AUSTIN – Bracewell & Giuliani LLP successfully received mandamus relief from the Supreme Court of Texas in a first party windstorm case in In re National Lloyds Ins. Co., No. 13-0761, __ S.W.3d __ (Oct. 31, 2014) (per curiam). After holding that a trial court abused its discretion in ordering the defendant insurer to produce evidence related to insurance claims other than the plaintiff’s, the Supreme Court granted relief and ordered the trial court to withdraw its order.
The Supreme Court held that the trial court abused its discretion in compelling the production of claims files for other insureds, even when those claims involved the same storms and adjusting firms in the same town. As the Court explained, alleging the claims files are relevant to prove a bad faith or underpayment claim is not enough, as the Court “fail[s] to see how National Lloyds’ overpayment, underpayment, or proper payment of the claims of unrelated third parties is probative of its conduct with respect to Erving’s undervaluation claims at issue in this case.”
While the other claims had some linkage to the Plaintiff’s claim involving the same storm, the Court explained that is not enough “given the many variables associated with a particular claim, such as when the claim is filed, the condition of the property at the time of filing (including the presence of any preexisting damage), and the type and extent of damage inflicted by the covered event.”
As the Court pointedly stated, “[s]couring claim files in hopes of finding similarly situated claimants whose claims were evaluated differently from Erving’s is at best an ‘impermissible fishing expedition.’” This opinion should preclude both the recent practice of Plaintiffs’ firms seeking all claims files involving a particular storm in all cases they file. It should also prevent use of any information gained from such a fishing expedition in a particular case they select for trial, because as the Court noted, because the plaintiff sought information not reasonably calculated to lead to the discovery of admissible evidence, the trial court’s order compelling such information is necessarily overbroad.
For the opinion, please click here.
Bracewell attorneys involved include:
Partner: Casey Low