CA1: mutual mistake discussed

OneBeacon America v. Leasing Associates, No. 05-2014.  This is a dispute between insurance companies.  Essentially, this is a question of when a court should reform a contract on the grounds of mutual mistake:

OneBeacon argued that the Agreement, taken together with evidence of the course of conduct between it and LAI, and of the insurance obligations LAI imposed on its lessees, established that the parties were mutually mistaken when they executed a contract that did not exclude from coverage vehicles that lessees had chosen to insure independently. 

Applying Massachusetts law, the Court determines that:

[Restatement (Second) of Contracts § 155 (2006)] summarizes the applicable principles as follows: Where a writing that evidences or embodies an agreement in whole or in part fails to express the agreement because of a mistake of both parties as to the contents or effect of the writing, the court may at the request of a party reform the writing to express the agreement, except to the extent that rights of third parties such as good faith purchasers for value will be unfairly affected.

The burden is thus: to “establish that the undisputed material facts fully, clearly, and decisively show[] a mutual mistake," or that a party must demonstrate “to a high degree of certainty – is not that the outcome of its agreement differed from its expectations, but rather that the contract language did not express the agreement as originally intended.”  Moreover, reformation is an equitable doctrine.  Anyway, after reviewing the undisputed facts (and the parties vehemently agree that the facts are undisputed), the court finds that reformation is warranted.