The Question of Whether an Insured is Entitled to Review the Claims File?

June 22, 2005

The process is straight-forward and being conducted by insurers thousands of time each day.

An insured is involved in an accident, contacts his or her insurer to report the claim, and the insurer begins to record information about the claim as part of a claims file. A recent case from Missouri highlights the problems that may develop when the insured requests to see the contents of the claims file and the insurer refuses. Grewell v. State Farm Mutual Automobile Insurance Company, et al., No. WD 64077, 2005 WL 1149082 (W.D. MO May 17, 2005).

In Grewell, the plaintiff was involved in a car accident. State Farm insured both the plaintiff and the driver of the other vehicle, and each driver was subsequently assigned a different State Farm claims specialist. Initially, the claims specialist assigned to the plaintiff’s claim assigned the plaintiff’s fault for the accident at twenty percent. The claims specialist assigned to the other driver’s claim assigned the plaintiff’s fault at fifty percent.

In turn, the specialist for the plaintiff’s claim raised her assessment of fault for the plaintiff to fifty percent. Upon learning of the change in assessment of fault, the plaintiff requested the contents of her claim file. State Farm initially denied the request, asserting a work-product privilege. Following a second request for the file, State Farm provided a partial disclosure of the requested information.

The plaintiff filed a declaratory judgment action, asking the court to determine whether a special relationship existed between an insurer and insured, requiring full disclosure of the claims file and sought an award of punitive damages and attorneys fees. The trial court ruled that no special insurer/insured relationship existed under Missouri law and dismissed the declaratory judgment action.

Following a series of procedural events after the plaintiff appealed the trial court decision, the Missouri Supreme Court reversed the dismissal and remanded the case to the trial court. The Missouri Supreme Court ruled that when an insurance claim involves potential liability, the relationship between the insurer and insured attains a protected status analogous to that of the attorney-client relationship under Missouri law. Grewell v. State Farm Mut. Auto Ins. Co., 102 S.W.3d 33, 36-37 (Mo. banc. 2003).

Following the instruction of the Supreme Court, State Farm allowed the plaintiff to review the entire claims file. The plaintiff requested copies of several documents, but State Farm provided copies of only some of the materials. State Farm maintained that the withheld documents were comparable to an attorney’s work-product. The plaintiff subsequently filed a new three count petition, seeking the court order: (1) State Farm provide copies of all of the requested documents; (2) State Farm pay all attorneys fees based on the continued refusal to produce the documents; and (3) State Farm pay punitive damages based on a breach of a fiduciary relationship.

The trial court ordered State Farm to provide copies of all documents in the claims file. However, the trial court denied the plaintiff’s request for attorney’s fees and punitive damages.

After reviewing the factual and procedural facts of the case, the appeals court found that the trial court incorrectly dismissed the claim for attorney’s fees. The appellate court reasoned that a genuine issue of material fact existed as to whether “special circumstances” may exist to support an award of attorney’s fees.

For support, the appellate court reasoned there was support for the plaintiff’s allegation that State Farm’s defense to production of the documents was frivolous, reckless, and without substantial grounds. In addition, the Court found additional “special circumstances” as State Farm may have breached a legal duty causing the plaintiff to be involved in collateral litigation (i.e. having to go to court twice to address the same issue).

The appellate court also reversed the decision regarding the dismissal of the claim for punitive damages. The appellate court ruled that there was a genuine issue of material fact as to whether State Farm had breached its fiduciary duty by refusing to provide copies of the requested documents.

In addition, the court ruled that the plaintiff was able to create an inference of evil motive and reckless conduct when State Farm refused to grant complete access to the claims file in contravention to a ruling by the Missouri Supreme Court. Thus, the appellate court remanded the question of the plaintiff’s entitlement to attorney’s fees and punitive damages back to the trial court for for their review.

This decision should sound an alarm bell for insurers concerning their actions in handling multiple claims by different insureds arising out of the same accident. Further, it should also make insurers especially attentive to the comments included in an insured’s claims file. For insureds, the decision highlights the special relationship that some courts find may exist between an insurer and insured.

Andrew S. Boris is a partner in the Chicago office of Tressler Soderstrom Maloney & Priess. His practice is focused on litigation and arbitration of insurance coverage and reinsurance matters throughout the country, including general coverage, directors and officers liability, professional liability, environmental, and asbestos cases. Questions and responses to this article are welcome at The Tip of the Month runs each month on

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