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Posts Tagged ‘documents’

Dealing with Nonparty Document Requests

Posted on: December 4th, 2018

By: Ze’eva Kushner

As an executive or business owner, at some point you may receive a request to produce documents relating to your business from a party to a lawsuit that does not involve your company.  There are a variety of potential issues that you should consider once this lands on your desk.

The Georgia Civil Practice Act allows parties to a lawsuit to serve requests for production of documents on nonparties as part of the process of gathering information relevant to the subject matter of the case.  (O.C.G.A. § 9-11-34 (c)).  Ordinarily, your deadline to respond to such a request falls 33 days after the request was put in the mail or emailed to you.  But what happens if the request is mailed to your company’s registered agent, and he or she does not get it to you in time for you to gather the documents and respond by the deadline?

Although you, as a nonparty, have an obligation to respond or object to the request for documents by the deadline, the party who sent you the request cannot just run to court if you miss the deadline to obtain an order compelling you to produce the documents.  Instead, they have to make a good faith effort to work with you regarding any issue or dispute stemming from the document requests.  This means that you should expect a phone call from the attorney to find out the reason for the delay.

When you receive the call from the attorney who requested the documents, it is a good opportunity to discuss the types of documents that are being sought, potentially narrowing the topics and thus reducing your burden.  Additionally, you may request reimbursement of reasonable copying costs and additional time to produce the documents.

If you have any questions or would like more information, please contact Ze’eva Kushner at [email protected].

Dealing with Discovery Dangers in Bad Faith Litigation

Posted on: October 25th, 2017

By: Jessica C. Samford

Whenever an insurer could be facing a bad faith claim, what documents may be discoverable during litigation is an important consideration. While the ultimate outcome hinges on specific circumstances of the case, the discovery rules of the applicable jurisdiction is a major factor. Regardless of which state or federal laws apply, counsel often attempt to obtain the broadest scope of documents, which could include the claims file, underwriting file, internal communications, personnel files, claims of other insureds and claims handling procedures.

Although relevancy objections, as well as work-product and attorney-client communication privileges, can be asserted, a proactive rather than reactive approach is better. This is especially true because the scope of protection provided by work-product doctrines for documents created in anticipation of litigation is typically a qualified protection that can be overcome by showing substantial need for the documents and might not protect documents from production in discovery if they were created in the ordinary course of business of claims handling. Even further, it is possible for attorney-client privileges that are asserted based on the relationship between the insured and the attorney hired by the carrier to defend the insured to be waived by the insured. That means that despite the common interest the carrier and the insured once shared in the defense against the third-party claimant, in bad faith litigation, these attorney-client communications could now be discoverable. Therefore, best practice is to keep communications with counsel about defending the insured’s liability separate from communications with counsel about coverage defenses.

One option is to seek to bifurcate or stay discovery on bad faith claims and limit discovery to whether there is coverage under the policy before evidence of bad faith is addressed. The ideal way to accomplish this would be with the consent of opposing counsel early on so that, if necessary, it can be part of a discovery order or, in federal cases, a joint proposed discovery plan for court approval. If opposing counsel does not agree, this relief can be sought by motion to the court.

However, courts may not always grant such relief without consent of all parties. In Virginia, for example, a federal district court recently declined to bifurcate or stay discovery on the bad faith portion of the lawsuit for breaches of contract plus extracontractual attorneys’ fees and costs. Federal judges have the discretion to separate issues “for convenience, to avoid prejudice, or to expedite and economize.” FRCP 42. Delaying discovery on bad faith has been found to meet this standard because bad faith discovery may not ultimately be necessary if it can be established that there was no policy coverage, in the first place, upon which the extra-contractual bad faith claim is based. Similarly, courts applying Georgia law typically follow this reasoning because evidence of bad faith is irrelevant absent coverage.

The court in Virginia, however, noted that the issue of bifurcation was not raised until after considerable discovery and a motion to compel, found “obvious overlap in discoverable evidence that would support” breach of contract as equally as bad faith, and commented that “it would be difficult to imagine a scenario in which there was evidence to support bad faith and not breach of contract.” Hopeman Bros. v. Cont’l Cas. Co., 2017 U.S. Dist. LEXIS 164434. Other courts may be more inclined to agree with persuasive arguments focusing on overreaching discovery requests for documents that are not claim specific, that generate costly (regarding time, effort, and expense) discovery disputes over relevancy and privileged materials, and that is generally more complex an issue, especially if coverage can be determined as a matter of law based on the policy terms and liability allegations themselves.

With advance assistance of counsel, insurance carriers can more effectively evaluate these strategies in defending bad faith claims and navigate these discovery pitfalls in particular.

If you have any questions or would like more information, please contact Jessica Samford at [email protected].