HSB Group, Inc. v. SVB Underwriting, Ltd. (664 F. Supp. 2d 158, 2009)

RULING ON CROSS-MOTIONS FOR SUMMARY JUDGMENT

STEFAN R. UNDERHILL, District Judge.

This insurance coverage dispute arises out of an explosion that originated in the boiler room at the Clara Barton Convalescent Center (the “Nursing Home”) in Flint, Michigan, on November 10, 1999. The explosion destroyed the Nursing Home and caused the deaths of five people and injured numerous others. The explosion was caused by a natural gas leak, but the precise cause of the gas leak remains unknown.

Numerous personal injury and wrongful death lawsuits were filed in Michigan state court, including seventeen suits alleging, inter alia, negligence by HSB Group, Inc. (“HSB”) in its inspection of the boiler, and one subrogation suit by the Nursing Home’s property and casualty insurer against HSB (the “Lawsuits”). In 2004, HSB settled the personal injury and wrongful death suits on the eve of trial for $7.35 million. HSB now seeks to recover the settlement amounts from SVB Underwriting, Ltd. (“SVB”) under an extended reporting period insurance policy (the “Policy”) issued after the explosion and effective as of December 1, 2000. SVB has denied coverage based upon a prior knowledge exclusion in the Policy and HSB’s failure to disclose the claims prior to issuance of the Policy.

HSB then filed this action, invoking diversity jurisdiction under 28 U.S.C. § 1332. HSB seeks compensatory damages for SVB’s alleged breach of contract and a declaration, pursuant to 28 U.S.C. § 2201, of the rights and legal obligations of HSB and SVB under the Policy. SVB answered the complaint and asserted an eight-count counterclaim seeking reformation of the Policy to exclude coverage for all claims arising out of the explosion and for various other forms of declaratory relief. The parties filed cross-motions for summary judgment. HSB has moved for summary judgment on all counts of its Second Amended Complaint and all eight counts of SVB’s Counterclaim [Doc. # 123]. SVB has cross-moved for summary judgment on Counts I through VII of its Counterclaim [Doc. # 118].

Standard of Review

Summary judgment “should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c). In considering a motion for summary judgment, this court is required to view the evidence in the light most favorable to the nonmoving party and to resolve all ambiguities and draw all reasonable inferences against the moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The court’s function is not to resolve disputed factual issues but rather to determine if there exists a genuine issue for trial. Id. at 249, 106 S.Ct. 2505. The party seeking summary judgment bears the burden of showing that no genuine issue of material fact exists. Cronin v. Aetna Life Ins. Co., 46 F.3d 196, 202 (2d Cir.1995). The substantive law governing the case identifies those facts that are material on a motion for summary judgment. Anderson, 477 U.S. at 248, 106 S.Ct. 2505. “Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.” Id. A dispute regarding a material fact is genuine “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id.

Once a motion for summary judgment has been properly made and supported, the nonmoving party may not rely on mere allegations or denials in the pleadings. Rather, “its response must — by affidavits or as otherwise provided in [Rule 56] — set out specific facts showing a genuine issue for trial.” Fed.R.Civ.P. 56(e)(2); see Anderson, 477 U.S. at 256, 106 S.Ct. 2505.

When cross-motions are presented to the court, the same standard is applied as in the case of individual motions for summary judgment. Morales v. Quintel Entm’t, Inc., 249 F.3d 115, 121 (2d Cir. 2001). “[E]aeh party’s motion must be examined on its own merits, and in each case all reasonable inferences must be drawn against the party whose motion is under consideration.” Id.; see also Make the Road by Walking, Inc. v. Turner, 378 F.3d 133, 142 (2d Cir.2004); Scholastic, Inc. v. Harris, 259 F.3d 73, 81 (2d Cir. 2001). “[N]either side is barred from asserting that there are issues of fact, sufficient to prevent the entry of judgment, as a matter of law, against it. When faced with cross-motions for summary judgment, a district court is not required to grant judgment as a matter of law for one side or the other.” Heublein, Inc. v. United States, 996 F.2d 1455, 1461 (2d Cir.1993); see also Otis Elevator Co. v. Factory Mut. Ins. Co., 353 F.Supp.2d 274, 279 (D.Conn. 2005). Rather, summary judgment should not be granted “unless one of the moving parties is entitled to judgment as a matter of law upon facts that are not genuinely disputed.” Heyman v. Commerce & Indus. Ins. Co., 524 F.2d 1317, 1320 (2d Cir.1975); see also Green Party of Conn. v. Garfield, 590 F.Supp.2d 288, 299-300 (D.Conn.2008).

Facts

The Parties and Insurance Policies at Issue

HSB is a Connecticut corporation with its principal place of business in Hartford, Connecticut. HSB is in the business of providing equipment and machinery breakdown insurance, other specialty insurance and reinsurance products, inspection services, and engineering consulting services to its customers. It is one of the largest equipment and machinery insurers in the United States. Equipment insurance coverage, such as that offered by HSB, is often purchased to complement property and casualty insurance, because property and casualty policies often exclude coverage for equipment breakdowns. Additionally, in connection with its issuance of equipment breakdown policies, HSB conducts boiler and pressure vessel certification inspections of insured equipment in accordance with applicable state and city codes. Those inspections are commonly referred to in the industry as “jurisdictional inspections.” HSB performs approximately 500,000 jurisdictional inspections a year.

For a number of years, HSB issued equipment breakdown policies to Clara Barton Terrace Home. Those policies insured against certain losses at the Nursing Home caused as a direct result of an “accident” to “covered equipment,” including the Nursing Home’s cast iron heating boiler (the “boiler” or the “heating boiler”) and two hot water boilers. In 1999, HSB issued policy number FBP2249697 (the “Equipment Breakdown Policy”) (Pl.’s Summ. J. Ex. E), which was in effect at the time of the explosion. In connection with the insurance policies issued to the Nursing Home, and pursuant to the laws and regulations of the State of Michigan, HSB conducted jurisdictional inspections of the Nursing Home’s heating boiler. The last such inspection was performed by HSB’s inspector, Herbert Wathan, on November 24, 1998, nearly one year prior to the explosion. Wathan reported that the boiler was not leaking. Reinspection Report — All Boilers dated 11/24/98 (PL’s Summ. J. Ex. F). The boiler operated without incident during the entire heating season following the November 1998 inspection. After that inspection, no representative of HSB returned to the Nursing Home prior to the explosion.

From the late 1980s through December 1, 2000, HSB maintained “claims-made” errors and omissions professional liability insurance through the Lloyd’s of London insurance market, to cover, among other things, potential risks arising from or relating to its jurisdictional inspection activities. During this time period, Jean Cooper, HSB’s insurance agent and — after 1990 — its risk manager, was responsible for obtaining HSB’s professional liability insurance. Cooper did so through Dan Barton, a London insurance broker with Cooper Gay & Company, Ltd. (“Cooper Gay & Co.”). In 2000, for business reasons relating to AIG’s acquisition of HSB, instead of buying another such policy, HSB opted to purchase extended reporting period coverage, also referred to as “tail” or “run-off’ coverage, subscribed to by a number of underwriting syndicates at Lloyd’s of London. The purpose of the extended reporting period insurance was to cover claims that would have been covered under the regular claims-made term policy but which came to light after the end of the term. HSB’s expiring claims-made policy, Policy No. 738/UU048250T (Pl.’s Summ. J. Ex. T), effective September 1, 1999, to November 1, 2000, was extended to December 1, 2000, and thereafter certain underwriters (“the Underwriters”) issued the Policy, No. 738/ UU048250U (Pl.’s Summ. J. Ex. A), to HSB for the policy period December 1, 2000, through December 1, 2005. The Policy provided HSB with $35 million in errors and omissions insurance coverage, inclusive of defense costs, in excess of HSB’s self-insured retention amount of $5 million. SVB, organized under the laws of England with its registered office and principal place of business in London, is an underwriting member of the lead syndicate, Syndicate 1241, underwriting the Policy.

The Nursing Home Explosion and Investigation

On November 10, 1999, an explosion occurred inside the boiler room at the Nursing Home, destroying a substantial portion of the Nursing Home and, as noted above, killing five people and injuring numerous others. The following day, Voss Insurance Services, the Nursing Home’s insurance agency, faxed to Dennis Dobranksy, the Claims Manager for HSB, a property loss notice, which described the loss at the Nursing Home as a “steam boiler explosion, building destroyed, several people dead, others missing.” Property Loss Notice dated 11/11/99 (Dobransky Dep. Ex. 103). HSB assigned a claim number to the Clara Barton Nursing Home file. Id.

Stephanie Watkins, then in-house counsel for HSB, along with Thomas Mochnick, HSB’s Vice President and Litigation Counsel, learned of the explosion on November 11, 1999. Watkins heard that a boiler had exploded at the Nursing Home and that there were several injuries and/or deaths. She immediately retained outside counsel, Dennis Withers, to represent HSB’s interests in connection with the explosion and to address insurance coverage issues that might arise in connection with the Equipment Breakdown Policy HSB issued to the Nursing Home. On November 12, 1999, Withers retained an expert, George Theus, on behalf of HSB to determine the cause of the explosion and to rule out a boiler explosion. Email dated 11/12/99 from Withers to Theus (Dobransky Dep. Ex. 78). HSB admits that, in the days following the explosion, it recognized the possibility that it might face a lawsuit for negligent inspection of the boiler based on the reports of a boiler explosion.

The day following the explosion, HSB’s boiler inspector, Robert Oshnock, was advised by the assistant boiler inspector for the State of Michigan that the boiler was virtually intact except for a portion of the boiler’s circulating pipe, which appeared to have been broken off by falling debris. Notes dated 11/11/99 by Oshnock (PL’s Summ. J. Ex. I).

The Chief of the Boiler Division of the Michigan Department of Consumer and Industry Services prepared a Boiler Accident Investigation Report regarding the inspection on November 11, 1999. That report indicated that the boiler had been turned off early on the morning of November 10th because the outdoor temperature was going to be in the upper 60s. Maintenance personnel worked on air-conditioning equipment in the boiler room during the early afternoon of November 10th. At approximately 3:30 p.m., a gas odor was reported to the maintenance manager but, after investigating, he was unable to detect an odor. At approximately 7:00 p.m., the boiler was turned on, and at approximately 8:41 p.m., an explosion occurred in the boiler room. The State inspector reported that the covering or outer skin of the hot water boiler was detached, indicating that an explosion had occurred in the furnace chamber. The inspector reported that the east iron sections of the boiler vessel were not damaged by the explosion, and the boiler vessel itself remained intact. He also observed that two nozzles had been broken by debris and noted that the boiler support pedestal had been crushed by falling debris and that the boiler was resting on the burners. His conclusion was that the heating boiler boundary was not ruptured. Boiler Accident Rpt. at 2 (Pl.’s Summ. J. Ex. J).

In the days and weeks following the explosion, Claims Manager Dobransky visited the site three or four times. Within a week of the explosion, he photographed the boiler in the Nursing Home basement and concluded that it was intact and had not exploded. On December 1, 1999, he performed an inspection of the boiler to determine whether a boiler explosion had occurred. He observed that the boiler was intact except for some broken pieces and that it had shifted off its foundation and was listing downward about five degrees, probably due to the tons of debris that had fallen on it. 'While inspecting the boiler, he spoke with a city plant building inspector, Ken LaBelle. LaBelle suggested that Nursing Home personnel working on the chiller unit the day of the explosion may have sprayed water onto one of the pilot lights, which then went out. When the boiler cycled on, the accumulated gas from the extinguished pilot light ignited, causing the boiler to shift off its foundation, which then broke the gas main. Dobransky concluded, based on his observations and the information that he received from the hired consultants, that the cause of the explosion was a natural gas explosion, not an explosion from the interior of the boiler vessel caused by a buildup of steam or water pressure. Having concluded that the explosion was not a steam or water pressure explosion, Dobransky was not concerned with the specific cause of the explosion. He testified that it would have been extremely unlikely for a boiler of this type to explode because it was a hot water boiler, not a steam boiler, and it was designed with a safety relief valve, which would have relieved any pressure buildup unless the valve was faulty. (Dobransky Dep. 49.)

On December 10, 1999, Dobransky received a letter from an attorney concerning an upcoming inspection of the boiler. Dobranksy forwarded the letter to Withers, commenting on the fax cover sheet, “Looks like people are still looking at the boiler as the likely source of the gas explosion.” (Dobransky Dep. Ex. 96.) He suggested that they might want to send in their expert to take another look at the boiler. Id.

On January 11, 2000, the Michigan Department of Consumer and Industry Services issued its Investigation Report, concluding that “[t]he hot water heat boiler pressure boundary was not ruptured in the explosion.” Boiler Accident Rpt. at 2 (Pl.’s Summ. J. Ex. J). Following that report, several local newspapers reported that state investigators had concluded that the three boilers at the Nursing Home were not the cause of the explosion. (Pl.’s Summ. J. Ex. K, L.) One newspaper quoted a tort plaintiffs counsel as stating that “[t]he explosion was caused by excess buildup of natural gas in the building.... Either there was a failure in the gas piping in the building or it was the failure of a gas appliance.” Bryn Mickle, Boilers ruled out in blast, The Flint Journal, Jan. 12, 2000, at Al, A8.

Nevertheless, inspection and testing of the boiler, among other things, continued. In early February, Dobransky, as well as numerous other parties, received a fax from Consumers Energy, the local utility company, regarding “[c]ontinued observation/testing of evidence items,” including the boiler equipment. (Dobransky Dep. Ex. 108.) Jack Voss, President of Voss Insurance Services, also received that fax and left a telephone message for Dobransky suggesting that they should be there for the inspection. (Dobransky Dep. Ex. 109.)

On February 23, 2000, Dobransky received a letter from Scott Feringa, counsel for Consumers Energy, requesting, inter alia, copies of all documents pertaining to inspections of the three boilers at the Nursing Home by HSB. Ltr. dated 2/18/00 from Feringa to Dobransky (Dobransky Dep. Ex. 110). Dobransky forwarded the letter to Withers and HSB’s in-house counsel. Facsimile Msg. dated 2/24/00 (Dobransky Dep. Ex. 110).

Four days later, Nancy Fisher, an adjuster for The St. Paul Companies, the property and casualty insurer for the Nursing Home, wrote to Dobransky, advising him that to date St. Paul had made advance payments of $420,000 and was continuing to investigate the cause of the explosion. “The intent of this letter is to notify [HSB] that we may seek reimbursement for the amount of loss paid under The St. Paul insurance policy, in whole or in part.” Ltr. dated 2/27/00 from Fisher to Dobransky at 1 (Dobransky Dep. Ex. 111). In an attached memorandum, Fisher proposed that nine “interested parties,” including St. Paul, HSB, the boiler and hot water heater manufacturers, Consumers Energy, the local service company, and several other insurers, share on a pro rata basis the expenses associated with the investigation of the explosion. Mem. dated 2/27/00 from Fisher to Dobransky at 1 (Dobransky Dep. Ex. 111).

On March 1, 2000, Dobransky sent Voss Insurance Services, the Nursing Home’s insurance agency, a denial-of-eoverage letter. He stated that, after an investigation, HSB had determined that the cause of the explosion was an accumulation and ignition of natural gas and, therefore, HSB was denying coverage under the Equipment Breakdown Policy. The letter provided in relevant part:

A catastrophic combustion explosion occurred at [the Nursing Home]. The cause was due to the accumulation and ignition of natural gas. The explosion resulted in significant damage to the building and contents. Our investigation has found that the three boilers are intact, except for damage caused by falling debris from the combustion explosion.

Please refer to the attached policy exclusionary wording. Exclusion B.l.h. states, “We will not pay for loss or damage caused by or resulting from: Fire or combustion explosion, whether or not caused by or resulting from an ‘accident.’ ” Therefore, we must deny any and all liability in connection with this occurrence.

Ltr. dated 3/1/00 from Dobransky to Voss (Dobransky Dep. Ex. 105). HSB’s coverage denial was never disputed by the Nursing Home.

On March 9, 2000, Dobransky received from Consumers Energy a schedule of upcoming inspections that included the boiler components, among other things. The following day, he learned that the Nursing Home had requested a copy of HSB’s last inspection report on the boiler. Withers advised him to “[h]old all parties off regarding the requests for copies of inspection reports.” Phone Msg. dated 3/13/00 to Dobransky (Dobransky Dep. Ex. 116). After discussing the issue with Watkins in the legal department, Withers advised Dobranksy to turn down the requests for HSB’s inspection reports, noting their concern with the one report that mentioned the pressure gauge, and to suggest that the requesting parties obtain the reports from the State of Michigan. Over the next few months, Dobransky continued to receive copies of correspondence from various attorneys, including tort plaintiffs’ counsel, regarding the on-going investigation and inspection of the boiler components with requests for copies of HSB’s inspection reports. Most of that correspondence he forwarded to Watkins in the legal department, as well as to Withers.

On April 25, 2000, Withers sent Watkins what he, at the time, anticipated would be his firm’s final statement for services rendered in connection with the explosion. His cover letter stated:

Every indication we have indicates this was a natural gas explosion which did not rupture the pressure retaining portions of either of the two boilers HSB insured at this location. Assuming that this is accurate it seems unlikely that HSB would be named as a defendant in any future lawsuits.

Ltr. dated 4/25/00 from Dobransky to Withers (Ambridge Dep. Ex. 43).

The boiler inspection ultimately took place on June 22, 2000, with over forty parties in attendance, including various tort plaintiffs’ counsel, although HSB did not attend. Withers, in HSB’s legal department, was made aware of the inspection activities as they were taking place.

In September 2000, the Nursing Home’s counsel requested copies of Dobransky’s explosion investigation photographs. On the advice of Withers, Dobransky forwarded copies to the Nursing Home’s attorney. (Dobransky Dep. 125-26 & Ex. 131.) That same month, Consumers Energy took possession of a number of boiler parts that had been stored off-site for metallurgical testing, subject to an evidence preservation agreement. Included in the items taken were a number of boiler burner pieces as well as the boiler support. Dobransky testified that he did not inquire why those particular pieces were being tested, because that was beyond the scope of his investigation, which had already been concluded. He faxed a copy of the list of parts and an addendum to the evidence preservation agreement to Withers in HSB’s legal department. (Dobransky Dep. 127-28 & Ex. 133.)

In November 2000, Dobransky received a letter from “Records Deposition Service, Inc.,” addressed to “Dear Deponent,” asking for a copy of HSB’s entire insurance file pertaining to the Nursing Home. (Dobransky Dep. Ex. 134.) The letter did not indicate on whose behalf those records were being requested, and Withers advised him not to provide anything at the time. (Dobransky Dep. Ex. 135,136.)

The Lawsuits Against HSB

In March 2001, three lawsuits were filed against HSB and other defendants. Two were wrongful death cases and one was a personal injury suit brought by an employee of the Nursing Home, alleging negligent inspection of the boiler and boiler supports. This was the first time anyone had alleged that HSB’s inspector had been negligent in the performance of the jurisdictional inspection of the boiler. Between September 2001 and July 2002, another fourteen wrongful death and personal injury lawsuits (the “Lawsuits”) were filed against HSB and others. Dobransky testified that he was not surprised that the Lawsuits were filed. “Well, you have people killed and injured, someone is looking for a deep pocket, whether it is us or St. Paul Insurance or someone else.” (Dobransky Dep. 144.) Withers was retained as litigation counsel for HSB and began billing HSB for his fees and expenses, commencing in March 2001.

On November 8, 2002, St. Paul filed a subrogation suit against HSB, seeking approximately $4.5 million in property losses as a result of HSB’s negligent inspection of the boiler supports.

The complaints in the Lawsuits alleged that HSB’s inspector had been negligent in his 1998 jurisdictional inspection of the equipment at the Nursing Home when he failed to observe and report that the metal stand on which the boiler rested was rusted and failed to report these deficiencies to the Nursing Home and appropriate governmental agencies. (Attachs. to Black Aff.) The theory was that the stand collapsed, setting in motion a chain of events that resulted in a crack in a natural gas pipe, leading to an accumulation of natural gas that exploded. HSB took the position that, under Michigan rules and regulations on boiler inspections, the stand was not within the scope of the boiler inspection. HSB considered that position significant from a liability standpoint, for a failure of a component that HSB did not inspect and was not required to inspect should not give rise to any liability on HSB’s part.

Three years later, in 2004, one of the tort plaintiffs’ retained experts opined for the first time that the boiler had been leaking for ten years before the explosion, setting off the chain of events that culminated in the explosion, thus blaming HSB for the explosion. Additionally, there was new testimony that the boiler stands were, in fact, part of a jurisdictional inspection, contrary to earlier testimony from two State officials. As a result of this new theory of liability and the testimony concerning the boiler stands, as well as outside counsel’s assessment that HSB had become “the target defendant” (Watkins Aff. ¶ 10), HSB became concerned that its potential liability could exceed the Policy’s $2 million reporting threshold. In March 2004, HSB instructed its broker, Cooper Gay & Co., to place Underwriters on notice of the Lawsuits. Ltr. dated 3/16/04 from Cooper to Barton (Pl.’s Summ. J. Ex. Y). The Lawsuits were scheduled for trial commencing on September 8, 2004. Shortly before trial, HSB settled all of the personal injury and wrongful death suits for $7.35 million.

The St. Paul subrogation action was scheduled for trial in January 2006. Ultimately, HSB and St. Paul agreed to arbitrate their dispute. The arbitration took place in June 2006 over a period of ten days. The arbitration panel issued an award in favor of St. Paul and against HSB in the amount of $1,931,647.00. Pursuant to a “high-low” settlement agreement entered into by the parties before the arbitration, HSB paid St. Paul $1.3 million.

Additionally, HSB incurred legal fees and expenses of approximately $2.3 million in defending the Lawsuits and the arbitration proceeding, for which it is also seeking reimbursement under the Policy.

The Coverage Dispute Between HSB and SVB

Dan Barton of Cooper Gay & Co. served as HSB’s insurance broker in connection with procuring the Policy. Toward the end of 2000, as HSB’s claims-made policy was expiring, Jean Cooper, then HSB’s Risk Manager, asked Barton to secure “run-off’ coverage because HSB was about to be purchased by AIG. Cooper testified that her intent in obtaining the extended reporting period insurance was to provide “full continuity” with “no gaps” in coverage. (Cooper Dep. 155.) Barton understood that HSB’s prior coverage was going to be folded into an AIG policy and that HSB was seeking a “run-off’ policy that would respond to claims or circumstances taking place prior to the Policy’s inception date, December 1, 2000, but which only became known to HSB after that date. His role was to negotiate the terms with Underwriters on behalf of HSB and obtain the most favorable terms possible for his client.

In November 2000, Barton approached Stephen Burnhope, then the “active underwriter” for one of the syndicates on the expiring policy, to see if he would be willing to be the lead underwriter for a run-off policy for HSB. Burnhope agreed. During the time that the Policy was being negotiated, Burnhope never had any direct communications with anyone at HSB; all of his dealings were directly with Barton. At their second meeting, Barton presented Burnhope with a “quote slip” on which Burnhope then listed some of the terms and conditions he was offering to HSB, including premiums for three different policy periods (36, 60, and 72 months). According to Barton, it was anticipated that the wording used in the expiring policy would roll over to the run-off policy, subject to necessary amendments because it was a run-off policy. At the bottom of the “quote slip,” Burnhope wrote “Known Claims/Circumstances Exclusion (PTO).” On the back he wrote,

Ex. Claims and Circumstances

(i) known to the office of General Counsel

(ii) identified in the due diligence process and known to HSB;

(iii) known to any director of the Assured or the Assured’s principal operating subsidiaries as at inception hereof.

Actual “policy” wording to be agreed. (Barton Dep. 40 & Ex. 2.) Barton confirmed that Burnhope was “very keen” that “all claims and/or circumstances” then known by HSB would be disclosed to the Underwriters subscribing to HSB’s expiring policy. (Barton Dep. 40; Burnhope Dep. 70.) Indeed, in a memorandum to Cooper dated November 17, 2000, Barton stated:

Regarding the wording Stephen [Burn-hope] confirmed that he will give full continuity. He is not trying to be clever with the known claims declaration, he just wants to make sure all known claims are notified now under the existing policy. He has added to 3.b) “and known to H.S.B.”

(Pl.’s Summ. J. Ex. HH) (underlining in original).

Burnhope testified, however, that his agreement to subscribe to the extended reporting period Policy was not based on an understanding that notification of known claims would be made under the expiring policy. (Burnhope Dep. 72-73.) Moreover, that notification was “irrelevant” to his underwriting decision. (Burn-hope Dep. 73.)

During the negotiation process, Barton advised HSB of all of the terms and conditions on the quote slip, including that Burnhope was requiring that all claims and circumstances known to HSB be the subject of notice under its expiring policy before it expired on December 1, 2000. Thus, he instructed HSB to provide a full list of all known claims and circumstances under its expiring policy because, under the quote slip, they would be excluded under the run-off policy.

As discussed below, HSB’s expiring policy contained a provision allowing HSB to obtain coverage under the expiring policy for a claim that arose after the policy period if HSB provided notice of a “specific Wrongful Act” prior to the expiration of the policy period. Thus, Burnhope testified that it was his desire that “all known claims and circumstances that could give rise to a claim should be excluded under the policy going forward, and as a consequence it was [his] expectation that those would be notified to the current policy.” (Burnhope Dep. 71.) Burnhope described this notice as a “logical corollary” to the known elaim/eircumstances exclusion he was requiring going forward. Id. at 70.

Thus, on November 16, 2000, Cooper ordered “updated claim/incident exhibits” from Watkins in the legal department. Six days later, Cooper sent an email to Barton regarding the run-off policy, stating in relevant part:

As a “heads up,” I alert you to the following:

1-Our legal department has prepared various exhibits to update Underwriters on all incidents which could possible [sic] give rise to a claim, based on Stephen’s desire to be sure anything is reported under the current policy. This will be kept as current as possible until the closing date and then I will forward it to you. This will be an extensive list, however, most everything would not be expected to be a claim under the policy and would not normally have been reported.

Mem. dated 11/22/00 from Cooper to Barton (Burnhope Dep. Ex. 5).

On November 30, 2000, Amy Bassett, who worked in HSB’s risk management department under Cooper’s supervision, sent Barton an eighteen-page fax with a cover letter stating “Attached are the incident reports Jean advised we would send.” Mem. dated 11/30/00 from Bassett to Barton (Burnhope Dep. Ex. 6). The attachment listed several categories of potential or existing claims grouped under the following headings:

• Potential Claims/Complaints Regarding ASME Inspection Services

• Potential Claims/Complaints Regarding Jurisdictional Inspection Services

• Personal Injuries Reported in Connection with Insurance Claim[s]

• Negligence Litigation Pending Against [HSB]

Id. The list included a number of explosions, as well as several requests for inspection records, including one in connection with an explosion wrongful death case. Id. The list, however, did not contain any reference to the Nursing Home explosion. Watkins, who prepared the incidents list, did not recall why the Nursing Home explosion was not on the list. She did explain that HSB had already ruled out negligent inspection by the time they prepared the list. (Watkins Dep. 108.)

That same day, Cooper Gay & Co. faxed the incidents list to the underwriters on the expiring policy. The underwriters responded that, with respect to the first category (24 notices relating to ASME inspection services), none of the matters constituted a claim within the meaning of the claims-made policy (i.e., a suit, arbitration, or written demand for damages against the insured). With respect to the second category (30 notices relating to jurisdictional inspections), the underwriters accepted only four of the incidents as constituting a claim, those being the ones where it appeared that the insured had received a written demand for damages. Likewise, with respect to the third category (24 notices involving personal injuries), the underwriters accepted only one as a claim, and with the fourth (25 notices of negligence litigation), the underwriters accepted all matters involving actual litigation. The underwriters further rejected HSB’s argument that it had provided notice of a wrongful act, which would allow coverage for claims later asserted.

It is Underwriters’ opinion, with respect to none of the matters listed in the fax of 30 November 2000, did the insured provide Underwriters with written notice necessary to comply with Condition VII(B). Condition VII(B) requires the insured to inform Underwriters of a specific wrongful act, actual or alleged, of which it is aware. At most, the information submitted by the assured with respect to any particular matter relates very general allegations and not a specific wrongful act.

Ltr. dated 3/20/01 from Tim Carter to Martin Prew (Pl.’s Summ. J. Ex. JJ).

On December 1, 2000, Cooper Gay & Co. issued HSB an “Insurance Cover Note” advising HSB that it had effected an “Errors and Omissions Insurance, Extended Reporting Period Policy.” One of the listed conditions was “Known Claims/Cireumstances Exception, wording to be agreed by Underwriters.” Ins. Cover Note dated 12/1/00 (Burnhope Dep. Ex. 7). Although the amount of coverage ($35 million), the self-insured retention amount ($5 million), and the Policy Period (December 1, 2000, to December 1, 2005) were agreed to at the time coverage was bound, the actual wording of the Policy was not. On January 5, 2001, Cooper Gay & Co. issued a second cover note listing the Lloyd’s syndicates with which coverage had been placed, as well as the general terms, conditions, and exclusions to be included in the policy. HSB was instructed to examine the Insurance Cover Note carefully and to notify Cooper Gay & Co. if it did not comply with HSB’s requirements or was materially inaccurate. With respect to the “Known Claims/Circumstances Exclusion,” the cover note again provided “wording to be agreed by Underwriters.” Ins. Cover Note dated 1/5/01 (Burnhope Dep. Ex. 8).

In early 2001, Cooper Gay & Co. prepared the wording for the Policy and then submitted it to Underwriters, which signified its acceptance on February 27, 2001, by initialing Cooper Gay & Co.’s wording. At the time, Barton believed the wording accurately reflected the intent of both parties to the insurance contract he had negotiated on behalf of HSB. The Lloyd’s Policy Signing Office issued the Policy on or about April 19, 2001. The second page of the Policy stated in all capital letters:

THE ASSURED IS REQUESTED TO READ THIS POLICY AND, IF IT IS INCORRECT, RETURN IT IMMEDIATELY TO YOUR BROKER FOR ALTERATION.

(Policy at 2.)

Under the terms of the Policy, the Underwriters agreed to reimburse HSB for a loss “for any Claim first reported by the Insureds during the Policy Period, for a Wrongful Act by the Insureds ... in the rendering of or failure to render Professional Services, provided such Wrongful Act occurred, or is alleged to have occurred, prior to the 1st December 2000.” (Policy § I — Insuring Agreements.)

The Policy defined “Claim” as:

1. a civil or criminal proceeding, or an administrative adjudicatory proceeding commenced by the filing of a notice of charges or a formal investigative order, in which money damages are sought;

2. an arbitration or mediation proceeding in which monetary damages are sought; or

3. a written demand for monetary damages,

against the Insureds, including any appeal therefrom.

(Policy § II.A. — Definitions.)

“Loss” was defined as “damages, settlements and Defense Costs.” (Policy § II.G. — Definitions.)

“Wrongful Act” was defined as “any actual or alleged error, misstatement, misleading statement, act, omission, neglect or breach of duty, or other act done or wrongfully attempted.” (Policy § ILL.— Definitions.)

When issued, the Policy also included in Section III a number of exclusions, including “Exclusion M,” which read as follows:

The Underwriters shall not be liable to pay any Loss in connection with any Claim:

M. or circumstance which could give rise to a Claim

1. known to the office of General Counsel, or

2. identified in the due diligence process and known to HSB Group, Inc., or

3. known to any director of the Insureds or the Insured[’s] principal operating Subsidiaries

as at inception hereof, 1st December 2000.

(Policy Excl. M; Burnhope Ex. 10.) Burn-hope testified that the wording of Exclusion M “perfectly” reflected what he had intended to include in the Policy when he made his handwritten notations on the quote slip. (Burnhope Dep. 113-14.)

On October 17, 2001, HSB first contacted Barton about the Policy’s wording. In an email, Cooper advised Barton that the Policy had three errors (in two of the definitions and in Exclusion L, which are not relevant to this suit) and that she had “concerns over the wording of Exclusion M” that she wanted to discuss with him. Email dated 10/17/01 from Cooper to Barton (Cooper Dep. Ex. 72). Her concerns were two-fold. First, it was not worded according to “common industry standards” and, second, she did not feel that it “totally, accurately reflected the intent of both the underwriters and [herself], and needed a little tweaking for [their] specific business, and how incidents come in.” (Cooper Dep. 151.) On December 20, 2001, Cooper sent Barton an email regarding, inter alia, the rewording of Exclusion M to clarify “the ‘circumstances’ to be excluded.” Email dated 12/20/01 from Cooper to Barton (Cooper Dep. Ex. 73). She attached the following suggested revision of Exclusion M, which she had drafted:

The Underwriters shall not be liable to pay any Loss in connection with any Claim:

M. or circumstance which could reasonably be expected to give rise to a Claim

1. known to the office of General Counsel, or

2. identified in the due diligence process performed as part of the acquisition by American International Group and known to HSB Group, Inc., or

3. known to any member of the Board of Directors of the Insured or the Insured’s principal operating Subsidiaries

as at inception hereof, 1st December 2000.

Attachment to Email dated 12/20/01 from Cooper to Barton (Cooper Dep. Ex. 73) (italics added to denote revisions).

Cooper testified that she did not become aware of the Nursing Home explosion or the Lawsuits until sometime in 2004 and, therefore, did not withhold information about these matters from Underwriters. (Cooper Dep. 44.) Likewise, Barton testified he was not aware of the explosion or the Lawsuits against HSB while he was negotiating the terms of the Policy or the amendment to Exclusion M. (Barton Dep. 133-34.)

Burnhope had left SVB in September 2001, so the negotiations over HSB’s proposed revision to Exclusion M took place between Barton and Richard Peters, another SVB underwriter who had no involvement with the prior negotiations. Peters, like Barton and Cooper, was unaware of the Nursing Home explosion or any of the Lawsuits. Peters agreed to the proposed change and, on February 1, 2002, an endorsement to the Policy was issued that retroactively amended Exclusion M as HSB had requested. Peters testified that, had he been aware of the Lawsuits and that HSB had not given notice of the explosion under its expiring policy, he would not have agreed to the proposed amendment. (Peters Dep. 84.)

In March 2004, Underwriters first received notice of the Lawsuits, which Cooper Gay & Co. provided at HSB’s direction. During the spring and summer of 2004, Underwriters requested and received from HSB various materials pertaining to the Lawsuits, including pleadings, depositions, witness lists, and HSB’s underwriting file for the Policy. On August 31, 2004, HSB sent Underwriters the incidents list that HSB had provided to Cooper Gay & Co. on November 30, 2000.

On September 7, 2004, one day before trial of the Lawsuits was to commence, Underwriters’ counsel sent HSB a letter acknowledging its request for coverage but not confirming coverage. The letter stated that the Underwriters were conducting an ongoing investigation and set forth a reservation of rights, remedies, and defenses, including the right to deny coverage on the basis of the amended Exclusion M. The letter requested HSB to provide specific information and documents to assist with the investigation, including documents showing when the constituencies listed in subsections (1), (2), and (3) of Exclusion M had learned about the explosion and what they knew about it. Ltr. dated 9/7/04 from Black to Watkins at 2-3 (Pl.’s Summ. J. Ex. Z). Watkins, then Chief Legal Counsel and an officer of HSB, responded in writing on September 24, 2004, advising Underwriters that HSB had settled the pending wrongful death and personal injury lawsuits for $7.35 million.

On December 16, 2004, the instant lawsuit was filed by HSB.

Discussion

I. Which Version of Exclusion M Applies?

Before deciding whether coverage for the Lawsuits is barred by an exclusion in the Policy, I must first resolve which version of Exclusion M applies. That issue arises with consideration of the summary judgment motions addressed to SVB’s counterclaims for reformation of the Policy.

A. Reformation of the Policy to Exclude All Losses Arising out of the Explosion

In Count I of its Counterclaim, SVB seeks reformation of the Policy so that it expressly excludes coverage for all losses, including defense costs, HSB has incurred in connection with all Claims arising out of the explosion at the Nursing Home, including but not limited to the Lawsuits. Both parties have sought summary judgment in their favor on this count. The burden of proof on this issue is on the party seeking reformation of the contract, in this case SVB. See Lopinto v. Haines, 185 Conn. 527, 535, 441 A.2d 151 (1981).

In Connecticut, a cause of action for reformation rests on the equitable principle that a written instrument that does not reflect the contracting parties’ intent should be rewritten where the instrument is the product of either a mutual mistake or a unilateral mistake by one party coupled with actual or constructive fraud, or other inequitable conduct on the part of the other. Lopinto, 185 Conn. at 531, 441 A.2d 151. The purpose of reformation is to restate the terms of an agreement when the writing that memorializes it is at variance with the parties’ intent. Id. at 532, 441 A.2d 151. To prevail on a reformation claim, a litigant must meet a heightened standard of proof, specifically clear, substantial and convincing evidence that reformation is in order. Id. at 533-34, 441 A.2d 151. Thus, “[w]here fraud is absent, ‘it must be established that both parties agreed to something different from what is expressed in writing, and the proof on this point should be clear so as to leave no room for doubt.’ ” Id. at 535, 441 A.2d 151 (quoting Bishop v. Clay Fire & Marine Ins. Co., 49 Conn. 167, 172 (1881)).

1. The Parties’ Contentions

SVB seeks summary judgment on Count I of its Counterclaim, arguing that the evidence of record is clear, substantial, convincing and undisputed that the Lawsuits were precisely the type of claim the Policy was not intended to cover and that any failure of the current Policy wording to effectuate that intent was necessarily the product of a mutual mistake or a unilateral mistake on the part of SVB, coupled with actual or constructive fraud or other inequitable conduct on the part of HSB. SVB argues that, because Barton was HSB’s agent for all purposes in negotiating the Policy, HSB is charged with his knowledge and understanding about the terms and conditions of the Policy and is bound by his actions. See McDermott v. Calvary Baptist Church, 263 Conn. 378, 384, 819 A.2d 795 (Conn.2003) (holding that “it is a general rule of agency law that the principal in an agency relationship is bound by, and liable for, the acts in which his agent engages with authority from the principal, and within the scope of the [agency relationship]”) (internal quotation marks and citations omitted). Based on the testimony of Barton and Burnhope, which SVB characterizes as “remarkably consistent,” SVB insists that there can be no doubt that “the Policy was not intended to cover any claim HSB might report during the Policy period arising from any circumstance which could give rise to a Claim that was known at the highest levels of HSB” as of December 1, 2000. (Def.’s Mem. in Supp. of Mot. Summ. J. 20.) “Indisputably,” it asserts, “HSB’s representation that it had complied with Burnhope’s condition by reporting under its prior policy all known ‘incidents which could possible[sic] give rise to a claim,’ was not true” because both Withers and Watkins in HSB’s legal department knew of the explosion. (Def.’s Mem. in Supp. of Mot. Summ. J. 24.) Thus, it reasons, when Barton and Burnhope finalized the Policy’s wording in early 2001, they were operating under a mutual mistake of fact — i.e., that HSB had complied with Burnhope’s condition by reporting all known circumstances which could possibly give rise to a claim under its expiring policy — and that their mutual mistake of fact warrants reformation of the Policy. Alternatively, SVB claims that it was operating under a unilateral mistake of fact because it believed that HSB had reported everything under the expiring policy, when in fact it had not done so, despite Cooper’s fraudulent representation to Barton to the contrary.

HSB responds that there is no evidence to support SVB’s contention that, due to a mutual mistake, the Policy failed to express the true intent of the parties, namely that all prior incidents had been reported. Although certain people at HSB, including several people in its legal department, were aware of the Nursing Home explosion, they had ruled out any liability on the part of HSB for negligent inspection and, therefore, did not feel a need to include the explosion on the incidents list. (Watkins Dep. 113.) Moreover, the evidence is undisputed that Cooper did not learn of the Nursing Home explosion until 2004. She was the only person at HSB who was involved in procuring the Policy and she was the person who sent the email to Barton about the incidents list. HSB argues that, given her lack of knowledge of the explosion, she could not have intended to deceive the Underwriters, which is required to show fraud. HSB also argues that SVB did not rely on HSB’s representations concerning what was reported under the expiring policy, because, as Burn-hope testified, whether or not notification was given under the expiring policy was “irrelevant” to his underwriting decision. (Burnhope Dep. 73.)

2. Whether SVB is Entitled to Reformation to Exclude Losses from the Explosion

The Connecticut Supreme Court has cautioned that, in exercising its power to reform a contract, a court must act with the utmost caution and can only grant the relief requested if the prayer for reformation is supported by convincing evidence. Greenwich Contracting Co. v. Bonwit Constr. Co., 156 Conn. 123, 126-27, 239 A.2d 519 (1968); Palmer v. Hartford Fire Ins. Co., 54 Conn. 488, 500, 9 A. 248 (1887). Moreover, reformation should not be granted “for the purpose of alleviating a hard or oppressive bargain, but rather to restate the intended terms of an agreement when the writing that memorializes that agreement is at variance with the intent of both parties.” Lopinto, 185 Conn. at 532, 441 A.2d 151.

I will first address SVB’s claim for reformation based upon a unilateral mistake, which requires a showing of actual or constructive fraud or other inequitable conduct on the part of HSB. Even assuming that Underwriters believed that HSB had reported everything under the expiring policy, SVB cannot carry its heavy burden of showing by clear, convincing, and substantial evidence that HSB’s failure to report the explosion was fraudulent or that HSB engaged in any other conduct that could be characterized as inequitable.

In the context of reformation of a contract based on a unilateral mistake coupled with fraud, the Connecticut courts have defined “fraud” as including “not only misrepresentations known to be such, but also concealment or nondisclosure by a party who knows that the other party is acting under a mistake as to material facts.” Baptist v. Bankers Indem. Ins. Co., 245 F.Supp. 33, 37 (D.Conn.1965) (quoting Home Owners’ Loan Corp. v. Stevens, 120 Conn. 6, 10 n. 2, 179 A. 330 (1935)), aff'd, 377 F.2d 211 (2d Cir.1967).

As HSB points out, although the Policy had an effective date of December 1, 2000, it was not actually issued until April 19, 2001. The evidence is undisputed that Cooper was the only person at HSB who was involved with the procurement of the Policy and that she was not aware of the Nursing Home explosion until 2004. There is simply no evidence to suggest that Cooper knew her statements to be false when she provided the incidents list to Barton in November 2000 and represented that it included all incidents that could possibly give rise to a claim. Nor is there any evidence to suggest that Watkins engaged in any type of fraudulent conduct in compiling the incidents list, because her testimony is undisputed that she did not know the purpose for that list. On the other hand, the evidence is undisputed that, as of November 2000, HSB’s Legal Department was aware of the Nursing Home explosion, the personal injuries and deaths resulting therefrom, and had hired outside counsel to represent the interests of HSB. SVB correctly argues that generally a corporation is charged with constructive knowledge of all material facts of which its officers and agents acquire knowledge while acting in the scope of their employment. 3 Fletcher Cyc. Corp. § 790 (2009 Supp.). Thus, HSB cannot dispute that it made a false statement to SVB in connection with providing the incidents list, even though no employee was aware that a false statement had been made.

A showing of fraud, however, requires more than just a false statement. There must also be an intent to defraud, of which there is absolutely no evidence in this case, circumstantially or otherwise. See Busker v. United Illuminating Co., 156 Conn. 456, 458-59, 242 A.2d 708 (1968). HSB had no motive to leave the Nursing Home explosion off the incidents list, because including that incident on the list would not have affected coverage under the Policy, which turns on what HSB knew rather than on what it listed. Nor is there any evidence of SVB’s reliance on the contents of the incidents list for, as HSB points out, Burnhope testified that it was “irrelevant” to his underwriting decision. To justify reformation based upon a unilateral mistake coupled with fraud, there must have been reliance on the part of the party seeking reformation' — in other words, that party must have been actually misled. 66 Am. Jur. 2d, Reformation of Instruments § 24 (2009). Moreover, only a mistake concerning a material fact can form the basis for reformation of a contract. See DeLuca v. C.W. Blakeslee & Sons, Inc., 174 Conn. 535, 544-45, 391 A.2d 170 (1978). Here, Burnhope’s testimony was unequivocal that the provision of the List and the contents of the List were irrelevant to his underwriting decision.

The Connecticut courts have repeatedly cautioned that fraud is not to be presumed and must be strictly proven by clear, convincing, and unequivocal evidence. See Id. Even when the facts are viewed in the light most favorable to SVB, there is no genuine issue of material fact whether HSB acted with fraudulent intent or whether SVB relied upon a material false statement made by HSB. Therefore, because no reasonable jury could find facts necessary to support SVB’s claim for reformation based upon a unilateral mistake supported by actual fraud, that claim fails as a matter of law.

SVB asserts that, even if fraud cannot be established, Connecticut case law makes clear that a contract may be reformed based on a unilateral mistake of fact supported by constructive fraud or inequitable conduct on the part of HSB. SVB maintains that, regardless of what Cooper knew, HSB was charged with constructive knowledge of all material facts known to any of its officers and agents, including knowledge of the Nursing Home explosion, which was known to the legal department. Therefore, it argues, Cooper’s representation, which was made on behalf of HSB, was tantamount to constructive fraud on the part of HSB.

The difficulty with this argument is that SVB erroneously equates “constructive knowledge” with “constructive fraud.” Under Connecticut law, constructive fraud requires a special or confidential relationship between the parties, the breach of which forms the basis for liability. See DeMorais v. Wisniowski, 81 Conn.App. 595, 607, 841 A.2d 226, cert. denied, 268 Conn. 923, 848 A.2d 472 (2004); Mitchell v. Mitchell, 31 Conn.App. 331, 335, 625 A.2d 828 (1993). The relationship between an insured and insurer has been characterized by the Connecticut courts as one based solely upon contract. Although there may be circumstances when dealing with third-party claims that fiduciary duties arise between an insurer and its insured, such is not the case in first-party disputes between an insurer and insured. 1019 Asylum Ltd. P’ship v. Kinney Pike Ins., Inc., No. CV020816344, 2003 WL 21496543, at *2 (Conn.Super.Ct. May 30, 2003). Thus, this is not a situation where the policy may be reformed based upon unilateral mistake coupled with constructive fraud. Similarly, there is no evidence of inequitable conduct that would allow reformation based upon a unilateral mistake.

In the absence of fraud or inequitable conduct reformation requires proof that both parties agreed to something different from what is expressed in writing. Bishop, 49 Conn. at 172. The proof on this point should be clear so as to leave no room for doubt that, through mistake common to both parties, the written contract fails to express the real agreement made by the parties. Harlach v. Metropolitan Prop. & Liability Ins. Co., 221 Conn. 185, 190, 602 A.2d 1007 (1992).

SVB emphasizes that HSB is charged with the knowledge and understanding of Barton, its agent who procured the Policy. See McDermott, 263 Conn, at 384-85, 819 A.2d 795. Charging HSB with knowledge that the Policy would not cover “known claims/circumstances,” however, is far different than charging HSB with knowledge of precisely what incidents the Policy would and would not cover, including the losses arising from the Nursing Home explosion. Neither Barton nor Burnhope was even aware of the explosion at the time the Policy was being negotiated. Indeed, as of the inception of the Policy, neither the wording of the Policy nor the wording of Exclusion M had been agreed upon by the parties. Burnhope had simply indicated that he wanted a “Known Claims/Circumstances Exclusion” which he described on the back of the quote sheet as “Claims and Circumstances” known to the office of the General Counsel, identified in the due diligence process, and known to any director of HSB, with the actual policy wording to be agreed upon. (Barton Dep. Ex. 2.)

In the case of Union America Ins. Co. v. Atlas Construction Co., No. CV 980168418S, 2000 WL 839982, at *4 (Conn.Super.Ct. May 12, 2000), the insurance company sought reformation of an insurance policy based upon mutual mistake and unilateral mistake coupled with inequitable conduct on the part of the insured. Contrary to the expressed intentions of the parties during the procurement of the Policy, the Policy did not include an endorsement excluding completed operations from coverage. In ruling on the insurer’s summary judgment motion, the court stressed the heavy burden that the party seeking reformation bears and admonished that “[t]his standard of proof should operate as a weighty caution upon the minds of all judges, and it forbids relief whenever the evidence is loose, equivocal or contradictory.” Id. at *4 (internal citations and quotation marks omitted). Despite affidavits from the individuals who negotiated the issuance of the policy for both sides that the policy would not cover completed operations, as well as a firm quote and cover note indicating that the policy excluded all completed operations prior to inception, the court denied the insurance company’s motion for summary judgment. The court found that, although the insurance company’s evidence was relevant to show the parties’ intent to exclude completed operations from coverage under the policy, it had failed to prove by clear and convincing evidence that it made a mistake in failing to exclude coverage for completed operations from the policy. Id. at *5.

In the instant case, the facts are far less favorable to the insurer than in Union America. Although it is clear that the parties intended the Policy to exclude known “claims/ circumstances,” it is not clear that an agreement had been reached about precisely what those “claims/circumstances” would encompass. In Baptist v. Bankers Indemnity Insurance Co., 245 F.Supp. at 40, this court refused to grant reformation of an insurance contract where the plaintiff had failed to sustain his burden of establishing the existence of the terms of the alleged antecedent agreement with sufficient clarity. Similarly, in this case, SVB has not proven by clear, convincing, and substantial evidence the precise antecedent agreement between Barton and Burnhope, other than that there would be a known “claims/circumstances” exclusion, with the wording to be agreed upon by the parties. Thus, there can be no mutual mistake on which to base a claim of reformation.

SVB bears a heightened burden of proof in seeking reformation of the Policy. Anderson v. Liberty Lobby instructs that whether “a given factual dispute requires submission to a jury must be guided by the substantive evidentiary standards that apply to the case.” 477 U.S. at 255, 106 S.Ct. 2505. Applying that standard to the evidence of record, I conclude that SVB has not and cannot meet its burden. Accordingly, SVB is not entitled to reformation of the Policy. SVB’s motion for summary judgment on Count I of its Counterclaim seeking reformation of the Policy to exclude all losses arising out of the Nursing Home explosion is denied. Conversely, after viewing the evidence in the light most favorable to SVB, HSB’s motion for summary judgment on Count I of the Counterclaim is granted. The Policy will not be reformed to exclude all losses arising out of the Nursing Home explosion.

B. Reformation of the Policy to Strike the Revisions to Exclusion M

In Count II, SVB seeks to reform the Policy by striking the amended version of Exclusion M and leaving the original version as the operative provision.

1. The Parties’ Arguments

As with the previous count, SVB has moved for summary judgment on Count II of its Counterclaim on the ground that the record contains clear, substantial and convincing evidence that Underwriters’ agreement to amend Exclusion M in 2002 was the result of mutual mistake between those who negotiated the amendment or a unilateral mistake on the part of SVB induced by HSB’s failure to disclose the lawsuits that had been filed against HSB. SVB argues that, by the time Exclusion M was amended, Burnhope was no longer involved in the negotiations and a new underwriter with SVB, Peters, was involved. Four of the Lawsuits had been filed, yet neither Peters nor Barton was aware of the explosion or that any of the Lawsuits had been filed against HSB. Although Cooper, who requested the revision, was also