NYCAL Court Denies Post-Verdict Disclosure of Settlement Amounts and Agreements

In this NYCAL case, defendants Cleaver Brooks, Inc. and Burnham LLC brought post-verdict motions on a variety of issues, including disclosure of settlements for the purpose of molding the judgment. By the time the motion was heard, the remaining issues were if “plaintiffs failed to disclose settlements in a timely fashion, and, if so, whether such failure affected defendants ability to present evidence with respect to Article 16 entities, and whether defendants are entitled to disclosure of the settlement agreements, including the amounts of settlement with individual companies and bankruptcy trusts.”

The court held that the defendants’ argument that the plaintiffs failed to provide them with disclosures as to claims and settlements was without merit. The court found that, with the exception to Owens-Illinois, all non-bankrupt entities were disclosed through discovery or the settlements occurred after trial. Regarding Owens-Illinois, the court held: “While plaintiffs do not contend that they provided settlement information as to Owens-Illinois prior to trial, plaintiffs’ response to the interrogatories, gave defendants notice of its claims, which was sufficient to enable defendants to prepare a defense. Moreover, an in camera review of the Agreement with respect to Owens-Illinois, does not reveal any new liability information as to this company.”

The court also found the same to be true with the bankrupt entities, with the exception of H.K. Porter, U.S. Mineral, and U.S. Gypsum.  With those entities, the court stated: “While the Agreements show that settlements with these bankruptcy trusts occurred prior to trial, and plaintiffs do not contend they provided such settlement information prior to trial, an in camera review of the trust Agreements, did not reveal any additional liability information as to H. K. Porter, U.S. Mineral, and U. S. Gypsum.”  The court concluded that “in light of this disclosure and the lack of new liability information in the Agreements with Owens-Illinois, H. K. Porter, U.S. Mineral, and U. S. Gypsum, and while plaintiffs’ failure to disclose the settlements is not condoned, based on the record before me, I conclude that such settlement information would not have assisted defendants in a meaningful way in proving liability against Article 16 entities.”

The court also did not believe that the decision in Garlock v. Sealing Technologies, LLC, No. 10-31607, slip op (Bankr. W.D. N.C. Jan. 10, 2014), supported defendants’ motions for disclosure of confidential settlement agreements and settlement amounts.  As the court held: “I find that the decision in Garlock does not provide a legal or discretionary basis to order the disclosure defendants seek. I reach this conclusion, based on defendants’ failure to offer any proof that plaintiffs in the instant cases engaged in any conduct to that of plaintiffs in Garlock, such as to delay filing claims, or to minimize exposure to products of other companies, and on the fact that the cases in Garlock were not a representative sample and were pre-selected by the defendant.”

Read the full decision here.