Wednesday, March 12, 2014

Judge Nealon of Lackawanna County Covers Wide Variety of Discovery Issues In First Party Benefits Litigation

In his recent decision in the case of Sharp v. Travelers Personal Security Ins. Co., No. 12 CV 6483 (C.P. Lacka. Co. March 7, 2014 Nealon, J.), Judge Terrence R. Nealon of the Lackawanna County Court of Common Pleas addressed a variety of discovery issues in a first party benefits case.

The Court pointed out that a bad faith claim was not filed in this matter within the two year statute of limitation.  Of note in this regard in this case was the court's handling of the issue of whether the insured's assertion of a breach of the implied contractual duty of good faith and fair dealing served to transform the breach of contract claim into a bad faith claim, thereby entitling the insured to secure certain bad faith discovery from the carrier such as reserves information, adjusters' personnel files, the UIM claims file, etc.

Judge Terrence R. Nealon
Lackawanna County
Judge Nealon ruled that there was no such transformation and, as such, the requested discovery would not be permitted.

However, other discovery such as amounts paid by the carrier to peer review doctors,  the carrier's first party benefits claims manuals, as well as information on other claims asserted against the carrier where the first party benefits limits were $100,000.  The court found that these items of discovery were relevant to the Plaintiff's efforts to prove its claims under the Unfair Trade Practices and Consumer Protection Law.

The rule gleaned from a review of this case is that, if you want bad faith discovery, a bad faith claim must be asserted.

Anyone wishing to review a copy of this case may click this LINK.  Judge Nealon's 41 page Opinion covers many of the important cases and issues relevant to a litigation over first party benefits.

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