JANUARY 2007 BAD FAITH CASES
CARRIER’S DOCUMENTS RELATING TO MATTERS ESSENTIAL TO BAD FAITH CLAIM DISCOVERABLE, & DOCUMENTS NOT PROTECTED AS WORK PRODUCT NOR PRIVILEGED (Philadelphia Commerce)

The insurer appealed a Court Order forcing the insurer to produce documents that the insurer claimed were protected under the work product and attorney client privilege.  The Philadelphia Commerce Court issued this Opinion in support of its original decision, and recommended that the appeal be quashed.

The insured served a request for production of documents to which the insurer objected on the grounds that the documents were protected by attorney-client privilege, work product privilege and because some of the documents were generated after the bad faith lawsuit was filed.  The documents sought included claims management logs in the underlying case as well as correspondence related to the bad faith case.

The Trial Court opined that the insurer’s appeal should be quashed because the requirements of the collateral order doctrine, which allows for an interlocutory appeal where the order at issue is separable from the main cause of action, involves a right too important to be denied review and would cause the right to be irreparably lost if no review of the issue were made, had not been met.

In addition, the court held that even if the collateral order doctrine were applicable, the order should be affirmed because the documents were not protected under the work product privilege or the attorney client privilege.  Although the documents were prepared in anticipation of litigation, none of the documents included legal conclusions of the insurer or its representatives or counsel.

Further, the documents did not contain statements made by the insurer to counsel for the purpose of representation, rather, they were referral documents handing over the matter to the legal department.

Finally, the court held that there is no “post-suit” doctrine in Pennsylvania.  Therefore, documents generated by the insurer or its counsel were not privileged merely because they were generated after the initiation of the bad faith case.

Date of Decision: November 30, 2006.

Copley Associates, Inc. v. Erie Insurance Exchange, Inc., December Term 2005, No. 1332, 2006 Phila Ct. Com. Pl. LEXIS 473 (C.C.P. Philadelphia Nov. 30, 2006) (Abramson, J.)