Insurance lawyers can tell you that the process of a lawsuit on a claim can be complicated and confusing. But, understanding how the courts look at the process will help. A recent case from the Houston Court of Appeals [1st. Dist.] is a good read. It is styled, In Re Interinsurance Exchange Of The Automobile Club.
This is a mandamus action resulting from a trial court ordering Auto Club to turn over all reports of its retained engineer, Derrick S. Hancock, between the years 2000 and 2012, which relate to insurance claims.
The homeowners, John and Melanie Amponsah, had a homeowner’s policy with Auto Club. In 2012, they made a claim for foundation problems. Auto Club denied the claim base on the findings of Hancock saying the foundation problems were the result of settling and not a water leak. A lawsuit resulted claiming violations of the Texas Insurance Code and breach of contract.
During the discovery process the above reports were requested and Auto Club refused, causing a plea to the Judge who ordered the reports be provided.
This Court decided the lower court had abused it’s discretion in ordering Auto Club to produce Hancock’s reports, other than the one addressing the Amponsah’s claim.
In making this decision this court looked to the Texas Supreme Court for guidance. Citing the Texas Supreme Court, it has noted in the past that it “failed to see how insurers overpayment, underpayment, or proper payment of the claims of unrelated third parties is probative of its conduct with respect to an experts undervaluation claims at issue in this case.” Citing further, “this is especially so given the many variables associated with a particular claim, such as when the claim was filed, the condition of the property at the time of filing, and the type and extent of damage inflicted by the covered event.” In other words, scouring claim files in hopes of finding similarly situated claimants whose claims were evaluated differently from the Amponsah’s in order to prove Auto Club breached the contract by underpaying or denying their claim was at best an impermissible fishing expedition.
In this case, each report prepared by Hancock would be affected by many variables associated with that particular claim, such as when the claim was filed, the condition of the property at the time of filing (including the presence of any preexisting damage) and other factors. These are unique to each claim and have no bearing on whether the damage to the Amponsah’s house foundation was actually caused by settling versus a leak. Accordingly, the reports are not discoverable on the theory that they are evidence that may support their breach of contract claim or to show a bias on the part of the expert.
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