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With Respect to Discoverability, Indiana Federal Court Distinguishes Between Pre-Suit and Post-Suit Reserves

In May, we reported on a Third Circuit decision holding that loss reserve information was generally irrelevant and not discoverable.  In October, a federal court in Indiana came to the same conclusion with respect to post-suit reserves.  In G & S Metal Consultants, Inc. v. Continental Casualty Co., 2014 WL 5431223, 2014 U.S. Dist. LEXIS 151431 (N.D.Ind., Oct. 24, 2014), the court agreed that reserves established after litigation were irrelevant because of the multiplicity of factors that were necessarily considered in establishing them.  The opinion suggests that pre-suit reserves are discoverable unless they have been set in anticipation of litigation and consultation with counsel, however. G & S Metal Consultants filed suit for property damage and business interruption loss after

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Posted in Discovery, Explosion, Privilege, Reserves

Iowa Decision Underscores the Danger of Sharing Privileged Material with Reinsurers

Last month, a federal court in Iowa handed down a decision holding that neither work product nor attorney-client nor the common interest doctrine shield legal advice and analysis from production in  discovery once it has been shared with a carrier’s reinsurers.  The case – Progressive Cas. Ins. Co. v. F.D.I.C., — F.R.D.— , 2014 WL 4168577, 2014 U.S. Dist. LEXIS 116909 (W.D. Iowa, Aug. 22, 2014) – involved a directors & officers (“D&O”) liability policy rather than a first party property insurance policy, but it nonetheless sounds a cautionary note about the potential consequences of such disclosures. The case arose after the Office of Thrift Supervision closed Vantus Bank and appointed the FDIC as its receiver.  The FDIC then filed

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Posted in Privilege, Reinsurance

Waiver of Attorney-Client and Work-Product – You Can’t Be Just a Little Bit Pregnant

A recent Mississippi opinion dramatically underscores the dangers of an advice-of-counsel defense.  In Willis v. Allstate Ins. Co., — F.Supp.2d —, 2014 WL 1882387 (S.D.Miss., May 12, 2014), the court held that the insurer had waived both the attorney-client privilege and the work-product doctrine with respect to coverage counsel’s entire file – and not just that portion of it that the carrier was willing to produce – when its representatives testified that they relied on the attorney’s advice to deny liability.  As the saying goes, in for a penny, in for a pound. The policyholder Sandra Willis’ home was damaged by a fire on June 14, 2012, and she made a claim under her homeowner’s policy with Allstate Insurance Company. 

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Posted in Fire, Privilege, U.S. Legal System, Waiver
About The Property Insurance Law Observer
For more than four decades, Cozen O’Connor has represented all types of property insurers in jurisdictions throughout the United States, and it is dedicated to keeping its clients abreast of developments that impact the insurance industry. The Property Insurance Law Observer will survey court decisions, enacted or proposed legislation, and regulatory activities from all 50 states. We will also include commentary on current issues and developing trends of interest to first-party insurers.
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