While reviewing an insurer’s claim denial letter yesterday, it occurred to me that it was time to remind folks of a few things: (1) loss reports, estimates, and the like prepared in the ordinary course of an insurer’s routine claim investigation are rarely work product immune and should be produced to the insured and/or the insured’s representatives during the claim process so that the propriety of an insurer’s claim decision may be assessed by more than the insurer, (2) claims must not be adjusted in an adversarial manner, and (3) adjusters (along with everybody else) must not engage in the unauthorized practice of law. Allow me to flesh these reminders out.
Regarding the first reminder, here are a couple instructive cases: Place St. Michel, Inc. v. Travelers Property Casualty Company of America,1 and Cotton States Mutual Insurance Company v. Turtle Reef Associates.2 The court in Place St. Michel put it very nicely:
It is well settled that [work product immunity] only pertain[s] to documents generated based on the anticipated probability that litigation will follow at the time the documents were drafted. Materials that were drafted in the ordinary course of business are not protected. Thus, in determining whether a document was made in anticipation of litigation, the primary focus is the reason or purpose for creating the document. … Factors relevant in the analysis, although not determinative, include who prepared the documents, the nature of the documents, and the time the documents were prepared. The nature of the litigation, the relationship between the parties, and any other fact peculiar to a given case should also be weighed. Finally, another factor that may make a material difference is the involvement of counsel in the process, either on behalf of the claimant or the insurance company.3
The court opinions in Place St. Michel and Turtle Reef being of advanced age, (five years old and twenty eight years old, respectively), insurance company adjusters should know by now that their withholding ordinary claim reports and estimates based on work product immunity is rarely (if ever) appropriate.
Regarding the second reminder, are insurance company adjusters, in raising the specter of work product immunity during the claim process, saying that the insurer anticipated litigation from the inception of a claim? Really? An indisputable insurance industry claim handling standard is that claims must not be adjusted in an adversarial manner. This truism is codified in several states, including Florida.4
Regarding the third reminder, how exactly are insurance company adjusters (or any other non-lawyer for that matter) in a position to make the legal determination that documents were prepared outside the ordinary course of routine claim adjustment; i.e., in anticipation of litigation? They are not.5
In sum, one should not go lightly when an insurer attempts to make secret the reports, estimates, and the like of its adjusters, investigators, and the like upon which claim decisions are partially or wholly based.
1 Place St. Michel, Inc. v. Travelers Prop. Cas. Co. of Am., 06-21817-CIV, 2007 WL 1059561 (S.D. Fla. Apr. 4, 2007).
2 Cotton States Mut. Ins. Co. v. Turtle Reef Assocs., Inc., 444 So. 2d 595 (Fla. 4th DCA 1984).
3 Place St. Michel, 2007 WL 1059561 at *2-4 (internal citations omitted, and holding that work product immunity did not attach to the insurance company adjuster’s reports because, in large part, “the adjuster was conducting … [a] traditional [claim] examination … [to] objective[ly] assess[ ] … the loss” as expected “from an insurance company’s representative at such an early state of the process”).
4 See, e.g., Fla. Admin. Code 69B-220.201(3) (“The work of adjusting insurance claims engages the public trust. An adjuster shall put the duty for fair and honest treatment of a claimant above the adjuster’s own interests in every instance.”) and 69B-220.201(3)(c) (“An adjuster shall not approach investigations, adjustments, and settlements in a manner prejudicial to the insured.”).
5 See, e.g., ABA Model Rules of Prof’l Conduct, Comment 2 to Rule 5.5 (“The definition of the practice of law is established by law and varies from one jurisdiction to another. Whatever the definition, limiting the practice of law to members of the bar protects the public against rendition of legal services by unqualified persons.” [emphasis added]).