Bernstein

OPINION AND ORDER GRANTING PLAINTIFFS’ MOTION TO COMPEL DISCLOSURE OF INFORMATION REGARDING INSURANCE RESERVES

Plaintiffs are first party insureds and defendants are the insurance companies that issued insurance policies to plaintiffs that covered certain property damage. In this action, plaintiffs (hereafter “Bernstein”) contend that defendants (hereafter “Travelers”) acted in bad faith when they unjustifiably resisted claims and delayed payments under the relevant policies and when they made a settlement offer to plaintiffs (their insureds) that they allegedly knew fell well short of the amount to which plaintiffs were entitled under the policies. Travelers eventually paid the claims (as determined by a panel of arbitrators) — but only, plaintiffs contend, after a studied effort to escape what it knew it owed by adopting a strategy of resistance and delay that it hoped would induce plaintiffs essentially to give up and accept a settlement offer at a figure that was much lower than the amount Travelers knew it really owed.

The Issue

The pending motion to compel, on which the court heard oral argument on August 16, 2006, requires us to address this issue: under the…