These motions are inextricably intertwined because Polo s proposed amended complaint includes a cause of action to reform the contract to eliminate the arbitration clause Gulf invoked. For the reasons stated below, the Court will permit the amendment, schedule a short discovery period to determine the reformation issue and tentatively rule on the motion to compel arbitration. That policy provides coverage for loss of money, securities or other property incurred as a result of an employee s dishonest or fraudulent acts. Gulf does not deny coverage but disputes the amount of the loss. Polo s original complaint alleged that the policy provides that the merchandise be valued at retail selling price.
Gulf contends that the policy provides that the merchandise be valued at replacement value.
Polo contends that if the actual clause provides for replacement value it does not reflect the actual agreement of the parties and that therefore there has been a mutual mistake. Polo requests that the Court enter an order reforming the Insurance Policy to include a selling price valuation clause for finished goods as per the expiring Affiliated FM policy. The Affiliated FM policy refers to a policy Polo had with another company prior to the effective date of the Gulf policy. Polo contends that this reformation, by expunging the current replacement value clause, will eliminate the only reference to arbitration in the entire insurance policy. In the complaint filed by Gulf in New York, Gulf did not seek arbitration.