NITZKY v. TECHTRONIC INDUSTRIES NORTH AMERICA, INC. et al

Filing 26

LETTER ORDER granting Plaintiff's request to compel Defendants to produce copies of all insurance policies, including excess insurance policies, under which an insurance business 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. Signed by Magistrate Judge Joseph A. Dickson on 4/21/15. (jr)

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
Chambers of

Martin Luther King, Jr. Federal Bid .
& U.S. Courthouse
50 Walnut Street
Newark, New Jersey 07102
(973-645-2580)

Joseph A. Dickson
United States Magistrate Judge

LETTER ORDER
April 21, 2015
All counsel ofrecord via ECF
Re:

Jose Garcia v. Techtronic Industries North America, Inc., et al. v. Union
Run,LLC
Civil Action No. 2:13-cv-05884 (MCA) (JAD)
Anwar Abu-Obaid v. Techtronic Industries North America, Inc., et al.
Civil Action No. 3:14-cv-00840 (KM) (JAD)
Robert J. Nitzky, Jr. v. Techtronic Industries North America, Inc., et al.
Civil Action No. 2:14-cv-04697 (KM) (JAD)

Dear Counsel,
This matter comes before the Court by way of Plaintiffs' request to compel Defendant o
produce "complete copies of any and all insurance agreements that may provide insur
coverage for any judgment Plaintiffts] might obtain against Defendants." (ECF No. 51, at
Upon careful consideration of Plaintiffs' submissions, (ECF Nos. 51, 54), Defendants' oppositi

,

(ECF Nos. 52, 55), as well as oral arguments held on April 13, 2015, (Minute Entry forproceedi

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held before Magistrate Judge Joseph A. Dickson on 4/13/15), and for the reasons stated bel
Plaintiffs' request is GRANTED.
I.

BACKGROUND

Plaintiffs submitted a letter to this Court dated January 26, 2015, arguing that Federal R le
of Civil Procedure 26 requires Defendants to provide Plaintiffs with their insurance agreem t.

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(ECF No. 51, at 2). Plaintiffs contend that Defendants did not produce any documentaf n
concerning their insurance, but "[i]nstead, they simply stated, '[t]he above named Defendants

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self-insured for purposes of satisfying any reasonable verdict against them in this matter, and t
have excess insurance available.' After a request from Plaintiftls'] counsel for the compl e
insurance agreements, Defendants agreed to produce the declaration pages, but not the agreem
themselves." (Id.). Defendants represented to Plaintiffs that they are self-insured up to $500,
and their insurance covers any excess loss. (Id. at 3). Plaintiffs believe that given the litigati n
costs involved, the $500,000 will be exhausted before trial, especially since "there have alre
been two plaintiffjury verdicts against [Defendants] in table saw cases similar to [the] instant ca ,
and in both cases the verdicts were in excess of $1 million." (Id.) (emphasis in original).
Additionally, Plaintiffs argue that courts are clear, "Rule 26(a)(l)(D) means exactly w
is says with no exception; it requires a defendant to produce a full and complete copy of
insurance agreement that may provide coverage and anything less (including declaration pages
insufficient." (MJ. Plaintiffs then cite to several cases, which support the proposition that" e
plain language of the rule requires a party to disclose, and to provide for inspection, 'any insur
agreement,' not just the declarations page of the policy." Wolk v. Green, No. C06-5025, 2008
298757, at *2 (N.D. Cal. Feb. 1, 2008).
Defendants opposed Plaintiffs request in a letter dated January 28, 2015. (ECF No. 5 ).
Defendants note that Rule 26 "provides that a party must make available to the other parties ' r
inspection and copying as under Rule 34, any insurance agreement under which an insur
business may be liable to satisfy all or part of a possible judgment in the action or to indemn
or reimburse for payments made to satisfy the judgment."' (Id. at 1-2) (emphasis in origin
Defendants argue that at the present time, "there is no indication that Plaintiffs' claims would e

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in excess of Defendants' self-insured retention and as such, the excess insurance policies are 1 ot
policies that 'may be liable' to satisfy all or part of a judgment in the action." (Id. at 2).
Defendants note that Plaintiffs' lead counsel, Richard Sullivan, Esq., has filed "well o er
seventy-five 'SawStop' cases against [Defendants] in numerous jurisdictions (including thirt( en
cases in the District of New Jersey, all of which [this Court] has managed)." (Id.). Defendru ts
argue that Plaintiffs' attorney has in fact interpreted Rule 26 as not requiring the production of
excess insurance policies because Plaintiffs' counsel as never previously requested them. (il ).
Defendants posit that "in a good faith effort to resolve any discovery dispute without the need Dr
court intervention, Defendants provided the declaration pages of its excess insurance polici s,
which detail the scope and limitations of coverage." (Id.). By providing the declaration pages Dr
the policies, Defendants maintain that they have already produced "all of the information necess: ry
to satisfy the purpose of the insurance coverage disclosure provision and therefore, the producti >n
of the policies is not required." (Id. at 3).
On Februrury 24, 2015, Plaintiffs submitted a letter with an attached Order entered in m
action pending against the same Defendants in the United States District Court for the Northc rn
District of Texas, in the case Francisco Re2:alado v. Techtronic Industries North America Inc. et
al. 1 The Order addressed the very issue presently before this Court. (ECF No. 54). Defenda ts
responded on February 26, 2015, and argued that in their previously filed opposition, (ECF 1' to.
52), Defendants "relied upon certain authorities (generally-accepted in the District of New Jerse ),

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Case No. 3:13-cv-4267-L.
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which [Defendants] in Regalado did not rely upon." (ECF No. 55, at 1). Defendants, therefo ,
request that the dispute be decided under the authorities "applicable" in this District. 2 (Id.).
The Court held oral arguments on April 13, 2015. The Court questioned Plaintiffs' coun
as to why the entire insurance policy was needed, instead of just the declaration pages. Plainti
counsel informed the Court that there may be information in the policy itself relating to "how

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self-insured retention and how defense costs are consumed." (Hr'g Tr. 7, April 13, 2015).
addition, Plaintiffs believe there "may be an additional excess policy above and beyond the exc s
policy that [Plaintiffs] were already aware of', thereby creating the possibility of additio
coverage. (Id.). Finally, Plaintiffs seek to determine the "terms and constraints, limitations
scope of the excess policy." (Id.).

Defendants counsel responded and maintained that

disclosures of the declaration pages are sufficient to satisfy Rule 26. (Id. at 8).

II.

LEGAL STANDARD AND ANALYSIS

Federal Rule of Civil Procedure 26 states,
Except as exempted by Rule 26(a)(l)(B) or as otherwise stipulated or ordered by
the court, a party must, without awaiting a discovery request, provide to the other
parties for inspection and copying as under Rule 34, 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.
FED. R. Crv. P. 26(a)(l)(A)(iv). This case neither falls under a Rule 26(a)(l)(B) exception,
FED. R. Crv. P. 26(a)(l)(B)), nor has there been a Court Order relieving Defendants of th ·r
obligation under the Rule, nor have the parties stipulated to such an arrangement. The Court m t,

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Defendants appear to be referring to the arguments made in their January 29, 2015 submissi
(ECF No. 52). There, Defendants argue that both this Court and the Third Circuit "frequently c e
to Moore's Federal Practice as persuasive authority." (Id. at 3).
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therefore, determine whether Defendants providing Plaintiffs with declaration pages is suffici t
to satisfy the production of "insurance agreements" as is required by Rule 26.
In Regalado, the Hon. David L. Horan, U.S.M.J. of the United States District Court for

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Northern District of Texas, addressed this very issue. (ECF No. 54-1). There, the Defend
made nearly identical arguments to those before this Court. In Regalado, Judge Horan determi
that the Defendants were required to produce not just the declaration pages, but "any insur
agreement under which an insurance business may be liable to satisfy all or part of a possi le
judgment in this action or to indemnify or reimburse for payments made to satisfy the judgm
including the excess insurance agreement disclosed by Defendants in their Rule 26(a)(l) ini
disclosures." (Id. at 5-6) (quoting FED. R. CN. P. 26(a)(l)(A)(iv)). For the reasons stated bel
this Court shall Order the same relief.
Defendants argued in that case, as they do here, that "there is no indication that Plaintif
claims would be in excess of Defendants' self-insured retention and as such, the excess insur
policies are not policies that 'may be liable' to satisfy all or part of a judgment in the action". (E
No. 52, at 2). As Judge Horan stated, this argument requires the court to "perform at least a p
valuation of the case to determine the likelihood of Plaintiffs' recovery of a judgment that exce s
Defendants' $500,000.00 self-insured retention." (ECF No. 54-1, at 3). This Court, like
Northern District of Texas, shall not perform such an analysis. Rule 26 disclosures are mandat
and requires the production of"any insurance agreement" that could potentially "satisfy all or
of a possible judgment" in the case. FED. R. CN. P. 26(a)(l)(A)(iv) (emphasis added). Altho
there is no indication that the claims would be in excess of Defendants' self-insured retenti
there is likewise no indication that a judgment would not be in excess of Defendants' self-ins
retention. The phrase "may be liable" indicates that regardless of whether there is actual liabil · ,

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the mere potential of satisfying a judgment requires the production of the insurance agreem1 nt
under Rule 26. 3 Even if Plaintiffs had not informed the Court that two previous jury verdi ts
against Defendants in similar cases resulted injudgments in excess of$1 million, the Court w01 d
still require Defendants to produce their insurance agreement. Defendants have not provided 1 ie
Court with any evidence that the damages Plaintiffs seek are in any way capped and, therefore, 1 ie
Court will not issue a ruling as if it were.
Defendants have not provided the Court with case law which states that producing 1 ie
declaration pages of an insurance policy is sufficient to satisfy the requirements set forth in R1 e
26. Instead, Defendants cite to Moore's Federal Practice on the issue and then cite to cases fr< m
the Third Circuit and this Court where judges have mentioned that they either find Moore to >e
persuasive or that they agree with his position in general. None of the cases cited, howev r,
specifically reference Moore's position on insurance agreements. Rather, Defendants seek to ha 1re
this Court adopt Moore's view regarding insurance disclosures simply because other judges ha e
found Moore's Federal Practice as persuasive on other issues. This Court will not, however, ignc "e
the plain language of Rule 26.
This Court finds that the production of merely the declaration pages is insufficient to satis ry
Rule 26. Rule 26 of the Federal Rules of Civil Procedure does not specifically address 1 e
production of declaration pages. See FED. R. C1v. P. 26. The Rule is clear on its face regardi g
insurance agreements as a whole: their disclosure is automatic. See Fed. Home Loan Mort1rn e
Corp. v. Scottsdale Ins. Co., 316 F.3d 431, 448 n.13 (3d Cir. 2003) (citing FED. R. CIV.

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I>.

Indeed, Defendants' argument boils down to this: the carrier may not be liable. While that m y
be true, it does not logically negate the possibility, contemplated by Rule 26, that the carrier ill y_
be liable.
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26(a)(l)(A)(iv)) (Rule 26 of the Federal Rules of Civil Procedure requires the automatic disclos e
of "any insurance agreement" which may result in liability to satisfy the judgment).

III.

CONCLUSION

For the foregoing reasons, Plaintiffs request to compel Defendants to produce copies f
all insurance policies, including excess insurance policies, under which an insurance business
be liable to satisfy all or part of a possible judgment in the action or to indemnify or reimburse

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payments made to satisfy the judgment, (ECF No. 51 ), is GRANTED. Defendants shall prod e
any such agreements by April 29, 2015.
SO ORDERED

J~.M.J.
cc:

Hon. Madeline C. Arleo, U.S.D.J.

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