Insurers in Federal DJ Action Granted Protective Order Against Discovery Sought by Third Parties Suing Their Insured in State Court
 

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Insurers in Federal DJ Action Granted Protective Order Against Discovery Sought by Third Parties Suing Their Insured in State Court

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From FC&S Legal: Insurers in Federal DJ Action Granted Protective Order Against Discovery Sought by Third Parties Suing Their Insured in State Court. ...

From FC&S Legal: Insurers in Federal DJ Action Granted Protective Order Against Discovery Sought by Third Parties Suing Their Insured in State Court.

A federal district court in Georgia has granted a protective order to insurance companies that filed a declaratory
judgment action, which order protects the insurers against discovery sought not by their insured, but by third parties
suing their insured in a parallel state court case.

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Insurers in Federal DJ Action Granted Protective Order Against Discovery Sought by Third Parties Suing Their Insured in State Court Document Transcript

  • 1. The Insurance Coverage Law Information Center The following article is from National Underwriter’s latest online resource, FC&S Legal: The Insurance Coverage Law Information Center. INSURERS IN FEDERAL DJ ACTION GRANTED PROTECTIVE ORDER AGAINST DISCOVERY SOUGHT BY THIRD PARTIES SUING THEIR INSURED IN STATE COURT January 6, 2014 Steven A. Meyerowitz, Esq., Director, FC&S Legal A federal district court in Georgia has granted a protective order to insurance companies that filed a declaratory judgment action, which order protects the insurers against discovery sought not by their insured, but by third parties suing their insured in a parallel state court case. The Case Thurman Lee Howard allegedly drove his car along Interstate 95 in Georgia, became “road-raged,” pulled alongside the Frank Powers family, took out his pistol, and fired at least five rounds into their vehicle. Mr. Powers claimed that he: suffered physical injury from flying glass, emotional harm, and physical and mental pain and suffering as a direct and proximate result of ... [Mr.] Howard’s actions. He and his family sued Mr. Howard in a state court in Georgia for, among other things, negligence, assault, and intentional infliction of emotional distress. The two insurance carriers that had issued vehicle and umbrella policies to Mr. Howard subsequently filed a declaratory judgment action in federal district court in Georgia, naming Mr. Howard and the Powerses as defendants. The carriers sought a judgment declaring that the policies did not extend to Mr. Howard’s allegedly intentional conduct because of the policies’ intentional-conduct exclusions. The Powerses served Fed.R.Civ.P. 30(b)(6) deposition notices on the insurers in the declaratory judgment action. They sought to have their designated witness bring to the deposition things including the policies and procedures that they used to process Mr. Howard’s coverage claim. They also sought: [a] complete copy of any and all documentation related to and/or generated in response to claims evaluation and/or policy interpretation utilized in processing ... [Mr.] Howard’s claim in connection with [their case against him]. Additionally, they sought: all documentation related to and/or generated in response to claims evaluation and/or policy interpretation utilized in the processing of ... [Mr.] Howard’s claim in connection with [the declaratory judgment action]. The insurers sought a protective order from the federal district court, arguing that the Powerses wanted claims adjuster and attorney work product memos, legal billing, and other information. The insurers contended that such “claims handling” materials were irrelevant and violated various privileges. The Court’s Decision The court granted a protective order to the insurers. In its decision, it first explained that the Powerses, as parties in the case, were entitled to conduct discovery. The court then ruled that enabling a “stranger to the contract” – the Powerses, who pointed to no assignment of any claim from Call 1-800-543-0874 | Email customerservice@SummitProNets.com | www.fcandslegal.com
  • 2. Mr. Howard against his insurers – to “rake through the work-product/attorney communications portion of [the insurers’] claims file [was] not warranted under Rule 26(b)(1).” The court added that the Powerses were “literally at the scene” of the accident so that they were “in the best position to prove via direct testimony what [Mr.] Howard did to them that day.” In the court’s view, the insurers’ claims files likely had “only hearsay-based recitations, as gathered by an investigator, if not also attorney work product.” The court conceded that it was conceivable that the files could contain a direct admission from Mr. Howard as well as third party eyewitness statements, but it added that courts typically did not order such work product disclosures (i.e., information beyond gathered facts) even for insureds. The court did not grant the insurers everything they wanted. The court denied the insurers’ request for a protective order to the extent that they were objecting to any Rule 30(b)(6) document request aimed at eliciting what facts they had gathered as a matter of routine claims investigation in this case. The court, however, granted a protective order to the insurers “against any demand to produce documents containing its agents’ and attorneys’ assessment of the strength of [Mr.] Howard’s coverage claim against it, as well as other mental-impression based writings,” and the balance of the insurers’ request. The case is State Farm Mutual Automobile Ins. Co. v. Howard, No. CV412–215 (S.D. Ga. Dec. 27, 2013). Attorneys involved include: Mason White, Brennan, Harris & Rominger, LLP, Savannah, GA, for Plaintiffs; Travis D. Windsor, Brennan & Wasden, LLP, Savannah, GA, Stephen G. Lowry, Kristy B. Sweat, Harris, Penn & Lowry, LLP, Savannah, GA, for Defendants. Call 1-800-543-0874 | Email customerservice@SummitProNets.com | www.fcandslegal.com
  • 3. Call 1-800-543-0874 | Email customerservice@SummitProNets.com | www.fcandslegal.com Copyright © 2014 The National Underwriter Company. All Rights Reserved. NOTE: The content posted to this account from FC&S Legal: The Insurance Coverage Law Information Center is current to the date of its initial publication. There may have been further developments of the issues discussed since the original publication. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting or other professional service. If legal advice is required, the services of a competent professional person should be sought. For more information, or to begin your free trial: • Call: 1-800-543-0874 • Email: customerservice@SummitProNets.com • Online: www.fcandslegal.com FC&S Legal guarantees you instant access to the most authoritative and comprehensive insurance coverage law information available today. This powerful, up-to-the-minute online resource enables you to stay apprised of the latest developments through your desktop, laptop, tablet, or smart phone —whenever and wherever you need it.