Clauss v. Danker, 64 Civ. 2608.

• Court: United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
• Citation: 264 F. Supp. 246
• Docket Number: No. 64 Civ. 2608.,64 Civ. 2608.
• Parties: Theodore A. CLAUSS, as Administrator of the Goods, Chattels and Credits which were of Beverly Ann Clauss, deceased, Plaintiff, v. Bertha M. DANKER and C & M Equipment Co., Defendant. C & M LEASING COMPANY, Third-Party Plaintiff, v. Theodore A. CLAUSS, Third-Party Defendant. Theodore A. CLAUSS, Fourth-Party Plaintiff, v. EMPLOYERS MUTUAL LIABILITY INSURANCE COMPANY OF WISCONSIN, Fourth-Party Defendant.
• Decision Date: 31 January 1967

264 F. Supp. 246

Theodore A. CLAUSS, as Administrator of the Goods, Chattels and Credits which were of Beverly Ann Clauss, deceased, Plaintiff,
v.
Bertha M. DANKER and C & M Equipment Co., Defendant.
C & M LEASING COMPANY, Third-Party Plaintiff,
v.
Theodore A. CLAUSS, Third-Party Defendant.
Theodore A. CLAUSS, Fourth-Party Plaintiff,
v.
EMPLOYERS MUTUAL LIABILITY INSURANCE COMPANY OF WISCONSIN, Fourth-Party Defendant.

No. 64 Civ. 2608.

United States District Court S. D. New York.

January 31, 1967.

264 F. Supp. 247

Jerome Edelman, Brooklyn, N. Y., for plaintiff Theodore A. Clauss.

Hanner, Fitzmaurice & Onorato, New York City, for C & M Leasing Co. s/h/a C & M Equipment Co. and Employers Mut. Liability Ins. Co. of Wisconsin; James G. Barron, Jackson Heights, N. Y., of counsel.

Thomas V. Kingham, New York City, for defendant Bertha M. Danker; McLaughlin & Quinn, New York City, Trial Counsel; James A. Quinn, New York City, of counsel.

OPINION

MANSFIELD, District Judge.

Plaintiff, suing as an administrator in this wrongful death action,¹ brings this motion pursuant to Rules 1, 26(b) and 33 of the Federal Rules of Civil Procedure seeking disclosure of particulars regarding the insurance coverage of defendants Bertha M. Danker and C & M Leasing Company (sued herein as "C & M Equipment Company"). There is no contention that the information, if disclosed, would be admissible upon the trial of the action, or that it is calculated to lead to discovery of relevant evidence. The motion is denied.

While the question of disclosure of a defendant's insurance coverage in a personal injury action has been the subject of erudite debate for years, it is here presented as an issue of first impression in this district, at least as far as reported decisions reveal. There are many reasons why such disclosure would be desirable—foremost of which is that it would facilitate settlement. See, e. g.,

264 F. Supp. 248

Johanek v. Aberle, 27 F.R.D. 272 (D. Mont.1961); Ash v. Farwell, 37 F.R.D. 553 (D.Kan.1965); see 4 Moore, Federal Practice ¶ 26.16 3 (2d ed. 1966); but see Rosenberger v. Vallejo, 30 F.R.D. 352 (W.D.Pa.1962). This Court has witnessed the dismal waste of time and effort, both on the part of the parties and the court, in cases where an early disclosure of limited policy limits would have led to prompt settlements that were not reached until the eve of trial, when such information was first revealed after needless pretrial discovery and preparation for trial. Aside from such unnecessary consumption of time and effort resulting from inability to learn such crucial information until the very last minute, the effect frequently is to disrupt the court's schedule and cause loss of trial time for many needy prospective litigants

There are circumstances where disclosure of insurance would more fully protect a defendant than non-disclosure, due principally to a potential conflict of interest between the insurer and the insured. For instance, in cases where liability is doubtful but potential recovery large, the insurer on a small policy might refrain from settlement and refuse disclosure of the policy limits for the reason that it would not lose a great deal by going to trial and it might win the case outright. Disclosure might pressure the insurance company into a settlement within the policy limits, whereas non-disclosure could lead to a judgment against the defendant in a sum far in excess of the limits. Thus the decision not to disclose exposes the defendant to the risk of heavy personal liability for an overage that might have been avoided by the insurer. See 2 Barron & Holtzoff, 2A Federal Practice...