Daily Archive for January 8th, 2007

JANUARY 2007 BAD FAITH CASES
COURT RULES DISCOVERY OF RESERVE INFORMATION IS PERMISSIBLE (Middle District)

  

In Javorski v. Nationwide Mutual Insurance Company, the insured moved to compel the insurer to produce reserve information.  The insurer argued that the reserve information should only be discoverable where liability on the underlying policy is not contested.  The court ruled that reserve information is discoverable under the Federal Rules of Civil Procedure.

Date of Decision: November 30, 2006.

Javorski v. Nationwide Mutual Insurance Company, United States District Court for the Middle District of Pennsylvania, No. 3:06-CV-1071 (M.D. Pa. November 30, 2006) (Conaboy, J.).
    

JANUARY 2007 BAD FAITH CASES
COURT ORDERS IN CAMERA REVIEW OF ALLEGEDLY PRIVILEGED INFORMATION TO DETERMINE ISSUES ON MOTION TO COMPEL PRODUCTION (Middle District)

    

In Javorski v. Nationwide Mutual Insurance Company, the insured moved to compel the insurer to produce documents which the insurer asserted were protected by attorney/client privilege and/or attorney work product.  Pennsylvania law provides that communications from an attorney to her client are only protected if they reveal confidences of the client.  The court ruled that such materials should be presented to the court, for in camera review, to determine if and when the privilege is properly asserted.  The court would likewise determine if and when the attorney work product doctrine applies (which protects an attorney’s mental impressions or conclusions respecting the value or merit of a claim or defense or respecting strategy or tactics).

Date of Decision: November 30, 2006.

Javorski v. Nationwide Mutual Insurance Company, United States District Court for the Middle District of Pennsylvania, No. 3:06-CV-1071 (M.D. Pa. November 30, 2006) (Conaboy, J.).
    

JANUARY 2007 BAD FAITH CASES
CASE ORIGINALLY STATE COURT ARBITRATION ALLOWED TO PROCEED IN FEDERAL COURT AFTER REMOVAL DESPITE INITIAL CLAIM BEING LIMITED TO $50,000 (Philadelphia Federal)

    

In Valley, et al. v. State Farm Fire and Casualty Company, the insureds sued for breach of contract and bad faith for failure to pay on their claim for $31,445.65 in soot damage.  The case was brought in the Philadelphia Court of Common Pleas’ Compulsory Arbitration Program, which has a maximum jurisdiction limit of $50,000.  The case was removed by the insurer to federal court, which has an amount-in-controversy minimum of $75,000 for this type of case.  The insureds moved to remand the case to state court.  They argued that removal was improper because the case did not meet the minimum amount-in-controversy.  The Federal Court ruled that the removal was proper.  The Philadelphia civil court cover sheet, where the insureds listed their claims as less than $50,000, was not controlling.  Rather, the court reasoned that the insured could conceivably recover in excess of $75,000 if they succeeded on their contract claim for $31,445.65, their bad faith claim (which sough punitive damages), and attorneys fees.  The court noted that it would not be unforeseeable for the insureds to recover three or four times their claim (for $31,445.65) in punitive damages alone.  And the court further observed that the insureds were unwilling to stipulate that their claims were for less than $75,000.

Date of Decision: December 12, 2006

Valley, et al. v. State Farm Fire and Casualty Company, United States District Court for the Eastern District of Pennsylvania, No. 06-4351, 2006 U.S. Dist. LEXIS 90376 (E.D. Pa. 2006) (Shapiro, J.).