Defendant Cannot Depose Lawyers Of Settling Parties About Reasonableness Of Settlement Amount

A Florida appellate court quashed an insurer’s attempts to depose the attorneys of parties that had entered into a stipulated judgment and assignment of claims against the insurer. In a lawsuit brought against the insurer on the assignment and judgment, the trial court refused to prevent the defendant from deposing the settling parties’ attorneys about the advice they gave to their clients regarding the settlement. The settling parties then petitioned the higher court for relief.
In a lawsuit based on a stipulated judgment and assignment of claims against an insurer who allegedly breached the duty to defend and indemnify, the reasonableness of the settlement amount ordinarily must be proven by the plaintiff. The defendant insurer in this case, Northern Ins. Co. of New York, claimed “reasonableness” implicated the lawyers’ mental state and advice to their clients. The Florida Court of Appeals, District 3, rejected that argument. The court held that the reasonableness of a settlement is judged from the standpoint of an objective person, and an attorney’s subjective thoughts or advice don’t affect whether a settlement is in fact reasonable. The case, Chomat v. Northern Ins. Co. of New York, was decided January 11, 2006. The cite is 2006 WL 47460.

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Filed under Duty to Defend, Settlements, Assignments and Reasonableness

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