privilege. Absent a showing that the parties intended the language of the cooperation clauses of the insurance policies at issue here to work a waiver of the attorney-client privilege, the court declines to follow the holding of Waste Management to find a contractual waiver of the privilege.
This Court agrees with the holdings of Remington Arms and Bituminous Casualty, and therefore rejects the reasoning of Waste Management. Although a reinsured may contractually be bound to provide its reinsurer with all documents or information in its possession that may be relevant to the underlying claim adjustment and coverage determination, absent more explicit language, it does not through a cooperation clause give up wholesale its right to preserve the confidentiality of any consultation it may have with its attorney concerning the underlying claim and its coverage determination. Provided that the reinsured has been forthright in making available to its reinsurer all factual knowledge or documentation in its possession relevant to the underlying claim or the handling of that claim, it has satisfied its obligations under the cooperation clause. The reinsurer is not entitled under a cooperation clause to learn of any and all legal advice obtained by a reinsured with a "reasonable expectation of confidentiality." Carey-Canada, 118 F.R.D at 251.
CIGNA Re contends that the documents that it seeks to have produced were not created with a reasonable expectation of confidentiality because North River produced a number of other attorney-client documents to CIGNA Re on May 21, 1991. Reply Brief at 12. Counsel for North River represented to the Court at oral argument on this motion that the documents previously produced to CIGNA Re were part of North River's official claims file, and that the documents it has withheld were segregated from the claims file and maintained in confidence at a different location. This position has been maintained consistently by North River from the inception of this discovery dispute. See P 4, Allen Affidavit dated March 9, 1992, annexed as E to CIGNA Re's Motion to Compel ("we were being provided access to only "of record" portions of the file and . . . were not being provided with, e.g, internal memoranda and attorneys' notes regarding preparation of the case" (emphasis in original)). CIGNA Re has not refuted or otherwise questioned North River's representation in any way. Consequently, the Court rejects CIGNA Re's contention that North River lacked a reasonable expectation of confidentiality as to the documents it has withheld from discovery. Those documents, as opposed to the attorney-client documents already produced, were from their creation treated with a greater degree of secrecy and expectation of confidentiality.
CIGNA Re further argues that North River had no reasonable expectation of confidentiality with respect to the documents sought because those documents are of a type that under industry custom are ordinarily made available for review. This argument is also without merit. Whether reinsureds typically produce similar documents is irrelevant to the issue whether North River, at the time it created or received the documents in question, intended to withhold those documents from CIGNA Re, and expected that their secrecy would be preserved. Assuming CIGNA Re's representation of industry custom is accurate, it is nevertheless an inaccurate statement of North River's obligations under the reinsurance agreement. Although North River was free to produce such documents if it chose, to facilitate adjustment of its claim, it was not required under the contract to do so. On this count, Judge Pisano's decision was entirely correct.
D. Fiduciary Relationship
CIGNA Re also argues that the documents in question are discoverable because North River has a fiduciary obligation of full disclosure. Memorandum of Law in Support of Appeal at 16. Although the court in Mutuelle Generale Francaise Vie v. Life Assurance Co. of Pennsvlvania, 688 F. Supp. 386 (N.D. Ill. 1988) found a fiduciary relationship to exist between a reinsured and a treaty reinsurer, this Court declines to apply its reasoning and holding to a facultative reinsurer.
This Court agrees with the observation of the District Judge in Christiana General Ins. Corp. of New York v. Great American Ins. Co., 745 F. Supp. 150 (S.D.N.Y. 1990) that "nothing in the cases cited by the parties, or discovered by the Court, indicates that the duty between a ceding insurer and a facultative reinsurer rises to the level of being a fiduciary one." Id. at 161. The presence of sufficient influence and control over the affairs of another necessary to give rise to fiduciary responsibilities is absent between reinsured and reinsurer. The reinsurer's "right to associate" gives it adequate means by which to keep informed of events that may give rise to coverage under its agreement, and also provides a sufficient means to protect its own interests.
Reinsurance agreements are negotiated at arms-length between equally sophisticated parties. Reinsurers are well aware of the risks inherent in reinsurance obligations and are adequately situated to protect their interests. The Court therefore rejects CIGNA Re's argument that North River owed it a fiduciary duty to disclose the contents of its attorney-client communications.
E. The "In Issue" Doctrine
CIGNA Re's last argument is that the withheld documents are discoverable because they pertain to subject matter that has been placed "in issue" by North River. It thus asserts that North River has impliedly waived the attorney-client privilege as to that subject matter under the "in issue" doctrine. In rejecting this argument, Judge Pisano relied on the analysis similar to that later adopted by the court in Remington Arms, F.R.D. at , Slip Op. at 5-16. Remington Arms held that the "in issue" doctrine should be construed narrowly to create an implied waiver of the attorney-client privilege only when a party puts "in issue" the contents of an attorney-client communication. Remington Arms, F.R.D. at , Slip Op. at 14. This will occur only when the party has asserted a claim or defense that he intends to prove by disclosure of an attorney-client communication. Id. ("If the information actually required for a truthful resolution of the issue . . . which the party has raised . . . , the party must either waive the attorney-client privilege as to that information or it should be prevented from using the privileged information to establish the elements of the case"). This Court believes that with Judge Pisano that the analysis in Remington Arms is persuasive, and will accordingly reject CIGNA Re's arguments to the contrary.
North River represented to the Court at oral argument that it has no intention to prove its case in any way by reliance on any attorney-client communication, whether produced or withheld from discovery. It thus cannot be said that North River is using the attorney-client privilege as a "sword and shield" through selective disclosure of privileged documents. CIGNA Re has not identified any other manner through which North River has placed the advise of its counsel or other contents of any privileged communication in issue in this action. Its argument that North River's merely placing the broad question of coverage in issue somehow makes it fair game for CIGNA Re to discover confidential attorney-client communications is a misconstruction of the "in issue" doctrine.
It appears that CIGNA Re's primary goal in seeking production of privileged documents is so that it can test the veracity and completeness of North River's disclosure to it as to the facts of the underlying claim dispute. The Remington Arms court convincingly rejected this ground for abrogating the attorney-client privilege by explaining that such a construction of the "in issue" doctrine would seemingly apply to any litigant offering evidence in a case on any issue that he has discussed with his attorney, and would drastically alter the traditional boundaries of the privilege. Id. at & n.7, Slip Op. at 15 & n.7.
For the reasons stated above, CIGNA Re's appeal of the portion of Judge Pisano's Opinion and Order filed April 6, 1992 denying production of attorney-client ADR documents will be denied, and that part of the Opinion and Order will be affirmed.
Dated: July 21, 1992
ALFRED M. WOLIN, U.S.D.J.
In accordance with the Court's Opinion filed herewith, It is on this 21st day of July, 1992,
ORDERED that the appeal of CIGNA Reinsurance Company of the portion of Magistrate-Judge Pisano's Opinion and Order filed April 6, 1992 denying production of attorney-client Alternative Dispute Resolution documents denied; and it is further
ORDERED that that part of the Opinion and Order is affirmed.
ALFRED M. WOLIN, U.S.D.J.