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North River Insurance Company and United States Fire Insurance Company et al. v. Mayor and City Council of Baltimore No. 98, September Term, 1995. [Discovery Sanctions. Judgment holderUs garnishment laid on

insurers seeking coverage for asbestos removal - court ordered insurers to produce underwriting and claims files of judgment debtor and of other insureds - as discovery sanctions, court entered judgment against insurers for entire judgment against insured and court of awarded and counsel fees factual record, Held:

overbreadth

order,

confidentiality

discussed.

Judgments vacated and case remanded.]

Circuit Court for Baltimore City Case #84268068/CL25639

IN THE COURT OF APPEALS OF MARYLAND No. 98 September Term, 1995 ____________________________________

NORTH RIVER INSURANCE COMPANY AND UNITED STATES FIRE INSURANCE COMPANY et al. v. MAYOR AND CITY COUNCIL OF BALTIMORE

____________________________________ Eldridge Rodowsky Chasanow Karwacki Bell Raker McAuliffe, John F. (retired, specially assigned), JJ. ____________________________________ Opinion by Rodowsky, J. Raker, J., concurs. ____________________________________ Filed: August 1, 1996

Presented here are appeals from judgments entered as sanctions for discovery violations in a sequel to United States Gypsum Co. v. Mayor & City Council of Baltimore, 336 Md. 145, 647 A.2d 405 (1994). There we affirmed, inter alia, a judgment of the Circuit

Court for Baltimore City in favor of Mayor and City Council of Baltimore (the City) for compensatory damages against Asbestospray Corp. in the amount of $8,333,183.81. Id. at 153, 647 A.2d at 408.

Asbestospray was a manufacturer/distributor of asbestos-containing surface treatment products. Id. at 152, 647 A.2d at 408.

"The greatest part of the compensatory damages award against Asbestospray represented $8,016,442.33 in costs to the City associated with rectifying the effects of and the complete removal of approximately 350,000 square feet of AsbestosprayUs fireproofing from Walbrook Senior High School. The asbestos fireproofing in Walbrook Senior High School had deteriorated, and had contaminated furniture, equipment and books in the school." Id. at 155, 647 A.2d at 409. In an effort to collect its judgment, the City caused writs of garnishment to be served on two liability insurers whose policies, the City contended, covered AsbestosprayUs loss. denied coverage, the parties undertook The insurers discovery

discovery,

disputes developed, and the circuit court entered, as a discovery sanction, a default judgment against the garnishees for

$10,351,412.44, representing the full amount of the judgment of the City against Asbestospray, together with interest. The circuit

court further entered judgment against both the garnishees and

-2their attorneys for the CityUs attorneysU fees of $335,981.66. The

aggrieved parties appealed, and this Court, on its own motion, issued the writ of certiorari prior to consideration of the matter by the Court of Special Appeals. The garnishees are North River Insurance Company (North River) and United States Fire Insurance Company (USFI). They have

business offices in the Morristown area of New Jersey. were represented by:

Garnishees

McElroy, Deutsch & Mulvaney, a Morristown-

based law firm; by Lawrence F. McHeffey and Pamela A. Tanis (Tanis), a partner and associate respectively in the McElroy firm; by Ober, Kaler, Grimes & Shriver (OKG&S), a Baltimore-based law firm; and by Jervis S. Finney (Finney) and Warren B. Daly, Jr. (Daly), partners in OKG&S. appellants. Garnishees and all of their counsel are

Approximately thirteen months after the garnishment

was instituted, OKG&S replaced local counsel initially engaged by the garnishees. Counsel for the City, in addition to the City

Solicitor, were Jordan C. Fox (Fox) of the New York City-based firm of Levy, Phillips & Konigsberg, L.L.P. and Carl E. Tuerk, Jr. (Tuerk) of the Baltimore-based firm of Cooper, Beckman & Tuerk, L.L.P. Neither of the attorneys who argued in this Court

participated in the garnishment proceedings. United States Gypsum v. Baltimore and its spin-off proceedings were complex litigation, administratively assigned to a single judge. All proceedings were conducted before Judge Joseph I.

-3Pines, a retired judge of the Circuit Court for Baltimore City, acting pursuant to Article IV,

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