Mineweaser v. One Beacon America Insurance Company et al
Filing
86
ORDER denying 73 Motion to Seal Document ; granting in part and denying in part 76 Motion to Compel. Signed by Hon. H. Kenneth Schroeder, Jr on 6/5/2015. (KER)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
EDNA K. MINEWEASER, Executrix of the
Estate of PAUL J. MINEWEASER,
Deceased, and Individually as
Surviving Spouse
Plaintiffs,
-v-
14-CV-0585A(Sr)
ONE BEACON AMERICA INSURANCE
COMPANY,
RESOLUTE MANAGEMENT INC.,
Administrator for ONE BEACON
INSURANCE COMPANY,
SEATON INSURANCE COMPANY,
Individually and as Successor
to UNIGUARD INSURANCE
COMPANY,
CONTINENTAL INSURANCE COMPANY,
Individually and as Successor in
Interest to HARBOR INSURANCE
COMPANY (CNA),
HARPER INSURANCE LIMITED, f/k/a
TUREGUM INSURANCE COMPANY,
and
ASSICURAZIONI GENERALI, SPA,
Defendants.
DECISION AND ORDER
This case was referred to the undersigned by the Hon. Richard J. Arcara,
pursuant to 28 U.S.C. § 636(b)(1), for all pretrial matters and to hear and report upon
dispositive motions. Dkt. #81.
On April 11, 2014, following a bench trial before the Hon. Jeremiah J.
Moriarty III, J.S.C., New York State Supreme Court, County of Erie, a judgment of $3
million was entered against Hedman Resources, Ltd. (“Hedman”), as damages for
personal injuries, to wit, pleural mesothelioma, sustained by Paul J. Mineweaser due to
asbestos exposure at his place of employment, Durez Plastics, a division of Occidental
Chemical Corporation, between May and October of 1971, and pecuniary loss
sustained by his spouse, Edna K. Mineweaser. Dkt. #1-3 & Dkt. #1-4. Paul J.
Minewaser died of complications from malignant mesothelioma on April 24, 2014.
This action seeks payment of the state court judgment from Hedman’s
excess insurance carriers. Dkt. #1. The defendant excess insurance carriers disclaim
any obligation to plaintiffs on multiple grounds, including, as relevant to the instant
motions, confidential settlement agreements releasing them from all outstanding
coverage obligations they may have had with Hedman. Dkt. #1. Plaintiffs assert that
the settlement agreements constitute fraudulent conveyances. Dkt. #1.
Currently before the Court is defendants’ motion to enforce the
confidentiality of the settlement agreements between the excess insurance companies
and Hedman by allowing defendants to file the agreements under seal and subject to a
protective order (Dkt. #73), and plaintiffs’ motion to compel production of those
settlement agreements.1 Dkt. #76.
1
By letter dated May 7, 2015, plaintiffs’ counsel withdraws its motion to compel
except with respect to the disclosure of the settlement agreements.
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In support of the motion, counsel for Seaton Insurance Company
(“Seaton”), avers that it entered into the settlement agreement with Hedman to resolve
its dispute as to whether there was insurance coverage for Hedman under the policy.
Kelly declaration, ¶ 2. As it intends to rely upon the settlement agreement in defense of
this action, Seaton does not oppose disclosure of the settlement agreement. Kelly
declaration, ¶ 5. However, the settlement agreement between Seaton and Hedman
contains a confidentiality provision and Hedman has only consented to production of
the settlement agreement upon the condition, as set forth in the settlement agreement,
that disclosure occur “under a pledge of confidentiality to other Persons when such
disclosure is reasonably required for the conduct of Hedman’s or Seaton’s legitimate
business activities.” Kelly declaration, ¶ 7.
Harper Insurance Limited and Assisicurazioni Generalli, SPA similarly
advise the Court that their respective settlement agreements with Hedman are “the
central document at issue, yet confidentiality concerns raised by Hedman have
prevented [defendants] from producing this information.” Dkt. #85, p.1. Their
settlement agreement provides “that all matters relating to this Agreement other than
the fact of this Agreement shall be confidential and are not to be disclosed except by
order of a court of competent jurisdiction or by written agreement of the Parties.”
Seaton’s Memo of Law, p.4.
One Beacon’s settlement agreement provides that the “Agreement and its
terms are confidential and shall not be disclosed by either party except, after advising of
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the confidentiality of the Agreement . . . to any tax, regulatory, or other governmental
authority that properly requires disclosure or as otherwise legally required.” Seaton’s
Memo of Law, p.4.
Continental’s settlement agreement provides that “all matters relating to
this Agreement other than the fact of this Agreement shall be confidential and are not to
be disclosed except by order of a court of competent jurisdiction or by written
agreement of the Parties.” Seaton’s Memo of Law, p.4.
In opposition to the motion, counsel for plaintiffs declares that there is no
basis to seal the settlement agreements and no justification for protecting the
confidentiality of a “judgment creditor who has apparently absconded with the funds the
Defendants claim was [sic] designed to pay for asbestos-claims like those pending in
this Court.” Dkt. #77, ¶ 11.
Defendants rely upon case law holding that “the Second Circuit strongly
endorses the confidentiality of settlement agreements in virtually all cases.” Scheops v.
Museum of Modern Art, 603 F. Supp.2d 673, 676 (S.D.N.Y. 2009). It is the exception to
that rule, however, which applies to the facts of this case.
“There is a well-established presumption favoring full and complete
access to court proceedings and judicial documents.” Hens v. Clientlogic Operating
Corp., No. 05-CV-381, 2010 WL 4340919, at *1 (W.D.N.Y. Nov. 2, 2010). This
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“presumption of access is based on the need for federal courts . . . to have a measure
of accountability and for the public to have confidence in the administration of justice.”
Lugosch v. Pyramid Co. of Onondaga, 435 F.3d 110, 119 (2d Cir. 2006), quoting United
States v. Amodeo, 71 F.3d 1044, 1048 (2d Cir. 1995).
In assessing whether a document is a judicial document, the Court
considers whether the document is “relevant to the performance of the judicial function
and useful in the judicial process.” United States v. Erie County, N.Y., 763 F.3d 235,
239 (2d Cir. 2014), quoting Lugosch, 435 F.3d at 119. Because an adjudication of a
motion for summary judgment is a formal act of government, the basis of which should,
absent exceptional circumstances, be subject to public scrutiny, documents used by
parties moving for, or opposing, summary judgment should not remain under seal
absent the most compelling reasons. Lugosch, 435 F.3d at 121; Joy v. North, 692 F.2d
880, 893 (2nd Cir. 1982), cert denied, 460 U.S. 1051 (1983).
Clearly, the settlement agreements in which Hedman and the excess
insurance carriers resolved their dispute as to coverage for asbestos related claims will
be relevant to, perhaps even determinative of, the Court’s assessment of the merits of
plaintiffs’ claims against the excess insurance carriers. Yet defendants present no
compelling reason for upholding the confidentiality provisions in the settlement
agreements and precluding public scrutiny of this Court’s determination regarding the
propriety and consequences of the settlement agreements between Hedman and the
excess insurance carriers. Hedman’s desire to avoid such scrutiny of the terms and
-5-
conditions of the settlement of the underlying coverage dispute does not provide a
sufficient basis for sealing these documents, particularly when weighed against the fact
that the settlement effectively foreclosed the ability of workers to collect damages for
personal injuries caused by Hedman. See Lugosch, 435 F.3d at 121 (“where
documents are used to determine litigants’ substantive legal rights, a strong
presumption of access attaches.”), citing Amodeo, 71 F.3d at 1049. Accordingly,
defendants motion to file the settlement agreements under seal and subject to a
protective order (Dkt. #73), is denied and plaintiffs’ motion to compel production of
those settlement agreements (Dkt. #76), is granted.
SO ORDERED.
DATED:
Buffalo, New York
June 5, 2015
s/ H. Kenneth Schroeder, Jr.
H. KENNETH SCHROEDER, JR.
United States Magistrate Judge
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