By: Fred Shuchart
Is information regarding the handling of other claims by an insurance company relevant to and discoverable in a lawsuit involving one specific claim? Or is it an impermissible “fishing expedition” under Texas law? The Dallas Court of Appeals recently held it was the latter in In re Hanover Lloyds Ins. Co., 2018 WL 1127436 (Tex. App.-Dallas March 2, 2018, orig. proceeding), a case involving discovery requests for engineering reports on storm damage claims.
In Hanover, one carrier retained HAAG Engineering to perform an inspection of the allegedly hail-damaged property. HAAG determined that the hail damage was a result of a previous storm; thus, the insured submitted the claim to Hanover. Hanover denied the claim on the basis that it could not determine when the damage occurred, thereby rejecting the HAAG report. The insured sued and propounded discovery requesting documents relating to the last 25 HAAG reports received by Hanover both prior to and after the claim in question. Hanover objected, but the trial court issued an order compelling Hanover to produce the requested documents.
Hanover petitioned the Court of Appeals for a writ of mandamus directing the trial court to vacate its improper order. The insured argued that the information was discoverable because it was not seeking the information to prove the accuracy of the HAAG report but to establish the relationship between HAAG and Hanover and the unreasonableness of rejecting the report.
The Court rejected the insured’s position, following the lead of two Texas Supreme Court cases: In re Nat’l Lloyds, 507 S.W.3d 219 (Tex. 2016) (orig. proceeding), and In re Nat’l Lloyds, 449 S.W.3d 486 (Tex. 2014) (orig. proceeding). In both cases, the Texas Supreme Court concluded that discovery requests seeking information about a carrier’s handling of other claims, to compare to the handling of the claim at issue, did not seek relevant or probative information and, instead, constituted an “impermissible fishing expedition.”
Here, despite the insured’s claimed different reason for wanting the reports from other cases, the Court appeared to conclude that the insured was simply wanting to compare Hanover’s handling of its claim with that of other claims. The Court noted that, although there was a remote possibility that the information could lead to the discovery of admissible evidence, it failed to see how Hanover’s use of HAAG reports in unrelated claims of third parties was probative of its use of a HAAG report in handling the claim in question. Thus, it held the trial court abused its discretion in compelling production of the 50 engineering reports from other claims.