Western Asbestos Settlement Trust v. Hartford Accident and Indemnity Co.

Summarized by David Guess , Buchalter
15 years 3 months ago

Citation:

Case No. 09-17290 (9th Cir. 2010)

Tag(s):

9th Circuit

Ruling:

The Ninth Circuit affirmed the lower courts' interpretation of a settlement agreement between certain predecessors to the Western Asbestos Settlement Trust (the "Trust"), a trust established in the MacArthur Company and Western MacArthur Company bankruptcy cases pursuant to 11 U.S.C. § 524(g), and an insurer, Hartford Accident and Indemnity Co. ("Hartford"), that Hartford may not use certain trust claimant information, which it had the right to "review and "audit," for purposes unrelated to the Trust. The Ninth Circuit further affirmed an injunction issued by the bankruptcy court prohibiting the unauthorized use of the trust claimant information and the bankruptcy court's setting of a six-month limit on Hartford's retention of that information. The Ninth Circuit held that the terms "review" and "audit" do not necessarily imply rights to disseminate or use for unlimited purposes the information that is reviewed and audited, particularly in light of the extrinsic evidence presented below. In accordance with applicable California case law, it was appropriate for the bankruptcy court to consider extrinsic evidence in interpreting the settlement agreement. The bankruptcy court's interpretation did not add to, detract from, or vary the terms of the settlement agreement. The bankruptcy court's admission of a declaration setting forth extrinsic evidence that had been challenged as hearsay was not an abuse of discretion since the out-of-court statement was submitted to show the mind-set and knowledge of the parties at the time of the negotiation. There is no "rigid rule" prohibiting a trial court from interpreting an ambiguous contract on summary judgment. In this case, there was no genuine issue of material fact presented by the extrinsic evidence and any ambiguity in the settlement agreement could not be resolved in a manner consistent with Hartford's position. It was unnecessary for the Ninth Circuit to determine whether the trust claimant information was confidential under California privacy law and therefore entitled to protection on that basis.

Procedural context:

This is an appeal from the bankruptcy court's order granting a motion for partial summary judgment and issuing a permanent injunction, and the district court's subsequent affirmance of the bankruptcy court's orders.

Facts:

See above.

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