Western Ins. Co. v. Rottman, No. 2:13-CV-436-DAK, 2016 U.S. Dist. LEXIS 180161 (D. Utah. Dec. 29, 2016)
A Utah federal court held that reinsurance information regarding an insolvent insurer was relevant to the defense of directors and officers being sued for negligence by the liquidator. The liquidator sued a group of insurer’s former directors and officers for negligence, breach of fiduciary duty, liability and other claims. The directors and officers moved to compel discovery from the insolvent carrier in the form of a Federal Rules of Civil Procedure 30(b)(6) deposition on a variety of topics, including reinsurance and whether the insolvent insurer had received reinsurance payments.
In granting discovery of reinsurance information, the court found that the liquidator’s objection seemed to admit the relevance of reinsurance information given that the liquidator contended that the directors and officers should have caused reinsurance claims to be made prior to liquidation and failing to do so lost millions of dollars for the insolvent carrier. Given this assertion, the court held that the directors and officers would be entitled to discovery regarding reinsurance policies, payments and settlements to prepare their defense to the assertion.