Insurance attorneys in Fort Worth would want to know what is in the insurance company claims file when they are involved in a lawsuit with an insurance company.
When extra-contractual lawsuits are filed, there is often a pitched battle over discovery wherein the insured seeks to prove his case by showing deficiencies or omissions in the claim file. Many attorneys on both sides of the docket maintain that bad faith cases are won and lost in discovery. Typically, the claim file is not discoverable in a simple contract case, but it is discoverable in an extra-contractual case, up to the date suit is anticipated.
Texas Rules of Civil Procedure 166b(3)(d) provides certain communications between a party’s agents, employees and representatives, when made after the occurrence upon which the suit is based, and in anticipation of litigation, are privileged and exempt from discovery. The party claiming the privilege has the burden of producing evidence to establish its applicability to the materials sought to be protected and must prove the evidence was acquired and developed in anticipation of litigation. In other words, the privilege may be invoked if the documents were prepared after a lawsuit has been filed or if there is good cause to believe suit is likely. The mere fact that one party has hired an attorney is not sufficient to place the other party in anticipation of litigation; there must be some objective manifestation of the intention to bring suit. The proof required to sustain the privilege must be specific and detailed and is set forth in the Texas Supreme Court in Peeples v. Fourth Court of Appeals. In Peeples the court stated:
We hold that any party who seeks to exclude documents, records or other matters from the discovery process has the affirmative duty to specifically plead the particular privilege or immunity claimed and to request a hearing on his motion. The trial court should then determine whether an in camera inspection is necessary. If such inspection is ordered by the trial court, those materials for which the inspection is sought must be segregated and produced to the court. Failure to follow the above procedure constitutes a waiver of any complaint of the trial court’s action.
In a Fort Worth Court of Appeals mandamus proceeding, In Re Maher, the question was whether and when litigation was anticipated. An insured submitted bills and documentation of future medical expense to his insurer, USAA, following an accident. USAA sent only a check for a small amount. The insured filed suit alleging breach of contract and multiple extra-contractual theories. He soon filed a motion to compel discovery after USAA failed to provide most of the discovery materials he requested. USAA claimed work-product privilege. Pursuant to the trial court’s order, USAA produced a privilege log. The insured objected to its sufficiency. The trial court denied the insured’s motion to compel; he then petitioned for a writ of mandamus. The appellate court found that USAA had not shown that it was entitled to the privilege because it had not shown that, in good faith, it anticipated litigation; accordingly, the appellate court ruled in foavor of the insured in the mandamus proceeding.
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