Discovery

REINSURANCE POLICIES DEEMED DISCOVERABLE IN INSURANCE COVERAGE DISPUTE

December 5, 2007 by Carlton Fields

This case involves an insurance coverage dispute based on Illinois state law that arose when Defendants denied coverage under five Commercial Crime Insurance Policies insuring Plaintiffs. Defendants asserted that the denial of coverage was justified because plaintiffs failed to comply with notice and loss provisions of the policies. Plaintiffs alleged those clauses were ambiguous.

The present matter came before the court on plaintiff’s motion to compel production of certain documents and information pertaining to Defendant’s reinsurance information. Noting the relatively low threshold necessary to make materials discoverable, the court ruled that such information may be used to support the plaintiff’s attempt to prove an ambiguity in the insurance policy. The court also relied on Seventh Circuit precedent holding that reinsurance agreements are discoverable and the fact that the insurers did not raise an objection to the discoverability of the policies in their briefs or at oral argument. Machinery Movers v. Fidelity and Deposit Co., Case No. 06-C-2539 (USDC N.D. Ill. Oct. 19, 2007).

This post written by Lynn Hawkins.

MOTION TO COMPEL PRODUCTION OF REINSURANCE AGREEMENT DENIED, WITHOUT PREJUDICE

November 12, 2007 by Carlton Fields

This discovery dispute arose out of defendant’s failure to answer certain of plaintiffs’ interrogatories and requests for production of documents relating to defendant’s reinsurance. Defendant, United States Fidelity & Guaranty Co. (“USF&G”), acknowledged having reinsurance, but objected to identifying its reinsurer and producing the reinsurance agreement based on relevancy. Plaintiffs filed a motion to compel. The Court denied Plaintiffs’ request, without prejudice, because the defendant had not notified the reinsurer of the claim. However, the court stated that if the defendant did notify the reinsurer of the claim, then it would be required to supplement its initial disclosures and produce a copy of the reinsurance agreement. Turnell Corp. v. United States Fidelity & Guaranty Co., Case No. 4:07-cv-1169 (USDC E.D. Mo. Sept. 10, 2007). Background on this matter is found in the Motion to Compel.

COURT HOLDS REQUEST FOR PRODUCTION OF ALL DOCUMENTS FILED WITH ANY REGULATORY AUTHORITIES FOR TEN YEARS OVERBROAD

October 30, 2007 by Carlton Fields

Excess Insurance Company reinsured H. S. Weavers on more than 500 reinsurance contracts, and entered into a commutation agreement with Weavers. Rochdale Insurance Company partially reinsured one of the reinsurance agreements. Excess sued Rochdale, and sought production of every document filed by Rochdale with regulatory authorities over a ten year period of time. On a motion to compel, the court held that the request was overbroad. Excess did not state a rationale for the breadth of the request. Counsel had failed to meet and confer on the discovery dispute as required by a local rule, prompting a rebuke from the court. Excess Insurance Co. v. Rochdale Insurance Co., Case No. 05-10174 (USDC S.D. N.Y. October 4, 2007). Background on this dispute may be found in a Memorandum of Law filed in opposition to the motion to compel.

CASE UPDATE: SCOTTSDALE INSURANCE v. AMERICAN RE DISCOVERY DISPUTE

October 1, 2007 by Carlton Fields

This case, arising from a dispute over insurance coverage following a deadly collision when a tractor trailer struck several other vehicles, was first reported on in a February 28, 2007 posting. Recently, defendant American Re (now known as Munich Re) filed a motion to compel Scottsdale to produce documents. Specifically, American Re sought two categories of documents – documents relating to premium bordereaux and documents relating to underwriting guidelines. With respect to the first request, Scottsdale did not argue the merits of each request, but simply asserted that the requests were irrelevant, overbroad, and burdensome. The court found Scottsdale’s arguments insufficient to bar production, but did limit the timeframe to documents created on or after January 1, 1997.

The court denied American Re’s request with respect to the second category of documents, concluding that American Re did not meet its burden of showing how the requested information was relevant to its claims or defenses. Scottsdale Ins. v. American Re-Insurance Co., Case No. 8:06cv16 (USDC D. Neb. Sept. 10, 2007).

COURT ENFORCES LIMITATIONS ON DISCOVERY IN CONNECTION WITH RULE 60 MOTION

September 12, 2007 by Carlton Fields

This case presents an interesting arbitration process issue. In 2004, the parties to this action participated in an arbitration, resulting in a $10,000 award to defendant, Smith Barney. Subsequently, plaintiff filed an action to vacate, and defendant moved to confirm the award. In February, 2005 a California district court confirmed the arbitration award. Plaintiff then filed a motion under Rule 60 of the Federal Rules of Civil Procedure to vacate that order, and later filed a Renewed Rule 60 Motion. The renewed motion was filed on the grounds that defendant and its counsel had committed “fraud. . . misrepresentation or other misconduct” by making material misrepresentations to the court. Plaintiff also sought discovery under its motion on the basis of newly discovered case law and evidence. The court granted “limited’ discovery. Plaintiff proceeded to use the limited permission granted by the court to “bombard” Defendant with voluminous discovery. Concluding that the Plaintiff’s discovery requests were “inappropriate in breadth” and “went well beyond the limited subjects referred to in the court’s. . . [o]rder,” the Court denied plaintiff’s motion to compel and granted Smith Barney’s motion for protective order. Sathianathan v. Smith Barney, Case No. C-04-02130 SBA (JCS) (N.D. Cal. Aug. 24, 2007).