YHT, INC., Plaintiff,
OXFORD/PROGRESSIVE GROUP doing
business as PROGRESSIVE INSURANCE COMPANY (PAGO PAGO), LTD.; PROGRESSIVE
INSURANCE COMPANY (APIA), LTD.; OXFORD PACIFIC INSURANCE COMPANY; INSURANCE
COMPANY OF THE PACIFIC; THE BOSTON GROUP;
and DOES 1-5, Defendants.
High Court of American Samoa
CA No. 92-00
 Under definition of “contract of reinsurance” in
A.S.C.A. § 29.1590, T.C.R.C.P. 26(b)(2) allows discovery of existence and contents
of insurance agreement between reinsurer and insurer.
 T.C.R.C.P. 26(b)(1) requires that discovery be both
non-privileged and relevant to subject matter in pending action.
 Reinsurance contract is made by
original insurer for its own protection.
It creates privity only between
reinsurer and reinsured, and no rights accrue to original insured.
of identity of reinsurers and their contracts with defendant are not relevant
to subject matter of case. Although T.C.R.C.P. 26(b)(2) allows discovery
as to “any insurance agreements,” Court exercised its discretion to limit discovery.
denied plaintiff’s motion to compel discovery, granted defendant’s motion for
protective order, and awarded reasonable expenses of motion, including
attorney’s fees. Plaintiff’s
counsel may resume deposition but shall
not ask irrelevant questions regarding reinsurers of insurance policy issued to
Before RICHMOND, Associate Justice, ATIULAGI, Associate Judge,
and SAGAPOLUTELE, Associate Judge.
Counsel: For Plaintiff, Paul F. Miller
William H. Reardon
ORDER ON MOTIONS TO COMPEL DISCOVERY
MOTION FOR PROTECTIVE ORDER
YHT, Inc., (“YHT”) started to take the deposition upon oral examination of a
Defendant Oxford/Progressive Group (“Progressive”) representative, specifically
of the entity identified as Progressive Insurance Company (Pago Pago),
Ltd. During the deposition, the
representative, Julian E. Ashby, refused to identify the reinsurers that may
have responsibility for any liability imposed on Progressive under the
insurance policy at issue in this case.
On October 17, 2000, YHT moved, pursuant to T.C.R.C.P. 25 and 30, to
compel Progressive, during the discovery process, to reveal the identity of any
and all reinsurers that may be liable under the insurance policy at issue in this case, and generally to require
cooperation in discovery proceedings. In response, Progressive moved, pursuant
to T.C.R.C.P. 30(d), for a protective order to limit the scope of the oral
examination deposition. We deny the
motion to compel discovery and grant the protective order.
to Compel Discovery
The first issue concerns
whether discovery may be conducted as to reinsurers. T.C.R.C.P. 26 governs the liberal scope of
discovery allowed in the trial court.
T.C.R.C.P. 26(b)(2) specifies the scope allowed for discovery pertaining
to insurance agreements. It states:
A party may obtain discovery of the existence and contents of any insurance
agreement under which any person carrying on an insurance business may be
liable to satisfy part or all of a judgment which may be entered in the action
or to indemnify or reimburse for payments made to satisfy the judgment.
26(b)(2) (emphasis added). The question
is thus whether the statute contemplates, and common law allows, the inclusion
of reinsurance agreements in its formulation of “any insurance agreement.”
 A contract of reinsurance is
defined by A.S.C.A. § 29.1590 as a contract by which “an insurer procures a
third person to insure him against loss or liability by reason of such original
insurance.” Under such a contract, the
reinsurer essentially indemnifies the original insurer against the loss or
liability that insurer has incurred under a separate contract with the original
insured. Fontenot v. Marquette Cas. Co., 247 So. 2d 572, 574-76 (La.
Given this definition, the
plain language of T.C.R.C.P. 26(b)(2) would allow for discovery regarding the
existence and contents of “any insurance agreement” between a reinsurer and
insurer. Our reading is
taken from the explicit language in the rule which allows discovery regarding
contracts where the “[insurer] may be liable to . . . indemnify or reimburse for payments made to
satisfy the judgment [entered in the action].” T.C.R.C.P. 26(b)(2). Since a
reinsurer would be liable to an insurer to indemnify payments made to an
original insured to satisfy a judgment, we hold that discovery of the existence
and contents of insurance agreements between reinsurers and insurers is allowed
under T.C.R.C.P. 26(b)(2).
2. The Issue of Relevancy
 Despite the above finding, we
exercise our discretion under the general preface of T.C.R.C.P. 26, which
enables us to limit the scope of Rule 26(b) provisions so long as they are in
accordance with the rule. Specifically, we rule according to the
provision T.C.R.C.P. 26(b)(1), which was applied in Johnson v. Coulter,
25 A.S.R.2d 84, 87 (Trial Div.
1993), and cited by YHT. This rule
requires that discovery be both non-privileged and relevant to the subject
matter in the pending action. T.C.R.C.P.
 We find that the existence and
content of Progressive’s reinsurance contracts are irrelevant to the subject
matter before the Court. A reinsurance contract is made by the original insurer
for its own protection as to the whole or part of a risk. People ex rel. Sea Ins. Co. v. Graves,
8 N.E.2d 872, 873, 874 (N.Y. Ct. App. 1937).
Reinsurance is neither double insurance nor co-insurance. A reinsurance contract creates privity only between the reinsurer and the
reinsured. It protects the first insurer
from a risk he has already assumed, and “creates no privity whatever between
the reinsured and the person originally insured, the reinsurer being in no
respect liable to the person originally insured.” Bethke v. Cosmopolitan
Life Ins. Co.,
262 Ill. App. 586, 591 (Ill. App. 1931); see
also Hunt v. New Hampshire Fire Underwriters’ Ass’n, 38 A. 145,
147 (N.H. 1985); Southwestern Surety Ins. Co. v. Stein Double Cushion Tire Co., 180 S.W. 1165,
1168 (Tex. Civ. App. 1915); Philadelphia Ins. Co. v. Washington Ins. Co.,
23 Pa. 250, 253 (Pa. 1854). As
stated in Thomas v. Land, 30
S.W.2d 1035, 1037 (Mo. Ct. App. 1930), “no rights could accrue to
[the original insured] by virtue of such contract of reinsurance.”
Thus, we reject all arguments by
YHT’s counsel made in the document submitted on October 25, 2000, entitled the
“Attorney’s Declaration in Support of Motion to Compel.” In this document, counsel declares “under
penalty of perjury” that YHT has asserted claims based on A.S.C.A. § 29.1537
against unknown defendants Does 1-5, and that the identity of these defendants
is “central to the theory of liability asserted as is the extent of that
liability.” First, contrary to counsel’s
avowal, there are no claims pleaded in the complaint pertaining to
defendants Does 1-5, nor any mention of A.S.C.A. § 29.1537. Second, A.S.C.A. § 29.1537, which grants injured persons a right of direct action against insurers
and is liberally construed by the courts, Holland v. Haleck’s Island Motors, 15 A.S.R.2d 44, 46 (Trial
Div. 1990), is not applicable to reinsurers by any courts of the United States
or western world. As held in Fontenot,
247 So.2d at 580, “[t]he direct action statute is not applicable to
reinsurance policies where neither a novation of the original policy obligation
nor a merger of the companies has occurred.”
See also Arrow Trucking Co. v. Cont’l Ins. Co., 465
So. 2d 691, 692 (La. 1985); 19 Lee R.
Russ & Thomas F. Segalla, Couch
on Insurance 2d § 80.69, at 676 (1983).
 Accordingly, discovery of the identity
of reinsurers and their contracts with Progressive are not relevant to the
subject matter of this case at hand.
Counsel should exercise caution in swearing to averments. Progressive should consult T.C.R.C.P. 41 as
regarding Does 1-5.
The plain language of T.C.R.C.P. 26(b)(2) allows YHT
to conduct discovery as to any insurance agreements, including those between
Progressive and its reinsurers. We
exercise our discretion, however, to
limit this power because YHT’s discovery does not meet the relevancy test
established generally in T.C.R.C.P. 26(b)(1).
3. Protective Order
 Progressive applies to the court to issue a
protective order pursuant to T.C.R.C.P. 30(d) against YHT counsel’s inquisition
of Progressive’s representative. T.C.R.C.P. 30(d) states:
upon a showing that the examination is being conducted in bad
faith or in such manner as unreasonably to annoy, embarrass, or oppress the
deponent or party, the court . . . may order the officer conducting the
examination to cease forthwith from taking the deposition or may limit the
scope and manner of the taking of the deposition as provided in 26(c)
TCRCP. If the order made terminates the
examination, it shall be resumed thereafter only upon the order of the court in
which the action is pending. . . . The provisions of 37(a)(4) TCRCP apply to the
award of expenses incurred in relation to the motion.
Progressive’s motion for a
protective order. YHT’s counsel may resume the deposition of Progressive’s representative, but
will be constrained to ask questions that are non-privileged, relevant, and if
inadmissible at trial are “reasonably calculated to lead to the discovery of
admissible evidence.” T.C.R.C.P.
(b)(1). YHT’s counsel shall not ask
further irrelevant questions regarding the reinsurers of the insurance policy
issued to YHT by
Progressive. We will further award
reasonable expenses of the motion, including attorney’s fees, to Progressive.
The motion to compel discovery from Progressive’s representative, Julian E. Ashby,
is denied insofar as the contracts of reinsurance on the subject matter of
YHT’s insurance policy at issue is concerned.
The motion for a protective order is granted to Progressive constraining YHT’s
counsel to relevant discovery.
3. Expenses, including attorney’s fees, of bringing the motion for a
protective order are awarded to Progressive against YHT in the amount of $300.00.
It is so ordered.
 The preface to Rule 26 states, “[u]nless otherwise
limited by order of the court in accordance with these rules.” T.C.R.C.P. 26.
 “Double insurance” or “co-insurance” exists when the
same party is separately insured by several insurers with respect to the “same
subject, interest and risk.” A.S.C.A. § 529.1583; see also Pink v. Fidelity
& Deposit Co. of Maryland, 15 F. Supp. 715,
716 (S.D.N.Y. 1936); Providence-Washington Fire Ins. Co. v.
Atlanta-Birmingham Fire Ins. Co., 166 F. 548, 553 (C.C.N.D. Ga.
1909); Ocean S.S. Co. v. Aetna Ins. Co.,
121 F. 882, 887 (S.D. Ga. 1903).
“Reinsurance,” however, is a contract to indemnify the entity reinsured,
which binds the reinsurer to pay the reinsured party, to the extent it is
reinsured, for the loss sustained as defined by the subject matter of the
insurance. This is independent of the
interest, loss, or ability to pay of the original party insured. Allemannia Fire Ins. Co. of Pittsburg v. Firemen’s Ins. Co. of Baltimore, 209 U.S. 326, 332 (1908).