Appellate Division, First Department Touches Upon Settlement-Privilege Evidentiary Rule in Insurance Context

Am. Re-Ins. Co. v. United States Fid. & Guaranty Co. is a recent, short decision from the Appellate Division, First Department that offers a useful and interesting evidentiary holding.  The Court affirmed the trial court order denying vacatur of a special referee's order for the defendants to produce certain material to the plaintiff reinsurer.  The disputed documents related to settlement negotiations in the underlying action, but the Court agreed that since the plaintiff reinsurer was not using the documents to prove the defendant's liability it did not enjoy the settlement privilege set forth under CPLR 4547.

Hearken back to your law school days and remember why certain out-of-court statements can be used for purposes other than the matter asserted -- i.e., notice   -- and, by analogy, the Court's reasoning in not applying the settlement-privilege makes sense.