Suffolk Federal Credit Union v. CUMIS Ins. Society, Inc. (E.D.N.Y. October 19, 2010)
Plaintiff filed a declaratory judgment action alleging that defendant failed to pay sums due under a fidelity bond it issued for losses plaintiff sustained as the result of wrongful acts of a company with which plaintiff did business. Plaintiff served discovery demands requesting reinsurance information, and defendant objected on the grounds that the request was overly broad, unduly burdensome and sought information not relevant to any claim or defense in the case. Plaintiff filed a motion to compel production of the material.
The court granted plaintiff’s motion. The court held that Federal Rule of Civil Procedure 26(a)(1)(A)(iv) provided that parties must produce in their initial disclosures, without awaiting a discovery request, any insurance agreement under which an insurance business may be liable to satisfy all or part of a possible judgment in the action or to indemnify or reimburse for payments made to satisfy the judgment. The court held that reinsurance agreements fit within the plain language of the rule when the primary insurer is named as a party. Additionally, the rule does not require any showing of relevance before reinsurance materials are discoverable.
Accordingly, the court held that to the extent that defendant is a party to any agreement that obligates a reinsurer to satisfy all or part of a possible judgment against it in the action or to indemnify or reimburse defendant for payments made to satisfy the judgment, defendant must produce that agreement to plaintiff.
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Toni Frain and Michael Glascott