花都影视

By Julie Grace VanVliet, Esq.

In a recent 5-2 decision, the Ohio Supreme Court clarified when the attorney-client privilege and work product doctrine applies to documents contained in insurance claim files in bad-faith cases. The Court held that claim file materials should only be disclosed upon a prima facie showing of bad faith and if it is related to an attorney’s aiding or furthering the commission of bad faith by a client, as determined by an in-camera inspection. Such documents can only be disclosed under the work product doctrine upon a showing of good cause. See Eddy v. Farmers Prop. Cas. Ins. Co., Slip Opinion No. 2026-Ohio-626.

The case involved an underinsured motorist claim where Plaintiffs were involved in a car accident but were not at fault. The other driver’s insurer paid its policy limits, and Plaintiffs sought $150,000 in underinsured motorist coverage – the difference between the tortfeasor’s policy limits and their underinsured motorist coverage limit – from their own insurer, Farmers. After negotiations stalled, Plaintiffs sued Farmers for breach of contract. Eventually, based on new medical information, Farmers agreed to pay Plaintiffs the $150,000.

A few months later, Plaintiffs filed a bad-faith lawsuit against Farmers, alleging Farmers delayed the resolution of their case, causing them to face long-term financial uncertainty, and emotional and mental pain and distress.

During discovery in the bad-faith lawsuit, Plaintiffs sought Farmers’ entire claim file. Farmers refused to produce any documents created after the coverage lawsuit was filed, arguing that such documents were privileged. The trial court ordered Farmers to produce the entire claim file without ordering an in-camera inspection. Farmers appealed, and the First District Court of Appeals upheld the decision, reasoning that the documents were subject to discovery because Plaintiffs alleged their insurer acted in bad faith by dragging its feet before settling the claim.

The Ohio Supreme Court reversed the First District’s decision, holding that R.C. 2317.02(A), revised in 2007, completely abrogated the Court’s prior decision in Boone v. Vanliner Ins. Co., 2001-Ohio-27. Under the statute, attorney-client communications in insurer bad-faith cases can only be produced upon a showing of bad faith after an in-camera inspection. The Court relied on the fact that the documents were created while Famers was already engaged in litigation with its insured – not before litigation commenced like in Boone.

The Court also held that the attorney-client privilege found in R.C. 2317.02(A) applies to attorney trial and deposition testimony, as well as documents containing attorney-client communications. Finally, the requested documents were not subject to production under the work product doctrine found in Civil Rule 26(B)(4) because Plaintiffs failed to show that good cause existed for their disclosure.

The Court’s decision is important because it clarifies how courts should apply the attorney-client privilege and work product doctrine to bad-faith claims against an insurer. No longer can plaintiffs obtain claim file materials from an insurer after alleging bad faith. Instead, privileged documents and communications found in claim files are largely protected by the attorney-client privilege absent a showing of bad faith.

If you have any questions regarding this decision or have any questions concerning insurance coverage matters, please contact a member of our Insurance Coverage or Appellate Law Practice Groups.