[co-author: Fred Poindexter]
AmGUARD Insurance Company ("AmGUARD") was ordered to comply with a plaintiff’s request for production in a worker's compensation case for forty-one medical reports of other, unrelated patients drafted by the same doctor because the plaintiff alleged the doctor repeatedly issued opinions preferential to the insurer.
Mark Krieger suffered a work-related injury in May 2017 and sought worker’s compensation through his employer’s insurer, AmGUARD. AmGUARD did not make any immediate payments to Krieger but instead, on August 29, 2017, sent Krieger to see Dr. Robert Smith for a defense medical examination ("DME"). AmGUARD issued its first payment more than thirty days after the DME. Krieger sued AmGUARD in November 2017, and his estate continued the suit after his death in 2018, alleging that AmGUARD engaged in bad faith for (1) failure to pay timely benefits and (2) unjustifiably delaying payment of covered medical expenses within thirty days as required by statute. The plaintiff’s claims rested on the potential bias of Dr. Smith.
Krieger’s estate was able to obtain and produce eighty-two DME reports that Dr. Smith previously authored—all but one "supported the insurance carriers’ positions to the detriment of their insureds." The plaintiff moved to compel AmGUARD to produce all reports in its possession authored by Dr. Smith from three years prior to Krieger’s claim. The reports were critical to the plaintiff’s justification for an award of punitive damages, which requires the insured to show willful or malicious denial of coverage by the insurer taken with reckless indifference or malice toward the plight of the insured. That is, the plaintiff needed to prove AmGUARD’s state of mind to recover punitive damages.
The court noted that the Saldi rule, set forth in Saldi v. Paul Revere Life Insurance Company, 224 F.R.D. 169, 175-94 (E.D. Pa. 2004), mandates that evidence of an insurer’s actions lying outside of the instant case is relevant when there is some nexus between the actions and the instant case. In declining to adopt that rule in the context of a bad faith insurance claim, the court reasoned that Rule 26(b)(1) already subsumes such a standard within its scope, and because "a court must find a logical nexus between the items sought and the subject matter of the claims when undertaking any discovery review."
Ultimately, by alleging that the insurer’s hired physician was biased towards insurers, the plaintiff was able to make relevant and compel the production of forty-one medical reports in AmGUARD’s possession from other, unrelated patients and insurance claims simply because of their potential relevance as impeachable evidence demonstrating AmGUARD’s state of mind in denying Krieger’s worker’s compensation claim. The commissioner’s order to compel was upheld by the appellate court, and AmGUARD was required to produce all forty-one medical reports in its possession.
