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Court Denies Reinsurer’s Motion to Compel, Finding No Basis to Decide Issues Concerning Costs for Which Cedent Has Not Requested Payment

Lamorak Insurance Co. issued excess policies to Olin Corp. and also reinsured those policies with the defendants, Certain Underwriters at Lloyd’s, London. After Lamorak and Olin settled a declaratory judgment action concerning coverage for underlying environmental property damage suits against Olin, Lamorak sought payment from Lloyd’s under the relevant reinsurance contracts. Lloyd’s disputed the reinsurance billings, and Lamorak commenced the instant action. In response, Lloyd’s sought a declaration that it is not obligated to pay expenses that Lamorak incurred in connection with its declaratory judgment action against Olin, even though Lamorak never asked to be reimbursed for such costs. Lloyd’s moved to compel discovery regarding the declaratory judgment costs, for an order setting a deadline for Lamorak to request reimbursement of such costs, or, alternatively, for an order barring Lamorak from ever making such a request. The court denied the motion in its entirety, finding no basis for compelling Lamorak to produce documents about costs it had not asked Lloyd’s to reimburse, nor for setting an arbitrary deadline for Lamorak to assert such a claim in the future. The court also refused to affirmatively bar Lamorak from pursuing a claim for the declaratory judgment costs, as doing so would be to decide a hypothetical legal question before it is arises.

Lamorak Ins. Co. v. Certain Underwriters at Lloyd’s, London, No. 1884CV00200BLS2 (Mass. Super. Ct. June 19, 2019).

©2011-2019 Carlton Fields, P.A.

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About this Author

Alex Silverman, Insurance lawyer, Carlton Fields
Associate

Alex Silverman represents U.S. and international insurers and reinsurers in complex commercial litigation and arbitration, including complex insurance coverage disputes and reinsurance matters. He regularly litigates and counsels insurers in connection with multimillion-dollar first-party and third-party claims in state and federal courts across the country, and has also litigated large-scale commercial health care and insurance fraud actions on behalf of insurers, including False Claims Act and RICO actions. 

In addition, Alex has experience representing corporations in shareholder...

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