Claims Handling Manuals Discoverable in Bad Faith Insurance Actions

In Platt v. Fireman’s Fund Insurance Company, the Eastern District of Pennsylvania held that an insurer sued for insurance coverage benefits and for bad faith under Pennsylvania law was required to produce any material which pertains to instructions and procedures given to the adjuster for adjusting the plaintiff’s claims.

In Platt, a car accident case, the plaintiff sued the other driver’s insurer under Pennsylvania’s Motor Vehicle Financial Responsibility Law for insurance benefits and for statutory damages under Pennsylvania’s Bad Faith Statute. The plaintiff served document requests upon the insurer seeking, among other things, the claims manuals the insurer used to process and handle claims. The insurer objected, asserting that such a request was overly broad and unduly burdensome, that the manuals were irrelevant, and that the materials were privileged and confidential.

The Court granted the plaintiff’s subsequent motion to overrule those objections. In so holding, the Court curtailed the reach of a prior holding in Garvey v. National Grange Mutual Insurance Company, in which the Court had previously denied a similar discovery request for claims manuals because the manuals were not relevant to either the plaintiff’s claim for coverage or allegations of bad faith.

The Platt Court observed that, despite the prior analysis in Garvey, “there are instances where [claims manuals] may be relevant to a bad faith claim,” and noted that other decisions had suggested their relevance where, for example, the manuals required an adjuster to take certain steps in adjusting a claim and a plaintiff could show that the adjuster deliberately omitted them. Consequently, the Court overruled the insurer’s blanket objections to producing these materials in discovery. Significantly, however, the Court limited its directive to requiring the insurer to produce only those materials that pertain to instructions and procedures for adjusting claims and were given to the adjusters who worked on the plaintiff’s claim. The Court further ordered both the plaintiff and her attorneys to keep confidential all such materials they receive as well as any information they learn from those materials.

The Platt decision certainly provides additional ammunition for insureds to seek the discovery of an insurer’s claims manuals and procedures, and we expect to see this decision cited well outside the automobile insurance context. It should be remembered, however, that some insurers may simply have no documents responsive to such a request because they do not put their claims procedures in writing. It is further noteworthy that, insofar as Platt based the discoverability of claims-handling procedures on their potential relevance to the plaintiff’s bad faith claim, where no bad faith claim is asserted, the Platt decision is unlikely to authorize the exploratory discovery of such materials. Finally, even if some claims-handling manuals and procedures might be discoverable in specific insurance coverage litigation, the fundamental rule of discoverability — whether the requested discovery is reasonably calculated to lead to the discovery of admissible evidence — should still govern.