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Rau v. Allstate Fire and Casualty Insurance Co.

United States District Court, M.D. Pennsylvania

May 29, 2015

KELLY RAU, Plaintiff,
v.
ALLSTATE FIRE AND CASUALTY INSURANCE CO., Defendants.

MEMORANDUM OPINION

ROBERT D. MARIANI UNITED STATES DISTRICT JUDGE

I. Introduction

Presently before the Court is a pending discovery dispute as to whether Plaintiff may depose Defendant Allstate Insurance Company's claims adjuster. For the reasons that follow, the Court will allow the deposition to proceed, subject to the qualifications expressed herein.

II. Procedural History

A deposition of Defendant Allstate Insurance Company's claim adjuster had been scheduled to take place on April 21, 2015. The Defendant objected to that deposition generally to the scope of the deposition insofar as it related to "Defendant's investigation of Plaintiffs claim, how Plaintiff's claim was evaluated and the specifics of Defendant's claims handling procedures." (Def.'s Br. in Supp. of Objections to Proposed Dep., Doc. 25, at 3.) Defendant argues that, because Plaintiffs Complaint only alleges a claim for Underinsured Motorist (UIM) coverage and not for bad faith, the claims adjuster's testimony as to how she handled this claim is irrelevant, in addition to possibly constituting protected work product. (See id. at 3-4.) In response, Plaintiffs counsel stated that she only intended "to ask the adjuster about the elements of her investigation of the Plaintiffs UIM claim, " i.e., to discover "the factual details of Allstate's investigation and evaluation of Ms. Rau's claim." (See PL's Letter Br., May 1, 2015, Doc. 24, at 1.) Counsel "conceded that [she] was not permitted to ask Ms. Johnson [i.e., the adjuster] questions pertaining to her mental impressions, conclusions or opinions with respect to Ms. Rau's UIM claim." (Id.)

A conference call was held at the request of counsel on the day of the deposition, during which both sides presented their above-stated positions and advanced case law in their support. The Court determined that it could not decide the issues presented without further submissions from counsel. Accordingly, the deposition was postponed and counsel submitted supplemental briefs setting forth their respective positions to this Court. (See Docs. 24; 25.) The matter is now ripe for disposition.

III. Analysis

a. The Deposition May Proceed

In general, the Federal Rules of Civil Procedure provide:

Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense-including the existence, description, nature, custody, condition, and location of any documents or other tangible things and the identity and location of persons who know of any discoverable matter. For good cause, the court may order discovery of any matter relevant to the subject matter involved in the action. Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence.

Fed. R. Civ. P. 26(b)(1). "It is well recognized that the federal rules allow broad and liberal discovery." Pacitti v. Macy's, 193 F.3d 766, 766 (3d Cir. 1999).

Defendant cites several cases for the proposition that "[inquiries into Defendant's method of investigating, evaluating and negotiating an underinsured motorist claim, is clearly outside the scope of relevant evidence in a pure underinsured motorist claim" and is only appropriate when the Plaintiff has alleged a claim for bad faith. (See Doc. 25 at 7-8.)

It is true that Plaintiffs Complaint only appears to allege a breach of contract action. However, in so doing the Complaint contains allegations that "Defendant has failed objectively and fairly to evaluate the Plaintiffs claim, " (Compl., Doc. 1-2, at ¶ 33); that "Defendant has failed reasonably to investigate the Plaintiffs claim and such a thorough and proper inquiry would have revealed that Plaintiff sustained serious injuries, " (id. at ¶ 35); and that "[a]s the insurer of the Plaintiff, the Defendant owes a fiduciary, contractual and statutory obligation to her to investigate, evaluate and negotiate her underinsured motorist claim in good faith and arrive at a prompt, fair and equitable settlement, " (id. at ¶ 36).

While these claims do not state a claim for a violation of the bad faith statute, the Court nonetheless concludes that they sufficiently set forth a claim for a breach of the common law duty of good faith and fair dealing-which may be understood as part of the broader breach of contract action-and therefore make her proposed lines of deposition questioning appropriate and permissible. (Cf. also Doc. 24 at 2-3 (invoking doctrine of good faith and fair dealing), ) The Pennsylvania "Supreme Court has long recognized that 'the utmost fair dealing should characterize the transactions between an insurance company and the insured.'" Berg v. Nationwide Mut. Ins. Co., 44 A.3d 1164, 1170 (Pa, Super Ct. 2012) (quoting Dercoli v. Pennsylvania Nat. Mut. Ins. Co., 554 A.2d 906, 909 (Pa. 1989)). The "duty of good faith and fair dealing is implicit in an insurance contract, " Simmons v. Nationwide Mut Ins. Co., 788 F.Supp.2d 404, 408 (W.D. Pa. 2011) (collecting cases), and therefore "acts as a term of the contract, and ... arises from the contract itself, " Zaloga v. Provident Life & Accident Ins. Co. of Am., 671 F.Supp.2d 623, 630 (M.D. Pa. 2009) (collecting cases). When such a duty can be implied from the contract, it is breached when, inter alia, "an insurer ...


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