CX Reinsurance Company Limited v. B&R Management, Inc., 1:15-cv-03364

CX Re filed suit seeking rescission of two 1997–1998 general liability policies issued to Jessica‑Carl, B&R Management, and others, alleging material misrepresentations on the insurance application regarding prior lead‑paint violations and asserting damages for costs paid defending and settling lead‑exposure claims.
CX Re alleges it first learned of the alleged misrepresentation during a broad underwriting review in August 2015 and sued in November 2015.
Discovery dispute: Jessica‑Carl moved to compel responses to Requests for Production Nos. 7, 8, and 10 and for a privilege log; CX Re initially objected on relevance and privilege grounds and declined substantive response pending a settlement-in-principle with B&R Management that later collapsed.
CX Re sought leave to supplement its opposition after the settlement fell through; Jessica‑Carl opposed that supplementation and moved to seal portions of filings that referenced sealed exhibits.
Magistrate Judge Gallagher granted CX Re leave to supplement, granted the sealing motion, ordered CX Re to produce underwriting‑review documents relating to B&R Management (Request No.10) within 14 days, and denied the motion to compel as to Requests Nos. 7 and 8 concerning post‑coverage claim‑handling.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Motion to supplement CX Re’s opposition	CX Re sought leave to file a supplement after its settlement fell through to address substance	Jessica‑Carl argued CX Re delayed and should suffer consequences for failing to timely oppose	Granted: Court allowed a surreply under Local Rule 105.2(a) because supplement narrowed objections and aided resolution
Request No. 10 (documents re: underwriting review)	Only documents related to B&R Management are relevant; privilege objections abandoned	Jessica‑Carl sought all documents of the broad underwriting review to test timeliness of CX Re’s discovery of the misrepresentation and defenses	Granted in part: CX Re must produce underwriting‑review documents pertaining to B&R Management; documents about other insureds are not relevant
Requests Nos. 7 & 8 (post‑issuance claims handling re: lead‑violation notices)	Such documents across all insureds show whether misrepresentation was material to underwriting decisions	Jessica‑Carl contended post‑coverage conduct shows materiality and is proportional to the case value	Denied: Court held post‑coverage claims handling does not bear on pre‑coverage underwriting materiality and would require impermissible speculation

Monumental Life Ins. Co. v. U.S. Fid. & Guar. Co., 94 Md. App. 505 (discusses fact‑specific inquiry into discovery of misrepresentation for rescission)
William Rounds v. Md.-Nat’l Capital Park & Planning Comm’n, 109 A.3d 639 (Md. 2015) (addresses accrual and notice principles relevant to when claims arise for statute of limitations and rescission questions)