The opinion of the court was delivered by: Wolfson, United States District Judge:
This case involves complex retrocessional agreements between Plaintiff Munich Reinsurance America Inc. ("Munich") and Defendant American National Insurance Company ("ANICO"). Presently before the Court are two motions: Munich's motion for partial summary judgment, pursuant to Federal Rule of Civil Procedure 56(c), on its breach of contract and declaratory judgment claims against ANICO and on ANICO's rescission counterclaim, as well as ANICO's cross-motion for summary judgment. Each of Munich's claims, and the rescission counterclaim, relate to ANICO's refusal to pay certain claims submitted for payment by Munich under the parties' agreements.
Munich seeks partial summary judgment: (a) on ANICO's rescission counterclaim, arguing that ANICO has waived its right to rescind and, alternatively, that its rescission counterclaim should be dismissed on the merits; (b) on ANICO's untimely claim submission defense to Munich's breach of contract claim, arguing that ANICO waived its defense and for judgment on the merits; (c) that, under the agreements, Munich's "retention" is calculated on a "ground up" basis; (d) that claims issued by Everest Re*fn1 are covered by the agreements; (e) that Munich's "roofer" claims are covered by the agreements; and (f) that Munich's use of bordereaux reporting did not breach the agreements. In its cross-motion, ANICO seeks summary judgment on its rescission counterclaim and, in the alternative, partial summary judgment on its untimely claim submission defense to payment.
The Court grants in part, and denies in part, Munich's partial motion for summary judgment. With respect to ANICO's rescission counterclaim, the Court denies Munich's motion on the merits because there exists a genuine issue of material fact. With respect to ANICO's untimely claim submission defense to payment, the Court grants Munich's motion on the merits. The Court grants Munich's motion on the retention issue, concluding that retention is calculated on a ground up basis. With respect to the Everest Re and roofer claims, Munich's motion is denied. Finally, in light of the aforesaid ruling on the untimely claim submission defense, the Court does not reach Munich's use of bordereaux reporting; hence summary judgment on that basis is denied. ANICO's cross-motion on the rescission counterclaim and untimely claim submission defense is denied.
I. FACTS AND PROCEDURAL HISTORY
Before delving into the facts of this case, a brief overview of reinsurance and retrocessional insurance is helpful. Of course, an overview of such complex intersections of insurance law must be taken with a grain a salt. As an attorney with fifty years of reinsurance practice experience has explained,"[t]he minds that run the insurance and reinsurance industries are very clever, intelligent, and sophisticated, and they have devised almost an infinite number of variations on [the] basic categories [of reinsurance]...." Interview with Eugene Wollan, Esq., in Zukerman, T., Environmental Ins. Litig.: Law and Practice Appx. 31A at 2 (2012) ("Wollan Interview"). Nevertheless, I provide a basic primer for the purpose of orienting the reader to this obtuse subject.
The Third Circuit, in Pacific Employers Ins. Co. v. Global Reinsurance Corp. of America,--- F.3d ----, 2012 WL 3871588, *1 (3d Cir. 2012), describes reinsurance as insurance for insurance companies. A reinsurer agrees to indemnify a reinsured for certain payments the latter makes under one or more of its issued policies. In return, the reinsurer receives a share of the underlying premiums.
Ceding a portion of an insured risk prevents a single catastrophic loss from hurling the reinsured into insolvency.
It also allows the reinsured to invest more capital or to insure more risks.
Id. at 5. In short, "[a] reinsurance contract is essentially a contract of indemnity ...." Christiania General Ins. Corp. of New York v. Great American Ins. Co., 979 F.2d 268, 271 (2d Cir. 1992).
"The reinsurance of reinsurance is called a retrocession, and the reinsurers of reinsurers-that is, reinsurers who assume retrocession risk through retrocessional agreements-are called retrocessionaires." Century Indem. Co. v. Certain Underwriters at Lloyd's, London, subscribing to Retrocessional Agreement Nos. 950548, 950549, 950646, 584 F.3d 513, 519 (3d Cir. 2009) (emphasis added). Such retrocession agreements present considerably more complex legal and factual scenarios because "there is another layer of coverage created and another party thrown into the mix." Plitt, et al., 1A COUCH ON INSURANCE § 9:3.
There are two overarching categories of reinsurance and retrocession-treaty and facultative; and the agreement here is the former. Through treaty reinsurance, the reinsurer [or retrocessionaire] agrees to accept an entire block of business from the reinsured. Once a treaty is written, a reinsurer is bound to accept all of the policies under the block of business, including those as yet unwritten. Because a treaty reinsurer accepts an entire block of business, it does not assess the individual risks being reinsured; rather, it evaluates the overall risk pool.
Pacific Employers, 2012 WL 3871588, *2.
As with primary insurance, reinsurance comes in several basic types, including proportion and excess of loss policies. An "excess of loss" policy is one that obligates the retrocessionaire to pay up to its "retention" amount, i.e., the amount of "cover" the retrocessionaire agreed to provide the reinsurer, once the total claim amount has surpassed a set monetary limit or "layer" that the reinsurer must first pay. See Hartford Acc. and Indem. Co. v. Ace American Reinsurance Co., 284 Conn. 744, 750 n.5 (2007).*fn2 Excess of loss policies come in three forms: "per risk," "annual aggregate" or "per occurrence." See Orpett, et al., 3 LAW AND PRAC. OF INS. COVERAGE LITIG. § 41:10 (2012). These three methods differ in the manner in which risks "attach" to the reinsurance agreement. Under a per occurrence policy, like that at issue here, the retrocessionaire's obligation is triggered by a particular incident, such as a personal injury. Id.
Turning now to the details of the retrocessional policy at hand, the following facts are undisputed unless otherwise noted. In this fact section, I also provide an outline of the parties' agreement. As there are additional facts that aid my analysis of the particular provisions that must be interpreted, I provide greater factual detail in the body of the Opinion where appropriate.
Munich entered into a reinsurance relationship with Everest National Insurance Company ("Everest"), whereby Munich agreed to reinsure Everest's workers compensation insurance program for the period of January 1, 1998 through December 31, 2001 under an excess of loss reinsurance agreement. The Munich-Everest relationship was governed by an agreement with limits of $750,000 excess of $250,000. This means that Munich had no liability for any claim of less than $250,000-the layer from $0 to $250,000 was Everest's responsibility. For claims that exceeded $250,000, Munich was liable only for that portion of the claim beyond the initial $250,000 attachment point and up to a limit of $750,000.
Munich purchased excess of loss retrocessional cover, i.e., reinsurance on its reinsurance policy with Everest, for the duration of the Munich-Everest reinsurance agreement. The retrocessional cover was purchased through an agent-IOA Re-that represented several retrocessionaires. One of the retrocessionaires IOA Re represented was ANICO. Munich contends that the retrocessional agreements it entered into with various retrocessionaires each attach at the $500,000 level, such that "on a million dollar claim, Everest would be responsible for the first $250,000, Munich [ ] would be responsible for the next $250,000 and the retrocessionare would be responsible for the final $500,000." Pl. Stat. Mat. Facts at ¶ 20.
The ANICO-Munich retrocessional agreements at the center of the parties' dispute are for the periods of November 1, 1999 through December 31, 2000 ("the 2000 Retrocessional Agreement"), and January 1, 2001 through December 31, 2001 ("the 2001 Retrocessional Agreement"). For purposes of this motion, the parties agree that these two agreements are identical in substance.
Generally, the agreements provide that ANICO will indemnify Munich "for the amount of ultimate net loss . . . which may accrue to [Munich] as a result of loss or losses occurring during the term of [the] Agreement[s] as a result of [Munich's] participating in the [Munich-Everest] Reinsurance Agreement ...." LeBlanc Cert., Exh. 2 ("2001 Retrocessional Agreement"), Art. I(A). Ultimate net loss is defined by the agreements as "only such amounts as are actually paid or payable by [Munich] and [Everest] under the Underlying [Munich-Everest] Agreement ...." Id. at Art. VII(A). The agreements further provide that ANICO indemnifies Munich for "each and every accident or occurrence or series of accidents or occurrences arising out of one event ...." Id. at Art. VI. In short, ANICO agreed to indemnify Munich for the amount of ultimate net loss accruing under the Munich-Everest workers' compensation reinsurance agreement, on a per occurrence basis.
To be clear, and as suggested above, ANICO is not the only retrocessionaire that agreed to indemnify Munich. ANICO agreed to accept a 75.00% share of the retrocessionaire obligations under the 2000 retrocessional agreement. LeBlanc Cert., Exh. 1 ("2000 Retrocessional Agreement"), Interest and Liabilities Contract.*fn3 This share of the retrocessionaire obligations is referred to as ANICO's "proportionate" share. However, ANICO agreed to accept 100% of the retrocessionaire obligations arising under the 2001 retrocessional agreement. 2001 Retrocessional Agreement, Interest and Liabilities Contract.
In terms of notice, Munich agreed to "promptly" advise ANICO of "all claims coming under [their] Agreement on being advised by [Everest] ...." Once so advised, ANICO "agree[d] to pay [Munich] on demand, [ANICO's] proportion of all losses and/or loss expenses paid by [Munich] arising from the Underlying [Munich-Everest] Agreement ...." Id. at Art. X.
On December 22, 2009, Munich brought the instant action against ANICO. In its complaint, Munich alleges that ANICO owes Munich $4,330,578.01 under the retrocessional agreements and that ANICO has refused to pay. The complaint asserts two breach of contract claims (Count One - the 2000 retrocessional agreement; Count Two - the 2001 retrocessional agreement), and a declaratory judgment claim regarding any future losses under the agreements. ANICO answered and discovery ensued.
On January 3, 2011, following the close of discovery, ANICO moved for leave to file an amended answer asserting several counterclaims against Munich: fraudulent inducement, breach of the duty of good faith and fair dealing, breach of the duty of utmost good faith owed to a reinsurer, rescission of the retrocession agreements, and breach of contract. In moving for leave to file its amended answer, ANICO argued before the Magistrate Judge that, through discovery, it uncovered alleged misrepresentations and omissions by Munich that form the basis of its rescission claim.
Now before the Court is Munich's motion for partial summary judgment, on its breach of contract and declaratory judgment claims, and on ANICO's rescission counterclaim. ANICO cross-moves for summary judgment.
"Summary judgment is proper if there is no genuine issue of material fact and if, viewing the facts in the light most favorable to the non-moving party, the moving party is entitled to judgment as a matter of law." Pearson v. Component Tech. Corp., 247 F.3d 471, 482 n. 1 (3d Cir. 2001) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986)); accord Fed. R. Civ. P. 56(c). For an issue to be genuine, there must be "a sufficient evidentiary basis on which a reasonable jury could find for the non-moving party." Kaucher v. County of Bucks, 455 F.3d 418, 423 (3d Cir. 2006); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In determining whether a genuine issue of material fact exists, the court must view the facts and all reasonable inferences drawn from those facts in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Curley v. Klem, 298 F.3d 271, 276-77 (3d Cir. 2002). For a fact to be material, it must have the ability to "affect the outcome of the suit under governing law." Kaucher, 455 F.3d at 423. Disputes over irrelevant or unnecessary facts will not preclude a grant of summary judgment.
As noted, both parties have moved for summary judgment on issues relating to the viability and interpretation of the retrocessional agreements. Munich seeks partial summary judgment: (a) on ANICO's rescission counterclaim, arguing that ANICO has waived its right to rescind and, alternatively, that its rescission counterclaim should be dismissed on the merits; (b) on ANICO's untimely claim submission defense to Munich's breach of contract claim, arguing that ANICO waived its defense and for judgment on the merits; (c) that, under the agreements, Munich's "retention" is calculated on a "ground up" basis; (d) that claims issued by Everest Re are covered by the agreements; (e) that Munich's "roofer" claims are covered by the agreements; and (f) that Munich's use of bordereaux reporting did not breach the agreements. In its cross-motion, ANICO seeks summary judgment on its rescission counterclaim and, in the alternative, partial summary judgment on its untimely claim submission defense to payment.
Because ANICO's rescission counterclaim is threshold in nature, I analyze that issue first. Thereafter, I turn to Munich's remaining grounds for partial summary judgment raised by both parties' motions. In assessing the viability of each claim at issue, I apply New York law as the parties agree that it governs their agreements.
A. Legal Standard "A reinsurance contract is governed by the rules of construction applicable to contracts generally." Christiania, 979 F.2d at 274 (citation omitted). That is, the terms of unambiguous contracts are enforced as written. An ambiguous contract is one subject to different, reasonable interpretations. Where the terms of the contract are ambiguous, "reference to extrinsic evidence provides guidance to the parties' intent." Id. (citation omitted). Extrinsic evidence may include evidence of custom and usage. Excess Ins. Co. v. Factory Mut. Ins. Co., 3 N.Y.3d 577, 590--591, 789 N.Y.S.2d 461, 822 N.E.2d 768, 777 (2004) ("Our precedent establishes that where there is ambiguity in a reinsurance certificate, the surrounding circumstances, including industry custom and practice, should be taken into consideration") (Read, J., dissenting) cited with approval in Stolt-Nielsen S.A. v. AnimalFeeds International Corp., 130 S.Ct. 1758, 1769 n.6 (2010).
In this connection, "when resort to extrinsic evidence is necessary to shed light on the parties' intent summary judgment ordinarily is not an appropriate remedy, and must be denied unless, viewing the evidence in a light most favorable to the non-movant and resolving all doubts in its favor, no reasonable trier of fact could find against the movant." Christiania, 979 F.2d at 274 (internal citations omitted).
A substantial portion of the parties' briefing focuses on ANICO's rescission counterclaim, which was added to this suit by way of an amended counterclaim after discovery was concluded. The parties dispute whether ANICO has waived its right to pursue the rescission counterclaim by raising it so late and Munich argues that, even if ANICO has not waived its right to rescind, it is not entitled to rescind as a matter of law. As both parties seek summary judgment on this issue, I address their motions simultaneously. But, first, I recount the pertinent facts.
Lisa Hoekstra served as the IOA Re underwriter for the retrocession agreements. Oct. 18, 2010 Hoekstra Dep. at 19:2-7. During the formation of the Retrocession Contracts, Munich conveyed to Hoekstra "information about what Everest . . . was intending to write." Oct. 21, 2011 Hoekstra Dep. at 231:21 - 232:2. The parties do not dispute that Everest provided Munich with data relevant to the underwriting process. Pl. Stat. of Facts, at ¶¶ 27, 31; Def. Resp. Stat. of Facts, ¶¶ 27, 31; Oct. 21, 2011 Hoekstra Dep., at 162:12-24. And, neither ANICO nor IOA Re contend that Munich withheld any information that Everest provided to Munich. Nov. 29, 2011 Circuit Dep. at 239:10-20; Oct. 25, 2011 Schouweiler Dep. at 135:23-136:4. However, the parties disagree about the sufficiency of the information Munich did provide to ANICO.
Before signing the retrocession agreements, both Munich and IOA Re calculated potential losses and liabilities inherent in the Underlying Agreement between Munich and Everest. Verhaegen Dep., at 116:1-10. Specifically, they calculated "loss ratios" and "loss costs" using different internal "manual" rates.*fn4 Oct. 21, 2011 Hoekstra Dep. at 24:1-12; Verhaegen Dep. at 118:6-17. When possible, underwriters use historical loss data to formulate an "experience rating projection," based upon the reinsured business's prior losses. Oct. 21, 2011 Hoekstra Dep. at 21:21-22:1. However, when relatively new reinsurance agreements lack sufficient historical loss data, underwriters resort to more generalized "actuarial numbers." Id. at 23:16-20. Because IOA Re did not have sufficient historical loss data regarding the Underlying Agreement, IOA Re calculated the loss ratio using a "manual rate." Id. at 24:1-12. With that rate, and using the data provided by Everest, IOA Re estimated a 1.65% loss ratio. Kline Cert., Appx. II, Vol. III, Ex. 110 at 5.
Munich also performed an internal analysis of potential losses related to the $750,000 in excess of $250,000 layer of the Underlying Agreement. In an intra-company email, Munich employee Edward Pawlowski summarized loss projections on the Underlying Agreement as follows:
Treaty Expected Loss Cost/ELR: 4.95%/110% Carve Out Loss Cost: 1.72%/120%
Net Treaty Loss Cost/ELR: 3.23%/106%"
ANICO contends that Munich withheld its internal calculations from IOA Re, and that the internal calculations would have materially affected the underwriting process undertaken by IOA Re on behalf of ANICO. Specifically, ANICO contends that Munich did not disclose the following information:
(1) Munich's internal Underwriting Summary Memo showed a "156% incurred loss ratio," and expected "the all-time loss ratio to be above 200% before carve-out cessions;" LeBlanc Cert., Ex. 9;
(2) Munich "project[ed] an incurred loss ratio of 150 percent for 2000" for their $750,000 excess reinsurance of Everest; Verhaegen Dep. at 155:2-8;
(3) Munich's guidelines "would require [it] to move [the] deal offshore," because the alleged 150% loss was "unacceptable to" Munich; Pawlowski Dep., at 178:14-23;
(4) Munich employee Edward Pawlowski believed the loss ratios provided to Munich by Everest National were "dubious;" LeBlanc Cert., Ex. 6; and
(5) Munich still estimated its loss ratios to be 110%, while the carve-out loss cost to the retrocessionaire would be 120%. LeBlanc Cert., Ex. 10.
Munich acknowledges that it did not provide ANICO with its internal analysis, although it contends it had no obligation to do so.
Accounts differ on whether the internal analysis would have been relevant to the underwriting process. Munich representative Thierry Verhaegen testified that while a ceding company's expected loss calculations "would [be] good to have . . . a retrocessionaire would do [its] own pricing analysis," and "would not rely on secondhand information." Verhaegen Dep. at 252:5-23. IOA Re underwriter Lisa Hoekstra "assumed" that Munich would calculate a loss ratio of its own, but has no recollection of "asking what their loss ratio was." Oct. 21, 2011 Hoekstra Dep. at 42:24-23:11; 130:5-11. Nonetheless, Hoekstra also testified that, had she known that Munich "purchased at 1.42 percent," but expected a loss cost of "1.72 percent," she would not have issued coverage at the same price. Id. at 196:24-197:19. Similarly, Hoekstra testified that she "doubt[ed]" she would have underwritten the Retrocession Contracts in the same way had she known that Munich estimated a "Carve-Out loss cost of 1.72%/120%," or a "Net treaty loss cost/ELR [of] 3.23%/106%." Id. at 198:17-22; 199:3-19.
The issues relating to Munich's internal analysis and its failure to disclose that analysis to IOA Re form the cornerstone for ANICO's rescission claim. Steven Schouweiler, Senior Vice President of Health Operations at ANICO, had "overall responsibility for . . . the Munich Re/American National contracts." Oct. 26, 2010 Schouweiler Dep. at 6:14-16; Oct. 25, 2011 Schouweiler Dep. at 6:5-9. In his October 25, 2011 deposition, Schouweiler testified that he became aware that ANICO was considering rescission of the Retrocession Contracts "'a year' or 'two'" before his deposition. Oct. 25, 2011 Schouweiler Dep. at 16:8-15. Indeed, he discussed rescinding the contracts with another ANICO employee, "Mr. Stelling," "a couple of years" before his (Schouweiler's) 2011 deposition. Id. at 17:16-22. "[I]n [his] own mind," Schouweiler thought that "lack of disclosure and compliance with the agreement" justified rescission at that time. Id. at 18:13-16. Thus, according to his deposition testimony, Schouweiler believed rescission might be a remedy available to ANICO sometime during late 2009.
Subsequent to his deposition, Schouweiler avers in a 2012 affidavit that once this suit was filed by Munich and served in January 2010, he then knew "something had gone wrong" and that he would rescind the agreement if he could, at that time. LeBlanc Cert., Ex. 11, Schouweiler Aff. p. 5.*fn5 Thereafter, he qualifies the foregoing statement by averring that "[u]ntil all the depositions of Munich's witnesses were completed in late 2010, [he] did not have facts from which [he] could determine whether to file a rescission claim." Id.
As noted, ANICO did not initially assert a rescission counterclaim but successfully sought leave to add the counterclaim after the close of discovery. In its January 2011 motion seeking leave to amend before the Magistrate Judge, ANICO argued that, through discovery, it discovered that Munich failed to convey to ANICO historical loss data that was solely in Munich's possession. Specifically, Munich pointed to Pawlowski's testimony that the "expected loss ratios for . . . [the Agreements were] very dubious ....", among other deposition testimony taken near the end of 2010. April 18, 2011 Order at 10. While not ruling on the merits of ANICO's contention, the Magistrate Judge held that ANICO's claim was colorable on its face and, therefore, granted its request for leave to amend. With these facts in mind, I now turn to the merits of the parties' arguments.
1. Waiver of Right to Rescind
As an initial matter, Munich argues that ANICO's lengthy delay in bringing the rescission counterclaim amounts to a waiver of that claim. Generally, [a] reinsured is obliged to disclose to potential reinsurers all "material facts" concerning the original risk, and failure to do so generally entitles the reinsurer to rescission of its contract. But the reinsured ordinarily has no obligation to disclose the terms upon which insurance has been granted where those terms are generally to be found in policies of that nature, for the reinsurer ought to be aware of such standard terms. Where the reinsured has offered extended coverage or an unusual term, however, that is a material fact which, if not disclosed, would render a reinsurance agreement voidable.
Sumitomo Mar. & Fire Ins. Co.--U.S. Branch v Cologne Reins. Co. of Amer., 75 N.Y.2d 295, 303 (1990) (internal citations omitted). In the reinsurance context, this duty to disclose is rooted in the duty of utmost good faith or uberrimae fidei. Allendale Mut. Ins. Co. v. Excess Ins. Co. Ltd., 992 F.Supp. 278, 282 (S.D.N.Y. 1998).
Even when this duty is breached, if the reinsurer or retrocessionaire treats the reinsurance or retrocessional agreement as valid for a "considerable time" after discovering the undisclosed facts, and fails to assert its rescission claim "within a reasonable time," the insurer waives its right to seek rescission. Sumitomo, 75 N.Y.2d at 304. See also Prudential Ins. Co. of America v. BMC Industries, Inc., 630 F.Supp. 1298, 1300 (S.D.N.Y. 1986) ("A waiver requires the intentional relinquishment of a known right with both knowledge of its existence and an intention to relinquish it.") (quoting City of New York v. State of New York, 40 N.Y.2d 659, 669, 357 N.E.2d 988, 389 N.Y.S.2d 332, 340 (1976)). Indeed, "New York courts have held specifically that '[w]here an insurer accepts premiums after learning of an event allowing for cancellation of the policy, the insurer has waived the right to cancel or rescind." GuideOne Specialty Mut. Ins. Co. v. Congregation Adas Yereim, 593 F.Supp.2d 471, 485 (E.D.N.Y. 2009) (collecting cases). See also BMC Industries, Inc., 630 F.Supp. at 1300 ("waiver will be found where, subsequent to the discovery of the fraud, the party later claiming a right to rescind has continued to accept the benefits of the agreement or acted in some other fashion inconsistent with exercise of a right to rescind.") (quoting MacTaggart v. Risucci, 85 Civ. 0812, slip op. at 3 (S.D.N.Y. October 28, 1985)).*fn6
Here, while the parties devote considerable space in their briefs to their waiver arguments, the arguments distill to a single factual dispute: whether ANICO asserted its rescission counterclaim within a reasonable period of time. Pointing to Schouweiler's testimony, Munich suggests that ANICO knew as early as 2009 that it intended to rescind the retrocessional agreements. Yet, according to Munich, ANICO "sat on its rights," made some payments under their agreements, and for those claims that ANICO denied, it never cited Munich's alleged failure to disclose material facts as a basis for denying those claims. While Schouweiler testified in his deposition that he considered rescission as early as late 2009, he later stated in an affidavit that it was not until he became aware, through discovery in late 2010, of (i) Pawlowki's emails indicating a treaty rate of 4.5% and carve out loss cost of 1.72%, and (ii) that Everest's projections (that were provided to Munich and ANICO) were "dubious," that he (Schouweiler) had sufficient facts to assert a rescission counterclaim. Thus, it is Schouweiler's testimony that the rescission counterclaim could not have been brought until late 2010.
Munich has not demonstrated that summary judgment is appropriate on the question of waiver. The record evidence establishes that Schouweiler believed that he could not assert the rescission claim on behalf of ANICO until he became aware of Munich's alleged failure to disclose during discovery in late 2010. Munich has not pointed to any evidence to challenge Schouweiler's testimony on this point, nor has Munich shown that Schouweiler's affidavit testimony clearly contradicts his earlier deposition testimony.*fn7 Indeed, his testimony vaguely states that he became aware that ANICO was considering rescission "a year or two" before his Oct. 25, 2011 deposition, and that he discussed rescission with his co-employee "a couple of years" before his deposition. Viewing this deposition testimony in the light most favorable to ...