶ 11, 38-62.) The Banks' first cause of action (Compl. ¶¶ 38-42) seeks a judicial declaration that the Banks are entitled to the replacement cost of the Leasehold Improvements (Compl. ¶¶ 40, 42).
The Banks' second cause of action is for breach of contract, asserting that Granite breached the Policy by "baselessly concluding that the Banks' Leasehold Improvements were not covered by the Insurance Policies and by refusing to pay amounts due to the Banks [for replacement cost] under the Policies." (Compl. ¶¶ 44-45.) In addition to direct damages arising from this alleged breach (Compl. ¶ 45), the Banks seek consequential damages from Granite's "conducting an unreasonable investigation and otherwise delaying in paying" the Banks. (Compl. ¶¶ 46-47.)
The Banks allege that "[a]s a consequence of Granite State's refusal to honor its contractual obligations, the Banks have been forced to spend hundreds of thousands of dollars of their own money, and expend valuable resources replacing the improvements that were in their new offices." (Compl. ¶ 8.) The Banks further allege that "Granite State's delay has cost the Banks' potential future business and impacted and impeded its current business operations." ( Id. ).
The Banks' third cause of action alleges that Granite violated New York General Business Law § 349 because its "baseless decision to deny the Banks' claim related to the Leasehold Improvements . . . is part of a pattern and practice of deceptive acts of wrongfully calculating insurance benefits owed to Granite State's policyholders, including the Banks, by baselessly denying policyholders' rightful insurance coverage for 'Leasehold Improvements.'" (Compl. 51.)
The Banks' fourth cause of action is for breach of Granite's duty of good faith and fair dealing by (1) "failing to adopt reasonable interpretations" of the Policy provisions; (2) "willfully interpreting provisions in the Insurance Policies, and the factual circumstances at issue, to resolve ambiguities and uncertainties against the Banks and in favor of Granite State's own interests"; (3) "failing to provide a reasonable explanation of the basis for denying insurance coverage for the disputed loss amounts"; and (4) "compelling the Banks, through Granite State's wrongful conduct, to initiate the instant litigation to obtain the insurance coverage to which the Banks are entitled under the Insurance Policies." (Compl. ¶ 58.)
Prior Proceedings in this Action
Granite initially moved to dismiss the Banks' second through fourth causes of action for failure to state a claim. (Dkt. Nos. 5, 7-9: Granite Motion to Dismiss Papers.)
At a hearing before this Court on May 21, 2003, the parties agreed that the insurance Policy was unambiguous and "clear on its face" and that, under New York law, contract interpretation is a matter of law to be decided by the court. (5/21/03 Conf. Transcript ["Tr."] 10-11.) The parties further agreed that if Granite's interpretation of the Policy language was correct, Granite would prevail on all of the Banks' claims, so that it made sense to determine the correct interpretation of the Policy before ruling on the motion to dismiss. (Tr. 5-7.) Accordingly, the Court directed the parties to cross-move for summary judgment on the Policy's interpretation (Tr. 12-14), and held Granite's motion to dismiss in abeyance pending determination of the cross-motions for summary judgment regarding the Policy's interpretation (Tr. 14-15).
ANALYSIS
I. STANDARDS FOR CONTRACT INTERPRETATION (INCLUDING INSURANCE POLICY CONTRACT) UNDER NEW YORK LAW
For other decisions by this Judge discussing the standards for contract interpretation under New York law in language substantially similar to that in this entire section of this Report Recommendation, see New Paradigm Software Corp. v.New Era of Networks, Inc., 99 Civ. 12409, 2002 WL 31749396 at *4-7 (S.D.N.Y. Dec. 9, 2002) (Peck, M.J.); Aviation Dev. Co. v. CS Acquisition Corp., 97 Civ. 9302, 1999 WL 46630 at *6 (S.D.N.Y. Feb. 2, 1999) (Peck, M.J.), aff'd, 201 F.3d 430 (2d Cir. 1999).
"It is black letter law that in a diversity action such as this, state substantive law applies." Contri v. Yellow Freight Sys., Inc., 92 Civ. 2603, 1996 WL 87237 at *2 (S.D.N.Y. Feb. 29, 1996) (Peck, M.J.) (citing Erie R.R. v. Tompkins, 304 U.S. 64,78, 58 S.Ct. 817, 822 (1938)). Here, the Banks and Granite State agree that New York substantive law governs this dispute. (5/21/03 Conf. Tr. at 6-7; Dkt. No. 13: Banks Br. at 3, 5; Dkt. No. 18: Banks Reply Br. at 5-6; Dkt. No. 15: Granite Br. at 9-11.) As the Second Circuit has stated, "the parties agree that New York substantive law governs . . . and 'where the parties have agreed to the application of the forum law, their consent concludes the choice of law inquiry.'" Texaco A/S (Denmark) v. Commercial Ins. Co., 160 F.3d 124, 128 (2d Cir. 1998) (quoting American Fuel Corp. v. Utah Energy Dev. Co., 122 F.3d 130, 134 (2d Cir. 1997)); accord, e.g., Bellis v.Tokio Marine Fire Ins. Co., 93 Civ. 6549, 2002 WL 193149 at *13 n. 20 (S.D.N.Y. Feb. 7, 2002).
See also, e.g., Stagl v. Delta Airlines. Inc., 52 F.3d 463, 467 (2d Cir. 1995); Gelb v. Royal Globe Ins. Co., 798 F.2d 38, 44 n. 5 (2d Cir. 1986), cert. denied, 480 U.S. 948, 107 S.Ct. 1608 (1987); Printers II. Inc. v. Professional Publ'g, Inc., 784 F.2d 141, 146 n. 6 (2d Cir. 1986); IBS, Inc. v. Banco Exterior De Espana. Ltd., 98 Civ. 6487, 2001 U.S. Dist. LEXIS 23505 at *8 n. 2 (S.D.N.Y. Jan. 12, 2001);Norfolk Southern Ry. v. Flexi-Van Leasing, Inc., 99 Civ. 0055, 2000 WL 1855112 at *5 n. (S.D.N.Y. Dec. 18, 2000); ABC Radio Network, Inc. v. Lens America, Inc., 97 Civ. 9467, 1999 WL 771360 at *2 (S.D.N.Y. Sept. 28, 1999); Air Support Int'l, Inc. v. Atlas Air, Inc., 54 F. Supp.2d 158, 165 (E.D.N.Y. 1999); Vanguard Mun. Bond Fund, Inc. v. Cantor, Fitzgerald L.P., 40 F. Supp.2d 183, 189 (S.D.N.Y. 1999) (Stein, D.J. Peck, M.J.).
"Under New York law 'the initial interpretation of a contract is a matter of law for the court to decide.' Included in this initial interpretation is the threshold question of whether the terms of the contract are ambiguous." Alexander Alexander Servs., Inc. v. These Certain Underwriters at Lloyd's, 136 F.3d 82, 86 (2d Cir. 1998) (citations omitted); accord, e.g.,W.W.W. Assoc., Inc. v. Giancontieri, 77 N.Y.2d 157, 162, 565 N.Y.S.2d 440, 443 (1990) ("Whether or not a writing is ambiguous is a question of law to be resolved by the court.") Sutton v.East River Sav. Bank, 55 N.Y.2d 550, 554, 450 N.Y.S.2d 460, 462 (1982) ("the threshold decision on whether a writing is ambiguous is the exclusive province of the court").
See, e.g., Augienello v. Coast-to-Coast Financial Corp., No. 02-9043, 64 Fed.Appx. 820, 821-22, 2003 WL 21069080 at *1 (2d Cir. May 9, 2003) (citing International Multifoods Corp. v. Commercial Union Ins. Co., 309 F.3d 76, 83 (2d Cir. 2002)); Norfolk Southern Ry. v. Flexi-Van Leasing. Inc., 2000 WL 1855112 at *5; ABC Radio Network. Inc. v. Lens America. Inc., 1999 WL 771360 at *2; Air Support Int'l, Inc. v. Atlas Air, Inc., 54 F. Supp.2d at 165; see also, e.g., Commercial Union Ins. Co. v. Flagship Marine Servs., Inc., 190 F.3d 26, 33 (2d Cir. 1999); Haber v. St. Paul Guardian Ins. Co., 137 F.3d 691, 695 (2d Cir. 1998); Sayers v.Rochester Tel. Corp., 7 F.3d 1091, 1094 (2d Cir. 1993);Seiden Assoc., Inc. v. ANC Holdings. Inc., 959 F.2d 425, 429 (2d Cir. 1992); Berman v. Parco, 986 F. Supp. 195, 209 (S.D.N.Y. 1997) (Wood, D.J. Peck, M.J.); EJS-ASOC Ticaret ve Danismanlik Ltd. v. ATT, 886 F. Supp. 331, 334 (S.D.N.Y. 1994); Chase Manhattan Bank, N.A. v. Keystone Distrib. Inc., 873 F. Supp. 808, 811 (S.D.N.Y. 1994).
Under New York law, the construction of an unambiguous contract is a matter of law, appropriate for summary judgment resolution. See, e.g., Adirondack Transit Lines, Inc. v. United Transp. Union, Local 1582, 305 F.3d 82, 85 (2d Cir. 2002) ("'The proper interpretation of an unambiguous contract is a question of law for the court, and a dispute on such an issue may properly be resolved by summary judgment.'") (quoting Omni Quartz, Ltd. v. CVS Corp., 287 F.3d 61, 64 (2d Cir. 2002)); Bouzo v. Citibank, N.A., 96 F.3d 51, 58 (2d Cir. 1996); Nowak v. Ironworkers Local 6 Pension Fund, 81 F.3d 1182, 1192 (2d Cir. 1996); Sayers v. Rochester Tel. Corp., 7 F.3d at 1094; Seiden Assoc., Inc. v. ANC Holdings. Inc., 959 F.2d at 428; Metropolitan Life Ins. Co. v. RJR Nabisco, Inc., 906 F.2d 884, 889 (2d Cir. 1990).
The summary judgment standards under Rule 56, Fed.R.Civ.P., are well-known and will not be set out here.See, e.g., Aviation Dev. Co. v. CS Acquisition Corp., 1999 WL 46630 at *7 n. 6; Fleet Capital Corp. v. Yamaha Motor Corp., 01 Civ. 1047, 2002 WL 31174470 at *10-11 n. 16 (S.D.N.Y. Sept. 26, 2002) (Peck, M.J.) ( cases cited therein);Brown v. Cushman Wakefield. Inc., 01 Civ. 6637, 2002 WL 1751269 at *12-13 (S.D.N.Y. July 29, 2002) (Peck, M.J.), report rec. adopted, 235 F. Supp.2d 291 (2002); Hogan v.Metromail, 99 Civ. 11204, 2002 WL 373245 at *11-13 (S.D.N.Y. Mar. 8, 2002) (Peck, M.J.); Cobian v. New York City, 99 Civ. 10533, 2000 WL 1782744 at *7 (S.D.N.Y. Dec. 6, 2000) (Peck, M.J.), aff'd, No. 01-7575, 2002 WL 4594 at *1 (2d Cir. Dec. 21, 2001); Austin v. Ford Models, Inc., 95 Civ. 3731, 2000 WL 1752966 at *6 (S.D.N.Y. Nov. 29, 2000) (Peck, M.J.), aff'd, No. 01-7030, 2001 WL 1562070 at *1 (2d Cir. Dec. 4, 2001), cert. denied, 123 S.Ct. 189 (2002); Douglas v. Victor Capital Group, 21 F. Supp.2d 379, 387-88 (S.D.N.Y. 1998) (Stein, D.J. Peck, M.J.); Mariani v. Consolidated Edison Co., 982 F. Supp. 267, 271-273 (S.D.N.Y. 1997) (Peck, M.J.), aff'd, No. 97-9502, 172 F.3d 38 (table), 1998 WL 961111 (2d Cir. Jan. 25, 1998).
See also, e.g., Nicholas Labs. Ltd. v. Almay, Inc., 900 F.2d 19, 21 (2d Cir. 1990); Hunt Ltd. v.Lifschultz Fast Freight. Inc., 889 F.2d 1274, 1277 (2d Cir. 1989); Norfolk Southern Ry. v. Flexi-Van Leasing. Inc., 2000 WL 1855112 at *5; ABC Radio Network. Inc. v. Lens American Inc., 1999 WL 771360 at *3; Air Support Int'l, Inc. v. Atlas Air, Inc., 54 F. Supp.2d at 165; Berman v. Parco, 986 F. Supp. at 208-09; Chase Manhattan Bank, N.A. v. Keystone Distrib. Inc., 873 F. Supp. at 810-11; Royal Bank of Canada v.Mahrle, 818 F. Supp. 60, 62 (S.D.N.Y. 1993); Broadway Nat'l Bank v. Progressive Cas. Ins. Co., 775 F. Supp. 123, 126 (S.D.N.Y. 1991), aff'd mem., 963 F.2d 1522 (2d Cir. 1992).
Where the terms of an agreement are clear and unambiguous, the Court will not look beyond the "four corners" of the agreement, and parol evidence of the parties' intentions is inadmissible.E.g., R/S Assoc. v. New York Job Dev. Auth., 98 N.Y.2d 29, 33, 744 N.Y.S.2d 358, 360 (2002) ("Unless the court finds ambiguity, the rules governing the interpretation of ambiguous contracts do not come into play. Thus, when interpreting an unambiguous contract term [e]vidence outside the four corners of the document . . . is generally inadmissible to add to or vary the writing. [E]xtrinsic and parol evidence is not admissible to create an ambiguity in a written agreement which is complete and clear and unambiguous upon its face.") (ellipsis brackets in original, citations internal quotations omitted) (quotingW.W.W. Assoc. Inc. v. Giancontieri, 77 N.Y.2d at 162-63, 565 N.Y.S.2d at 443); Weissman v. Sinorm Deli, Inc., 88 N.Y.2d 437, 447, 646 N.Y.S.2d 308, 313 (1996) ("[W]hen parties set down their agreement in a clear, complete document, evidence outside the four corners of the document as to what was actually intended is generally inadmissible."); Wells v. Shearson Lehman/American Express, Inc., 72 N.Y.2d 11, 19, 530 N.Y.S.2d 517, 521 (1988); see, e.g., RJE Corp. v. Northville Indus. Corp., 329 F.3d 310, 314 (2d Cir. 2003) ("Where a 'contract is clear and unambiguous on its face, the intent of the parties must be gleaned from within the four corners of the instrument, and not from extrinsic evidence.'") (quoting De Luca v. De Luca, 300 A.D.2d 342, 342, 751 N.Y.S.2d 766, 766 (2d Dep't 2002)); Feifer v. Prudential Ins. Co., 306 F.3d 1202, 1210 (2d Cir. 2002) ("It is axiomatic that where the language of a contract is unambiguous, the parties' intent is determined within the four comers of the contract, without reference to external evidence."); Omni Quartz. Ltd. v. CVS Corp., 287 F.3d at 64; In re Revere Armored. Inc., No. 976112, 131 F.3d 132 (table), 1997 WL 794460 at *3 (2d Cir. Dec. 30, 1997) ("When the terms of a contract are clear and unambiguous, this Court will not look beyond the four corners of the contract itself to interpret the parties' intentions."); Mizuna, Ltd. v.Crossland Fed. Sav. Bank, 90 F.3d 650, 660 (2d Cir. 1996) (quoting W.W.W. Assoc., Inc. v. Giancontieri, supra);Goldman v. Commissioner of Internal Revenue, 39 F.3d 402 406 (2d Cir. 1994); Goodheart Clothing Co. v. Laura Goodman Enter. Inc 962 F.2d 268,272 (2d Cir. 1992); Seiden Assoc., Inc. v. ANC Holdings, Inc., 959 F.2d at 428.
See also, e.g. Nicholas Labs. Ltd. v. Almay, Inc., 900 F.2d at 20; Burger King Corp. v. Horn Hardart Co., 893 F.2d 525, 527 (2d Cir. 1990); Daigle v. West, No. 5:00-CV-189, 5:00-CV-1055, 2002 WL 31177712 at *8 (N.D.N.Y. Nov. 6, 2002); New Avex, Inc. v. Socata Aircraft. Inc., 02 Civ. 6519, 2002 WL 1998193 at *5 (S.D.N.Y. Aug. 29, 2002) ("'It is the primary rule of construction of contracts that when the terms of a written contract are clear and unambiguous, the intent of the parties must be found within the four corners of the contract, giving a practical interpretation to the language employed and the parties' reasonable expectations.'") (quotingMarshall v. Marshall, 264 A.D.2d 826, 827, 695 N.Y.S.2d 595, 596 (2d Dep't 1999), appeal dismissed in part denied in part, 94 N.Y.2d 894,706 N.Y.S.2d 696 (2000)); Schafrann v.Venezuela, 01 Civ. 10637, 2002 WL 1766446 at *2 (S.D.N.Y. July 31, 2002) (quoting W.W.W. Assoc., Inc. v. Giancontieri, supra); Municipal Capital Appreciation Ptnrs. I, L.P. v.Page, 181 F. Supp.2d 379, 390-92 (S.D.N.Y. 2002); ABC Radio Network. Inc. v. Lens America, Inc., 1999 WL 771360 at *3;Berman v. Parco, 986 F. Supp. at 209; G.D. Searle Co. v.Medicore Communications Inc., 843 F. Supp. 895, 906 (S.D.N.Y. 1994); Royal Bank of Canada v. Mahrle, 818 F. Supp. at 62;Broadway Nat'l Bank v. Progressive Cas. Ins. Co., 775 F. Supp. at 126-27; Health-Chem Corp. v. Baker, 737 F. Supp. 770, 773 (S.D.N.Y.), aff'd mem., 915 F.2d 805 (2d Cir. 1990);Adler Shaykin v. Wachner, 721 F. Supp. 472, 476, 479 (S.D.N.Y. 1988).
Specifically, in the context of an insurance policy,
"The New York approach to the interpretation of contracts of insurance is to give effect to the intent of the parties as expressed in the clear language of the contract. Unambiguous terms are to be given their plain and ordinary meaning, and ambiguous language should be construed in accordance with the reasonable expectations of the insured when he entered into the contract."United States v. American Home Assurance Co., 94 Civ. 7621, 2003 WL 21436219 at *2-3 (S.D.N.Y. June 19, 2003) (quotingMcCarthy v. American Int'l Group, 283 F.3d 121, 124 (2d Cir. 2002)) (internal quotations omitted). Moreover, "'[w]here the terms of an insurance policy are clear and unambiguous, they should be given their plain and ordinary meaning, and courts should refrain from rewriting the agreement. However, where the policy is ambiguous and susceptible of two reasonable interpretations, extrinsic evidence may be admitted to resolve the ambiguity.'" United States v. American Home Assurance Co., 2003 WL 21436219 at *3 (quoting Matter of Ideal Mut. Ins. Co., 231 A.D.2d 59, 63, 659 N.Y.S.2d 273, 275 (1st Dep't 1997)).
See also, e.g., Commercial Union Ins. Co. v.Flagship Marine Servs., Inc., 190 F.3d at 32-33 ("'The starting point in interpreting an insurance policy is to determine whether the policy terms are ambiguous. As a general rule, plain or unambiguous language will be given its ordinary meaning and effect and the need to resort to rules of construction arises only when an ambiguity exists.' 'As with contracts generally, a provision in an insurance policy is ambiguous when it is reasonably susceptible to more than one reading.'") (citations omitted); Andy Warhol Found. for the Visual Arts, Inc. v. Federal Ins. Co., 189 F.3d 208,215 (2d Cir. 1999) ("[A]n insurance policy, like any contract, must be construed to effectuate the intent of the parties as derived from the plain meaning of the policy's terms. . . . If the language of the insurance policy is unambiguous, we apply its terms. Where its terms are reasonably susceptible to more than one interpretation, the policy must be regarded as ambiguous.").
"Contract language is not ambiguous if it has a 'definite and precise meaning . . . concerning which there is no reasonable basis for a difference of opinion.'" Hunt Ltd. v. Lifschultz Fast Freight, Inc., 889 F.2d at 1277 (quoting Breed v. Ins. Co. of N. Am., 46 N.Y.2d 351, 355, 413 N.Y.S.2d 352, 355 (1978)). Conversely, a contract is ambiguous if it is reasonably susceptible to more than one meaning. E.g., Chimart Assoc. v. Paul, 66 N.Y.2d 570, 763,498 N.Y.S.2d 344, 346 (1986) (to determine if ambiguity exists in contract court must determine "whether the agreement on its face is reasonably susceptible of more than one interpretation"); St. Mary v.Paul Smith's Coll. of Arts Sciences, 247 A.D.2d 859, 859, 668 N.Y.S.2d 813, 813 (4th Dep't 1998) (same, quotingChimart); Hutzel v. United States Aviation Underwriters. Inc., 132 A.D.2d 45, 49, 522 N.Y.S.2d 301, 303 (3d Dep't 1987) ("an ambiguity exists . . . when a term 'is capable of more than one meaning'"), appeal denied, 71 N.Y.2d 804, 528 N.Y.S.2d 829 (1988); Walk-In Med. Ctrs., Inc. v. Breuer Capital Corp., 818 F.2d 260, 263 (2d Cir. 1987) ("An 'ambiguous' word or phrase is one capable of more than one meaning when viewed objectively by a reasonably intelligent person who has examined the context of the entire integrated agreement and who is cognizant of the customs, practices, usages and terminology as generally understood in the particular trade or business."); Health-Chem Corp. v. Baker, 737 F. Supp. at 773 ("[A] term is ambiguous when it is 'capable of more than one meaning when viewed objectively by a reasonably intelligent person who has examined the context of the entire integrated agreement . . .'").
Accord, e.g., RJE v. Northville Indus. Corp., 329 F.3d at 314; Nowak v. Ironworkers Local 6 Pension Fund, 81 F.3d at 1192; Sayers v. Rochester Tel. Corp., 7 F.3d at 1095; Seiden Assoc., Inc. v. ANC Holdings, Inc., 959 F.2d at 428; Norfolk Southern Ry. v. Flexi-Van Leasing, Inc., 2000 WL 1855112 at *5; ABC Radio Network, Inc. v. Lens America, Inc., 1999 WL 771360 at *3; Air Support Int'l, Inc. v. Atlas Air, Inc., 54 F. Supp.2d at 165.
See, e.g. Lipari v. Maines Paper Food Serv., Inc., 245 A.D.2d 1085, 1085, 667 N.Y.S.2d 548, 549 (4th Dep't 1997);Levey v. A. Leventhal Sons, Inc., 231 A.D.2d 877, 877, 647 N.Y.S.2d 597, 597 (4th Dep't 1996); Arrow Communication Labs., Inc. v. Pico Prods., Inc., 206 A.D.2d 922, 922-923, 615 N.Y.S.2d 187,188 (4th Dep't 1994); American Express Bank Ltd. v. Uniroyal. Inc., 164 A.D.2d 275, 277, 562 N.Y.S.2d 613, 614 (1st Dep't 1990) ("A contract should be construed so as to give full meaning and effect to all of its provisions."), appeal denied, 77 N.Y.2d 807, 569 N.Y.S.2d 611 (1991); see also, e.g., Alexander Alexander Servs., Inc. v. These Certain Underwriters at Lloyd's, 136 F.3d at 86; Sayers v. Rochester Tel. Corp., 7 F.3d at 1095; Goodheart Clothing Co. v. Laura Goodman Enter., Inc., 962 F.2d at 272; Seiden Assoc., Inc. v.ANC Holdings, Inc., 959 F.2d at 428; Norfolk Southern Rv. Flexi-Van Leasing. Inc., 2000 WL 1855112 at *5; Berman v.Parco, 986 F. Supp. at 209 n. 9 (citing cases).
Clear contractual language does not become ambiguous simply because the parties to the litigation argue different interpretations. E.g., Bethlehem Steel Co. v. Turner Constr. Co., 2 N.Y.2d 456,460, 161 N.Y.S.2d 90, 93 (1957) ("Mere assertion by one that contract language means something to him, where it is otherwise clear, unequivocal and understandable when read in connection with the whole contract, is not in and of itself enough to raise a triable issue of fact."); Moore v. Kopel, 237 A.D.2d 124,125, 653 N.Y.S.2d 927, 929 (1st Dep't 1997) ("[A] contract is not rendered ambiguous just because one of the parties attaches a different, subjective meaning to one of its terms."); see, e.g., Sayers v. Rochester Tel. Corp., 7 F.3d at 1095; Seiden Assoc., Inc. v. ANC Holdings, Inc., 959 F.2d at 428 ("The language of a contract is not made ambiguous simply because the parties urge different interpretations."); Metropolitan Life Ins. Co. v. RJR Nabisco, Inc., 906 F.2d at 889 ("Language whose meaning is otherwise plain is not ambiguous merely because the parties urge different interpretations in the litigation.").
See also, e.g., Hunt Ltd. v. Lifschultz Fast Freight. Inc. 889 F.2d at 1277; Norfolk Southern Ry. v.Flexi-Van Leasing, Inc., 2000 WL 1855112 at *6; ABC Radio Network, Inc. v. Lens America. Inc., 1999 WL 771360 at *3;Air Support Int'l, Inc. v. Atlas Air, Inc., 54 F. Supp.2d at 165-66; Berman v. Parco, 986 F. Supp. at 210; EJS-ASOC Ticaret v. ATT, 886 F. Supp. at 334; Chase Manhattan Bank, N.A. v. Keystone Distrib., Inc., 873 F. Supp. at 811;Broadway Nat'l Bank v. Progressive Cas. Ins. Co., 775 F. Supp. at 126; Health-Chem Corp. v. Baker, 737 F. Supp. at 773.
"[W]hen ambiguity exists and the resolution of the ambiguity hinges on such extrinsic matters as the credibility of witnesses or documents or upon choosing one among several reasonable inferences that may be drawn from such extrinsic evidence, a jury, and not a court, should decide what meaning is to be ascribed to the contract." Chase Manhattan Bank, N.A. v.Keystone Distrib., Inc., 873 F. Supp. at 811. However, it is the Court's role to determine the value or existence of extrinsic evidence produced by the parties. Uniroyal, Inc. v.Home Ins. Co., 707 F. Supp. 1368,1375 (E.D.N.Y. 1988) (Weinstein, D.J.) ("The appraisal of the value or existence of extrinsic evidence is for the court as a matter of substantive law."). Thus, even when a contract is ambiguous, if the parol evidence offered by the parties does not resolve that ambiguity, or after opportunity to do so the parties do not offer extrinsic evidence to resolve the ambiguity, the Court must construe the contract as a matter of law on a summary judgment motion.E.g., State of New York v. Home Indem. Co., 66 N.Y.2d 669, 671, 495 N.Y.S.2d 969, 971 (1985) ("[I]f the tendered extrinsic evidence is itself conclusory and will not resolve the equivocality of the language of the contract, the issue remains a question of law for the court."); Kenavan v. Empire Blue Cross Blue Shield, 248 A.D.2d 42,677 N.Y.S.2d 560, 563 (1st Dep't 1998) (where the "evidence introduced by the parties extrinsic to the [contract] was not dispositive of the [interpretation] issue . . . the proper interpretation is an issue of law for the court"); Primavera v. Rose Kiernan, Inc., 248 A.D.2d 842, 670 N.Y.S.2d 223, 224-25 (3d Dep't 1998) ("If, however, extrinsic evidence does not resolve the ambiguity, the interpretation of the ambiguous contract terms remain a question of law for the court."); Econo Truck Body Equip., Inc. v. Guaranty Nat'l Ins. Co., 162 A.D.2d 913, 915, 557 N.Y.S.2d 991, 993 (3d Dep't 1990).
See also, e.g., Seiden Assoc., Inc. v. ANC Holdings, Inc., 959 F.2d at 428; Burger King Corp. v. Horn Hardart Co., 893 F.2d at 528; Wards Co. v. Stamford Ridgeway Assoc., 761 F.2d 117, 120 (2d Cir. 1985); Norfolk Southern Ry. v. Flexi-Van Leasing, Inc., 2000 WL 1855112 at *6; ABC Radio Network, Inc. v. Lens America, Inc., 1999 WL 771360 at *3; Berman v. Parco, 986 F. Supp. at 210.
See also, e.g., Alexander Alexander Servs., Inc. v.These Certain Underwriters at Lloyd's, 136 F.3d at 86 (where no extrinsic evidence exists, court may grant summary judgment);Chase Manhattan Bank v. American Nat'l Bank Trust Co., 93 F.3d 1064, 1073 (2d Cir. 1996) ("Summary judgment may be proper in a contract action if . . . the contract is ambiguous but there is no relevant extrinsic evidence of the parties' actual intent."); McCostis v. Home Ins. Co., 31 F.3d 110, 113 (2d Cir. 1994); General Star Indem. Co. v. Custom Editions Upholstery Corp., 940 F. Supp. 645, 655 (S.D.N.Y. 1996);Uniroyal, Inc. v. Home Ins. Co., 707 F. Supp. at 1374-75 (leading case).
Here, the parties agree that the Policy is clear and unambiguous, and they have not offered any extrinsic evidence to its meaning. (See 5/21/03 Conf. Tr. at 10-11; Dkt. No. 13: Banks Br. at 1 ("The Banks do note, however, that the insurance policies are unambiguous in their scope. . . ."); Dkt. No. 18: Banks Reply Br. at 2 ("In its briefs before this Court, Granite State correctly argues that its insurance policies are unambiguous. Granite State is also correct that the Court does not need to consider extrinsic evidence to rule on the appropriate interpretation of the insurance policies. . . ."); Dkt. No. 15: Granite Br. at 8 ("The Court need not look to extrinsic evidence since the policy language is unambiguous.").)
The Court thus turns to interpretation of the Policy as a matter of law on this summary judgment motion.
II. GRANITE SHOULD BE GRANTED SUMMARY JUDGMENT BECAUSE THE BANKS' LEASEHOLD IMPROVEMENTS BECAME PORT AUTHORITY PROPERTY UPON INSTALLATION AND THE BANKS ARE NOT ENTITLED TO REPLACEMENT COSTS FOR THE PROPERTY OF OTHERS
The Policy is clear and unambiguous. It provides coverage for the Banks' "use interest as tenant in improvements and betterments" that the Banks "made at [their] expense but cannot legally remove." (Compl. Ex. A: Policy, § A(1)(b).) As to theamount of coverage, the Policy provides that the value of "Tenant's Improvements and Betterments" is "actual cash value." (Id., § E(7)(a), (e).) The Policy's "Optional Coverage" section provides that "Replacement Cost . . . replaces Actual Cash Value," but specifically provides that "[t]his optional coverage does not apply to: 1) property of others." (Id., § G(2)(a)-(b).) Thus, recovery under the Policy for "property of others" is only for actual cash value, not replacement cost.
The issue, therefore, is whether the improvements and betterments that the Bank had installed in its World Trade Center premises are "property of others."
It is undisputed that under the Banks' leases with the Port Authority, fixtures became the Port Authority's property immediately upon installation. (See pages 6-7 above.) Indeed, the very Policy definition of "improvements and betterments" as "fixtures, alterations, installations or additions . . . [y]ou acquired or made at your expense but cannot legally remove" (Compl. Ex. A: Policy, § A(1)(b)(6)) clearly indicates that the improvements were not the Banks' property. In fact, the Banks agree that "[t]he installation of improvement[s] and betterments become a part of the building and cannot be legally removed." (Dkt. No. 18: Banks Reply Br. at 3.) The Banks assert, however, that "this was contemplated by Granite State when it sold these insurance policies" which "is why the 'use interest' of improvements and betterments that cannot be removed are specifically covered by the insurance policies." (Id.) The latter part of the Banks' argument is a red herring: Granite does not dispute that the Banks had a covered insurable use interest in the improvements and betterments. (Dkt. No. 20: Granite Reply Br. at 3.) "Granite State recognizes that the Banks have an insurable interest under the Policies in their leasehold improvements. This is why Granite State paid the Banks for those leasehold improvements at actual cash value. . . .The issue is whether those leasehold improvements are covered at replacement cost or actual cash value." (Id.)
Insurance treatises recognize that where the lessor owns the improvements, the lessor has an insurable interest in them, but the lessee has an insurable interest in the use of those fixtures and improvements. See, e.g., C-Suzanne Beauty Salon, Ltd. v. General Ins. Co. of America, 574 F.2d 106, 113 (2d Cir. 1978) (Second Circuit "assume[d], without deciding, that in the absence of a controlling policy provision a New York court would award only the value of the improvements and betterments for the unexpired term of the lease if presented with a case in which they would lawfully become the property of the lessor at the expiration of the lease.") (citing Lighting Fixture Supply Co. v. Fidelity Union Fire Ins. Co., 55 F.2d 110, 113 (5th Cir.) ("As the betterments and improvements installed in the building passed to the owner at the expiration of the lease, in part consideration for the rent, [lessee] could not sell them, or remove them, or recover their value. It had no other insurable interest than the right to use them until the expiration of the lease."), cert. denied, 286 U.S. 558, 52 S.Ct. 641 (1932), Grand Forks Seed Co. v. Northland Greyhound Lines, Inc., 168 F. Supp. 882, 884-85 (D. N. Dak. 1959) ("The lessee had no insurable interest other than the right to use the improvements and betterments until the expiration of the lease.")); 12 Couch on Insurance § 42:60 (2003) ("A lessor has an insurable interest in any permanent improvements, fixtures, and repairs made by his or her lessee . . ."); 12 Couch on Insurance § 178:71 ("[W]here betterments and improvements pass to the lessor on termination of the lease, the lessee, upon their destruction, can recover only the value of their use, since that measures his or her insurable interest. Thus, where a lessee makes improvements which become 'immovables' and cannot be removed by him or her, and the lessee insures the same under a valued policy, he or she can recover only the value of the use thereof for the balance of the term of his or her lease.") (fns. omitted); 70A N.Y.Jur.2d Insurance § 2033 (2003) ("Where there is no policy provision controlling who bears the loss of improvements and betterments made by the insured lessee where such improvements lawfully become the property of the lessor at the expiration of the lease, the lessee is awarded only the value of the improvements for the unexpired term of the lease and not the full value of such improvements."); Annotation, Improvements Betterments Insurance, 97 A.L.R.2d 1243, § 5 (1964) ("In estimating the recovery under a policy insuring improvements and betterments, the courts usually take into consideration the nature and extent of the lessee's interest in the improvements, recognizing that where the improvements become a part of the realty and pass to the lessor in accordance with and at the expiration of the lease, such an interest is less than absolute, entitling the lessee to something less than the full cost or value of the damaged or destroyed improvements. Where partial damages are allowed, they are usually based upon the value of the lessee's 'use' interest in the improvements for the remainder of the term of the lease.").
The Policy clearly states that the optional Replacement Cost coverage does not apply to "[p]roperty of others." (Policy, § G(2)(b)(1).) The leasehold improvements are, by the Policy definition and the Port Authority lease, "property of others,"i.e., the property of the Port Authority, not the Banks. Accordingly, the Banks' use interest in the improvements is covered, but only for actual cash value, not replacement cost.
The Court rejects the Banks' claim that the replacement cost exclusion for "[p]roperty of others" in § G(2)(b) refers to "Personal Property of Others" as defined in § A(1)(c). (Dkt. No. 13: Banks Br. at 4.) "Personal Property of Others" — such as bailment items (e.g., property of a Banks' customer in a safe deposit box at the premises) — is a subset of "property of others." The Policy drafters knew how to use the term"personal property of others" and the Court cannot read "property of others," a different and broader term, to merely have the same meaning as personal property of others. Property of others includes personal property of others, but is not so limited; it also includes leasehold improvements that are the property of the lessor Port Authority. Nor does this interpretation render the replacement cost coverage meaningless. Replacement cost coverage still applies to the Banks' furniture, machinery, equipment, and "other personal property owned by [the Banks] and used in [their] business" (Policy, § A(1)(b)(1)-(4)) — just not to improvements that are the Port Authority's property (or to the Banks' use interest in those improvements).
The Banks' "use interest" in the improvements is what gives them an insurable interest in the improvements (since they do not own them). (See authorities cited at page 21 fn. 17.) The parties' briefs make clear that they both consider the value of the use interest to be identical to the value of the improvements. Exclusion of the improvements as property of others from replacement value accordingly excludes the Banks' use interest in the improvements from replacement value. There is no difference for this purpose between the improvements themselves and the Banks' use interest in the improvements.
The Banks' interest in the leasehold improvements, as provided in their leases with the Port Authority, contrasts to lessee's rights in cases where the lease expressly reserves to the lessee title to leasehold improvements. See, e.g., Modern Music Shop v. Concordia Fire Ins. of Milwaukee, 131 Misc. 305, 307, 309, 226 N.Y.S. 630, 634, 635 (Mun. Ct. 1927) (insured entitled to recover for fire damage to improvements and betterments where it was an "undisputed fact that the landlord expressly agreed that the plaintiff [lessee] should have the absolute title to the improvements and betterments which it made" and court found plaintiff lessee "was at all times the absolute owner" of the improvements and betterments.) Here, in contrast, under the lease the improvements immediately became the property of the Port Authority (see pages 6-7 above), the Banks only had a use interest in the improvements, and the improvements were not the Banks' "property."
See also, e.g., Lumbermens Mut. Ins. Co. v. Cantex Mfg. Co., 262 F.2d 63, 66 n. 3 (5th Cir. 1958) (noting in dicta, "the fact that the insured installed [an improvement or betterment] at its own expense and for its own use, and had the right to remove it at the end of its lease, would seem to increase the value of its interest in the improvement from a mere 'use value' to full replacement cost value") (citingModern Music Shop v. Concordia Fire Ins. Co.).
The parties have not cited to any cases specifically dealing with the issue before the Court. The Court's research has turned up one case, directly on point (albeit from a different state) that reached the same conclusion as this Report and Recommendation has reached. Teague-Strebeck Motors. Inc. v.Chrysler Ins. Co., 127 N.M. 603, 619, 985 P.2d 1183, 1199 (1999) (The lower court did not err in awarding the insured the actual cash value rather than replacement cost where insured "may have had an insurable interest" in the property but "did not have an ownership interest in the property" and replacement cost provision excluded coverage for "[p]roperty of others."),appeal denied, 127 N.M. 391, 981 P.2d 1209 (1999).
Because the Banks' leasehold improvements became the property of the Port Authority upon installation, and the Policy's Replacement Cost provision does not apply to the "property of others," the Court finds that Granite properly compensated the Banks for the actual cash value of the improvements and betterments.
CONCLUSION
For the reasons set forth above, the Court should grant summary judgment to Granite dismissing the Banks' complaint in its entirety. This Report and Recommendation moots Granite's original motion to dismiss the second through fourth causes of action of the Banks' complaint.
FILING OF OBJECTIONS TO THIS REPORT AND RECOMMENDATION
Pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure, the parties shall have ten (10) days from service of this Report to file written objections. See also Fed.R.Civ.P. 6. Such objections (and any responses to objections) shall be filed with the Clerk of the Court, with courtesy copies delivered to the chambers of the Honorable Deborah A. Batts, 500 Pearl Street, Room 2510, and to my chambers, 500 Pearl Street, Room 1370. Any requests for an extension of time for filing objections must be directed to Judge Batts. Failure to file objections will result in a waiver of those objections for purposes of appeal. Thomas v. Arn, 474 U.S. 140, 106 S.Ct. 466 (1985); IUE AFL-CIO Pension Fund v. Herrmann, 9 F.3d 1049, 1054 (2d Cir. 1993), cert. denied, 513 U.S. 822, 115 S.Ct. 86 (1994); Roldan v. Racette, 984 F.2d 85, 89 (2d Cir. 1993); Frank v. Johnson, 968 F.2d 298, 300 (2d Cir.), cert. denied, 506 U.S. 1038, 113 S.Ct. 825 (1992); Small v. Secretary of Health Human Servs., 892 F.2d 15,16 (2d Cir. 1989); Wesolek v. Canadair Ltd., 838 F.2d 55, 57-59 (2d Cir. 1988); McCarth v. Manson, 714 F.2d 234, 237-38 (2d Cir. 1983); 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72, 6(a), 6(e).