Gangemi v. Moor

• Decision Date: 19 May 1967
• Docket Number: Civ. A. No. 3268.
• Citation: 268 F. Supp. 19
• Parties: Mary V. GANGEMI, Individually, Mary V. Gangemi, as widow of John James Gangemi, Deceased and as Administratrix of the Estate of John James Gangemi, Deceased and Judy Gangemi, a minor, by her next friend, Mary V. Gangemi, Plaintiffs, v. Mary Gregg MOOR and A. Massey Moor, Defendants.
• Court: U.S. District Court — District of Delaware

268 F. Supp. 19

Mary V. GANGEMI, Individually, Mary V. Gangemi, as widow of John James Gangemi, Deceased and as Administratrix of the Estate of John James Gangemi, Deceased and Judy Gangemi, a minor, by her next friend, Mary V. Gangemi, Plaintiffs, v. Mary Gregg MOOR and A. Massey Moor, Defendants.

Civ. A. No. 3268.

United States District Court D. Delaware.

May 19, 1967.

Harold Schmittinger, of Schmittinger & Rodriguez, Dover, Del., for plaintiffs.

Henry Ridgely and G. Francis Autman, Jr., Dover, Del., and Roger Sanders, of Prickett, Ward, Burt & Sanders, Wilmington, Del., for defendants.

OPINION

CALEB M. WRIGHT, Chief Judge.

This is an action for personal injuries, wrongful death and property damages stemming from an automobile accident which occurred on December 27, 1964. Jurisdiction is based on diversity of citizenship; the plaintiffs are Maryland residents and the defendants reside in Delaware. The question of liability is highly disputed, and the defendants have filed a counterclaim for $100,000 for personal injuries and property damages.

Subsequent to the commencement of the action the plaintiffs filed certain interrogatories. Numbers 21-24 relate to the existence of defendants' insurance coverage, and its amount; interrogatory number 25 asks for an itemized schedule of the defendants' assets and their values. The defendants declined to answer interrogatories 21-25 claiming that the information called for was "privileged."¹ The plaintiffs then moved to compel the defendants to answer the interrogatories; it is this motion which is now before the Court.

There is considerable conflict between the various district courts as to whether the information called for should be ordered supplied, and resolution of the conflicting positions taken by the lower federal courts will apparently have to await an authoritative pronouncement from the appellate courts. Pending such a pronouncement, the lower courts are free to follow their conscience.

As far as the discovery of an insurance policy is concerned, the leading case in this area which permits discovery is Johanek v. Aberle, 27 F.R.D. 272 (D. Mont.1961). Judge Jameson analyzed the cases and found that Rule 26(b) of the Federal Rules of Civil Procedure required disclosure of the existence, nature and extent of the defendants' insurance coverage. Judge Jameson placed great reliance on the financial responsibility laws of Montana which he construed as giving the plaintiff a "discoverable interest" in the defendants' insurance policy. Delaware has a similar law, 21 Del. C. § 2901 et seq., (1953), but this statute has never been thought to give injured plaintiffs a "discoverable interest" in the defendants' insurance coverage. In fact, the law in Delaware is that no such discovery will be permitted. Ruark v. Smith, 51 Del. 420, 147 A.2d 514 (Super. Ct.1959). Absent some indication by the Delaware Courts that their statutes comprehend such a policy, this Court is loath to interpret the Delaware financial responsibility law as creating any such discoverable interest. Furthermore, even in the event the Delaware statute was so intended, that would not be conclusive for our purposes since state law cannot govern federal procedural question. Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 32 L.Ed. 1188 (1938). Cf. 4 Moore, Federal Practice ¶ 26.23 9 (1962).

The second part of Judge Jameson's argument reads Rule 1 of the Federal Rules into Rule 26(b). Rule 1 provides: "These rules shall be construed to secure the just, speedy, and inexpensive determination of every action." Rule 26(b) provides that "the deponent may be examined regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action * * *." In effect, Judge Jameson would define relevant matter as any information which might hasten the determination of lawsuits. The reasoning here is that knowledge of an adverse party's insurance coverage promotes realistic settlement negotiations, advancing the likelihood of a termination of lawsuits in advance of trial. But, this argument has two sides, and the court does not find the above-recited side dispositive. It is equally possible that the awareness of extensive insurance coverage will impel a plaintiff's attorney to "shoot the works" in the hope of a large judgment whose collection is assured, when, had he been ignorant of the size of the insurance coverage, he would have accepted a reasonable settlement. "Developments in the Law—Discovery", 74 Harv.L.Rev. 940, 1018-19 (1961).

It is difficult to see how insurance coverage differs from other assets of a defendant so that insurance coverage should be discoverable while other assets are not. The insured purchases insurance for the protection of himself and his family, not the prospective injured party. Only in those states with compulsory insurance laws can the injured party be said to be a beneficiary of the contract, and even in those states his "interes...