Cedar Hill, Texas Insurance Lawyer

This 2014, Texas Supreme Court opinion should be of local interest. The case is styled, In re National Lloyd’s Insurance Company.
In this narrow holding, the Texas Supreme Court held that the trial court abused its discretion by ordering the defendant insurance company to produce evidence related to insurance claims of third parties.
After her Cedar Hill home was damaged by storms, Mary Erving filed claims with her homeowners insurance company, National Lloyds Insurance Company. Although National Lloyds paid the claims, Erving became concerned that her claims had been undervalued. As a result, Erving sued National Lloyds for breach of contract, breach of duty of good faith and fair dealing, fraud, conspiracy to commit fraud, and violations of the Texas Deceptive Trade Practices Act, and Chapters 541 and 542 of the Texas Insurance Code.
During the discovery process, Erving requested all claim-files from the past year for properties in Dallas and Tarrant Counties involving the two adjusting firms that handled her claims. National Lloyds objected to this request as overbroad and unduly burdensome. Nevertheless, the trial court ordered production of claims files related to properties in Cedar Hill and to the storms that caused damage to Erving’s home. The order was also limited to claims that were assessed by the same adjusting firms that had assessed the damage to Erving’s home. After the court of appeals denied mandamus relief, National Lloyds sought relief from the Texas Supreme Court.
Erving argued that her discovery request was proper and would support her contention that her claims were undervalued by creating a comparison between National Lloyds’ evaluation of the damage to her home with its evaluation of damage to other homes in the area. The supreme court was not persuaded, and held that Erving’s discovery request was overly broad. According to the court, “scouring claims files in hopes of finding similarly situated claimants whose claims were evaluated differently from Erving’s is at best an ‘impermissible fishing expedition.'” Even if Erving’s request were narrowly tailored, “such limits in and of themselves do not render the underlying information discoverable.” Because Erving’s request was not reasonably calculated to lead to discovery of admissible evidence, the supreme court conditionally granted mandamus relief and ordered the trial court to vacate its discovery order. However, in footnote 2, the court clarified that its holding does not mean that evidence of third-party insurance claims can never be relevant in coverage litigation.