Claims and Bad Faith Law Blog

BAD FAITH IN THE NEW YORK ORGANIZATION?

Because Aon did business with Donald J. Trump and the Trump Organization, it was served with a 9-page subpoena on March 4, 2019.  The return date on the subpoena is March 19.

The subpoena was served by the New York State Department of Financial Services.  It requested documents from the insurance broker, Aon, going back 10 years, including:

• "copies of all communications between Aon and Mr. Trump and the Trump organization"
• "all internal Aon documents relating to Mr. Trump and the company"
• "[records of] compensation for the current and former Aon employees who handled the Trump Organization account," including "information about their incentives, bonus payments or commissions."
• "[S]imilar contracts and agreements between Aon and Mr. Trump."

See William K. Rashbaum and Ben Protess, Trump Businesses Draw Scrutiny From New York Over Insurance Policies, New York Times, Wednesday, March 6, 2019, p. A16 (the New York Times may require a subscription for access to the online version, https://www.nytimes.com/2019/03/05/nyregion/trump-aon-risk-services-subpoena.html).

This subpoena sounds an awful lot like the document requests I have dealt with for over 40 years in Insurance Bad Faith cases.

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DISCOVERY OF UNDERWRITERS' FILES: NOT IN FEDERAL CASE IN PENNSYLVANIA.

In Westfield Ins. Co. v. Icon Legacy Custom Modular Homes, 321 F.R.D. 107 (M.D. Pa. 2017), a policyholder could not get discovery of its Commercial General Liability carrier's underwriting files.

The carrier was the plaintiff in that case.  It filed a declaratory judgment action that it had no coverage for an underlying claim.

The policyholder, a homebuilder, filed a counterclaim for bad faith which was dismissed before the discovery issue was resolved.

The policyholder requested production of the plaintiff carrier's underwriting files in this declaratory judgment action to determine coverage.  The carrier refused.  The policyholder then filed a motion to compel production of the carrier's  underwriting files.

The Court in that case denied the defendant policyholder's motion and refused to order the underwriting files to be disclosed.  In the eyes of the Court, the policy was not ambiguous.  Since the policy was not ambiguous, Pennsylvania law would not allow the admission of extrinsic evidence to contradict or alter the plain meaning of the contract.  Since extrinsic evidence could not be admitted under Pennsylvania law, the Court ruled as a result both that the request for production of underwriting files was neither relevant nor reasonably calculated to lead to the discovery of admissible evidence, and that the requested production of underwriting files was not "proportional" in a case in which that extrinsic evidence could never be admitted.

Please Read The Disclaimer.  ©2017 by Dennis J. Wall.  All Rights Reserved.