2016 Ohio 836
Ohio Ct. App.2016Background
- Jack Bausman was injured in an auto accident and claimed uninsured/underinsured motorist (UM) benefits under his American Family policy; American Family paid $5,000 in medical payments and later tendered the $25,000 UM limit after litigation.
- Bausman sued American Family for bad faith handling of his UM claim after ultimately accepting the $25,000 limit and dismissing his tort suit.
- Bausman moved to compel production of attorney communications (emails) between American Family in-house counsel Wilbur Hane and regional managing attorney Martin Hulthen; American Family claimed attorney-client privilege and sought a protective order.
- The trial court ordered in camera review and then compelled production of 18 documents; American Family appealed the order to the Second District.
- The appellate court held that privileged materials that show insurer bad faith are discoverable when they reside in the insurer’s claims file, but declined to extend that rule categorically to documents kept only in attorneys’ files; remanded for the trial court to determine whether the disputed emails are part of the claims file.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether attorney-client communications are discoverable under the bad-faith exception when contained in an insurer’s attorney file | Emails show decisionmaking about claim; managing attorney acted as adjuster so file is effectively claims file and thus discoverable | Attorney files are privileged; documents in attorneys’ files are not automatically discoverable and Boone’s claims-file exception should not extend to them | Privileged communications in the insurer’s claims file showing bad faith are discoverable; but the Boone exception is limited to traditional claims files and does not automatically apply to attorneys’ files; remand to determine whether the emails are in the claims file |
| Whether immediate appeal is permitted from an order compelling production of privileged matter | (Implied) Immediate appeal necessary because disclosure would moot relief | (Implied) Trial court order should stand and is subject to normal appellate review | Appeal is permitted; appellant showed immediate appeal necessary to preserve meaningful and effective remedy |
Key Cases Cited
- Moskovitz v. Mt. Sinai Med. Ctr., 69 Ohio St.3d 638 (1994) (insurer claims-file materials showing lack of good faith are not protected by privilege)
- Boone v. Vanliner Ins. Co., 91 Ohio St.3d 209 (2001) (in bad-faith coverage cases insured may discover claims-file attorney-client communications created before denial of coverage)
- Squire, Sanders & Dempsey, L.L.P. v. Givaudan Flavors Corp., 127 Ohio St.3d 161 (2010) (R.C. 2317.02 testimonial privilege protects attorney-client communications in discovery absent statutory exception)
- Ward v. Summa Health Sys., 128 Ohio St.3d 212 (2010) (standard of review: privilege issues are questions of law reviewed de novo)
- Smith v. Chen, 142 Ohio St.3d 411 (2015) (for discovery orders compelling privileged matter to be final and appealable, appellant must show immediate appeal is necessary to afford meaningful and effective remedy)
- Garg v. State Auto. Mut. Ins. Co., 155 Ohio App.3d 258 (2003) (work-product materials in claims files treated under Boone exception)