Where a party alleges insufficient legal representation, any correspondence and communications between the party and the party's retained counsel concerning the defense of the party are subject to discovery.

The plaintiff insurance company brought a declaratory judgment action against the insureds where the plaintiff sought an order that it had no duty to indemnify the insured to a consent judgment entered against them in an underlying lawsuit. The insured had a florist company, and one of their drivers was involved in a motorcycle-automobile accident. The other driver, Robert Levesque, suffered a brain injury. Levesque brought a tort action against the insured. The florist's commercial liability insurer, Safeco, hired the law firm of Smith Clark to defend its insured. The florist also had a commercial automobile policy with the plaintiff, Allstate. While that action was pending, Levesque died before a settlement was reached. The plaintiff, Allstate Insurance Company, asserted a reservation of rights to deny coverage. The Levesque estate responded by asserting a breach of contract claim against Allstate for failing to provide adequate legal defense. The plaintiff moved to compel deposition testimony and to compel a non-party to comply with subpoenas and produce records. The defendants moved to compel production of documents. The court held that where an insured alleges that an insurer failed to adequately defend, any correspondence and communications between the insurer and the insured's retained counsel concerning the defense of the insured are subject to discovery – including notes of representatives of the insurer concerning the adequacy of the legal representation.

Case Law Alert - 2nd Qtr 2010