With respect to reserves information in a UIM carrier’s claims file, the court in Keefer found that the amount of reserves, if any, assigned to the insured’s UIM claim by the UIM carrier should be produced in a bad faith case where the insured was asserting that that the insurer acted in bad faith during its claim investigation. Judge Rambo ruled in Keefer that a comparison between the reserve value of the claim and the insurer’s actual actions in processing the claim could shed light on the insurer’s liability under the bad faith statute. Thus, the reserve amount was deemed relevant or, in the alternative, evidence that could potentially lead to the discovery of other relevant information. In so ruling, the court also rejected the argument that the reserve information is protected from discovery by the work product doctrine.
On another issue of note, the insurer argued against the plaintiff’s request that claims handling manuals be produced in this case where both the UIM claim and the bad faith claims were still pending.
The court in Keefer permitted the insured to inquire into the processes that the insurer used to investigate her claims. The court found that the allowance of discovery of the carrier’s policies for handling claims was reasonably calculated to lead to information relevant to the bad faith cause of action.
In Keefer, the UIM carrier also opposed the plaintiff’s request for information regarding its adjusters’ impressions, conclusions, and opinions regarding the value and merit of the claim and their evaluations of the insured’s demands and the insurer’s offers.
The court noted that mental impressions and opinions of a party and its agents are not generally protected by the work product doctrine unless they are prepared in anticipation of litigation. Thus, “work product prepared in the ordinary course of business is not immune from discovery.” The gravamen of a claim of work product protection necessarily requires an assessment of when litigation was anticipated, which, the court noted, is a determination that is not subject to a bright-line rule.
Judge Rambo found that, in this matter, the facts were not sufficiently developed yet to determine whether litigation was reasonably anticipated and, as such, the court deferred ruling on this discovery request for the moment.
In Keefer, the carrier also objected to the plaintiff’s request for discovery regarding the adjuster’s or supervisor’s rationale behind the decision not to pay the Plaintiff’s UIM claim. In light of the liberal scope of federal discovery allowed, and the fact that the reason for non-payment may be probative on the issue of whether insurer acted in bad faith in the handling of the UIM claim, the objection was overruled.
The court in this matter also noted that the UIM carrier could rely upon the work product doctrine to reject the plaintiff’s request for the unredacted production of the carrier’s entire claims file.
In another notable decision, Judge Rambo upheld the carrier’s objection to the plaintiff’s demand for information pertaining to unrelated bad faith claims against the insurer over the previous five years. The court found that past claims in that regard were irrelevant to the case at hand.
Anyone wishing to review a copy of the Keefer decision may click this LINK.
I cite to the excellent Pennsylvania and New Jersey Insurance Bad Faith Case Law Blog by the Philadelphia law firm of Fineman, Krekstein & Harris for bringing this decision to my attention. If you are a Bad Faith litigator, regardless of whether you are on the Plaintiff's side or the Defense side, that is an excellent blog to subscribe to for continuing updates.
Source of image: www.nobadfaith.com.
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