A Massachusetts trial court recently ordered a defendant insurer to produce reinsurance agreements during discovery in a coverage dispute. Neles-Jamesbury, Inc. v. Liberty Mutual Ins. Co., C.A. No. 02-0982A (October 11, 2007).
In the case, the plaintiff, a company sued for asbestos-related injuries, sought discovery of reinsurance agreements from the defendant insurers under Massachusetts Rule of Civil Procedure 26(b)(2), which requires a party to produce to all other parties “any insurance agreement under which any person carrying on an insurance decision may be liable to satisfy part or all of a judgment which may be entered in the action or to indemnify or reimburse for payments made to satisfy the judgment . . . .” The insurer opposed the discovery on the ground that reinsurance agreements are not insurance agreements discoverable under Mass. R. Civ. P. 26(b)(2) and are not otherwise discoverable.
The court rejected the insurers’ attempted distinction, finding reinsurance agreements discoverable under Mass. R. Civ. P. 26(b)(2). The court then indicated that a significant basis for its decision was an interest in fostering settlement of the matter, further stating as follows:
“On the record before the court, there are grounds to believe that the discovery sought by the plaintiff may lead to the discovery of admissible evidence regarding the disputed questions of fact in this case. It is also this court’s view that such discovery may aid the parties in coming to an agreement beneficial to all. While some courts have stated that the possibility of settlement alone is not a valid reason to grant such a discovery motion, it is an important consideration that this court should consider throughout the pretrial stage.”
For reports on court’s decisions concerning discoverability of reinsurance agreements in several other jurisdictions, please click here, here and here.
