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challenge might affect the agreement. Mr. Gordon also expected
that Guardian would want to recapture the underlying policies.
When the third amendment was executed, Mr. Gordon believed
that all settlements for amounts due petitioner had been made.
In fact, settlement had not been made. As a result of this
error, petitioner did not receive from Guardian moneys it was
entitled to receive. The third amendment would not have been
executed if Mr. Gordon had realized the error. The provision in
the third amendment pursuant to which each party waived its
rights also appears in the terminating amendments to the
reinsurance agreement between UPL and Guardian.
When the 1989 Agreement was terminated, neither party had
accurate information as to the actual status of the EAB. The
accounting information provided by Guardian showed a positive EAB
of $140,663. The EAB was actually negative by approximately
$260,181. Although the EAB was negative, petitioner made no
payment to Guardian, because neither party realized that it was
negative. Neither petitioner nor Guardian would have made the
decisions each did, if it had had accurate information.
OPINION
1. Overview
This case takes the Court inside the complex and esoteric
world of insurance law, taking into account the technical jargon
and standards utilized therein. In making our findings, we have
examined volumes of filings, reams of trial testimony, boxes of
exhibits, and assorted expert reports. Many of the critical
facts were disputed by the parties, and each party introduced
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