Last year, a defendant insurer filed an unsuccessful motion for protective order concerning subpoenas to the defendant’s reinsurers; the court more recently declined to reconsider that ruling. The issues presented in the underlying litigation included the defendant’s alleged conduct and representations in selling coverage to the plaintiff insureds, and in denying that coverage. The defendant sought to protect documents relating to positions it took with its reinsurers in the ordinary course of business and arbitrations attempting to secure coverage from the reinsurers for the plaintiffs. In denying the motion, the court found the discovery was “undoubtedly” relevant to the plaintiff’s lawsuit since it could include impeachment evidence on the question of whether defendant denied the existence of coverage, or reveal motives suggesting bad faith. The court rejected assertions of the attorney-client and work product privileges because no specific prejudice would result without the protective order, and because an insurance company waives any privilege if it shares its counsel’s documents with a reinsurer when the parties’ interests are not aligned. The defendant’s interests were not aligned with the interests of the reinsurers because the defendant engaged in two contested arbitrations with the reinsurers. The Regence Group v. TIG Specialty Insurance Co., Case No. 07-1337 (USDC D. Or. May 1, 2009).
On the defendant’s motion for reconsideration, the court found the defendant did not show an intervening change in the law or newly discovered evidence warranting reconsideration. Rather, the defendant relied on several older cases which the court found distinguishable. The court further clarified that it granted the plaintiff’s discovery requests in their entirety, without reservation. The Regence Group v. TIG Specialty Insurance Co., Case No. 07-1337 (USDC D. Or. Feb. 4, 2010).
This post written by Brian Perryman.