Court Orders Insurer’s Handwritten Notes Discoverable Despite Work-Product Doctrine

Last week, a Maine court took up a discovery fight regarding certain claim and underwriting files maintained by an oil and gas company’s insurer with respect to multi-forum MTBE litigation.  The oil and gas company contended that as a result of the more than 60 MTBE lawsuits filed against it, the company incurred significant unreimbursed expenses in connection with the investigation, defense, and settlement of the claims and expected to incur more expenses in future suits.  The company contacted its primary insurer and alleged that the applicable product hazard limits of liability underlying the insurer’s umbrella policies had been exhausted.  The insurer denies that the underlying primary policies have been exhausted and the company brought a declaratory judgment action seeking relief for breach of contract and unfair claims settlement practices by the insurer for its alleged willful and bad-faith refusal to defend or indemnify the company in numerous underlying product liability actions brought against the company.

As part of that suit, the company brought a motion to compel the insurer to produce its entire claim file for the MTBE lawsuits.  Notably, the court examined three documents allegedly protected by the insurer under the work-product doctrine:  1) handwritten notes from the insurer regarding a conference call with an insurance broker and outside counsel; 2) handwritten notes from the insurer regarding the status of the MTBE suits and the company’s suit against its primary insurers pending in a different forum; and 3) handwritten notes from the insurer concerning discussions with counsel for the insurers regarding an underlying MTBE action involving the company.  The court quickly found that these materials would be protected by the work-product doctrine because the prospect of litigation caused them to be prepared, but concluded that the oil and gas company had presented the requisite probable cause to overcome the work-product doctrine and to compel these documents’ discovery.  The court reasoned, “The court believes that access to said documents might provide the [company] with the information they need to evaluate [the insurer’s] handling of the MTBE claims and determine if there was a violation of the Unfair Claims Settlement Practices Act.”  The court did redact any language containing mental impressions, conclusions, opinions, or legal theories, but it was unclear from the opinion how much of the documents needed to be redacted.  The court also reasoned that the company had shown a substantial need for the documents because the company proved the likelihood that several of the insurer’s former employees may need to have their memories refreshed by these particular documents.

 

 

 

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