Crime-Fraud Exception Does Not Apply to Withheld Document in Reinsurance Battle, N.Y. Federal Judge Rules

UTICA, N.Y. — A New York federal judge has upheld a magistrate judge’s refusal to apply the crime-fraud exception to a document withheld by Utica Mutual Insurance Co. in a reinsurance dispute, holding that the finding “was neither clearly erroneous nor contrary to law.”

In a Jan. 13 order, Judge Brenda K. Sannes of the U.S. District Court for the Northern District of New York agreed that Munich Reinsurance America Inc. failed to establish probable cause to believe that Utica perpetrated fraud in connection with its settlement with Goulds Pumps Inc. and its allocation of related liabilities to its reinsurers.