Texas Court of Appeals Directs Automobile Liability Insurance Company to Produce Portions of Claim File After Driver Files Bad Faith Case

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Just as drivers owe one another certain duties when it comes to operating an automobile, insurance companies have responsibilities to their insured to properly handle liability claims that are filed following an east Texas car accident.

A recent case illustrates the difficulties that can arise when an insurance company allegedly breaches its contractual obligation.

Facts of the Case

In a recent case decided by the Texas Court of Appeals, the plaintiff was a man who had been sued by a passenger who was riding with him in a company vehicle that was involved in a rollover accident. During the accident, the passenger was ejected from the vehicle. She was rendered a paraplegic as a result. In a separate lawsuit, the passenger sued the man and the company, seeking compensation for her injuries. The vehicle and all permissive users were covered under a commercial automobile policy issued by the defendant insurance company. Eventually, the passenger obtained a $10 million verdict against the man.

The man then filed a bad faith lawsuit against the insurance company, alleging claims for, among other things, breach of contract, unfair insurance practices, fraud, and violations of the Texas Insurance Code. The gravamen of the man’s complaint was that the insurance company had failed to meet its obligation to defend and indemnify him in the lawsuit filed by the passenger. The man requested a copy of the insurance company’s file from the passenger’s case against him, but the insurance company produced only a heavily redacted version of the claim file, asserting the attorney-client privilege as to the redacted information. The man sought a writ of mandamus directing the trial court to compel the insurance company to produce the claim file without redaction.

Resolution of the Issues

The court conditionally granted the petition for a writ of mandamus, directing the trial court to issue an order requiring the insurance company to produce a copy of its claim file absent the redactions on 12 particular pages. The court began by acknowledging that, generally, mandamus is not available for most discovery disputes; only when there is no adequate remedy by appeal is mandamus appropriate. One situation in which a trial court’s discovery error is not curable on appeal is when the discovery that has been denied by the trial court goes to the very heart of the case.

The court then noted that, while the insurance company had properly made a prima facie showing of attorney-client privilege as to some of the redacted claim file entries, this could not be said as to all of the claim file entries. In particular, the redacted entries indicating that a certain individual transmitted certain items by email and facsimile on certain dates were not privileged, according to the court. As to the information that was protected by the attorney-client privilege, the court found that there was nothing indicating that the privilege had been waived.

Contact a Helpful East Texas Car Accident Attorney

East Texas auto accident attorney Earl Drott has been representing the victims of automobile accidents for more than 30 years. If your family is suffering because of a crash caused by a negligent or reckless driver, we offer a free consultation. Call us at 903-531-9300 to schedule a convenient time to come in and discuss your case. You should remember that claims not filed within the applicable statute of limitations are almost always dismissed on procedural grounds, so take prompt action to protect your legal rights.

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