Judge Brann of Federal Middle District Court Reviews Discoverability of Communications Between Third Party Administrator and Claims Representatives and Counsel

In  Heller’s Gas, Inc. v. Int’l Ins. Co. of Hannover Ltd., 4:15-CV-01350 (M.D. Pa. June 1, 2016 Brann, J.), Judge Matthew W. Brann of the Federal Middle District Court of Pennsylvania addressed the discoverability of communications between in-house counsel of a third party administrator and a claims representative of a carrier utilizing the services of the third party administrator.

In this breach of contract and bad faith case relative to a policy that provided commercial premises coverage, the Plaintiff insured claimed that documents withheld or redacted in discovery did not fall within the attorney-client privilege, the work product doctrine, and/or did not pertain to reserve information.

The Plaintiff insured asserted that all but one of the documents at issue was either sent to or from employees of the insurer’s third party administrator or its authorized claim representative, and as neither of these entities were subsidiaries of, or owned by, the insurer, the communications were not privileged.

In response, the carrier did not assert an agency relationship with either the third party administrator or the authorized claims representative.   Rather, the carrier, instead argued that the  communications between the third party administrator’s in-house counsel and/or the claim representative’s in-house counsel with the insurer all fell within the scope of attorney-client privilege.

Judge Matthew W. Brann
M.D.Pa.
 

The court reviewed the unredacted documents during an in camera session. Thereafter the court, referring to F.R.C.P. 26, decided: “After thoroughly examining the documents, this Court finds that the information redacted appropriately falls within the attorney-client privilege and work product doctrine and is consequently information directly related to or referencing legal strategy regarding the instant litigation. The correspondence further supports [the insurer’s] latterly-advanced argument that [the third party administrator and authorized claims representative] are essentially agents of [the insurer].”

As such, the court found that the redactions were appropriate.

Anyone wishing to read this decision may click this LINK.

I send thanks to Attorney Lee Applebaum and the other writers of the Pennsylvania and New Jersey Insurance Bad Faith Case Law Blog at Fineman, Krekstein & Harris for bringing this case to my attention.

 

Commentary:  Check out the Tort Talk blog post on the Pennsylvania Superior Court's recent ruling in a similar fashion on similar issues in the case of Brown v. Greyhound, Inc. HERE.  The Brown case can be viewed online HERE.