The insurance carrier was not required to produce the disputed documents identified in its privilege log where it had not waived the attorney-client privilege.

In this underinsured motorist case, the Middle District Court considered whether the defendant’s assertion of the attorney-client privilege and/or work-product doctrine to withhold responsive documents in discovery was warranted. This matter arose after the plaintiff submitted a claim for UIM benefits under her policy with the defendant, who refused to tender policy limits. After reviewing the law applicable to both doctrines, the court considered whether the defendant’s privilege log was adequate and whether the documents had been properly withheld. After reviewing the documents, the court concluded that they were. The court disagreed with the plaintiff’s argument that several of the documents should have been produced since coverage counsel was actually acting as a claims adjuster rather than as an attorney. The court was satisfied that counsel was serving the client in the attorney-client capacity. The court also found that, even though an attorney may have performed non-legal functions and had communications with the defendant’s employees or agents outside his/her capacity as an attorney, the defendant had not waived the attorney-client privilege. Finally, the court rejected the plaintiff’s argument that the defendant had waived the attorney-client privilege in its entirety by including an affirmative defense that its conduct was reasonable, in compliance with applicable Pennsylvania law and regulations, and in accordance with industry standards, customs and practices in the investigation and adjustment of insurance claims. The defendant’s assertion that it had conducted itself lawfully did not negate its ability to protect itself from disclosure of confidential attorney-client communications. Thus, the defendant was not required to produce the disputed documents identified in its privilege log.

Case Law Alerts, 4th Quarter 2013