Discovery

REINSURER SEEKS UNDERLYING CLAIM FILES IN DISPUTE OVER SCOPE OF “LOSS,” NOTWITHSTANDING “FOLLOW THE FORTUNES” DOCTRINE

June 21, 2012 by Carlton Fields

On March 8, 2012, we reported on a settlement of Travelers’s claims against certain of its “excess of loss” reinsurers in a dispute over the extent to which Travelers could claim that its settlement of thousands of underlying asbestos insurance claims constituted one “loss” or occurrence for purposes of meeting the dollar amount threshold for entitlement to reinsurance coverage. Nationwide Mutual, a reinsurer still a defendant in the action, has sought discovery from Travelers, including Travelers’s files related to its settlement of the underlying insurance claims. Travelers has disputed Nationwide’s entitlement to these materials, contending that the “follow the fortunes” doctrine renders irrelevant the details of Travelers adjudication of the underlying claims. The court recently denied (on non-substantive grounds) Nationwide’s motion to compel the discovery, without prejudice for Nationwide to re-file a more detailed motion. Travelers Casualty & Surety Co. v. Nationwide Mutual Insurance Co., Case No. 2:11-cv-00063 (USDC S.D. Ohio May 10, 2012).

This post written by Michael Wolgin.

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MOTION TO SET ASIDE DISCOVERY ORDER ON LOSS RESERVES DENIED

June 5, 2012 by Carlton Fields

In the latest development in the ongoing litigation between Granite State Insurance Company and Clearwater Insurance Company, Granite unsuccessfully moved to set aside a magistrate judge’s discovery order. As we reported in July 2011, Granite was ordered to produce certain asbestos loss reserve documents in response to Clearwater’s request for production of documents. The motion objecting to that order was denied, the district judge concluding that, first, the magistrate judge’s order was not contrary to law as the crucial issue was not merely, as Granite suggested, whether a ceding insurer has any practices in place regarding providing notice and, second, the order was not “clearly erroneous” because the notice procedures were relevant to the ultimate issue in dispute. The district judge explained that Granite’s arguments were largely tied to the merits of its defenses rather than to the permissibility of the discovery sought. Granite State Insurance Co. v. Clearwater Insurance Co., Case No. 09-10607 (USDC S.D.N.Y. Apr. 20, 2012).

This post written by John Black.

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COURT COMPELS PRODUCTION OF UNDERWRITING MANUALS; FINDS REINSURANCE DOCUMENTS GENERALLY IRRELEVANT

May 8, 2012 by Carlton Fields

A dispute arose between the city of Warren, Michigan and several insurance companies regarding their duties to defend and indemnify with respect to a state court class action suit against the city. The city sought to compel discovery of underwriting manuals, documents reflecting the company’s interpretation of key policy terms, and documents reflecting discussions with reinsurers and the setting of reserves from United States Fire Insurance Company as well as a series of other insurers who had provided coverage at various points between the 1960s and 2001. The district court granted the city’s motion to compel as to the claims manuals, underwriting manuals, and related documents, and denied all other requests. Specifically, the court found that (1) the other claims-related material was covered by attorney-client privilege or the work-product doctrine; (2) materials evidencing interpretation of policy terms were not relevant; and (3) while reinsurance policies themselves are discoverable, all other documents relating to reinsurance are irrelevant and not discoverable. United States Fire Insurance Co. v. The City of Warren, No. 10-13128 (E.D. Mich. Apr. 26, 2012).

This post written by John Black.

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SECOND CIRCUIT AFFIRMS ORDER DENYING MOTION TO DISQUALIFY REINSURER’S ATTORNEYS

May 1, 2012 by Carlton Fields

In a matter involving an arbitration with a reinsurance company, the Second Circuit Court of Appeals affirmed a district court’s order denying Utica Mutual Insurance Company’s motion to disqualify R & Q Reinsurance Company’s attorneys, the law firm of Chadbourne & Park, LLP. Utica had unsuccessfully argued to the district court that Chadbourne should be disqualified because a part-time associate had been exposed to Utica’s confidential information. The Second Circuit further affirmed the district court’s order unsealing certain confidential non-privileged information underlying Utica’s motion to disqualify, and the district court’s decision requiring R & Q to withdraw certain discovery requests that Utica had identified as suggesting an inference of Chadbourne’s improper knowledge of Utica’s confidential information. Utica Mut. Ins. Co. v. INA Reinsurance Co., No. 10-4164 (2d. Cir. Mar. 15, 2012) (See the district court disqualification and discovery orders).

This post written by Ben Seessel.

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CIVIL SUBPOENAS ISSUED BY ARBITRATOR AGAINST OUT-OF-STATE NONPARTIES HELD UNENFORCEABLE

April 18, 2012 by Carlton Fields

The Colorado Supreme Court vacated a district court’s order enforcing subpoenas issued by an arbitrator against out-of-state nonparties. The court held that a district court has the same authority to enforce subpoenas in civil actions regardless of whether arbitration is involved or not, and that Colorado courts have no authority to enforce civil subpoenas against out-of-state nonparties. The court rejected the argument that Colorado’s long-arm statute gives a Colorado court the authority to enforce such subpoenas. It further stated that, under the Uniform Interstate Depositions and Discovery Act (“UIDDA”), which Colorado and other states had recently adopted, a subpoena issued for discovery in the “trial state” must be submitted to the clerk of court in the “discovery state” at which time the clerk in the discovery state re-issues the subpoena. Colorado Mills, LLC v. SunOpta Grains & Foods, Inc., No. 11SA82 (Colo. Feb. 6, 2012).

This post written by Ben Seessel.

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