Court Opinion

ID: 9759686
Source: CourtListenerOpinion
Date Created: 2023-08-29 00:25:14.09584+00
Date Added: 2024-06-11T10:15:03.511011
License: Public Domain

ROBERT L. Brown, Justice, dissenting. It is difficult to conceive of what could be more significant in bad-faith litigation than for an insured to be able to determine how other insureds in the same situation were treated by the carrier. The majority has decided that this information is not pertinent and that Parker in this case must give absolute credence to the carrier’s representation that uniform procedures relating to cancellations were followed in this case. I disagree. The essence of litigation is proof— not representations by an adversary of what should have been done. Parker ought not to be bound by what Farm Bureau states its general procedures were. He is entitled to go behind Farm Bureau’s statements to verify what in reality was done with regard to cancellations. The majority characterizes this quest for verification as a “fishing expedition.” I cannot conclude that an attempt to confirm averred practices of an insurance carrier is anything of the kind. Farm Bureau holds the information. It has made statements under oath that it should be required to substantiate, and our rules and case law certainly support this conclusion. Arkansas Rule of Civil Procedure 26(b)(1) permits discovery of all relevant information, which is defined as information which is non-privileged and which “appears reasonably calculated to lead to the discovery of admissible evidence.” The seminal case in this area is Marrow v. State Farm Ins. Co., 264 Ark. 227, 570 S.W.2d 607 (1978). In Marrow, the complaint was brought by the victim of a car accident against the insurance carrier of the tortfeasor for fraud in misrepresenting the amount of liability coverage. The victim moved for documents held by the carrier pertaining to the claim. The request was denied by the trial court, and summary judgment was entered in favor of the carrier. We reversed the summary judgment on the basis that discovery was impermissibly curtailed. First, we noted that the trial court has broad discretion in discovery matters and will only be reversed for abuse of that discretion. But we went further and stated that we would find abuse of that discretion when the substantial rights of the moving party are limited. We said: In this case, we find an abuse of discretion in the denial of appellant’s last motion for production of documents. In so doing, we consider the fact that appellant, if he has any claim against State Farm, is placed in the position of having to prove it by the testimony of officers and agents of State Farm and by documents, papers and letters, written by them and kept by State Farm. In such a case, the scope of discovery permitted should be broader than otherwise and appellant here should be permitted to inspect any writing in the files of the insurance company which might lead to admissible evidence. See Connecticut Mutual Life Ins. Co. v. Shields, 17 FRD 273 (S.D., N.Y., 1955); Dow Chemical Co. v. Monsanto Co., 256 F.S. 315 (S.D., Ohio, 1966). Marrow, 264 Ark. at 236-37, 570 S.W.2d at 613. See also Rickett v. Hayes, 251 Ark. 395, 473 S.W.2d 446 (1971); Heinrich v. Harp’s Food Stores, Inc., 52 Ark. App. 165, 915 S.W.2d 734 (1996); Ashmore v. Ford, 267 Ark. 854, 591 S.W.2d 666 (Ark. App. 1980). The majority in the instant case hinges its truncation of discovery on two factors: (1) that the request is an outright and unadulterated fishing expedition; and (2) that Farm Bureau has a dual-billing system and, thus, was treating its insureds differently for cancellation-notice purposes. First, I disagree that this is an unadulterated fishing expedition for reasons already stated. Secondly, the fact that Farm Bureau gave different billing notices for Category X insureds involving renewal and installment premiums due versus Category Y insureds where additional premiums were assessed for changes in coverage, and only gave ten-day cancellation notices for Category Y insureds, does not resolve Parker’s dilemma. He wants to know whether any Category X insureds received cancellation notices for failure to pay when he did not. Parker asked for the 20 most recent cancellation notices mailed by Farm Bureau to its insureds. When Farm Bureau moved for a protective order, Parker responded that he was entitled to this information “to see if [Farm Bureau] dealt with [the 20] differently than [himself].” At the first hearing on the discovery request, counsel for Parker argued to the court: We think under the liberal discovery rules that we are enti-ded to that information. Were that not true, you could never really and completely prove the tort of bad faith for failure to pay insurance coverage because you need to see what the insurance company itself has done and said with regard to your file, your own claim, as well as how they have treated other or similarly situated claimants and whether they dealt with this plaintiff differently than they have dealt with other claimants, and was there some reason for that. This relates to both the last ten (10) notices of cancellation that they gave to their insureds for non-payment of premiums and to information from our own claim file.1 (Emphasis added.) The trial court denied the discovery request due to irrelevance and granted the protective order. What transpired next was the trial court’s grant of summary judgment on the bad-faith claim for the stated reason that “the court finds an insufficient factual basis to support it.” My response to that statement in the court’s order is that Parker was foreclosed, at least in part, from developing his factual basis. Again, this was not a fishing expedition. Nor was it an effort to garner information merely for impeachment purposes. It was an attempt by Parker to verify essential representations by Farm Bureau that went to the heart of his bad-faith claim. If Farm Bureau in fact was treating him differently, this would comprise a vital element of his case and would be probative of dishonesty on the part of the carrier. I would not shut the door on this essential inquiry but would require Farm Bureau to support its representation made in sworn depositions that all insureds like Parker were treated the same. Finally, I am not troubled by privacy concerns for the 20 insureds. Redaction of names and other information that might identify those insureds could be easily accomplished, and the trial court could review the redacted notices in camera to assure privacy rights are protected. Also, the majority focuses on the post-litigation point for the first time in its opinion. It was not raised at trial or by the parties in this appeal. The time frame for the notices to be discovered could have been fleshed out at the trial court level had not the door to discovery been shut and bolted. I respectfully dissent.  . Parker subsequently increased his request to the last 20 notices of cancellation.