Brandee Bower | Property Insurance Coverage Law Blog | November 18, 2014
This is a question I was asked recently so I thought I would answer it here. In this case, the insured made a claim for hail damage done to the roof. The insurance company investigated the claim and hired an Engineer to inspect the property. The Engineer drafted a report and provided it to the insurance company. Based on that report, the insurance company denied the claim. When the insured and his public adjuster asked for a copy of the report, the insurance company would not produce it, saying it is privileged “work product.” So what is “work product?”
‘The work product doctrine protects materials prepared in anticipation of litigation. It does not protect materials prepared in the ‘ordinary course of business.’ Western Nat’l Bank v. Employers Ins. of Wausau, 109 F.R.D. 55, 57 (D.Colo.1985). The Colorado Supreme Court has declared that the general standard to be applied when deciding whether something was prepared in anticipation of litigation is ‘whether, in light of the nature of the document and the factual situation in the particular case, the party resisting discovery demonstrates that the document was prepared or obtained in contemplation of specific litigation.’ Hawkins v. District Court, 638 P.2d 1372, 1379 (Colo.1982).”1
The general rule in Colorado is that insurance adjusters’ investigative reports are prepared in the ordinary course of business and, therefore, are discoverable.2 If the insurance company refuses to produce a document, it has the burden to prove that when it was prepared or obtained there was a substantial probability of imminent litigation over the claim, or a lawsuit had already been filed.3
In Texas, “a party may withhold a privileged communication to or from a lawyer or a lawyer’s representative,” or a “privileged document of a lawyer or lawyer’s representative” created or made from the point in time when a party consults the lawyer with an eye toward obtaining the lawyer’s services for the specific claim or suit in which the discovery is requested.4 Sometimes, even the work of an attorney is not privileged and must be produced.5 Farmers insurance hired an attorney to take an examination under oath of its insureds after their home was destroyed by fire. The fire investigator reported that no accidental ignition source could be identified, so the insurance company denied the claim. A suit was filed and the insureds sought to depose the attorney who took the EUO. The court found that until the date that suit was filed the attorney had acted as an investigator, not an attorney. Further, the court found that a reasonable person would not anticipate litigation based upon the fire investigator’s conclusion. The trigger date for anticipation of a lawsuit was the date the suit was filed, not the date the claim was denied.
1 Weitzman v. Blazing Pedals, Inc., 151 F.R.D. 125 (D. Colo. 1993).
2 Western Nat’l Bank, 109 F.R.D. at 57; American Bankers Ins. Co. v. Colorado Flying Academy, 97 F.R.D. 515, 517 (D.Colo.1983); Hawkins, 638 P.2d at 1377.
3 Hawkins, 638 P.2d at 1379.
4 TEX.R. CIV. P. 193.3(c).
5 In re Texas Farmers Insurance Exchange, 990 S.W.2d 337 (Tex.App. 1999).