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Date: 08-28-2007
Case Number: S134545
Judge: Unknown
Court: Supreme Court of California on appeal from the Superior Court of Los Angeles County
Plaintiff's Attorney:
Borton, Petrini & Conron, Rocky K. Copley, Jonathan P. Geen and Paul Kissel for Petitioners.
Hancock Rothert & Bunshoft, Paul J. Killion, Heidi H. Frenzel, Kathryn C. Ashton and Allegra A. Jones for Certain Underwriters at Lloyd’s, London and Certain London Market Insurance and Reinsurance Companies as Amici Curiae on behalf of Petitioners.
Defendant's Attorney:
No appearance for Respondent.
Kiesel Boucher & Larson, Raymond P. Boucher, Patrick DeBlase and Anthony M. DeMarco for Real Parties in Interest.
Description:
The Roman Catholic Archdiocese of San Diego is the principal defendant in an action brought by approximately 140 persons (plaintiffs) for alleged childhood abuse by certain priests. Those cases, along with others involving the San Bernardino Archdiocese, are known collectively as Clergy Cases II, and were coordinated within the Los Angeles County Superior Court with claims against dioceses from other parts of California.
In September 2003, pursuant to a stipulated order regarding settlement and mediation proceedings, the trial court issued an initial case management order which, among other things, directed the Roman Catholic Archdiocese of San Diego (Church) to turn over copies of all insurance policies that might provide coverage for plaintiffs' claims. Petitioner Catholic Mutual Relief Society is a nonprofit corporation that administers a self-insurance fund for more than three hundred archdioceses and other Catholic Church entities in the United States and Canada, including the San Diego Archdiocese. The Catholic Mutual Relief Society is not an insurance company, but its wholly owned subsidiary, petitioner Catholic Relief Insurance Company of America, is the Church's liability insurer.2
In compliance with the case management order, the Church produced copies of its liability insurance policies issued by petitioners. Plaintiffs contended this information was insufficient. According to plaintiffs, they also need to know whether petitioners were financially sound enough to cover their policy obligations. In April 2004, in an attempt to resolve the matter informally, the trial court allowed plaintiffs to serve on petitioners a series of "interrogatories" aimed at obtaining the desired information.3 Petitioners objected to those questions on grounds that (1) the questions sought information concerning their financial condition, reserves, and reinsurance agreements, none of which was relevant for discovery purposes or was otherwise nondiscoverable; (2) that much of the material sought was privileged; (3) that the requests were overbroad and ambiguous; and (4) that the trial court lacked authority to require interrogatory responses from nonparty insurers.
On May 6, 2004, the settlement judge issued an order permitting plaintiffs to serve deposition subpoenas on petitioners in an attempt to secure the information requested by plaintiffs' "interrogatories." The subpoenas sought broad categories of financial documents, including a request for all writings reflecting the total amount of funds available from reinsurance "to satisfy any defense expenses or indemnify losses in connection with sexual abuse claims against the [Church]."4
Petitioners moved to quash the subpoenas, arguing that to the extent the document requests sought information about the overall strength of petitioners' financial condition, they were not reasonably calculated to lead to the discovery of admissible evidence and were therefore beyond the permissible scope of discovery. The settlement judge denied the motions to quash, finding that the subpoena requests - aimed at determining whether petitioners were financially able to pay any judgment that might be entered against their insured - were "clearly relevant and discoverable" to inform and facilitate settlement.
Petitioners sought a writ of mandate from the Court of Appeal to vacate the settlement judge's order. The Court of Appeal granted relief, concluding the documents and information sought were not discoverable under either the general statutory discovery provision (§ 2017.010) or the specific provision authorizing limited discovery of insurance information as a matter of right (§ 2017.210). The court found that "section [2017.210] was intended to reach only a defendant's [direct] insurer, not that insurer's reinsurance agreements."5
We granted review of the issue framed by plaintiffs as follows: "Whether the long-standing California rule that ‘has permitted discovery of the existence and extent of liability insurance' (Laddon v. Superior Court (1959) 167 Cal.App.2d 391, 394-395) allows discovery of reinsurance information that is critical to determine the ‘nature and limits' of coverage that may be available to satisfy a judgment as set forth in California Code of Civil Procedure section [2017.210]."
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In this state pretrial discovery in a civil action is governed by the Civil Discovery Act. (Code of Civ. Proc., § 2016.010 et seq. (former § 2016 et seq.).) As a general matter, information is discoverable if it is relevant to the subject matter of an action and, additionally, is either admissible in evidence or reasonably calculated to lead to the discovery of admissible evidence. (§ 2017.010.) The Court of Appeal concluded none of the broad financial information sought from these nonparty insurers6 in connection with potential settlement of the underlying sexual abuse claims was relevant or discoverable on a showing of good cause under section 2017.010. Plaintiffs have not challenged that aspect of the Court of Appeal's holding on review. Instead, plaintiffs sought review only of the specific question whether section 2017.210, which authorizes limited discovery of a defendant's liability insurance coverage as a matter of right, likewise authorizes discovery of the nonparty liability insurer's reinsurance agreements, assertedly for purposes of facilitating pretrial settlement of underlying tort claims.
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Outcome: The majority creates an exception for discovery of reinsurance agreements that are “directly on the risk to satisfy a judgment.” (Maj. opn., ante, at p. 17.) In such a case, the majority acknowledges that discovery of the policy “would be appropriate.” (Id. at p. 18.)5 No statutory authority is offered for this exception. Nor is there any need for it; the discovery statutes should simply be applied as they are written. Reinsurance is plainly discoverable under section 2017.210. If the insurer objects, it may seek a protective order under section 2017.020.
Plaintiff's Experts: Unknown
Defendant's Experts: Unknown
Comments: None