*1 The Special Master, having reviewed Defendants’ Motion and Brief in Support (ECF Nos. 118, 119) to Compel Production of Documents, Plaintiff's Response in Opposition (ECF No. 143), Defendants request for discovery and Defendants’ Reply in Support (ECF No. 156), and having heard oral argument on Thursday, September 5, 2019, hereby DENIES Defendants’ Motion to Compel Production of Documents Nos. 1-6, for the reasons discussed below.[1]

The disputed discovery relates to expansive witness identification and document production in the Underlying Environmental Matters, the Township of Plainfield Action, and Wolverine v Liberty Mutual et al. Case No. 011176-CK., including, but not limited to: all discovery requested, responses to discovery, deposition transcripts, hearing transcripts, reports of experts, motions and accompanying briefs, opinions, orders, judgments, verdicts, agreements and settlements. The Underlying Environmental Matters is defined in the document request as (1) multiple individual actions (estimated at 250 tort actions) filed in 2017, 2018, 2019 in Kent County Circuit Court, (2) the Beverley Zimmerman, et al. v 3M Company, et al. class action, (3) the Megan Johns, et al. v Wolverine class action and Susan Henry v Wolverine World Wide class action, (4) Michigan Department of Environmental Quality v Wolverine World Wide (5) the Unilateral Administrative Order served on Plaintiff by the US EPA; and (6) Boulder Creek Development Co, LLC v Wolverine action. The Special Master is not convinced that Defendants cannot obtain this information in another manner as Defendants have represented at oral argument that they are defending Plaintiff in 98% of the underlying actions.

The parties are reminded of the Special Master's Initial Case Management/Scheduling Order (ECF No. 99), discovery, at present, is confined to the duty to defend, exhaustion of policies and missing policies. The focus of Defendants’ disputed discovery is not relevant to those issues, but is relevant to the duty to indemnify.

The Special Master notes that much of the authority cited by Defendants is unpublished,[2] and therefore, not precedentially binding. See Watson v. Pearson, 928 F.3d 507 (6th Cir. 2019); citing United States v. Sanford, 476 F.3d 391, 396 (6th Cir. 2007) (“As an unpublished decision, [it] is not precedentially binding under the doctrine of stare decisis, but is considered by us for its persuasive value only.”).

*2 The published case law is clear that “[a]n insurer's duty to defend depends on the allegations made in the complaint by a third party against the insured.” Alticor, Inc. v. National Union Fire Ins. Co. of Pennsylvania, 916 F.Supp.2d 813 (2013) W.D. In the Alticor case, the Court (Judge Paul L. Maloney) initially held that based on the underlying pleadings there was no duty to defend. However, based on the underlying plaintiff's answers produced in discovery, the Court held that a duty to defend was triggered from that point forward and in that regard an insurer is to consider the factual development of the case. Alticor at 10. Defendants seek extensive discovery at this point to disprove coverage and to show application of an exception to coverage. Alticor stands for the proposition that an insurer has the duty to look beyond the third party pleadings in determining if coverage is possible, not to disprove coverage.

“It is well settled that the insurer's duty to defend the insured is measured by the allegations in the plaintiff's pleading.” Guerdon Indus., Inc. v. Fidelity & Cas. Co. of New York, 371 Mich. 12, 18, 123 N.W.2d 143 (1963). “[A]ny doubt as to the extent of coverage [for defense costs] is to be resolved in the insured's favor.” Illinois Employers Ins. of Wausau v. Dragovich, 139 Mich.App. 502, 506, 362 N.W.2d 767, 769 (1984). “The duty to defend is separable from the duty to indemnify, and the issue of whether the insurer may ultimately be liable to indemnify the insured is not relevant to determining whether the insurer has a duty to defend.” Century Indem. Co. v. Aero-Motive Co., 318 F.Supp.2d 530 (2003). Accordingly, discovery relative to whether the “sudden and accidental” exceptions to coverage apply, the heart of the disputed discovery, are only relevant to the duty to indemnify.

With regard to Defendants’ argument that they are entitled to the disputed discovery because defense costs are to be allocated on a pro rata, time-on-the-risk basis, this determination can be made by comparing the underlying complaints with the applicable policies of insurance. Therefore, the discovery sought is unduly burdensome and exceeds the scope of Phase I discovery. Defendants do not dispute, and have not argued contrarily, that they are in possession of the underlying complaints in which Plaintiff has been sued, and for which Plaintiff seeks a defense. For these reasons, Defendants’ Motion to Compel is DENIED without prejudice.