n

contrasted with an actual denial of coverage, which would surely
have to be disclosed) does nothing more than to preserve for
future decision the question whether insurance coverage does or
does not exist. And that question of coverage vel non is one as
to which the party to whom an insurance agreement is disclosed
must make its own judgment, irrespective of the existence or
nonexistence of a reservation of rights.

Accordingly Native American Arts' motion is denied. It is
entitled to nothing more than the disclosure of the insurance

policies themselves.

Milton I, Shadur
Senior United States District Judge

Date: March 19, 2003



05).? Finally, Native American Arts' citation to Wright & Miller
substantially overstates what that treatise indicates as to the
scope of required discovery,

By contrast, even though (as stated earlier) none of the
cases adduced by defense counsel has expressly ruled that an
insurer's reservation of rights letter is not encompassed within
the term “insurance agreement” employed in the Rule, the thrust
of several cases that they have cited counsels a negative answer
to that question even apart from the literal language in Rule
26(a) (1) (D).? Indeed, the Wright & Miller treatise (speaking of
the version of the Rule that antedated its shift to a mandatory
initial disclosure regime) makes the point that the existence of
any reservation of rights did not negate the obligation to
disclose the insurance agreement itself, given the specific
reference to an insurer that “may be liable.”

What controls for this Court, in addition to what has

already been said, is the fact that a reservation of rights (as

+ In so doing, Judge Lefkow followed this Court's ruling in

Nat'l Union Fire Ins. Co, v. Continental Till, Corp., 116 F.R.D.
78, 83-84 (N.D. Ill. 1987)--which had upheld a ruling by then

Magistrate Judge Lefkow!

2 That literal language is further buttressed by the
provision in the Advisory Committee Note to the 1993 amendments
to Rule 26 (emphasis added), a provision left unchanged by the
year 2000 amendments:

Subparagraph (D) replaces subdivision (b) (2) of

Rule 26, and provides that liability insurance policies
be made available for inspection and copying.

3



Minty Cheer Form (G87)

United States District Court, Northern District of Illinois

N 1 As: d Jud j Sitting Judge if Oth
vor Magistrate Judge Milton I, Shadur than Assigned Judge
CASE NUMBER 01C 1618 DATE 3/19/2003
CASE Native American Arts, Inc. vs. Bundy-Howard, eic., et al
TITLE

[In the following box (a) indicute the purty filing the motion, e.g., plaintiff, defendant, 3rd purty plaintilY, and (h) state brielly the native
of the motion being presented.]

MOTION:

DOCKET ENTRY:

qd) Oo Filed motion of [ use listing in “Motion” box above.]

(2) o Brief in support of motion due

Q) Oo Answer brief to motion due___._ Reply to answer brief due

(4) o Ruling/Hearing on setfor at

(3) oO Status hearing[held/continued to] [set for/re-set for] on _—_set for at

(6) oOo Pretrial conference[held/continued to] [set for/re-set for]on set for at
(ea) o Trial[set for/re-set for]on at

(8) o [Bench/Jury trial] [Hearing] held/continued to at

(9) QO This case is distnissed | with/without] prejudice and without costs[by/agreemenU/pursuant Lo]

COFRCP4(m) = OlLocal Rule 41.1 OFRCP41(a\(1) OC FRCP4I(a)2).

ao) ff [Other docket entry) Enter Memorandum Order. Native American Arts’ motion is denied. It is
entitled to nothing more than the disclosure of the insurance policies themselves,

dt) @f [For further detail see order attached to the original minute order.)

No notices required, advised in open court. Document

Naber

No notices required. nwinber of notives

ov | Notices mailed by judge’s staff,

Notified counsel by telephone, HAR 2 0 2003

date docket

Docketing to mail notices,

6 1/-

docket duty initials

Mail AO 450 farm.

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courtroom S074 Wd 61 oywey auld wie
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IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

NATIVE AMERICAN ARTS, INC.,

Plaintiff,
v. No. 01 C 1618

BUNDY-HOWARD, INC., ete., et al.,

Defendants.
MEMORANDUM OPINION AND ORDER

Native American Arts, Inc. (“Native American Arts”) has
sought to springboard from the literal language of Fed. R. Civ.
P. (“Rule”) 26(a) (1) (D), which requires the automatic disclosure
of “any insurance agreement” that provides (or might provide)
coverage to a defendant, to its claimed entitlement to obtain any
reservation-of-rights letters that have been delivered by any
insurers in this case to their respective insureds. In response
to this Court's request for the interested parties’ submission of
letters citing authorities on the subject, counsel for Native
American Arts and for defendants Bundy-Howard, Inc. and Ronald c,
Sass and Judith A. Sass d/b/a 9-Mile Creek Traders have provided
such letters.

Here is the language by which the Rule itself defines the

scope of a litigant's obligatory advance disclosure:

for inspection and copying as under Rule 34 any
insurance agreement under which any person carrying on
an insurance business may be liable to satisfy part or
all of a judgment which may be entered in the action or
to indemnify or reimburse for payments made to satisfy
the judgment.



Though the parties dispute the answer to the question at issue,
what their submissions clearly have in common is a demonstration
that no reported case has dealt directly with the question
whether the Rule's reference to “any insurance agreement”
embraces an insurer's reservation-of-rights letter.

Just a few words should be said as to Native American Arts’
submission before this opinion turns to ruling on that subject.
Its counsel has cited to one opinion by a Magistrate Judge that
does refer to a reservation of rights, Blockbuster Corp. v.

McComb Video, Inc., 145 F.R.D. 402 (M.D. La. 1992)--but what

counsel has neglected to mention is that the ruling was made in a
case in which the insurer itself was being sued under the
Louisiana direct action statute, so that matters affecting the
insurer's liability or potential liability were directly
discoverable (a very different situation from what is involved
here). Native American Arts’ counsel has also miscited the

ruling in Great Lakes Dredge & Dock Co. v. Commercial Union

Assurance Co., 159 F.R.D. 502 (N.D, Ill. 1995)--an opinion by
this Court's colleague Honorable Joan Lefkow--as having “held
that information regarding reserves under an insurance policy is
discoverable under Rule 26(a) (1) (D)." In fact Judge Lefkow held

exactly to the contrary (id. at 504 &n.2), limiting

discoverability to the insurance policies themselves (id. at 504-