Court Denies Discovery Of Reserve Information

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On Plaintiffs’ motion to compel discovery in a bad faith action against first-party property insurer Liberty Mutual Fire Insurance Company (“Liberty Mutual”), an Alabama federal court limited, but allowed, discovery related to: past bad faith lawsuits against the insurer; commercial property claims files of the adjuster handling the Plaintiffs’ claim; performance goals and evaluations of the claims department; and, quality assurance manuals. The Court fully denied Plaintiffs’ overbroad and irrelevant requests for information relating to claims files and claims where bad faith was alleged as well as reserves information and personnel records.

The court declined to compel discovery of Liberty Mutual’s reserves, frequently a target of discovery in reinsurance matters, as reserve information “is not relevant as to what an insurer thought of the merits of a claim.” Graham & Company, LLC v. Liberty Mut. Fire Ins. Co., Case No. 14-2148 (USDC N.D. Ala. April 5, 2016).

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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