Listen to this articleA woman who was test-driving a used Ford Explorer with car dealership Hitt Automotive rear-ended another vehicle and its driver sued her. The question posed to the Missouri Supreme Court is whether the insurance company must provide information on discovery.
Brittany Trexler is calling on the justices to determine whether she is entitled to the full insurance claims file in her case, or if the car insurance company — Consumers — has the right to withhold it from discovery.
The driver of the vehicle Trexler rear-ended sued her and, in 2020, the driver’s attorney contacted Consumers with a settlement offer for the policy limits, according to the court. What happened next led to the case before the state’s highest court.
“Consumers responded that it needed additional information regarding Trexler’s personal insurance policy. After the driver informed Consumers there had been no settlement offer to Trexler’s insurer, Consumers denied coverage,” according to information provided by the court. “The driver sent Consumers a second demand letter, which Consumers again rejected. Trexler and the driver entered into a statutory indemnity agreement and proceeded to arbitration. The driver was awarded $4.25 million. The circuit court affirmed the award. The driver then brought the underlying garnishment action.”
Trexler’s brief, prepared by attorneys Edward D. Robertson and Rachel A. O’Donnell with Bartimus Frickleton Robertson Rader, said the issue at hand for the court relates to discovery in a bad faith case and this underlying garnishment action.
Trexler “filed a cross claim against liability insurer Consumer Insurance USA, Inc. for bad faith refusal to settle, bad faith refusal to defend, bad faith refusal to pay known insurance coverage, negligence, and breach of contract,” according to the brief.
As part of the discovery for this action, Trexler asked for the complete claims files pertaining to the accident and all of Consumer’s internal communications referencing her or the claim.
“Consumers objected to the request, stating it does not have a claim file for Trexler and any claim file for the dealership is privileged,” according to the court. “Trexler moved to compel discovery. The circuit court ordered Consumers to produce any portion of the claims file relating to its coverage decision regarding Trexler and the accident. Consumers produced 11 pages of discovery. Trexler requested the circuit court conduct an in-camera review (by only the judge, with no party present) of the claim’s notes. The circuit court declined to do so. Trexler then sought relief from the court of appeals, which issued a preliminary writ preventing any further action in the underlying garnishment action. Trexler now seeks the preliminary writ be made permanent.”
Consumer’s brief, prepared by Bradley R. Hansmann and Julia D. McFarland of Watters, Wolf, Bubb & Hansmann, argued that Trexler’s petition should be denied on the basis that she has not established that Cape Girardeau County Circuit Court Judge Scott Lipke, misapplied Missouri law or erroneously restricted the discovery.
“After the car accident, Consumers Insurance USA was required to ensure realtor Brittany Trexler up to $25,000 under a policy which said it’s coverage would be primary and which gave Consumers the exclusive right to control settlements as to that coverage,” Trexler’s attorney Robertson said during oral arguments before the court. “But instead of doing that and after handling the claim for some time, Consumers ignored two settlement opportunities and then completely denied coverage from the first dollar.”
Robertson argued that, as in any case, the insurance claims file is a “key and essential” piece of discovery and the need for its production is “compelling and overwhelming.”
“Yet the respondent here [circuit judge Scott Lipke] entered an order which was drafted entirely by Consumers which prevents Trexler from discovering substantial portions of that file, including claim notes related to the settlement opportunities, claim notes from the first 34 months of the claim, none of which are privileged and all of which are relevant to these claims,” Robertson said during oral arguments.
Hansmann, Consumers attorney, argued that his client does not have a contract with Trexler and that she does not have a right to their files in discovery.
“My client owes no duties to Ms. Trexler, Ms. Trexler owes no duties to my client. They are strangers to each other except for the Missouri Vehicle Financial Responsibility law,” Hansmann said.
In addition to deciding whether Trexler is entitled to the full claims file in her discovery, the court must consider “whether the file is relevant to Trexler’s cross-claims against Consumers; whether the file is privileged due to the insurer-insured relationship; whether the file is subject to attorney-client privilege; whether the work product doctrine prohibits disclosure of the file; whether the fact that Consumers insured the dealership, not Trexler, has any effect on the discovery request; and whether the fact that Trexler had her own insurance policy has any effect on the discovery request.”
The Case is: State of Missouri ex rel. Brittany Trexler v. The Honorable Scott A. Lipke Case. no. SC100440
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.