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State Farm v. Cramer, West Virginia Supreme Court of Appeals No. 15-1101

By: Kaitlyn N. McKitrick and Michael C. Cardi.
April 1, 2016

WVSCA authorizes "Fishing Expedition" into scope of UM Coverage offered to hundreds of non-party-insureds. WVSCA, however, limits identification of non-party-insureds' names, addresses, and telephone numbers.

Key Facts: State Farm insured Mr. William Bassett under three (3) separate insurance policies. In 2013, an Uninsured Driver injured Bassett in an auto accident. Pre-suit, State Farm offered (and paid) $60,000 in minimum Uninsured Motorist (UM) Coverage ($60,000 = $20,000 per-person limits x 3 policies); however, Bassett wanted additional coverage.

Procedural Posture: Bassett sued State Farm in Circuit Court of Wetzel County, West Virginia, alleging Breach of Contract, Unfair Trade Practices (UTPA) and Emotional Distress. Bassett argued that State Farm failed to use proper form to offer optional UM Coverage ("UM Form"), and that State Farm owed Bassett $240,000 in additional UM coverage. Eventually, State Farm paid $240,000; however, Bassett did not drop his UTPA claims.

Nature of Discovery Dispute: During Discovery, Bassett sought names, addresses and telephone numbers of State Farm policyholders who were injured/damaged by Uninsured Drivers, and whose UM limits were less than $100,000. Bassett wanted to know if State Farm used the proper UM Form for these "non‑party" insureds. State Farm identified 400 "non‑party" insureds, but refused to provide requested information. Circuit Court ordered State Farm to produce. State Farm asked the West Virginia Supreme Court of Appeals (WVSCA) to prohibit the Circuit Court's order, or, in the alternative, to permit redaction of all contact information, or to prohibit Bassett from contacting insureds without insureds' prior consent. WVSCA agreed, in part, with State Farm.

WVSCA's Decision: State Farm should disclose the form it used for the non-party insureds, as well as statistics as to when and how often State Farm paid additional coverage in connection with that form. However, WVSCA said disclosure of names, addresses, and telephone numbers was unwarranted.

Key Takeaways:

  • Certainly in the context of Bad Faith Litigation, Carriers should expect more requests by WV Plaintiffs' Bar for the production of documents involving non‑parties.
  • For now, names, addresses and telephone numbers remain presumptively private. The Court reaffirmed that this information is not discoverable to support allegations of unfair claim settlement practices. However, the Court has yet to espouse a blanket "bright line rule" forever barring production of non parties' contact information; as such, Carriers should anticipate continued efforts by WV Plaintiffs' bar to invade confidentiality of insureds.