Federal Middle District Court Addresses Parameters of Discovery of Claims File in UIM Bad Faith Case

In her recent March 10, 2014 Opinion in the case of Shaffer v. State Farm Mutual Automobile Insurance Company, Civil Action No. 1:13-cv-01837 (M.D. Pa. 2014 Rambo, J.), Judge Sylvia Rambo of the Federal District Court for Middle District of Pennsylvania issued a discovery Opinion in the UIM insurance bad faith context.  

In this matter, the judge originally ordered the insurance company to submit unredacted versions of all of the redacted and partially redacted pages of the log notes for an in camera review by the court.     

The court evaluated the redactions under the attorney work product privilege and Federal Rule 26(b)(3).  

More specifically, with regards to the carrier’s redaction of all reserves information, the court found that, because the Plaintiff had alleged that the carrier acted in bad faith during its investigation of the UIM claim, the amount set aside for reserves by the carrier could be relevant to the determination of whether or not the carrier acted in bad faith in processing the claim.  Accordingly, the court allowed the disclosure of such information in this limited context.  

With regards to the discovery of the insurance claims representative’s impressions, conclusions, or opinions, the court initially noted that such information is generally not protected under the Work Product Doctrine unless such information is prepared in anticipation of litigation.

Accordingly, the test of whether the Work Product Protection applies requires an assessment of when litigation was anticipated.   The court generally noted that this assessment is not subject to a bright line rule.   The court did recognize that the Third Circuit of Court Appeals has indicated that "[p]rudent parties anticipate litigation and begin preparation prior to the time suit is formally commenced.”  

While this assessment of when litigation was anticipated is ordinarily a fact-dependent inquiry, the court here reviewed the claims file with the standard of review in mind and found that certain portions of the requested documents were indeed prepared in anticipation of litigation and should therefore be protected from any discovery.  

Anyone desiring a copy of this Opinion may click this LINK.  The Order accompanying the Opinion can be viewed HERE.


I send thanks to the writers of the PENNSYLVANIA AND NEW JERSEY INSURANCE BAD FAITH CASE LAW BLOG at the Philadelphia law firm of Fineman Krekstein & Harris for publicizing this decision.