(Article from Insurance Law Alert, November 2019)
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An Ohio federal district court compelled an insured to produce a confidential settlement agreement, finding the agreement relevant to a pending action between the insurer and insured, and not otherwise privileged. Navigators Specialty Ins. Co. v. Guild Assocs., Inc., 2019 WL 5962686 (S.D. Ohio Nov. 12, 2019).
Ace American Insurance Company, a non-party to the action, sought to compel production of a settlement agreement filed under seal between its policyholder, Bio-Energy LLC, and Guild Associates. Ace American argued that the settlement agreement was relevant to its own litigation with Bio-Energy because the damages sought by Bio-Energy in both litigations overlapped, entitling Ace American to view the settlement to ensure there would be no double recovery.
The court noted that third parties have standing to challenge confidentiality orders in order to obtain relevant information. Furthermore, the court explained, “absent some privilege or other compelling reason to protect the contents of a settlement agreement, there is a strong public policy in favor of granting access to such documents.”
Applying these principles, the court granted Ace American’s motion to compel. The court reasoned that the information contained in the settlement agreement was not privileged and was relevant to Ace American’s pending litigation given the substantial overlap of damages sought by Bio-Energy in both cases. However, the court cautioned that the ultimate issue of admissibility of the settlement agreement in Ace American’s litigation was a separate issue to be determined by the trial court in that matter.