Applied Underwriters, Inc. v. Top's Personnel, Inc., No. 8:15CV90, 2017 U.S. Dist. LEXIS 49135 (D. Neb. March 31, 2017).
A Nebraska federal court largely ruled in favor of an insured's motion to compel discovery related to a dispute over monies allegedly owed under a reinsurance participation agreement with a captive insurer and separate promissory note with an affiliate of the captive insurer. The insured was a named party in the reinsurance participation agreement and was the issuer of the promissory note, but the counterparties were separate, affiliated entities. The insured sought discovery to determine why the affiliate used separate entities as the named parties in the governing documents. Specifically, the insurer sought correspondence regarding the promissory note, the reinsurance participation agreement and any negotiations between the parties.
In granting the motion to compel in part, the court determined that discovery concerning the relationship between the reinsurance participation agreement and the promissory note and the relationship between the affiliates were relevant to the dispute. Part of the dispute involved the applicability of the arbitration clause in the reinsurance participation agreement to the dispute. The court ordered the insurer and its affiliate to respond with information to the extent it participated or assisted in the negotiation of the reinsurance participation agreement.