Week's Best Posts

COURT HAS SECOND THOUGHTS ON DOCUMENT PRODUCTION

July 28, 2009 by Carlton Fields

In our January 7 post this year, we last told you about the discovery battles in AIU Insurance Company v. TIG Insurance Company, 07-7052 (USDC S.D.N.Y. Nov. 25, 2008), which we described as a “saga.” The saga continues. This time, the court reconsidered its August 28, 2008 order directing the production by TIG of information pertaining to its late notice investigation and records audit (which we discussed in a October 2, 2008 post). TIG moved for reconsideration of 25 of the documents ordered produced. The court found it had overlooked the factual bases for attorney-client privilege. Accordingly, the court entered an Order excusing TIG from producing some documents in their entirety, and permitting it to redact others.

This post written by Brian Perryman.

REACH OUT AND SUE SOMEONE – STOLEN CELL PHONES SPUR ARBITRATION

July 27, 2009 by Carlton Fields

Litigation was stayed pending concurrent arbitration in a dispute arising out of the theft of cell phones during international shipping. The complaint sought over $804,000 for the subrogated loss of approximately 15,000 cell phones. One of the defendants – companies involved in the phones’ shipping – moved to dismiss or, in the alternative, to stay on the basis of an arbitration clause between itself and the plaintiff’s subrogor. The court found that the litigation was intended to hold the defendants liable on the contract, which governed the parties’ relationship with respect to the transportation and delivery of cargo. Noting a strong bias in favor of international arbitration, the court found that the dispute should proceed through nonappealable arbitration in Peru. The court also denied another defendant’s motion to dismiss under the doctrine of forum non conveniens or, in the alternative, to transfer venue, holding that no factors “strongly” favored forcing the plaintiff to re-file elsewhere; there was no significant burden on the parties, nor were than any witnesses who would be inconvenienced. Rimac Internacional Cia. de Seguros y Reaseguros, S.A. v. Exel Global Logistics, Inc., Case No. 08-3915 (USDC S.D.N.Y. June 29, 2009).

This post written by Brian Perryman.

ARBITRATION PANEL’S ORDER TO SIGN SECURITY AGREEMENT AFFIRMED

July 21, 2009 by Carlton Fields

After a coverage decision by the arbitration panel, the parties disagreed as to the terms of the security interest agreement as stated in the “Memo of Understanding.” The panel subsequently issued an order directing Robinson Outdoors, Inc. (“Robinson”) to sign the other party’s proposed security agreement, which the trial court confirmed. Before the appellate court, Robinson argued that the panel exceeded its authority when it ordered Robinson to sign the agreement. However, the appellate court found that the record demonstrated that the panel had such authority because: (1) the memo expressly provided for a security agreement; (2) the language in the memo did not limit the scope of arbitration; (3) holding the parties to a broad reading of the scope of arbitration was fair; and (4) such authority was necessary in order to effectuate the intent of the memo. American Employers Ins. Co. v. Robinson Outdoors, Inc., Case No. 25-06-702 (Minn. Ct. App. June 9, 2009).

This post written by Dan Crisp.

COURT GRANTS LIMITED PRE-ARBITRATION DISCOVERY OF NON-PARTY

July 20, 2009 by Carlton Fields

A New York State Court allowed the issuance of judicial subpoenas to non-parties at the request of Petitioner corporations in a pre-arbitration discovery action. The Petitioners and Respondents had agreed to arbitrate under FINRA rules, but the arbitration had not yet commenced, as Petitioners sought discovery to determine if other parties should be joined in the arbitration.

The Court noted that FINRA provides a comprehensive discovery scheme, and allows for the issuance of arbitral subpoenas, but is ambiguous as to pre-arbitral discovery. The Court also noted a general judicial reluctance to order discovery where the parties have agreed to arbitrate, but ruled that it was nonetheless appropriate for the limited purpose of determining whether any other parties exist that should be brought into the arbitration. VP Trader Pro, LLC v. Joseph Azevedo Pires, No 102334-09 (N.Y. Sup. Ct. April 21, 2009).

This post written by John Pitblado.

REINSURANCE REGULATION: STATE AND FEDERAL LEGISLATIVE UPDATE

July 13, 2009 by Carlton Fields

Following are selected bills in the reinsurance area that were recently introduced or adopted in the state or federal legislature:

• S. 5994 was recently introduced in the New York Senate to permit mortgage guaranty insurers to obtain credit for reinsurance in a manner conforming to the requirements prescribed by the Superintendent of Insurance. The bill was referred to the Rules Committee.
• Oregon enacted House Bill No. 2755 (mentioned in our May 8, 2009 post), which requires the Department of Consumer and Business Services to conduct a study of options available for utilizing reinsurance and other mechanisms for spreading risk in individual and small employer group health insurance markets and submit a report to the Legislative Assembly by December 1, 2010.
• A companion bill, S 1363, to H.R. 2571 (mentioned in the June 9, 2009 post) was introduced in the U.S. Senate. The bill proposes to streamline the regulation of non-admitted insurance and reinsurance, and it contains the same principal provisions addressed in H.R. 2571, which were described in our June 9, 2009 post. The bill was referred to the Senate Banking, Housing, and Urban Affairs Committee.

This post written by Karen Benson.