Waste Management, Inc. v. International Surplus Lines Insurance

596 N.E.2d 726, 231 Ill. App. 3d 619
CourtAppellate Court of Illinois
DecidedJune 30, 1992
DocketNo. 1—90—2979
StatusPublished
Cited by2 cases

This text of 596 N.E.2d 726 (Waste Management, Inc. v. International Surplus Lines Insurance) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Waste Management, Inc. v. International Surplus Lines Insurance, 596 N.E.2d 726, 231 Ill. App. 3d 619 (Ill. Ct. App. 1992).

Opinion

PRESIDING JUSTICE JIGANTI

delivered the opinion of the court:

The defendants, International Surplus Lines Insurance Company, International Insurance Company and American Special Risk Insurance Company (insurers), moved for a preliminary injunction to prevent the plaintiffs, Waste Management, Inc., and Chemical Waste Management, Inc. (Waste), from further disseminating a letter which the insurers claim is protected by the attorney-client and work-product privileges. The letter was written by counsel for the insurers and was sent to the insurers and to several unidentified reinsurers and retrocessionaires who share a common interest with the insurers in defending against this litigation. Waste obtained the letter from the public file of the Federal district court in Chicago, where it had been placed by one of the reinsurers in a lawsuit against defendant International Insurance Company. Waste moved to strike the insurers’ motion for a preliminary injunction. The trial court granted Waste’s motion to strike, finding that a preliminary injunction would not be effective in preserving the status quo because the letter had already been disseminated.

The insurers have appealed, contending that their motion properly pleaded a cause of action for a preliminary injunction based on the attorney-client and work-product privileges and that the trial court erred as a matter of law in striking the insurers’ motion pursuant to section 2 — 615 of the Code of Civil Procedure. Ill. Rev. Stat. 1989, ch. 110, par. 2—615.

This action arose on cross-complaints for a declaratory judgment to determine the parties’ rights and obligations under a number of environmental impairment liability (EIL) insurance policies affecting coverage for underlying actions involving five waste disposal sites located throughout the country. Waste defended and settled several of the underlying actions, then sought indemnity from the insurers. The EIL policies were issued as part of an international insurance program, or pool, involving various insurers, reinsurers, retrocessionaires, underwriting agents, engineering surveyors and claim handling agents. The Societe Commerciale de Reassurance (SCOR) was one of the lead reinsurers. SCOR retained the law firm of Denenberg, Tuffley, Bocan, Jamieson, Black, Hopkins & Ewald, P.C. (the Denenberg firm), to coordinate the legal defense of claims made against EIL policies issued through the pool. The Denenberg firm was also retained by the defendant insurers.

On March 14, 1990, during a hearing on an unrelated discovery matter, counsel for Waste attempted to introduce into evidence a letter from the Denenberg firm to Melvyn L. Berliner, a claims consultant for SCOR with respect to the claims made by Waste in this litigation. Waste did not disclose the manner in which it obtained the letter.

On March 21, 1990, the insurers filed under seal an emergency verified petition for preliminary injunction, permanent injunction and other relief. The petition alleged that the letter was protected by the attorney-client and work-product privileges because it contained “communications constituting legal advice and containing mental impressions with respect to matters in which litigation had occurred and/or was anticipated.” The petition alleged that the recipient of the letter, Melvyn Berliner, was within the control group of SCOR and therefore within the class of persons intended to be protected by the attorney-client privilege. On March 22, 1990, the trial court denied the petition on the grounds that the allegations were insufficient to establish that Berliner was within the control group of SCOR.

On March 29, 1990, Waste filed under seal a request for production of documents. Attached as exhibits to the request were several documents which the insurers claimed were protected by the attorney-client privilege and work-product doctrine. The insurers filed a privilege log identifying the nature of the privilege claimed in connection with each document.

On July 2, 1990, the insurers filed a new motion for a preliminary injunction and other relief. The motion asked the court to restrain Waste “from disseminating, receiving, copying or communicating in any fashion or media” the Berliner letter or any of the documents identified in the privilege log. It asked that discovery be permitted to determine the source of Waste’s possession of the letter and other documents and to determine whether Waste disseminated them. The motion also asked the court to grant the insurers leave to file supplemental interrogatories. Attached to the motion were a memorandum of law and 37 exhibits. One of the exhibits was the letter in question, which does not contain language stating that its contents were to be treated as confidential. The affidavit of George F. Curran III, one of the authors of the letter, named several recipients of the letter, then stated that it was also distributed to a number of unnamed “reinsurers of [defendant] International and retrocessionaires of SCOR with respect to [the EIL] policies.” Curran further averred that the reinsurers who received the letter shared a “community of interest” with the insurers and that the letters and other documents claimed as privileged were “treated in confidence and no copies or other disclosures of the confidential information contained therein, have been provided by the Denenberg firm to any non-client or other entity who does not share a community of interest with the [insurers].”

An affidavit by Melvyn Berliner stated that Berliner was a claims consultant employed by SCOR, that his duties included the supervision of coordinating counsel and that Berliner’s advice formed the basis of SCOR’s decisions in certain specified areas.

John W. Dondanville, an attorney with the law firm of Baker & McKenzie, filed an affidavit stating that he was counsel for defendant International in a Federal court action brought by International against Certain Underwriters at Lloyd’s, London et al. (Certain Underwriters). The suit sought the recovery of reinsurance proceeds with respect to payments made by International to one of its insureds under an EIL policy. Dondanville averred that on March 21, 1990, he became aware of the “probable improper source for Waste Management’s possession” of the Berliner letter and the other allegedly privileged documents. According to Dondanville, on February 13, 1990, counsel for Certain Underwriters filed the letter and other documents in the Federal district court as a group exhibit to a motion to disqualify Baker & McKenzie from acting as counsel for International. Upon motion by Baker & McKenzie, these documents were sealed by the Federal court on March 22, 1990. Dondanville further averred that “prior to February 13, 1990, the [firm representing Certain Underwriters] had been advised that the privilege of such documents must be preserved and the *** firm acknowledged that they and their clients had a substantial obligation to preserve these privileges.”

Waste filed a motion to strike the insurers’ motion for a preliminary injunction. Waste’s motion alleged primarily that the insurers either failed to preserve or waived the confidentiality of the documents in question, and that an injunction would be ineffective in maintaining the status quo because the documents had already been disseminated. Hearings were held on July 31, 1990, August 21, 1990, and September 20,1990.

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Cite This Page — Counsel Stack

Bluebook (online)
596 N.E.2d 726, 231 Ill. App. 3d 619, Counsel Stack Legal Research, https://law.counselstack.com/opinion/waste-management-inc-v-international-surplus-lines-insurance-illappct-1992.