SUMMARY ORDER ADOPTING REPORT AND RECOMMENDATION
Plaintiffs Mark and Yanis Gelfinan (“Plaintiffs” or the “Gelfmans”) filed this action against Defendants (“Defendants” or “Capitol”), alleging that Capitol breached its contractual obligations under two insurance policies when it disclaimed coverage of the Plaintiffs in a lawsuit commenced by Yuri and Dmitri Kuklachev (the “Kuklaehevs”), arising out of Plaintiffs’ alleged trademark infringement of the “Moscow Cat Theater” mark. The parties cross-moved for summary judgment (see Motion for Summary Judgment in Favor of Plaintiffs, Doc. Entry No. 74;
STANDARD OF REVIEW
When a party objects to an R & R, a district judge must make a de novo determination with respect to those portions of the R & R to which the party objects. See Fed. R. Civ. P. 72(b); United States v. Male Juvenile,
DISCUSSION
Plaintiffs object to the R & R “in its entirety.” Plaintiffs’ objections, almost uniformly, are conclusory, immaterial, or mere reiterations of arguments litigated before the Magistrate Judge. Nonetheless, in light of Plaintiffs’ pro se status, the Court has carefully considered each of Plaintiffs’ objections and addresses herein those objections that arguably warrant discussion.
First, Plaintiffs complain that the factual background seсtion in their motion for summary judgment should have been construed as a proper Statement of Material Facts under Local Civil Rule 56.1. (Pis.’ Obj. at 1.) Plaintiffs do not dispute that they failed to annex to their motion “a separate, short and concise statement, in numbered paragraphs, of the material facts as to which the moving party contends there is no genuine issue to be tried.” Local Civ. R. 56.1(a). Nonetheless, although “[f]ailure to submit such a statement may constitute grounds for denial of the motion” id., in light of Plaintiffs’ pro se status, the magistrate judge considered those factual assertions that actually were supported by evidentiary submissions. See Erickson,
Next, Plaintiffs object to the R & R’s characterization of the Gelfmans as “promoters” rather than “producers” of the Moscow Cats Theater. (Pis.’ Obj. at 1.) However, the R & R accurately indicates that the Kuklachevs alleged that Plaintiffs were their prоmoters in connection with the related case of Kuklachev v. Gelfman, 08-cv-2214 (DLI)(WP) (the “Kuklachev action”).
Plaintiffs also take issue with the magistrate judge’s finding that the Gelfmans failed to provide Capitol with timely notice of a potential claim under the insurance policies at issue. (Pl.’s Obj. at 2-3.) Plaintiffs do not dispute that they never notified Capitol after receiving a May 31, 2007 cease-and-desist letter from the Kuk-lachevs threatening legal action. Nor do they dispute that Capitol first learned of the claim thirteen months later through one of the Gelfmans’ codefendants in the Kuklachev action. However, Plaintiffs argue that their failure to notify Capitol of the potential claim should be excused since they had “a reasonable and credible belief of nonliability.” (Pl.’s Obj". at 2 (citing Sparacino v. Pawtucket Mut. Ins. Co.,
Plaintiffs’ bare assertion is unsupported by the record. The cease-and-desist letter, written under the letterhead of Baker & McKenzie LLP, clearly specified the basis of the Kuklachevs’s trademark claims and indicated that they were “prepared to take legal action.” (Poe Deck, Ex. 13, Doc. Entry No. 81.) This letter would have suggested to a reasonable person the possibility of a claim. Although Plaintiffs contend that they genuinely believed that the cease-and-desist letter was merely “an attempt to blackmail” them, they have not presented any evidence showing that such a belief was objectively reasonable. See United, Nat. Ins. Co. v. 515 Ocean Ave., LLC,
Plaintiffs’ objections to the R & R’s finding that the claims asserted in the Kukla-chev action were not covered by the Plaintiffs’ insurance policies are also without merit. (Pis.’ Obj. at 3.) With respect to this objection, Plaintiffs offer only the con-clusory assertion that they have met their burden of proof. The Court finds no error, let alone clear error, with respect to this section of the R & R and adopts Magistrate Judge Mann’s analysis in its entirety.
Finally, Plaintiffs object to the magistrate judge’s finding that Capitol was not estopped from disclaiming its defense of the Gelfmans. (Pl.’s Obj. at 3-4.) The Gelfmans maintain that Capitol unreasonably delayed disclaiming coverage. (Id.) However, Plaintiffs still fail to identify any cognizable prejudice caused by Capitol’s conduct. See Burt Rigid Box, Inc. v. Travelers Prop. Cas. Corp.,
In sum, having undertaken a de novo review of those sections of the R & R to which Plaintiffs provide specific objections, the Court hereby adopts Magistrate Judge Mann’s characteristically thorough and well-reasoned R & R in its entirety. Accordingly, summary judgment is granted in favor of the Defendants, and the complaint is dismissed.
CONCLUSION
Upon due consideration, the R & R is adopted in its entirety. The complaint is dismissed as to all Defendants.
SO ORDERED.
REPORT AND RECOMMENDATION
Currently pending before this Court, on a referral from the Honorable Dora L. Irizarry, are cross-motions for summary judgment brought by pro se plaintiffs Mark Gelfman and Yanis Gelfman (collectively, the “Gelfmans”) and by defendants Capitol Indemnity Corporation, Capitol Specialty Insurance Corporation, and Capitol Transamerica Corporation (collectively, “Capitol”). See Plaintiffs’ Motion for Summary Judgment (docketed June 4, 2013) (“PI. Motion”), Electronic Case Filing (“ECF”) Document Entry (“DE”) # 74; Defendants’ Motion for Summary Judgment (docketed June 4, 2013) (“Def. Motion”), DE # 78. The Gelfmans commenced this action on January 14, 2011, alleging that Capitol had breached its contractual obligatiоns under two consecutive insurance policies when it disclaimed coverage and further representation of them after having initially defended the Gelf-mans in a lawsuit arising out of their alleged acts of trademark infringement. See Complaint (Jan. 14, 2011) (“Compl.”), DE #1.
For the reasons given below, this Court respectfully recommends that the District Court deny the Gelfmans’ motion for summary judgment and grant Capitol’s motion for summary judgment.
FACTUAL AND PROCEDURAL BACKGROUND
Unless otherwise indicated, the facts contained herein are drawn from Capitol’s uncontested Rule 56.1 Statement of Material Facts (“Rule 56.1 Statement”), DE # 79, # 90.
From 2006 to 2008, Capitol issued the Gelfmans and Gelfman International Enterprises, Inc. (“GIE”) two general liability insurance policies,
On June 2, 2008, Yuri and Dmitri Kukla-chev (collectively, the “Kuklachevs”) commenced a lawsuit here in the United States District Court for the Eastern District of New York, under docket number 08-CV-2214, against the Gelfmans, GIE and various other defendants (the “Kuklachev Suit”). See Rule 56.1 Statement ¶ 15. According to the allegations in that action, when the Kuklachevs toured the United States in 2005 and 2006 with their Russian circus show featuring trained cats, the Gelfmans served as their American promoters; but in 2007, the Gelfmans allegedly created an imitation show that infringed upon the Kuklachevs’ trademarks by copying their acts, cat tricks, and costumes, and by stealing the original production’s name, “Moscow Cats Theatre.” See id.; Kuklachev v. Gelfman,
It is undisputed that the Gelfmans first learned that the Kuklachevs might sue them when the Kuklachevs’ attorney sent the Gelfmans, through their then counsel,
On or about September 2, 2008, Capitol notified the Gelfmans that it had retained George R. McGuire, an intellectual property attorney with the firm of Bond Schoe-neck & King PLLC (the “Bond firm”), to defend the Gelfmans (as well as GIE) in connection with the Kuklachev Suit. See Rule 56.1 Statement ¶¶ 19-21. Michael Wedwick, a claims adjuster for Capitol, spokе to the Gelfmans via phone on September 19, 2008, and later confirmed by email that Capitol had retained counsel to defend them. See id. ¶ 22. In a letter dated October 2, 2008, Capitol expressly stated that counsel’s retention was subject to a reservation of rights while Capitol continued its investigation of the claims in the Kuklachev Suit. See id. James Woods and the Woods firm remained co-counsel of record for the Gelfmans.
Soon thereafter; the parties scheduled mediation for June 11, 2009. See id. ¶ 41. One week prior to that date, on June 4, 2009, Capitol issued a letter to the Gelf-mans disclaiming all defense and indemnity obligations, see id. ¶ 42, but agreeing to reimburse the Gelfmans for their legal fees for an additional 60 days in order to afford them an opportunity to retain new counsel, see id. ¶ 43.
No settlement was reached at the June 11, 2009 mediation, which was attended by Capitol’s coverage counsel, Anthony R. Gambardella. See id. ¶¶ 44-46. While the parties to the instant lawsuit do not dispute that Capitol offered to contribute $50,000 towards a resolution of the Kukla-chеv Suit, they do draw starkly different inferences from what transpired. Capitol claims that, though disclaiming coverage, its counsel nevertheless offered to have Capitol pay $50,000 toward a global settlement, but the Gelfmans rejected that offer. See id. ¶ 46. The Gelfmans maintain that they could have settled the Kuklachev Suit at the mediation if Capitol had offered to pay $215,000, see PI. Motion ¶ 21, DE # 74, and they characterize Capitol’s offer as one made in bad faith, see id.; April 29, 2013 Opposition to Defendants’ Motion for Summary Judgment (docketed June 4, 2013) (“PI. Opposition I”) ¶ 10, DE # 83.
Several months later, on August 11, 2009, the Bond firm withdrew as counsel of record for the Gelfmans, see Rule 56.1 Statement ¶ 47, while the attorney previously retained by the Gelfmans, co-counsel James Woods, continued to defend them until November 11, 2009, see id. ¶ 48. Thereafter, the Gelfmans represented themselves in the Kuklachev Suit, which they eventually settled in 2010 by agreeing to adhere to the terms of Judge Sifton’s preliminary injunction and by relinquishing any claim to the Moscow Cats Theatre trademark. See id. ¶¶ 49, 50; PL Motion ¶ 10, DE # 85 (sealed copy of DE # 74). The settlement agreement that the Gelf-mans entered into with the Kuklachevs did not require them to make any payments. See Rule 56.1 Statement ¶ 50. Capitol had continued to pay the Gelfmans’ attorneys’ fees and costs until August 2009, see id. ¶ 53, and they incurred no attorneys’ fees as a result of Capital’s disclaimer of coverage, see id. ¶ 55.
DISCUSSION
I. Summary Judgment Standard
Summary judgment may be granted only where the pleadings and evidence in the record “demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323,
Once the moving party has made the requisite showing, the nonmoving party “may not rest upon mere allegation or denials of his pleading, but must set forth specific facts showing that there is a genuine issue for trial.” Anderson v. Liberty Lobby, 477 U.S. 242, 256,
II. The Impact of Plaintiffs’ Failure to Follow Local Civil Rule 56.1
This district’s Local Civil Rule 56.1(a) requires a party seeking summary judgment to submit “a separate, short and concise statement, in numbered paragraphs, of the material facts as to which the moving party contends there is no genuine issue to be tried.” S.D.N.Y./ E.D.N.Y. Local Civ. R. 56.1(a). The non-moving party must then provide a counter-statement with “correspondingly numbered paragraph[s]” responding to each of the paragraphs in the moving party’s
Despite having been properly served with notice of the requirements of Local Civil Rule 56.1, see Notice (June 4, 2013), DE # 96, the Gelfmans filed neither a Rule 56.1 statement in support of then-motion for summary judgment nor a formal counterstatement of facts responding to the defense Rule 56.1 statement in support of Cаpitol's motion for summary judgment. Nevertheless, the Gelfmans have not simply rested on the assertions in then-complaint or their arguments in their summary judgment papers. Their brief in support of summary judgment includes as exhibits a series of emails between the Gelfmans and Capitol’s representatives, internal emails from Capitol discussing the June 2009 mediation, and a page of handwritten notes by an unidentified author that appear to have been made at the mediation. See PI. Motion, DE # 74 at 12-33. Similarly, their submission entitled Opposition to Defendants ‘ Motion for Summary Judgment attaches three exhibits in support of their contentions. See PI. Opposition I, DE # 83 at 5-32. These include a series of interrogatory answers from the plaintiffs in the Kuklachev Suit, internal claims notes from Capitol, and an unlabeled, undated spreadsheet that purports to show $351,000 in lost bookings for the Gelfmans’ version of the Moscow Cats Theatre. ' See id. Notwithstanding the Gelfmans’ violation of Local Civil Rule 56.1, this Court is prepared to exercise its discretion to consider those exhibits in connection with the arguments advanced by the Gelfmans.
III. Capitol’s Motion for Summary Judgment
The Court will first address Capitol’s motion for summary judgment, which is properly supported by a Rule 56.1 Statement that the Gelfmans have not responded to or otherwise controverted.
A. Whether Capitol Was Obligated to Defend the Gelfmans in the Kuklachev Suit
Capitol contends that, as an initial matter, it was not obligated to indemnify or defend the Gelfmans in connection with the Kuklachev Suit, because the Gelfmans failed to provide timely notice of the Kuk-lachevs’ potential claims. See Memorandum of Law in Support of Defendants’ Motion for Summary Judgment (docketed June 4, 2013) (“Def. Mem.”) at 4-7, DE # 80. In addition, Capitol argues that the Amended Complaint in the Kuklachev Suit
Under New York law,
1. Whether the Gelfmans Gave Timely Notice of the Kuklachevs’ Potential Claim
The insurance policies issued by Capitol to the Gelfmans require that, in order to obtain coverage, the policy holder must notify Capitol “as soon as practicable” of any “ ‘occurrence’ or ... offense which may result in a claim,” and must “immediately send [Capitol] copies of any demand, notices, summonses, or legal papers received in connection with the claim or ‘suit.’ ” Rule 56.1 Statement ¶ 9. On or about May 31, 2007, the Gelfmans (through counsel) received a cease-and-desist letter from the Kuklachevs’ attorney that threatened legal action unless they ceased their alleged trademark infringement; nevertheless, the Gelfmans never provided Capitol with either a copy or notice of that letter. See id. ¶¶ 10-14. Consequently, Capitol first learned of the claim thirteen months later, after the Kuklachevs had initiated their lawsuit, when. Tribeca, another defendant named in that action, apprised Capitol of the litigation. See id. ¶ 17.
New York law defines “as soon as practicable” to mean “within a reasonable time under all the circumstances.” Security Mut. Ins. Co. v. Acker-Fitzsimons Corp.,
The delay here—for which the Gelfmans proffer no excuse—exceeds thirteen months.
While not disputing that they failed to satisfy their contractual obligation of timely notice, the Gelfmans argue that Capitol’s disclaimer of coverage “on the basis of late notice has been waived by the fact that Capitol had voluntarily undertaken” their defense. PI. Opposition I ¶ 5, DE # 83. Waiver of a defense requires “a voluntary and intentional relinquishment of a known right ... where there is direct or circumstantial proof that the insurer
The Gelfmans offer argument— but no evidence—that Capitol intended to abandon its latе-notice defense. Nor does the record otherwise support an inference of such a waiver. Contrary to the Gelfmans’ contention, the fact that Capitol initially elected to undertake the Gelfmans’ defense in the Kuklaehev Suit did not, without more, preclude the insurer from thereafter withdrawing from the case. See Int’l Flavors,
It is undisputed that Capitol repeatedly reserved its rights. On October 2, 2008, within a month of having retained counsel to defend the Gelfmans in the Kuklaehev Suit, and before the Bond firm had even entered an appearance in that case, see Notices of Appearance (Nov. 3, 2008), DE # 91, ■ # 92 in Kuklaehev, Capitol sent the Gelfmans a reservation-of-rights letter advising that “[n]o action taken by us acknowledging receipt of this tender of defense and investigating this matter shall constitute a waiver of any of our rights under the policy.” Reservation-of-Rights Letter (Oct. 2, 2008) (“10/2/08 Reservation-of-Rights-Letter”), DE # 82-4 at 7, 17-18. Two months later, Capitol learned of the Kuklachevs’ May 31, 2007 cease- and-desist letter, which was attached to reply papers filed by the Kuklachevs on December 2, 2008, in connection with their motion for a preliminary injunction. See Declaration of Joseph K. Poe in Support of Defendants’ Motion for Summary Judgment (docketed June 4, 2013) ¶ 3, DE # 81; May 31, 2007 Cease-and-Desist Letter, DE # 81 at 4-5; Exh. F to Reply in Support of Amended Motion (Dec. 2, 2008), DE # 145-6 in Kuklaehev. Based on that new revelation, Capitol issued its December 30, 2008 reservation-of-rights letter, which expressly reserved Capitol’s “rights to deny coverage to the extent that the Insured provided late notice.... ” 12/30/08 Reservation-of-Rights Letter, DE # 82-4 at 87.
A waiver of an insurer’s right to disclaim will not be implied under New York law unless “the insurer possesse[d] sufficient knowledge (actual or constructive) of the circumstances regarding the unasserted defense.” AMRO Realty,
As detailed above, here the unrefuted facts in the record reflect the following:
Accordingly, the Gelfmans’ waiver argument is unavailing. Having failed to receive timely notice, Capitol was not contractually obligated to defend or indemnify the Gelfmans.
2. Whether the Claims in the Kuklachev Suit Were Covered by the Gelfmans’ Policies
Capitol also argues that it had no duty to defend the Gelfmans, on the ground that the amended complaint in the Kuklachev Suit does not allege “personal and advertising injury” as defined by the Gelfmans’ insurance policies, and, moreover, that the Kuklaehevs’ specific claims all fall within various policy exclusions. See Def. Mem. at 7-18, DE #80. Although the burden of establishing that coverage exists lies with the insured, see, e.g., Morgan Stanley Grp. Inc. v. New England Ins. Co.,
B. Whether Capitol Was Estopped From Disclaiming Its Defense of the Gelfmans
. Effectively conceding that Capitol was not contractually obligated to
arises where an insurer acts in a manner inconsistent with a lack of coverage, and the insured reasonably relies on those actions to its detriment. Thus, estoppel requires a showing of prejudice to the insured.
Burt Rigid Box,
The Gelfmans’ estoppel argument fails as a matter of law, as they cannot establish either of the two elements of estoppel: i.e., that they reasonably relied on any аctions by Capitol that were inconsistent with a lack of coverage, or that such actions caused them prejudice.
1. Capitol’s Conduct
The Gelfmans’ estoppel theory is predicated on their unsupported assumption that “Capitol represented to [the] Gelfmans that there was coverage in accordance [with] the policy....” PI. Opposition I ¶ 6, DE # 83. The Gelfmans point to two pieces of documentary evidence to support their characterization of Capitol’s conduct: (1) an email dated September 19, 2008, from one of Capitol’s senior claims adjusters, Michael Wedwick, to Yanis Gelfman, see Email of Michael Wedwick to Yanis Gelfman (Sept. 19, 2008) (the “9/18/08 Email”), DE # 82^ at 4; and (2) the internal notes of another of Capitol’s senior claims adjusters, Curt Hellmer, see PI. Opposition I ¶ 6, DE # 83; Claim Notes attached to PI. Opposition I, DE #83 at 25-31.
Even viewed in the light most favorable to the Gelfmans, Mr. Hellmer’s notes do not support their theory. First, they are Capitol’s internal notes, not evidence of any communication to the Gelfmans on which they could purport to have relied. Moreover, the notes nowhere state that Capitol had agreed to provide coverage or represented to the Gelfmans that it would provide coverage. To the contrary, in an entry from July 29, 2008, the notes expressly state that “coverage issues exist” and then outline Capitol’s concerns that the Kuklachevs’ claims may fall within one or more of the policies’ exclusions. Claim Notes attached to PI. Opposition I, DE # 83 at 30.
Mr. Wedwick’s email similarly contains no affirmative representation that Capitol had determined that the Kuklachevs’ claims were covered by the Gelfmans’ policies. See 9/19/08 Email, DE #82-4 at 4. In an apparent reference to a phone
2. Prejudice to the Gelfmans from Capitol’s Actions
Even if Capitol had represented to the Gelfmans that it would provide coverage for the Kuklachevs’ claims, the Gelfmans have not shown that they thereby suffered any prejudice. As an initial matter, where, as here, the insurer defends the insured subject to a reservation of rights, the insured will not be heard to complain that he detrimentally relied on the insurer’s representation of him: “The purpose of a reservation of rights is to prevent an insured’s detrimental reliance on the defense provided by the insurer.” Federated Dep’t Stores,
The Gelfmans identify no such prejudice, see generally PI. Motion, DE #74; PI. Opposition I, DE # 83; PI. Opposition II, DE # 77, nor can any be discerned by the Court. In early August 2008, before Capitol had retained the Bond firm or communicated with the Gelfmans about that retention, the firm that the Gelfmans had hired to defend them in the Kuklachev Suit filed a motion to dismiss. See Motion to Dismiss (Aug. 4, 2008), DE # 12 in Kuklachev. That motion was not ruled upon until February 26, 2009, see Memorandum and Opinion (Feb. 26, 2009), DE #252 in Kuklachev,
Even if the Gelfmans were entitled to look to events postdating those letters in order to support their claim of prejudice, their estoppel argument nevertheless fails. The Gelfmans incurred no legal fees as a result of the Kuklachev Suit. See Rule 56.1 Statement ¶ 53. Furthermore, the settlement agreement ultimately reached betwеen the Gelfmans and the Kuklachevs
Faced with this undisputed evidence, the Gelfmans nevertheless claim to have suffered several forms of prejudice. First, citing unlabeled, undated spreadsheets purporting to show $351,000 in lost bookings, see Spreadsheet attached to PL Opposition I, DE # 83 at 32, they contend that they “lost close to $400,000 in confirmed bookings directly due to the Kukla-chev lawsuit,” Pl. Opposition I ¶ 12, DE # 83. Even assuming arguendo that these spreadsheets are sufficient to prove the existence and amount of the Gelfmans’ lost bookings, the Gelfmans concede that those losses occurred shortly after the filing of the KuMaehev Suit as a result of the negative publicity generated by that case and not because of the settlement they eventually reached. See Deposition Testimony of Yanis Gelfman, DE # 92-1 at 45 (sealed). Thus, any such losses occurred before Capitol undertook the Gelfmans’ defense and would have occurred regardless of Capitol’s conduct in providing for that defense.
The Gelfmans additionally argue that they
were clearly prejudiced by Capitol[’]s disclaimer of coverage[,] by Capitol’s own undertaking of the Gelfman[s’] defense and thereby depriving [the] Gelf-mans [of] control of the defense action. After 9 months, and knowing that [the] Gelfman[s] have become completely reliant on their defense, Capitol pulls the plug 7 days before court[-]ordered medi-ations were to take place.
Pl. Opposition II at 3, DE # 77.
As a general rule, the fact that an insurer undertakes the defense of an insured, even for an extended period of time, does not constitute a legally cognizable' source of prejudice unless the representation occurred absent a reservation of rights or was such that the character and strategy оf the lawsuit could no longer be altered. See Phila. Indem. Ins. Co. v. City of New York, No. 09 Civ. 10432(PGG),
Here, shortly after retaining counsel for the Gelfmans, Capitol expressly reserved its rights on two separate occasions. The Gelfmans have presented no evidence • or argument that at the time of Capitol’s disclaimer they could not have altered their legal strategy, particularly given the fact that attorney James Woods, then-handpicked counsel, served as co-counsel of record along with the Bond firm, and remained in the case for several months after the Bond firm withdrew. Furthermore, at deposition, Mark Gelfman testified that there was nothing he would have done differently to defend against the Kuklaehev Suit had Capitol not provided for the defense. See Rule 56.1 Statement ¶ 57; Deposition Testimony of Mark Gelf-man, DE # 92-1 at 80 (sealed). Under thesе circumstances, no reasonable fact-finder could conclude that Capitol should be estopped from disclaiming coverage.
IY. Capitol’s Duty of Good Faith and Fair Dealing
The Gelfmans further allege that Capitol breached its duty of good faith and fair dealing by (a) withdrawing from their defense one week prior to the June 11, 2009 mediation and (b) failing to settle the Kuklaehev Suit at mediation. See Pl. Motion ¶¶ 15-21, DE # 74. Under New York law, once an insurer has assumed the defense of a claim asserted against its insured, “it has a duty ... to act in ‘good faith’ when deciding whether to settle such a claim, and it may be held hable for breach of that duty.” Pinto v. Allstate Ins. Co.,
Neither of the Gelfmans’ arguments is sufficient to overcome the presumption against bad-faith liability. Even viewed in the light most favorable to the Gelfmans, the existing record does not support a finding that the timing of Capitol’s decision to disclaim coverage evidences bad faith. As an initial matter, Capitol’s disclaimer was proper insofar as it had no duty to
Under circumstances similar to those in the instant case (though less favorable for the insurer), the Second Circuit held in Hugo Boss that since the plaintiff had not overcome the presumption against bad-faith liability, summary judgment should have been entered in the insurer’s favor. See Hugo Boss Fashions,
Similarly, Capitol did not violate its duty to defend the Gelfmans in good faith when it failed to settle the Kuklachev Suit at mediation. First, although the Gelfmans claim that, “[a]s shown in a handwritten note produced during the mediation process, the Kuklachev case ... would have been settled with $215,000,” Pl. Motion ¶ 21, DE # 74, the note in question does not appear to show that a demand to settle for $215,000 was made at the mediatiоn, see Handwritten Note attached to PI. Motion, DE #74 at 33. Instead, the note, whose author is not identified, indicates in one column that $215,000 represents an amount for which the case might settle. See id.
In any event, “the plaintiff in a bad-faith action must show that the insured lost an actual opportunity to settle the claim at a time when all serious doubts about the insured’s liability were removed.” Pavia v. State Farm Mut. Auto. Ins. Co.,
Accordingly, the Gelfmans have failed to create a triable issue of fact in support of their theory that Capitol violated its duty of good faith and fair dealing.
V. The Gelfmans’ Motion for Summary Judgment
Because this Court recommends that summary judgment be granted in favor of Capitol, there is no need to address the Gelfmans’ cross-motion for summary judgment in detail. For the same reasons that
CONCLUSION
For the foregoing reasons, this Court recommends that the Gelfmans’ motion for summary judgment be denied and that Capitol’s motion for summary judgment be granted.
Any objections to the recommendations contained herein must be filed with Judge Irizarry on or before June 27, 2014. Failure to file objections in a timely manner may waive a right of аppeal to the District Court order. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 6(a), 72; Small v. Sec’y of Health & Human Servs.,
The Clerk is requested to enter this Report and Recommendation into the ECF System and to transmit copies by Federal Express to the Gelfmans at their last known address, 2814 East 28th Street, Brooklyn, New York 11235.
SO ORDERED.
Notes
. In reviewing Plaintiffs’ submissions, the court is mindful that, "[a] document filed pro se is 'to be liberally construed’ and 'a pro se [pleading], however inartfully pleaded, must be held to less stringent standards than formal pleadings drafted by lawyers.’ ” Erickson v. Pardus,
. As discussed in greater detail below, the Gelfmans, despite being properly notified by Capitol of their obligations under Local Civil Rule 56.1 of the Southern and Eastern Districts of New York, see Notice (docketed Jun. 4, 2013), DE # 96, failed either to file a Rule 56.1 Statement in support of their motion or to properly contest Capitol's Rule 56.1 Statement. This Court nonetheless will consider the Gelfinans’ factual arguments to the extent that they have submitted supporting evidence.
. As GIE is not a party tо the Gelfmans’ action against Capitol, the facts recounted in this opinion often omit reference to GIE.
. Where, as in this citation, the cited page numbers follow the ECF docket entry number, they refer to the ECF system’s pagination for that entry as a whole, rather than to pages of the document itself.
. The Gelfmans and GIE were plaintiffs in an unrelated action filed in this district, Gelfman International Enterprises, Inc., et al. v. Klioner, et al., 05-CV-3826 (RJD), and were represented by the law firm Woods & Associates, P.C. (the "Woods firm”).
. Documents in the court file in Kuklachev v. Gelfman, 08-CV-2214, are cited herein by the name of the document, the date of docketing, followed by the docket entry number (if applicable) and the notation "in Kuklachev.”
. The Second Circuit denied that appeal on October 16, 2009. See Rule 56.1 Statement ¶ 38.
. By relying on New York law in their papers, the parties have implicitly agreed that New York law governs, and therefore the Court need not undertake a choice-of-law analysis. See Phila. Indem. Ins. Co. v. City of New York, No. 09 Civ. 10432(PGG),
. Indeed, but for the notice provided by Tribe-ca, it appears that the delаy might have continued indefinitely.
. In response to Capitol's showing on this issue, the Gelfmans simply rely on what they describe as ''[a] strong presumption in favor of coverage” and the principle that “ambiguities in insurance contracts are construed in favor of the insured.” May 31, 2013 Opposition to Defendants!'] Motion for Summary Judgment (docketed June 4, 2013) ("PL Opposition II”) at 2, DE # 77.
Because the Gelfmans have the burden of establishing that coverage exists but have offered no evidence, it is not necessary to analyze each of Capitol's coverage-related arguments in detail. As an illustrative example, however, Capitol argues that Counts 1, 2, 3, 4, and 7 of the Kuklaehevs' amended complaint, which assert claims related to and arising out of the Gelfmans' alleged trademark infringement, are not covered because the Gelfmans’ policies define “advertising injury” to apply only to alleged copyright, trade dress, or slogan infringement and each policy contains an express exclusion for trademark infringement. See Def. Mem. at 7-9, DE # 80.
. "Waiver and estoppel are distinct in New York insurance law.” Burt Rigid. Box,
. Although the Kuklachevs did obtain an entry of default against GEI, see Clerk's Entry of Default (June 7, 2010) in Kuklachev, the Kuklachevs never pursued a default judgment against GEI, and the notation of default was rendered moot when the Kuklaehev Suit settled and was closed. See Civil Case Terminated (Nov. 4, 2010) in Kuklachev; see also Minute Entry (June 11, 2010) ¶4, DE #407 in Kuklachev.
. If the Gelfmans wished to litigate the issue of lost business, they should have pursued their counterclaims in the Kuklaehev Suit, rather than claiming that alleged injury as a basis for recovery against Capitol in this case.
. Seeking to create the impression that the period of time leading up to the issuance of Capitol's two reservation-of-rights was a critical one in terms of devising defense strategy, the Gelfmans allude to "several dozen pleadings, cross[-]claims, responses and motions” that were filed in the’Kuklaehev Suit in the interim. Pl. Motion V 8, DE # 74. They fail to note, however, that nearly all of those involved other parties, and were docketed while the dispositive motion previously filed by their original counsel, the Woods firm, was still pending.