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Case Briefs

By ALM Staff | Law Journal Newsletters |
February 27, 2009

New York Supreme Court Bars Discovery of Extrinsic Evidence Without Allegation Of Contract Ambiguity

One of the issues driving the cost and length of insurance coverage litigation is whether policyholders may pursue discovery of other policies and policyholders to establish a coverage claim. Disputes over such discovery have brought more and more third parties into these cases and have led to increasingly protracted and expensive discovery-related litigation. On Dec. 10, 2008, in a long-running New York insurance coverage case, Mt. McKinley Insurance Co., et al. v. Corning, Inc., et al., No. 02-602454 (Sup. Ct. N.Y. County), Justice Eileen Bransten gave helpful guidance about the outer bounds of such discovery. Justice Bransten denied discovery of extrinsic evidence, reiterating the scope of the long-established New York rule that extrinsic and parole evidence is not admissible to create an ambiguity in a written agreement that is complete, clear and unambiguous on its face. The court ruled that to obtain such third-party discovery, the threshold question is whether the requesting party has alleged an ambiguity; if not, then discovery of extrinsic evidence is impermissible.

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