Professional Liability

The Ohio Supreme Court has accepted the insurer’s appeal in this case, which arose out of an underinsured motorist claim, which the insurer had settled. After settling the claim, the insurer was sued for alleged bad faith in its handling and delay in settlement. A discovery dispute arose when the plaintiff demanded that the insurer turn over its entire claim file. The insurer objected to producing its claim file after the point where it had offered to pay policy limits without conditions. 

The trial court, without an in-camera inspection, ordered the insurer to turn over the complete file. The insurer appealed, and the First District Court of Appeals affirmed. 

The insurer has now appealed to the Ohio Supreme Court, and the appeal has been accepted for two propositions of law: (1) does Boone v. Vanliner Ins. Co., 91 Ohio St.3d 209, 744 N.E.2d 154 (2001) apply to an insurer’s privileged materials created during litigation between the insurer and its insured? and (2) to the extent that Boone applies to an insurer’s privileged materials created during litigation between the insurer and the insured, is the trial court required to conduct an in-camera inspection of such materials to determine the scope of the exception to the privilege set forth in Boone?

The Boone decision created an exception to the attorney-client and work-product privileges, holding that evidence tending to show an insurer’s bad faith was “not worthy of protection.” Since that decision, Ohio amended the Attorney Client Privilege Statute, R.C. 2317.02, to require a plaintiff to make a “prima-facie showing of bad faith” and the court to conduct an in-camera inspection of the communications before there is a waiver of the privilege. 

This decision will be closely watched by insurers and plaintiffs’ counsel to determine to what extent an insurer is required to produce its claim file in bad faith litigation and whether the earlier decision in Boone will be modified or limited. 

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_{Case Law Alerts, 4th Quarter, October 2024 is prepared by Marshall Dennehey to provide information on recent developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. Copyright © 2024 Marshall Dennehey, all rights reserved. This article may not be reprinted without the express written permission of our firm.}