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Discovery in Bad Faith Insurance Litigation:

Best Practices for Proving or Defending Claims

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WEDNESDAY, SEPTEMBER 19, 2012

Presenting a live 90-minute webinar with interactive Q&A

Soren E. Gisleson, Partner, Herman, Herman & Katz, New Orleans

David A. Strauss, Member, King Krebs & Jurgens, New Orleans

Alan P. Jacobus, Partner, Carroll, Burdick & McDonough, San Francisco

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Soren E. Gisleson, Esq. Partner

Phone: (504) 581-4892 Fax: (504) 561-6024 Email: [email protected]

30(b)(6) Notice MIS UNITED STATES DISTRICT COURT

PLAINTIFF * CIVIL ACTION NO.

*

* SECTION:

Versus *

* JUDGE

*

INSURER * MAGISTRATE JUDGE

*

* * * * * * * * * * * * *

PLAINTIFFS’ 30(B)(6) DEPOSITION NOTICE

RELATING TO INFORMATION SYSTEMS

AND INITIAL REQUESTS FOR PRODUCTION OF DOCUMENTS

To: Insurer

6

Definitions and Instructions

A. Document - As used herein, the term “document” shall be construed broadly and expansively to include any medium upon which information is recorded, including, but not limited to, contracts, agreements, applications, forms, policies, claims, files, records, letters, correspondence, minutes, logs, memoranda, notes, ELECTRONIC EVIDENCE (as defined herein), photocopies, facsimiles, transcripts, pleadings, claims, sketches, drawings, designs, blueprints, graphs, photographs, videotapes, audiotapes, microfilm, charts, studies, tables, calculations, analyses, summaries, pricing data, other data, compilations, advertisements, fliers, mailings, brochures, notices, acknowledgments, and any draft of the foregoing, which is, or has been, at any time, in the control, custody or possession of INSURER.

B. Electronic Evidence - As used herein, the term “Electronic Evidence” shall be construed broadly and expansively to include any electronic medium upon which information is recorded, including, but not limited to, computer tapes, computer disks, computer cards, computer files, computer systems, computer databases, e-mails, floppy discs, zip discs, backup tapes, mainframes, hard drives, computer presentations, PowerPoint slides, calendars, directories, diaries, application programs, data files and file fragments, word processing files and file fragments.

7

C. Communication - Shall refer to all communication, whether written or oral or by electronic means, including, but not limited to, telephone conversations, letters, memoranda, e-mails, facsimiles, reports, interviews, statements, contracts, agreements and consultations. Whenever a request refers to conversations with others, such request also refers to communications with all persons acting on behalf of that other, including, but not limited to, employees, officers, managers, directors, parent corporations, subsidiaries, associates, consultants, investigators, secretaries, assistants, agents, brokers, claims adjusters, or attorneys.

D. You or Your or Defendant - Shall refer to Defendant Solutions, Inc., and/or any affiliates, subsidiaries, predecessors-in-interest, and/or successors-in-interest of Defendant, (including, but not limited to, Xactnet, Defendant, and/or ISO), and to any and all parties or persons acting on behalf of one or more of these entities, including, but not limited to, employees, officers, managers, directors, associates, consultants, investigators, secretaries, assistants, agents, brokers, claims adjusters, or attorneys.

E. Insurer - Shall refer to Insurer, and/or all related entities, such as parent corporations, sister corporations, predecessors-in-interest, successors-in-interest, affiliates, and/or subsidiaries, and to any and all parties or persons acting on behalf of one or more of these entities, including, but not limited to, employees, officers, managers, directors, associates, consultants, investigators, secretaries, assistants, agents, brokers, claims adjusters, or attorneys.

8

F. Pricing Information - shall be defined as any DOCUMENT and/or ELECTRONIC EVIDENCE and/or COMMUNICATION obtained, collected, compiled, created, modified, purchased, sold, and/or used by DEFENDANT and/or INSURER, relating or in any way pertaining to the price and/or cost and/or estimated price and/or cost of any repair, restoration, replacement and/or construction of any movable or immovable property, including, but not limited to, material, labor, tax, overhead and profit, minimum price, base service charge and/or other element(s) of a price and/or cost.

G. Privilege - If a privilege is claimed over any document, (as defined above), please provide: (a) the identity of the author of the document, (b) the identity of all recipient(s) of the document, (c) the date that the document was prepared, (d) a brief description of the document, and (e) the basis upon which the privilege is claimed, including the statute, rule or decision upon which the claim of privilege is based.

H. The terms “and” and “or” and “and/or” shall be construed broadly and expansively as “and/or”, and shall not be construed to limit the documents or information sought in any manner.

I. The term “relate” (including “relating”, “related” and/or “relates”) shall be construed broadly and expansively to mean consisting of, referring to, reflecting, or in any way referring to, reflecting, or being in any way legally, logically, or factually connected with the matters discussed.

9

NOTICE

PLEASE BE ADVISED that Plaintiffs will take the deposition of Defendant, pursuant to Rule 30(b)(6) of the Federal Rules of Civil Procedure, at the ?????, on the ??th day of ???, 2008, commencing at 9:00 a.m. (local time), and continuing from day to day until complete. Defendant is requested to designate one or more officers, managers, agents, employees, or other representatives to discuss the following issues:

Areas of Inquiry

1. The existence, duties, structure, and personnel associated with Your information technology (“IT”), information systems (“IS”), or management information systems (“MIS”) department or division, and/or any other department or division responsible for the maintenance, storage, preservation, deletion, and/or utilization of Electronic Evidence as defined herein.

2. The existence, layout, functions, practices and procedures associated with the maintenance of your corporate library or libraries.

3. Your Document (and/or Electronic Evidence) retention and/or destruction policies.

4. Your computer system configuration, including the structure and use of networks, desktops, and offsite access, as well application software and utilities.

5. Your policies and practices regarding deletion, back-up, preservation, and storage of electronic data.

6. The nature, existence, generation, distribution and retention of routinely-kept records or reports relating to Pricing Information.

7. Your electronic mail and messaging systems.

10

Areas of Inquiry (cont.)

8. Your policies regarding the confidentiality of information, including the use of logins,

passwords, and other security devices, as well as confidentiality agreements with employees.

9. Your policies regarding employee use of computers, networks, servers, e-mail, the Internet, or

World Wide Web.

10. The process, or processes, by which You sell, distribute, disseminate or otherwise provide

Pricing Information to Insurer (from an IT, IS and/or MIS perspective).

11. The process, or processes, by which You obtain Pricing Information from Insurer (from an IT,

IS and/or MIS perspective).

12. The personnel primarily responsible for coordinating and/or communicating with Insurer.

13. The process, or processes, by which You collect, compile, assimilate, modify, alter and/or

utilize Pricing Information (from an IT, IS and/or MIS perspective).

11

REQUESTS FOR PRODUCTION OF DOCUMENTS

PLEASE TAKE FURTHER NOTICE that deponent is hereby requested,

pursuant to Rules 34 and/or 30(b)(5) of the Federal Rules of Civil Procedure, to

produce and to permit the Plaintiff to inspect and photocopy all documents set

forth below, which are in the possession, custody or control of DEFENDANT:

1. Your basic employee handbooks, manuals, and/or guides, in effect from January 2005 thru the present.

2. Any written document retention and/or destruction policies.

3. Your information technology (“IT”), information systems (“IS”), or management information systems (“MIS”) handbooks, manuals, or guides, from January 2005 thru the present.

4. Your basic manuals, handbooks, or guides relating or pertaining to the creation, compilation, dissemination, purchase, collection, modification and/or sale of Pricing Information.

5. Any notices of pending or anticipated litigation distributed to some or all of Your officers or employees.

6. Your computer, network, and/or e-mail policies or protocols.

7. Your organizational charts.

8. Your library coding systems.

12

REQUESTS FOR PRODUCTION OF DOCUMENTS (cont.)

9. Any corporate glossary or glossaries.

10. Any document coding indexes.

11. Any sample or standard form confidentiality agreements with, or policies provided to, Your

employees and/or “independent” adjusters hired and/or otherwise retained by You.

12. All biographies, resumes, and/or curriculum vitae of any witness or witnesses offered as

corporate representatives with respect to one or more of the Areas of Inquiry.

13. All sworn or unsworn statements, affidavits, testimony, or declarations of any witness or

witnesses offered as corporate representatives with respect to one or more of the Areas of

Inquiry, including any and all depositions, trial testimony, affidavits, declarations, and/or

testimony before any governmental, legislative, regulatory or investigative body or agency.

14. All Federal Rule 30(b)(6), person most knowledgeable, or other representative testimony, on

Your behalf, relating to one or more of the Areas of Inquiry.

15. All publications authored or co-authored by any witness or witnesses offered as corporate

representatives with respect to one or more of the Areas of Inquiry.

This day of , 2008.

Respectfully Submitted,

13

1442 Notice of Deposition

CIVIL DISTRICT COURT FOR THE PARISH OF ORLEANS

STATE OF LOUISIANA

NO. DIVISION

Plaintiff

versus

INSURER

FILED:_________________________ ___________________________

Deputy Clerk

1442 NOTICE OF VIDEOTAPED DEPOSITION

NOW COMES, through undersigned counsel, Plaintiff, who, pursuant to La.C.C.P. 1442,

respectfully NOTICES the videotaped deposition of a corporate representative of Plaintiff to

testify as to the following matters of inquiry on ??????? at ????????????? for all purposes

provided by law:

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1. Plaintiff’s document retention policy.

2. Plaintiff’s policy, practice, and procedure of creating and maintaining a claims file.

3. Plaintiff’s policy, practice, and procedure of developing claims handling and/or

adjusters’ manuals, guidelines, or any other documents used to instruct personnel on

the claims handling and/or adjustment process, including additions, deletions, and

other revisions from previous versions of any such material.

4. Plaintiff’s policy, practice, and procedure of employing claims representatives, experts,

engineers, and/or adjusters, including, but not limited to, employment standards and

qualifications.

5. Plaintiff’s policy, practice, and procedure of training claims representatives, adjusters,

and all other personnel involved in the claims processing and/or adjustment operation.

6. Plaintiff’s policy, practice, and procedure of adjusting and processing Hurricane

Katrina insurance claims.

7. Plaintiff’s policy, practice, and procedure of initiating and using adjuster summaries,

expert reports, and any and all other investigative reports, as well as the drafts and

notes of such, in processing and assessing coverage for Hurricanes Katrina insurance

claims.

8. Plaintiff’s policy, practice, and procedure of instructing and/or training experts hired

by Plaintiff on how such claims should be calculated under the terms of the policy.

15

9. Plaintiff’s policy, practice, and procedure of developing manuals, guidelines, or any

other documents used to instruct experts on how claims should be calculated under the

terms of the policy, including additions, deletions, and other revisions from previous

versions of any such material.

10. Plaintiff’s policy, practice, and procedure of inspecting properties that it insures prior

to offering insurance coverage

11. Plaintiff’s policy, practice, and procedure of establishing reserves.

12. The insurance policy that is at issue in this case.

13. Any and all individuals that communicated with Plaintiff and/or inspected the insured

property on behalf of Plaintiff concerning the insurance claim that is the basis of this

lawsuit.

14. Any and all payments made to Plaintiff on the claim that is the basis of this lawsuit.

15. Any and all documents requested and/or produced through written discovery.

16. Any and all of Plaintiff’s responses to requests for admissions and/or interrogatories.

17. Any and all pleadings filed in this matter.

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Respectfully submitted,

____________________________

SIDNEY A. COTLAR (Bar No. 04430)

BRIAN D. KATZ (Bar No. 24137)

JOSEPH E. “JED” CAIN, (Bar No. 29785)

HERMAN, HERMAN, KATZ & COTLAR, LLP

820 O’Keefe Ave.

New Orleans, LA 70113

Telephone: (504) 581-4892

Fax No. (504) 561-6024

CERTIFICATE OF SERVICE

I hereby certify that I have on this ________ day of ____________, 2007, served a copy of the

foregoing by United States mail, properly addressed and first class postage prepaid to counsel of

record.

_______________________________

JOSEPH E. CAIN

17

30(b)(6) Notice Pricing Systems

UNITED STATES DISTRICT COURT JANE DOE, ET AL * CIVIL ACTION NO. * * SECTION: Versus * * JUDGE * INSURER * MAGISTRATE *

* * * * * * * * * * * *

PLAINTIFFS’ 30(B)(6) DEPOSITION NOTICE

RELATING TO PRICING SYSTEMS

AND REQUESTS FOR PRODUCTION OF DOCUMENTS

To: Insurer

Through Counsel of Record:

18


A. Document - As used herein, the term “document” shall be construed broadly and expansively to include any medium upon which information is recorded, including, but not limited to, contracts, agreements, applications, forms, policies, claims, files, records, letters, correspondence, minutes, logs, memoranda, notes, ELECTRONIC EVIDENCE (as defined herein), photocopies, facsimiles, transcripts, pleadings, claims, sketches, drawings, designs, blueprints, graphs, photographs, videotapes, audiotapes, microfilm, charts, studies, tables, calculations, analyses, summaries, pricing data, other data, compilations, advertisements, fliers, mailings, brochures, notices, acknowledgments, and any draft of the foregoing, which is, or has been, at any time, in the control, custody or possession of INSURER.

B. Electronic Evidence - As used herein, the term “Electronic Evidence” shall be construed broadly and expansively to include any electronic medium upon which information is recorded, including, but not limited to, computer tapes, computer disks, computer cards, computer files, computer systems, computer databases, e-mails, floppy discs, zip discs, backup tapes, mainframes, hard drives, computer presentations, PowerPoint slides, calendars, directories, diaries, application programs, data files and file fragments, word processing files and file fragments.

C. Communication - Shall refer to all communication, whether written or oral or by electronic means, including, but not limited to, telephone conversations, letters, memoranda, e-mails, facsimiles, reports, interviews, statements, contracts, agreements and consultations. Whenever a request refers to conversations with others, such request also refers to communications with all persons acting on behalf of that other, including, but not limited to, employees, officers, managers, directors, parent corporations, subsidiaries, associates, consultants, investigators, secretaries, assistants, agents, brokers, claims adjusters, or attorneys.

19

D. You or Your or Insurer - Shall refer to Insurer, and/or all related entities, such as parent corporations, sister corporations, predecessors-in-interest, successors-in-interest, affiliates, and/or subsidiaries, and to any and all parties or persons acting on behalf of one or more of these entities, including, but not limited to, employees, officers, managers, directors, associates, consultants, investigators, secretaries, assistants, agents, brokers, claims adjusters, or attorneys.

E. Xactware - shall be defined to include Xactware Solutions, Inc., and any affiliates, subsidiaries, predecessors-in-interest, and/or successors-in-interest of Xactware Solutions, Inc., (including, but not limited to, Xactnet, Xactware, and/or ISO), and to any and all parties or persons acting on behalf of one or more of these entities, including, but not limited to, employees, officers, managers, directors, associates, consultants, investigators, secretaries, assistants, agents, brokers, claims adjusters, or attorneys.

F. Pricing Information - shall be defined as any DOCUMENT and/or ELECTRONIC EVIDENCE and/or COMMUNICATION obtained, collected, compiled, created, modified, purchased, sold, and/or used by INSURER, relating or in any way pertaining to the price and/or cost and/or estimated price and/or cost of any repair, restoration, replacement and/or construction of any movable or immovable property, including, but not limited to, material, labor, tax, overhead and profit, minimum price, base service charge and/or other element(s) of a price and/or cost.

20

G. Privilege - If a privilege is claimed over any document, (as defined above), please

provide: (a) the identity of the author of the document, (b) the identity of all

recipient(s) of the document, (c) the date that the document was prepared, (d) a

brief description of the document, and (e) the basis upon which the privilege is

claimed, including the statute, rule or decision upon which the claim of privilege

is based.

H. The terms “and” and “or” and “and/or” shall be construed broadly and

expansively as “and/or”, and shall not be construed to limit the documents or

information sought in any manner.

I. The term “relate” (including “relating”, “related” and/or “relates”) shall be

construed broadly and expansively to mean consisting of, referring to, reflecting,

or in any way referring to, reflecting, or being in any way legally, logically, or

factually connected with the matters discussed.

21

NOTICE

PLEASE BE ADVISED that Plaintiffs will take the deposition of Defendant,

Insurer, pursuant to Rule 30(b)(6) of the Federal Rules of Civil Procedure, on the __ day

of, __ 2012, commencing at 9:00 a.m., and continuing from day to day until complete.

Defendant is requested to designate one or more officers, managers, agents, employees,

or other representatives to discuss the following issues:

22

Areas of Inquiry

1. The policy, practice, and procedure for receiving the unit prices from Xactware.

2. The policy, practice, and procedure for incorporating the unit prices from Xactware into the

“Pricing Virtual Unit” and/or the “Virtual Unit Structure.”

3. The policy, practice, and procedure for altering the unit prices from Xactware before

incorporating into the “Pricing Virtual Unit” and/or the “Virtual Unit Structure.”

4. The policy, practice, and procedure for providing pricing information to Xactware before

and after Xactware’s distribution of unit price updates.

5. The policy, practice, and procedure for the Insurer’s Estimatics Unit to provide pricing

information to Xactware.

6. The policy, practice, and procedure for creating the XactAnalysis Management Report.

7. The policy, practice, and procedure for updating the pricelists before and after August 29,

2005.

8. The policy, practice, and procedure for the method of updating the pricelists.

9. The policy, practice, and procedure for summarizing payments based upon pricelists.

10. The policy, practice, and procedure for identifying Insurer as an agent and/or consultant for

pricing data.

23

Areas of Inquiry (cont.)

11. The policy, practice, and procedure for the periodic (e.g., quarterly) comparing data contained in the pricelists.

12. The policy, practice, and procedure for maintaining the databases of previous versions of pricelists.

13. The interpretation of Operating Guidelines 783-100, 75-50, 75-01, and any other Operating Guideline relating in any manner to Xactimate and/or pricing.

14. The interpretation of Operating Guideline 783 Series for Xactimate99.

15. The policy, practice, and procedure for adjusters to provide pricing updates.

16. The policy, practice, and procedure for creating, maintaining, and storing multiple versions of an updated pricelist.

17. The policy, practice, and procedure for distinguishing between different versions of an updated pricelists.

18. The persons involved in maintaining, storing, creating, and implementing updates of the pricelists.

19. The policy, practice, and procedure for how the pricelists are updated and distributed to the adjusters.

20. The policy, practice, and procedure for updating payments based on increased unit prices.

21. The interpretation of any manuals, guidelines, and/or documents that describe the method for updating the pricelists.

22. The interpretation of any manuals, guidelines, and/or documents that describe the criteria for updating pricelists.

23. The existence of any additional and/or alternative version of pricelists.

24

REQUESTS FOR PRODUCTION OF DOCUMENTS

PLEASE TAKE FURTHER NOTICE that deponent is hereby requested,

pursuant to Rules 34 and/or 30(b)(5) of the Federal Rules of Civil Procedure, to

produce and to permit the Plaintiff to inspect and photocopy all documents set forth

below, which are in the possession, custody or control of INSURER:

1. Any written documentation explaining and/or describing the duties and responsibilities of Insurer’s “Pricing Specialists” and “Estimatics Team Manager.”

2. Operating Guideline 783-100.



5. Xactware Depreciation List (June 2005).

6. The Operation Guide 783 Series for Xactimate99 (effective 12/15/98).

7. Any and all documents maintained and/or created by Insurer’s Estimatics Unit since May 2005.

8. Any and all documents exchanged between Insurer’s Estimatics Unit and Xactware from January 2005 until the present.

25

9. XactAnalysis Management Reports from January 2005 until the present.

10. The Xactware pricelist sent to Insurer on or about September 15, 2005.

11. The (at or around) September 19, 2005 Insurer comments to the (at or around) September 15, 2005 Xactware pricelists.

12. All documents reflecting the changes Insurer made to Xactware’s pricelists issued at or around October 4, 2005.

13. The (at or around) October 14, 2005 pricelists Insurer used as the version downloaded on the adjusters’ computers.

14. All documents reflecting the duties and responsibilities of the following persons.

15. All “Price Check Request” forms created after August 29, 2005.

16. All documents identifying and describing the use of information uploaded and downloaded into the “Pricing Virtual Unit” and/or the “Virtual Unit Structure.”

17. Any and all documents copied, sent, transmitted, and/or emailed to “domain name” which include the following search terms: (a) Xactimate; (b) Xactware; (c) XactTotal; (d) XactAnalysis; (e) pricing specialist; (f) XactNet; (g) pricing structure; (h) estimatics; (i) pricing specialist; (j) pricelists, and (k) pricing.

18. Any and all documents reflecting, memorializing, summarizing, and/or documenting the daily and/or weekly conference calls between Insurer and Xactware from August 29, 2005 until December 31, 2005.

19. Any and all documents identifying, discussing, and/or interpreting the use of alternative versions of pricelists.

20. All documentation exchanged between Insurer and Xactware from August 29, 2005 until December 31, 2005.

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Katrina Initial Discovery

CIVIL DISTRICT COURT FOR THE PARISH OF ORLEANS

STATE OF LOUISIANA

NO. DIVISION SECTION

Plaintiff

versus

INSURER

FILED: _________________________________ ____________________________________

Deputy Clerk

FIRST SET OF DISCOVERY TO INSURER

TO: INSURER

Through its attorney of record:

NOW COME, through undersigned counsel, Defendant, Plaintiff, who, pursuant to the Louisiana Code of Civil

Procedure, respectfully requests that you answer the following Interrogatories and respond to the following Requests for

Production of Documents within the legal delays, and where necessary make available, for inspection and copying, the

following documents, at mover's office, located at 820 O’Keefe Ave., New Orleans, Louisiana, 70113 at mover's expense,

and to amend and/or supplement your responses on a continuing basis:

27


A. Document - As used herein, the term “document” shall be construed broadly and expansively to include any medium upon which information is recorded, including, but not limited to, contracts, agreements, applications, forms, policies, claims, files, records, letters, correspondence, minutes, memoranda, notes, e-mails, photocopies, facsimiles, transcripts, graphs, photographs, videotapes, audiotapes, microfilm, charts, studies, tables, calculations, analyses, summaries, compilations, advertisements, fliers, mailings, brochures, notices, acknowledgments, and any draft of the foregoing, which is, or has been, at any time, in the control, custody or possession of Defendants.

B. Communication - Shall refer to all communication, both written and oral, including, but not limited to, telephone conversations, letters, memoranda, e-mails, facsimiles, reports, interviews, statements, contracts, agreements and consultations. Whenever a request refers to conversations with others, such request also refers to communications with all persons acting on behalf of that other, including, but not limited to, employees, officers, managers, directors, parent corporations, subsidiaries, affiliated entities, associates, consultants, investigators, secretaries, assistants, agents, brokers, claims adjusters, or attorneys.

C. You and Your - Shall refer to Defendants collectively, unless specifically noted, and all parties acting on its behalf, including, but not limited to, employees, officers, managers, directors, parent corporations, subsidiaries, affiliated entities, associates, consultants, investigators, secretaries, assistants, agents, brokers, claims adjusters, or attorneys.

28

D. Identify - When asked to “identify” a natural person, please provide: (a) the person’s full name, (b) current or last known home address and telephone number, (c) current or last known business address and telephone number, (d) birth date, (e) social security number, (f) current or last known place of employment, and (g) job title or description.

When asked to “identify” a corporation or other business entity, please provide: (a) the full name of the entity, (b) the type of entity, (e.g. partnership, limited partnership, corporation), (c) the state of formation or incorporation, (d) the date of formation or incorporation, (e) the principal business address and telephone number, and (f) the principal business address (if any) within the State of Louisiana.

E. Privilege - If a privilege is claimed over any document, (as “document” is defined above), please provide: (a) the identity of the author of the document, (b) the identity of the recipient of the document, (c) the date that the document was prepared, (d) a brief description of the document, and (e) the basis upon which the privilege is claimed, including the statute, rule or decision upon which the claim of privilege is based.

F. The terms “and” and “or” and “and/or” shall be construed broadly and expansively as “and/or”, and shall not be construed to limit the documents or information sought in any manner.

29

INTERROGATORIES

NOW, through undersigned counsel, comes Plaintiff, who, pursuant to the Louisiana Code of Civil Procedure, hereby propound the following interrogatories, to be answered fully, within legal delays, in writing, under oath, and to be amended and supplemented on a continuing basis:

INTERROGATORY NO. 1:

Please identify each and every person who ever communicated with Plaintiff

concerning the claim that is the subject of this law suit.


Please identify each and every person who inspected and/or adjusted the insured property on

your behalf in conjunction with the claim that is the subject of this law suit.


Please identify each and every person retained by you that calculated the replacement cost of

the insured premises as of August 29, 2005 to be between $2,025,000.00 and $2,362,500.00


Please identify each and every person retained by you that concluded that the presence of

water within the insured premises “was the result of a defective roof design and longstanding

maintenance problems.”

30


Please describe in detail the repairs to the insured premises that were covered in the

$????? tender made by Plaintiff on ????? and how Plaintiff arrived at this figure.


Please explain your policy, practice, and procedure of inspecting properties prior to

insuring such properties. Please include in your explanation the reasoning behind

Conducting such inspections.


Please explain why and how you contend that the insured property had a defective

roof design.


Please explain in detail the specific “long standing maintenance problems” that you

contend inflicted the insured property. Please include in your answer the evidence in

support of your contention that such problems were “long standing.”

31

REQUEST FOR PRODUCTION OF DOCUMENTS

AND NOW, pursuant to the Louisiana Code of Civil Procedure, Plaintiff respectfully requests that,

within legal delays, you please make available, for inspection and copying, the following documents, at

mover’s office, located at 820 O’Keefe Ave., New Orleans, Louisiana, 70113 at mover’s expense, and to

amend and/or supplement your responses on a continuing basis:

REQUEST FOR PRODUCTION NO. 1:

The underlying claim file, including all documents regarding and/or related to the processing, payment

and/or denial of the claim.


Any and all correspondence between you and employees, contractors, experts, and adjusters concerning

the underlying claim.


All adjustment documents, including but not limited to any underwriting information or documents and

any information on documents reflecting a wind versus flood percentage if relied upon by the insurer in

adjusting this claim.


Any investigative report not included in the claims file.


Any and all claims handling manuals, guidelines, and/or any other materials used to train claims handlers

and/or adjusters for use in handling catastrophe claims and/or Hurricane Katrina claims, including

additions, deletions and other revisions from previous versions.

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REQUEST FOR PRODUCTION NO. 6: Any and all underwriting manuals or guidelines regarding and/or including premium setting information, including by not limited to the policy, application, amendments, letters and memoranda. REQUEST FOR PRODUCTION NO. 7: Any and all correspondence, hand written notes, memorandum, and/or reports generated in conjunction with pre Hurricane Katrina inspections of the insured property. REQUEST FOR PRODUCTION NO. 8: Any and all photographs and/or videos of the property taken prior to Hurricane Katrina. REQUEST FOR PRODUCTION NO. 9: Any and all photographs and/or videos of the property taken after Hurricane Katrina. REQUEST FOR PRODUCTION NO. 10: Your document retention policy. REQUEST FOR PRODUCTION NO. 11: The resumes of any and all persons identified in your Answers to Interrogatories 2-4. REQUEST FOR PRODUCTION NO. 12: Any and all reports, including but not limited to engineering reports, adjusters reports, and Construction reports commissioned by you in conjunction with the underlying claim. REQUEST FOR PRODUCTION NO. 13: Any and all reports, including but not limited to engineering reports, adjusters reports, and construction reports used by you to determine whether coverage was afforded for the underlying claim. REQUEST FOR PRODUCTION NO. 14: Any and all drafts, handwritten notes, or other documents evidencing information relied upon in the adjustment of the underlying claim. 33

REQUEST FOR PRODUCTION NO. 15: Copies of all invoices for work done on the underlying claim on your behalf by engineers, contractors, adjusters, and/or experts. REQUEST FOR PRODUCTION NO. 16:

The daily claim reports that show the highest and lowest reserve set for this claim.


All documents setting reserves in this case.


Any and all information regarding loss reserves, including but not limited to letters, charts, tables, e-

mails, and memoranda.


Any agreement, treaty or insurance protocol by which any reinsurers, co-insurers or any other entity

has been, or may be, responsible for all, or part of, the claim made in this cause.


All indemnity or insurance agreement(s) under which any person or entity may be liable to satisfy

part or all of a judgment rendered in this action or to indemnify or reimburse anyone for payments made

to satisfy a judgment in this cause.

REQUEST FOR PRODUCTION NO. 21: All documents relating to this claim by any reinsurer.

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All reinsurance contracts, treaties, or agreements that may relate to this claim in any way.


All communications with any reinsurance company, excess carrier, insurance agent, adjuster,

Insurance excess carrier, relating directly or indirectly to this claim.


All insurance policies which may be applicable to this lawsuit.


All payments made by any reinsurer that relates directly or indirectly to this claim.


All documents relating to any payment made by a reinsurer that relates directly or indirectly to this

claim.


All documents referenced in or relied upon in your responses to Plaintiff’s Interrogatories.

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Defense Perspective on Discovery in Bad Faith Suits

David A. Strauss, Esq. 504.582.3816 [email protected]

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Identifying Documents and Testimony to Refute Bad Faith Claims

One of the goals of discovery in Bad Faith litigation is to obtain sufficient evidence to have the bad faith claim dismissed on MSJ.

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Elements of a Bad Faith Case

Breach of Duty

Valid Insurance Claim

Arbitrary, Capricious or Without Probable Cause

Damages

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Satisfactory Proof of Loss

Covered Property Loss

Failed to Pay Undisputed Amount within 60 Days of Satisfactory Proof of Loss

Failed to Make Written Offer to Settle or Tender Undisputed Amount within 30 Days of Satisfactory Proof of Loss

Arbitrary, Capricious or Without Probable Cause

Plaintiff Must Show Satisfactory Proof of Loss Before Proving Breach of Duty

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Plaintiff’s Duty to Submit Satisfactory Proof of Loss Prior to Suit

• A bad faith claim can be dismissed for the plaintiff’s failure to notify the insurer of the alleged insufficient payments prior to filing suit

• “It logically follows from this burden that a plaintiff who possesses information that would suffice as satisfactory proof of loss, but does not relay that information to the insurer, is not entitled to a finding that the insurer was arbitrary or capricious”

– Reed v. State Farm Mut. Auto. Ins. Co., 857 So.2d 1012,1020–21 (La 2003)

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Plaintiff’s Duty to Submit Satisfactory Proof of Loss Prior to Suit

• Tardo v. State Farm Fire & Cas. Co., No. 08-1165, 2009 WL 1804762 (E.D. La. June 19, 2009)

• About 19 months lapsed between last contact with State Farm, regarding coverage A benefits, and filing suit

• Court dismissed Plaintiffs’ bad faith claim where Plaintiff failed to submit “any information showing that they were entitled to additional benefits” prior to filing suit. Id. at *4

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Documents Needed to Dispute Satisfactory Proof of Loss

• Affidavit from claim adjuster attesting to insured’s failure to contact insurer after last tender made

• Propound interrogatories seeking specific details regarding steps Plaintiff took to notify the insurer that he was unsatisfied with the adjustment of the claim

• Request production of estimates, repair contracts, receipts, invoices – Pay close attention to dates on above items; were the estimates

drafted after the suit was filed

• Issue requests for admission relative to satisfactory proof of loss – e.g., admit you failed to contact the insurance company prior to

the institution of the instant lawsuit

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Reasonable Basis to Deny Claim

• While it is plaintiff’s burden to prove the insurer’s conduct was arbitrary, capricious or without probable cause, the insurer may want to collect evidence to prove a prima facie case that its denial of the claim was reasonable

• Issue commonly arises in alleged vehicle theft claims

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Reasonable Basis to Deny Claim

Numerous Louisiana courts have held insurers who denied coverage based on suspected and/or suspicious facts were not liable for bad-faith even though the coverage question was resolved at trial in favor of the insured.

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Reasonable Basis to Deny Vehicle Theft Claim

Courts have found a reasonable basis to deny vehicle theft claims where there are inconsistencies discovered during the adjustment of the claim, making it “not a clear cut theft of loss”

– Duhon v. State Farm Mutual Automobile Insurance Co., 952 So.2d 908 (La.Ct.App.3d. Cir.2007)

– Johnson v. State Farm Mutual Automobile Insurance Company, 2012 WL 1745497 (E.D. La., May 16, 2012)

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Documents Needed to Prove Reasonable Basis to Deny Theft Claim

• Look for any evidence of discrepancies in the insured’s story of the purchase of the vehicle, the alleged theft, and the discovery of the theft – Significant amount of information may already be

in the claim file (e.g. recorded statements, EUOs, initial reporting of the claim, affidavit of vehicle theft, police report)

• Investigate plaintiff’s financial situation at time of theft to determine financial motive

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Documents Needed to Prove Reasonable Basis to Deny Theft Claim

• Criminal background of the insured

• Past theft claims made by the insured

• Affidavit of adjuster attesting to statements made by insured during investigation of claim

• Bank statements

• Credit report

• Cell phone records

• Cell tower records

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Catastrophe Claims / First Party Property Claims

• Bad Faith issues can arise when property is in a dilapidated condition prior to storm

• An adjuster may deny a claim or certain damage on the property concluding the damage was preexisting due to the age or condition of the property

• Must show the insurer had a reasonable basis to deny claim

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Discovery in Catastrophe Claims / First Party Property Claims

• Conduct informal interview of adjuster

• Hire own expert to opine on causation of damage

• Request inspection of the property

• Issue requests for admission of fact relative to condition of house prior to storm

• Road home / SBA / FEMA documents

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Discovery in Catastrophe Claims / First Party Property Claims (cont’d)

• Research prior insurance claims on same property

• Estimates from contractors for repairs at issue and for prior claims

• Photos of property prior to storm

• History of property: year built and repairs last made

• Subpoena experts and public adjusters hired by plaintiff

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Limiting the Scope of Plaintiff’s Discovery

Documents typically requested by plaintiff in Bad Faith litigation:

– Claim file

– Claim file for similarly situated claims

– Internal operating guidelines

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Production of the Claims File

• Redact all privileged portions of claim file • Blanket requests for claim file generally not

acceptable • Work product privilege – When does it attach?

– The work-product doctrine arises “at the pivotal point ‘where the probability of litigating the claim is substantial and imminent’ or where ‘litigation was fairly foreseeable....’ ” Vinet v. Allstate Ins. Co., 1993 WL 515753 (E.D. La. 1993), citing State Farm Fire and Casualty Company v. Perrigan, 102 F.R.D. 235, 238 (W.D.Va.1984)

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Production of the Claims File (cont’d)

A determining factor regarding the work-product doctrine is whether the document was prepared or obtained because of the prospect of litigation or in the normal course of business. Vinet v. Allstate Ins. Co., 1993 WL 515753 (E.D. La. 1993), citing Carver v. Allstate Insurance Co., 94 F.R.D. 131, 134 (S.D.Ga.1982)

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Production of Claims Files Myers v. State Farm, 2009 WL 3353223 (E.D.La. 2009)

• Plaintiffs moved to compel production of redacted documents and documents claimed as privileged

• Magistrate entered Order directing the insurer to produce certain enumerated documents from the claims file, reasoning, “[a]lthough either the attorney-client or work product privilege is invoked as to all withheld items, most appear to be entries which more properly would be considered business records kept in connection with documenting the adjustment of the claim”

• Insurer appealed the order of the Magistrate Judge, arguing that the judge legally erred in ordering the insurer to produce certain enumerated documents. Insurer submitted docs at issue under seal for the Court’s in camera inspection

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– cont’d

• Insurer argued documents were subject to the attorney-client and work product privilege, are irrelevant and not discoverable

• Plaintiffs argued undue disadvantage since they had not seen the documents at issue; the documents, because they are part of a claim file, were discoverable under the broad scope of discovery under FRCP 26(b)(1); even if the docs are work product, because the plaintiffs are in “substantial need of the materials; the documents are relevant because the claims file may contain critical information as to the insurer’s duty of good faith

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– cont’d

• DC conducted in camera review of the documents at issue and determined that most of the numbered documents contained information protected by the attorney-client and/or work-product privileges and issued order significantly limiting the documents the insurer was required to produce

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Production of Similarly Situated Claims Files

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Production of Internal Operating Guides and Protocols

Tactic employed by plaintiffs to show bad faith -demonstrate an insurer violated its own internal policies while adjusting the claim at issue. This results in a discovery request for the insurer’s internal guides for claims handling. Most insurers consider those guides to be protected trade secrets and proprietary data that is similarly not relevant and not discoverable.

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Zip Code Discovery – Pattern of Practice

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Scandalous Allegations

• Plaintiffs’ counsels have begun asserting scandalous allegations in petitions, likely hoping to force an early settlement

• Example: – “…one of the reasons that the adjuster is refusing to

pay her claim and making her jump through all kinds of hoops is that he believes that young African American males and females are always making fraudulent insurance claims.”

– “ABC’s adjuster tends to treat young African American females and males differently from their other customers.”

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Discovery Sought by Plaintiff to Support Scandalous Allegations

• Interrogatory – Please provide us with the statistical data regarding

the number of claims that have been settled based on race and gender in the Greater New Orleans area, including Orleans Parish, but not limited to Jefferson and St. Tammany Parish. For example, how many African American reported theft claims have you settled within sixty days in the last two years? How many Caucasian reported theft claims have you settled within sixty days in the last two years? How many reported theft claims, other than African American and Caucasian, have you settled with sixty days in the last two years?

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• Interrogatory – How many of the auto theft claims mentioned in Interrogatory

No. 4, where the insured was domiciled in Orleans parish, were sent to the Special Investigation Unit (SIU)?

– How many of the auto theft claims mentioned in Interrogatory No. 4, where the insured was domiciled in Jefferson parish, were sent to the Special Investigation Unit (SIU)?

– How many of the auto theft claims mentioned in Interrogatory No. 4, where the insured was domiciled in St. Tammany parish, were sent to the Special Investigation Unit (SIU)?

– How many of the auto theft claims mentioned in Interrogatory No. 4, where the insured was domiciled in St. Bernard parish, were sent to the Special Investigation Unit (SIU)?

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• Request for Admission:

– Please admit or deny that the person, (Plaintiff’s Name), claim number XX-XXXX-XXX, is an African American.

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Strategy to Responding to Scandalous Allegations

• File Motion to strike scandalous allegations

• Tailor discovery to show no factual basis

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Strategy To Responding to Scandalous Allegations

• Request plaintiff to produce evidence to support specific allegations in petition

• Example:

– Please identify all facts and evidence which support your allegations as alleged in ¶XII of your Petition for Damages that “…one of the reasons that the adjuster is refusing to pay her claim and making her jump through all kinds of hoops is that he believes that young African American males and females are always making fraudulent insurance claims.”

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Strategy to Responding to Scandalous Allegations (cont’d)

• Example:

– Please identify all facts and evidence which support your allegations as alleged in ¶XIII of your Petition for Damages that “ABC’s adjuster tends to treat young African American females and males differently from their other customers.”

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Strategy to Responding to Scandalous Allegations

• Conduct own discovery and investigation, prior to responding to plaintiff’s discovery, to uncover evidence showing no bases to support allegations

• Interview adjusters to determine if they knew the race of the insured during the investigation – “Where a decision is putatively race based, it naturally follows

that a defendant accused of intentional racial discrimination would have to know the race of the plaintiff." Johnson v. Northwest Airlines, 839 F. Supp. 1253, 1259 (E.D. Mich. 1993); see also, Robinson v. Adams, 847 F.2d 1315 (9th Cir. 1987), cert. denied, 490 U.S. 1105 (1989)(“An employer cannot intentionally discriminate against a job applicant based on race unless the employer knows the applicant's race.”)

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Object to Discovery Regarding Similar Claims

• Privacy concerns for other insureds

• Statics are not credible evidence to prove discrimination

• Statics not relevant to reason for denial of claim at issue – Other denials were made by different adjusters

• Evidence of other claims would essentially force insurer to defend multiple mini-trials

• Not in possession of the requested materials

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Object to Discovery Regarding Similar Claims

• Courts generally allow statistical data in discrimination suits.

• Hollander v. American Cyanamid Co., 895 F.2d 80 (2nd Cir.1990) – “It is well-settled that an individual disparate treatment plaintiff

may use statistical evidence regarding an employer's general practices at the pretext stage to help rebut the employer's purported nondiscriminatory explanation.”

– “Because employers rarely leave a paper trail-or “smoking gun”-attesting to a discriminatory intent, disparate treatment plaintiffs often must build their cases from pieces of circumstantial evidence which cumulatively undercut the credibility of the various explanations offered by the employer.”

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Discovery in Bad Faith Insurance

Litigation: Best Practices for

Proving or Defending Claims

Alan Jacobus

Carroll, Burdick & McDonough [email protected]

415.989.5900

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Other Relevant Bad Faith /

Discovery Issues

• First party / third party differences

• Attorney-client privilege

• Work product

• Punitive damages

• Expert witnesses

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First Party / Third Party Concerns

• First Party (Fire / Theft / Etc.)

– Claim adjustment

• Third Party (Liability)

– Claim handling

– Duty to defend

– Duty to indemnify

– Duty to settle

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Attorney-Client Privilege and

Discovery

• Extends to communications and not to facts.

• The client cannot be compelled to answer the question, “What did you say or write to the attorney?”

• The client may not refuse to disclose any relevant fact within his knowledge merely because he incorporated a statement of such fact into his communication to his attorney.

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Public Policy Supporting the

Attorney-Client Privilege

• To encourage full and frank communication

between attorneys and their clients and thereby

promote broader public interests in the observance

of law.

• Sound advocacy depends upon the lawyer’s being

fully informed by the client.

• A lawyer’s assistance can only be safely and

readily availed of when free from the

consequences or the apprehension of disclosure.

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Work Product Protections and

Discovery

• More limited in scope than the attorney-

client privilege

• Note: Not attorney work product

• Policy: encourages lawyers to put their

work in writing

• Promotes efficiency

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The Work Product Rule

• “Ordinarily, a party may not discover documents and tangible things that are prepared in anticipation of litigation or for trial by or for another party or its representative (including the other party's attorney, consultant, surety, indemnitor, insurer, or agent). But, subject to Rule 26 (b) (4), those materials may be discovered if:

(i) they are otherwise discoverable under Rule 26 (b) (1); and

(ii) the party shows that it has substantial need for the materials to prepare its case and cannot, without undue hardship, obtain their substantial equivalent by other means.”

Fed. R. Civ. P. 26 (b) (3).

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• Applies to more than just attorneys

• General rule is that work product is not

discoverable

• High showing of substantial need and

inability to obtain the information elsewhere

required

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• Even if disclosure is ordered, it is limited.

• In ordering discovery of such materials

when the required showing has been made,

the court shall protect against disclosure of

the mental impressions, conclusions,

opinions, or legal theories of an attorney or

other representative of a party concerning

the litigation.

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Professional Responsibilities

Issues

• “It is the duty of an attorney . . . [t]o

maintain inviolate the confidence, and at

every peril to himself or herself to preserve

the secrets, of his or her client.”

• “A [lawyer] shall not intentionally,

recklessly, or repeatedly fail to perform

legal services with competence.”

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Advice of Counsel Defense in

Bad Faith Cases

• May be a complete defense to an insurer accused

of bad faith.

• Arguably puts the attorney’s advice at issue.

• May be discoverable.

• Limitations.

• State Farm Mut. Auto. Ins. Co. v. Superior Court

(Johnson Kinsey, Inc.), 228 Cal. App. 3d 721, 724,

279 Cal. Rptr. 116, 117-118 (1991).

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The Boone / Tackett / Lee Rules

• Policyholders will argue that the mere allegation of bad faith makes the insurer’s pre-denial file discoverable.

– Boone v. Vanliner Ins. Co., 91 Ohio St. 209, 744 N.E.2d 154 (2001)

– Tackett v. State Farm Fire & Cas. Ins. Co., 653 A.2d 254 (Del. 1995)

– State Farm Mut. Auto. Ins. Co. v. Lee, 199 Ariz. 52, 13 P.3d 1169 (2000)

• Bad policy?

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The Boone / Tackett / Lee Rule:

Strategies

• Limits use of coverage counsel before denying a claim

• Removal to federal court (arguably more favorable work product rules)

• Limitation to the facts in Boone / Tackett / Lee

• Sever and stay of the bad faith claim.

• Two-way street?

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The O’Hara Rule (Illinois)

• W. States Ins. Co. v. O’Hara, 357 Ill. App.

3d 509, 828 N.E.2d 842, 293 Ill. Dec. 532

(2005)

• Odd application of common interest

doctrine

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Discovery in Punitive Damages

Claims

• Claims handling for claim at issue

• Discovery of handling of other insureds’

claims

– State Farm Mut. Auto. Ins. Co. v. Campbell,

538 U.S. 208, 123 S. Ct. 1513 (2003)

– Privacy Issues

– Relevance versus burden

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Expert Witnesses

• Policyholder will want to try to explain

failures in claim handling

• Insurer may or may not want to call an

expert

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Conclusion

• Know your jurisdiction

• Anticipate what your opponent’s discovery

will be

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