Opinion ID: 774879
Heading Depth: 2
Heading Rank: 6

Heading: Number of Deductibles

Text: 95 Count VI of the amended complaint seeks a declaration that Stroh's claim for the recall of bottles filled at the Perry plant is subject to more than one deductible. 96 The declarations accompanying the original Policy provide for a $250,000 deductible for each Accidental Contamination. The Policy itself, however, states in Declaration C of the General Conditions that the deductible(s) stated in Item IV of the declarations will apply separately to each and every Loss. As noted, a Loss includes certain costs incurred by the Insured directly and solely as the result of a covered Insured Event, including Recall Costs incurred... as a result of an Accidental Contamination. And an Accidental Contamination is any accidental or unintentional contamination... of an Insured's Product(s) which occurs during or as a result of its production, preparation, manufacture or packaging. 97 National Union originally contended that a separate deductible would apply to each contaminated bottle, a reading that would effectively have wiped out all insurance coverage. It subsequently modified its position to argue that a separate deductible applies to each proximate, uninterrupted, and continuous cause of contamination, a position with which the district court generally agreed. See National Union III, 2000 WL 264320, at , 2000 U.S. Dist. LEXIS 2581, at . Stroh argued to the district court, as it does on appeal, that that means that the Policy provides for one deductible per recall. 98 The district court concluded that a separate deductible applied to each Loss, with Loss defined not as the full cost of a given recall but as the recall costs attributable to a specific Accidental Contamination. See id., 2000 WL 264320, at , 2000 U.S. Dist. LEXIS 2581, at -. Because a single recall may be required to address more than one Accidental Contamination, the cost of a recall may constitute more than one Loss and thus be subject to more than one deductible. The district court apparently viewed an Accidental Contamination not as a single contaminated bottle, but as a single proximate, uninterrupted, and continuous cause of damages to Stroh. Id., 2000 WL 264320, at , 2000 U.S. Dist. LEXIS 2581, at  (internal quotation marks omitted). It held that [w]here there are several such causes, several deductibles apply. Id. 99 In applying this standard, the district court decided that the uncontested record demonstrates that all of the instances of glass inclusion that led to the recall were attributable to a single cause: the production line flaw. Id. 2000 WL 264320, at , 2000 U.S. Dist. LEXIS 2581, at -. The court noted that, for example, National Union's claims investigator stated in an affidavit that the cause of the contamination was a thermal shock problem[] caused by the production line flaw. The court also noted that the summaries of consumer complaints submitted by National Union show a steady flow of complaints in the months leading up to the recall, with no discernable gaps or spikes that could indicate the existence of varying intervening causes of contamination. 100 On appeal, National Union does not contest the district court's interpretation of the relevant provisions of the Policy. It also concedes that the record thus far does point to a flaw in the production line as the root cause of the problem. National Union points to nothing in the record overlooked or misinterpreted by the district court that indicates more than one proximate, uninterrupted, and continuous cause, to use its own definition, of contamination. 101 National Union's remaining argument is that the district court improperly denied its request pursuant to Fed. R. Civ. P. 56(f) for additional discovery on the cause or causes of glass contaminations at the Perry plant. A party seeking additional discovery under Fed. R. Civ. P. 56(f) to justify its opposition to a summary judgment motion must submit an affidavit explaining, among other things, what facts are sought and how they are to be obtained;... what efforts the affiant has made to obtain those facts; and... why those efforts were unsuccessful. Burlington Coat Factory Warehouse Corp. v. Esprit De Corp., 769 F.2d 919, 926 (2d Cir. 1985). Even where a Rule 56(f) motion is properly supported, a district court may refuse to allow additional discovery if it deems the request to be based on speculation as to what potentially could be discovered. Paddington Partners v. Bouchard, 34 F.3d 1132, 1138 (2d Cir. 1994). We review a district court's refusal to allow additional discovery for abuse of discretion. See Burlington Coat Factory Warehouse Corp., 769 F.2d at 925. 102 Before initiating this litigation, National Union conducted a seventeen-month investigation that included interviews with key Stroh personnel and a visit to the Perry plant. This was followed by eleven months of formal document discovery preceding Stroh's motion for summary judgment. Only depositions under Fed. R. Civ. P. 30 remained. National Union nonetheless failed to produce any evidence that the glass inclusion problem at the Perry plant was attributable to anything other than the single production line flaw. Nor did National Union submit the requisite affidavit describing the nature of the uncompleted discovery that it sought. 7 Instead, it asserted in its opposition papers, as it does on appeal, that it should have been given the opportunity to explore the possibility that variations in individual production runs at the Perry plant may have exacerbated the risk of contamination created by the production line flaw. The district court declined to grant time for additional discovery solely on the basis of [s]uch speculation at this late date. National Union III, 2000 WL 264320, at , 2000 U.S. Dist. LEXIS 2581, at . Under these circumstances, the district court acted within its discretion in refusing to allow additional discovery solely on the basis of such speculation. See Paddington Partners, 34 F.3d at 1138.