JULY 2012 BAD FAITH CASES: COURT GRANTS CARRIER’S MOTION TO RECONSIDER DISCOVERY ORDER IN FAVOR OF INSURED BECAUSE THE THIRD CIRCUIT DISFAVORS DISCOVERY OF SIMILAR CLAIMS EVIDENCE IN BAD FAITH LITIGATION (Western District)

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In Zettle v. American National Property & Casualty Co., the court ruled on a motion to reconsider part of the court’s May 7, 2012 order which directed the carrier to produce to the insured certain claims files relating to underinsured and uninsured motorist claims. The motion arose from a bad faith action that the insured initiated against the carrier.

The court first examined the carrier’s two theories for granting its motion for reconsideration. First, the carrier argued that the burden of complying with the court’s discovery order was extremely onerous. Second, the carrier alleged that the court should have examined the various Third Circuit decisions that reject the discoverability of other insureds’ claim files in bad faith actions.

The insured, who did not submit a written opposition brief, raised two counterarguments. First, the insured argued that the discovery order was not extremely burdensome. Second, the insured argued that the potentially disparate treatment of its claim vis-à-vis other claims is very relevant to the instant litigation.

The court ruled in favor of the carrier and granted its motion to reconsider. The court reasoned that, while the carrier’s estimate of its burden of production may be inflated, the extent of time and effort required to comply with the insured’s discovery requests was too great to place upon the carrier. Moreover, the court acknowledged Third Circuit precedent that disfavors the discovery of similar claims evidence in bad faith cases. Accordingly, the court granted the carrier’s motion for reconsideration and vacated the portion of its May 7, 2012 order directing the carrier to produce the relevant files.

Date of Decision: June 19, 2012

Zettle v. Am. Nat’l Prop. & Cas., Co., No. 3:10-cv-307, 2012 U.S. Dist. LEXIS 85330, U.S. District for the Western District of Pennsylvania (W.D. Pa. June 19, 2012) (Gibson, J.)

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