Ro v. Everest Indemnity Insurance Company et al

Filing 56

ORDER granting in part plaintiff's 41 Motion to Compel, by Judge Robert S. Lasnik. (KERR)

Download PDF
1 2 3 4 5 6 7 8 9 10 11 12 13 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE _______________________________________ ) DAEIL RO, ) ) Plaintiff, ) v. ) ) EVEREST INDEMNITY INSURANCE ) COMPANY, et al, ) ) Defendants. ) _______________________________________) Civil Case No. C16-0664RSL ORDER GRANTING IN PART PLAINTIFF’S MOTION TO COMPEL 14 15 This matter comes before the Court on “Plaintiff’s Motion to Compel Discovery.” Dkt. 16 # 41. Plaintiff alleges that Everest Indemnity Insurance Company, the insurer on a professional 17 liability policy purchased by plaintiff’s employer, acted in bad faith when it denied his claim for 18 coverage against third-party claims. Plaintiff seeks production of Everest’s unredacted claim file, 19 all claims-handling manuals and guidelines, underwriting materials for the policy at issue, and 20 reserve information. Having reviewed the memoranda, declarations, and exhibits submitted by 21 the parties, the Court finds as follows: 22 (1) Privilege Claims 23 Everest has clearly and plainly stated that the seven progress notes that were redacted 24 from the claim file reflect communications with counsel after the insurer was on notice that 25 plaintiff intended to file an Insurance Fair Conduct Act (“IFCA”) claim. Plaintiff takes issue 26 ORDER GRANTING IN PART PLAINTIFF’S MOTION TO COMPEL - 1 1 with the fact that the insurer has not disclosed the names of the attorneys involved in these 2 communications or proven that the communications involved legal advice or were in anticipation 3 of litigation. While the surrounding circumstances do not justify plaintiff’s unwillingness to 4 credit Everest’s statements, the redactions are very limited and this issue can be resolved through 5 an in camera review.1 6 (2) Claims-Handling Manuals 7 Request for Production No. 5 requests “all manuals, books, pamphlets, memoranda, best 8 practice manuals, guidelines, and any and all other documents[] you use or rely upon and that in 9 any way describe, detail, explain or address the manner or procedures that your agents or 10 employees are to follow when receiving, investigating and/or adjusting claims for insurance 11 benefits under any insurance policy you issued.” Dkt. # 42 at 13. See also Dkt. # 42 at 20. 12 Lancer Claims Services, the agent that handled plaintiff’s claim on Everest’s behalf, has 13 produced its claim-handling guidelines related to the type of insurance policy and claim at issue 14 in this case. Everest has refused to produce its own manuals and guidelines regarding the 15 handling of professional liability claims, however. Regardless of whether Lancer reviewed or 16 was required to comply with Everest’s guidelines, Everest’s advice regarding how these claims 17 should be handled is relevant to a determination of whether Everest and its agent behaved 18 reasonably and/or in bad faith. While an insurer’s internal guidelines do not set the standard of 19 reasonable care, they may inform the analysis (a) by showing an industry participant’s custom or 20 practice and/or (b) by providing a benchmark by which to compare Lancer’s conduct and 21 policies. Everest shall therefore provide any manuals or guidelines that apply generally to claims 22 handling activities and any such documents regarding the handling of the type of professional 23 1 24 25 Cedell v. Farmers Ins. Co. of Wash., 176 Wn.2d 686 (2013), is inapplicable. The Cedell presumption that the attorney-client privilege does not apply as between an insurer and its insured reflects the quasi-fiduciary duties owed in the first-party insurance context. No quasi-fiduciary duty arises in the third-party context presented here, and the presumption that does not apply. 26 ORDER GRANTING IN PART PLAINTIFF’S MOTION TO COMPEL - 2 1 2 liability claims at issue here. Plaintiff has made no attempt to explain how documents related to other types of policies 3 or claims are relevant to the issues in this case. Instructions to claims managers on how to 4 investigate and adjust workers compensation, uninsured motorist, or first-person property claims 5 have little, if any, relevance to the evaluation of plaintiff’s claim. Discovery of every document 6 that addresses the manner in which Everest’s employees handle claims under every type of 7 insurance it offers is neither relevant nor proportional to the needs of this case. Fed. R. Civ. P. 8 26(b)(1). 9 10 (3) Underwriting Materials Plaintiff seeks production of all documents that “refer or relate in any way to the 11 underwriting, application for, or issuance of, the Policy” purchased by his employer. Dkt. # 42 at 12 12. Everest objects on relevance grounds, but evidence regarding the insured’s request for 13 coverage and the negotiations that led to the selection of the form policy and endorsements may 14 reflect the risks Everest expected to cover and/or the scope of coverage provided to employees 15 like plaintiff. Silgan Containers v. Nat’l Union Fire Ins., 2011 WL 1058861, at *1 (N.D. Cal. 16 Mar. 23, 2011); Bayley Const. v. Wausau Bus. Ins. Co., 2012 WL 6553790, at *2 (W.D. Wash. 17 Dec. 14, 2012). 18 (4) Reserve Information 19 Everest redacted eleven entries in the claim file because they reflect “[c]onfidential and 20 irrelevant reserve information.” Dkt. # 42 at 35-36. The establishment of a reserve amount is 21 required by Washington law and is not, therefore, an admission of coverage or liability under the 22 policy. Although it may provide insight into the way the claims adjusters who investigated and 23 evaluated plaintiff’s claim valued the claim, the issue in this case is whether or not coverage 24 exists, not whether the insurer low-balled a settlement offer or undervalued the claim. Plaintiff 25 has not shown that the reserve information is relevant in this case. 26 ORDER GRANTING IN PART PLAINTIFF’S MOTION TO COMPEL - 3 1 2 For all of the foregoing reasons, plaintiff’s motion to compel is GRANTED in part. 3 Within fourteen days of this Order, Everest shall deliver to chambers unredacted copies of Dkt. 4 # 42-1 at 2-3 for in camera review and shall produce to plaintiff (1) all manuals and guidelines of 5 general applicability regarding claims handling procedures, (2) all manuals and guidelines 6 regarding the handling of the type of professional liability claims at issue here, and (3) the 7 underwriting materials related to this policy. 8 9 Dated this 25th day of January, 2017. 10 A 11 Robert S. Lasnik United States District Judge 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 ORDER GRANTING IN PART PLAINTIFF’S MOTION TO COMPEL - 4

Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.

Why Is My Information Online?