Recently, I spent a few weeks reviewing court decisions which analyzed discovery requests geared toward obtaining documents and information regarding an insured’s prior claims and an insurer’s handling of other insureds’ similar claims. I came across another decision by a County Court in Ohio and found the Court’s evaluation interesting. Although Owens-Corning Fiberglas Corporation v. Allstate Insurance Company is not a bad faith case, the court’s analysis of the discovery issues caught my attention due to my recent posts.
In Owens-Corning, the insured and liability insurer filed cross-motions to compel discovery in an insurance coverage dispute over asbestos products liability claims. The Court began its evaluation with the well established principle that parties may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action. At issue, was the following request to the insurer for:
[M]aterial from any lawsuits or arbitrations that defendants have had concerning asbestos coverage.
As expected, the insurer objected on grounds of relevancy, confidentiality and burden. The Court overruled all of the insurer’s objections. With regard to relevancy, the Court explained that the information is relevant as to the insurer’s intentions with regard to asbestos coverage because it will shed light on how the insurer has approached other asbestos issues and applied exclusionary clauses. The insurer’s objection on grounds of confidentiality was moot because there was already a protective order in place which addressed any concerns that the insurer had with regard to confidentiality. Finally, the Court found the insurer’s burden argument unpersuasive and ordered a production of the materials requested.
Another discovery request at issue was:
All reinsurance-related material that bears in any way upon OCD [insurer].
Again, the carrier objected on grounds of relevancy. The Court determined that the information requested was discoverable because it is relevant to whether the insurer believed that the policies at issue covered asbestos claims against the insured. The Court also ordered the production of the following:
[C]omprehensive discovery of [the defendants’] asbestos underwriting procedures and their knowledge of the alleged hazards of asbestos.
The insurer objected to the foregoing request on grounds of relevancy, burden, confidentiality and vagueness. The Court adopted the rationale of another court when ordering production, but limited the scope: “Research into other companies’ operations might have tangential relevance, but would lead to an inordinate expansion of discovery.” As discussed a few weeks ago in How to Overcome a "Burdensome" Objection When Seeking Information on Similar or Prior Claims, sometimes tweaking a discovery request so that it is limited in time, type of claim, or type of policy can make all the difference. In Owens-Corning, the Court ordered the production of the information sought by the insured, but simply limited the scope of production.
The Ohio Court’s analysis in Owens-Corning provides good examples of discovery requests to insurers that were supported by the Court. Evaluating the specific requests in Owens-Corning and other Ohio cases like it wherein a court compels production might shed some light on how to word discovery requests in an effort to overcome objections from an insurer in an Ohio court.
Please tune in next week for another bad faith discussion.