Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_10-cv-00363/USCOURTS-azd-2_10-cv-00363-1/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 12:635 Breach of Insurance Contract

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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Kellie D. Green, 

Plaintiff, 

vs.

Hartford Fire Insurance Company, 

Defendant. 

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No. CV-10-363-PHX-DGC

ORDER

The parties have filed memoranda addressing Plaintiff’s request for an order

compelling production of reserve information. Docs. 33, 34. That request will be granted.

In Arizona, an insurer “has an obligation to immediately conduct an adequate

investigation, act reasonably in evaluating the claim, and act promptly in paying a legitimate

claim. . . . It cannot lowball claims or delay claims hoping that the insured will settle for

less.” Zilisch v. State Farm Mut. Auto. Ins. Co., 995 P.2d 276, 280 (Ariz. 2000). To

establish the tort of bad faith, “‘a plaintiff must show the absence of a reasonable basis for

denying [or delaying] benefits of the policy and the defendant’s knowledge or reckless

disregard of the lack of a reasonable basis[.]’” Noble v. Nat’l Life Ins. Co., 624 P.2d 866,

868 (Ariz. 1981); see Zilisch, 995 P.2d at 279.

Plaintiff alleges that Defendant acted in bad faith by, among other things, improperly

evaluating her claim and intentionally making a “low-ball” settlement offer. Docs. 1 ¶ 21,

20 at 2, 34 at 1-2. The requested reserve information “may be relevant to showing the

difference between what [D]efendant thought it would have to pay and its communications

Case 2:10-cv-00363-DGC Document 35 Filed 11/12/10 Page 1 of 2
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with [P]laintiff regarding its evaluation of the scope of the loss.” Flintkote Co. v. Gen.

Accident Assurance Co. of Can., No. C 04-01827 MHP, 2009 WL 1457974, at *4 (N.D. Cal.

May 26, 2009). As other courts have recognized, “reserve information is relevant because

it can be evidence of bad faith, which has a subjective intent component that can be difficult

to prove.” Id. at 3 (citations omitted).

Defendant asserts that because “there are so many reasons for setting reserves which

are unrelated to the claim, the information can be misleading and irrelevant to litigation.”

Doc. 33 at 2. But Defendant has presented no facts showing that reserve information is

irrelevant in this case. While establishing a reserve does not necessarily amount to an

admission of liability, that does not render the reserve entirely irrelevant to a bad faith claim.

Defendant may, of course, challenge the probative value of the reserve information and its

admissibility. The Court has reviewed the cases cited by Defendant and finds them to be

unpersuasive and distinguishable.

IT IS THEREFORE ORDERED that Defendant shall promptly produce reserve

information to Plaintiff. 

DATED this 12th day of November, 2010.

Case 2:10-cv-00363-DGC Document 35 Filed 11/12/10 Page 2 of 2