Part III.C
Does New York Law on Implied or Constructive Conditions
Provide a Basis for Stronghold’s Conclusion?
New York’s six-year statute of limitations for breach of contract does not begin to run until the obligee has satisfied all express conditions to the obligor’s duty to perform. (See Parts I and II.) Part III.B explained why we believe the Second Circuit in Continental Cas. Co. v. Stronghold Ins. Co. did not correctly interpret and apply New York law when it concluded that a garden-variety notice-of-loss provision in an excess-of-loss reinsurance contract was an express condition to the extent it required the cedent to notify reinsurers of paid-loss claims and demand payment. That (we believe) erroneous conclusion enabled the Second Circuit to hold that the cedent’s breach-of-contract claims were not barred by New York’s six-year statute of limitations, even though they were based on settlements the cedent had concluded with its insureds more than six-years before the cedent commenced its action. (See Part III.A.)
At the conclusion of Part III.B we raised the question whether Stronghold might make sense under the law of implied or constructive conditions, that is, if we were to interpret it as having construed the notice-of-loss provision as an implied or constructive condition. But Stronghold fails even if it is reconceptualized that way. Continue Reading »
