Discover Prop. & Cas. Co. v. National Football League, No. 652933/2012, 2019 N.Y. Misc. LEXIS 5332 (N.Y. Sup. Ct., N.Y. Co. Oct. 4, 2019).
In this coverage case, a referee to supervise disclosure under CPLR 3104 issued an order directing the insurers to produce their reinsurance contracts and communications between themselves and their reinsurers about the underlying claim. The underlying claim is the huge settlement entered into between the NFL and former NFL players over concussion and other related injuries, including CTE and MTBI (mild traumatic brain injury).
In ordering production, the referee held the production of the reinsurance contracts was “seemingly mandated by” CPLR 3101(f). CPLR 3101(f) provides that “[a] party may obtain discovery of the existence and contents of any insurance agreement under which any person carrying on an insurance business 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 referee also held that reinsurance communications were discoverable to the extent that an insurer has asserted failure to disclose defenses or is targeted by a bad faith claim.
In affirming the referee on these issues (there were other discovery issues as well), the motion court rejected the insurers’ argument that the reinsurance information was confidential and proprietary information not relevant to the case. The motion court agreed with the referee that the plain language of CPLR 3101(f) meant that the reinsurance agreements should be produced. The court also stated that because this was an insurance coverage case, “the insurers’ communications with their reinsurers is reasonably calculated to lead to information relevant to (1) whether the Insurers have handled the NFL parties’ claims in good faith and (2) whether the Insurers lacked material information regarding the insured risks.” The court also noted that the allegations of bad faith by the NFL against the insurers for refusing to consent to the class action settlement was a basis for producing the reinsurance communications.