Safeco Insurance Company and its subsidiaries are certainly getting headlines regarding claims practice controversies and bad faith lawsuits. I discussed a Texas Safeco appraisal dispute in Litigation Discovery Continues During Appraisal of Damages in Texas Federal Court earlier this week. A recent case from the U.S. District Court for the Southern District of Florida, Magaldi v. Safeco Ins. Co. of Am., No. 10-80280, 2010 U.S. Dist. LEXIS 62085 (S.D. Fla. June 22, 2010), provides significant instruction for attorneys where there are allegations of slow and wrongful claims handling in the adjustment and appraisal.
American Economy Insurance Company, a Safeco subsidiary, takes different positions on appraisal and litigation in Texas. While American Economy refused to abate discovery in a matter I am litigating, it unsuccessfully argued to abate formal litigation discovery in another case, Tran v. Am. Econ. Ins. Co., 2010 U.S. Dist. LEXIS 66283 (S.D. Tex. July 2, 2010).
This week, I have another example of how a properly drafted Motion to Compel can make a world of a difference in the progress of your case. In a case against Safeco, a plaintiff’s attorney included the following argument in his motion:
These discovery requests seek documents aimed at Safeco’s attempts to institutionally turn claim handling practices into profit producers….The discovery requests also seek the personnel files of the claim handlers involved in the handling of the claims at issue in this case. These files should reveal, among other things, the training of the various claim handlers and whether they received incentives or reprimands for their claims handling.
Almost every attorney has filed a Motion to Compel regarding discovery. Sure, we’ve won some. Of course, we’ve lost some. And we’ve all gotten the “granted in part and denied in part.” But how many times has your motion to compel been granted in a bad faith case? When has the court ordered your insurer to produce both its “work product” and “attorney-client” privileged material about how your insured’s claim was handled? I know what you’re thinking – “it’ll never happen.” But it does…
Continue Reading “Going through the Motions” Is Usually Not Enough to Compel Bad Faith Discovery From an Insurer
Last week, I wrote about some of the things you can expect to see, and not see, when Insurers like Safeco and Liberty Mutual respond to discovery requests. This week, I want to explain one of the steps you can take to combat these evasive discovery tactics. Some of the most effective and successful methods have been used across the country by large and small firms alike. What makes these plaintiffs’ law firms stand out is not the type of claim they pursue, the amount of the claim or the kind of insured they represent, but their commitment to not letting insurers get away with stonewalling discovery tactics. These attorneys go the extra mile, invest wisely, and do their homework. Sure, it might take some time; it’s going to take extra effort, and, naturally, nothing is free. But in the end, plaintiffs’ attorneys who obtain adjuster’s diaries, employee training manuals, and documents showing incentives for employees to put money into their own pockets instead of the insureds’ pockets, are going to go a long way in proving how their insured’s claim was improperly handled by the insurer from day one. This type of evidence can show your judge how the insurer never really intended to pay anything near a fair amount on your insured’s perfectly legitimate claim, if anything at all.
How many times have you reviewed documents produced by Safeco, Liberty Mutual or other insurers, only to receive virtually nothing significant other than a large privilege log? While the purpose of discovery is to exchange relevant documents or information which helps parties prove their cases, the clever and difficult attorneys hired by insurers have developed a knack for hiding and preventing the disclosure of crucial evidence pertaining to what really motivates and determines claims actions and decisions. In many cases, policyholders and their counsel can expect well-calculated discovery tactics which lead many to simply give up or think that the effort will delay the case for too long a time.
Safeco Insurance Company cancelled depositions in a Texas insurance litigation matter yesterday. So, we spent the day working on Safeco and Liberty Mutual Insurance Company discovery and networking with other consumer attorneys who are helping clients with Safeco and Liberty Mutual claims problems. The collegiality of policyholder attorneys helping each other is refreshing. The Texas plaintiff’s bar is very good at this.
Vivian Persand is making headway against Safeco and Liberty Mutual Insurance Company. Sharing information and networking with similarly situated policyholders who are litigating issues involving the companies’ claims management practices and underpayment of claims is important. Attorneys who do share information reduce the cost of litigation for their clients, show that the insurance defense attorneys generally are not truthful in their disclosures of incriminating information, and generally win more cases. As a result of a Hurricane Ike insurance dispute involving a medical complex insured by Safeco and problems involved with opposing counsel and Safeco in that matter, I have become involved in organizing the policyholder’s bar so that we can more effectively litigate the claims practices of Safeco and Liberty Mutual.
I have been in a networking seminar regarding Safeco and Liberty Mutual insurance companies all day. One of my colleagues provided me some materials from State Farm. I am posting a couple of them for your review.
Safeco and Liberty Mutual Insurance Company claims practices impact the lives of millions of claimants. Over the past several months, we have been coordinating efforts with others to learn why so many of the claims are paid slowly or not for the amounts which claimants have demanded. This has been a national effort and a relatively enormous project for any one person with other matters to attend. Some prior posts have alluded to this effort we have initiated: