Washington Appeals Court Says Allstate Must Reveal Claims Documents

April 2, 2009

The Court of Appeals in Washington has upheld a trial judge’s ruling that reversed entry of a protective order to limit discovery of Allstate Insurance Co.’s claim manuals, training manual, claim bulletins.

According to court documents in Colleen McCallum v. Allstate Insurance Co., McCallum was involved in motor vehicle accident in May 2004 with a phantom vehicle that caused the accident. She had an an Allstate automobile policy that provided uninsured motorist benefits in the amount of $25,000 per person, $50,000 per accident and $10,000 in personal injury protection.

McCallum incurred more than $23,000 in medical expenses. Allstate evaluated her claim and extended a settlement offer of $9,000, which McCallum declined because she did not think it was reasonable. She then pursued a lawsuit, and an arbitrator eventually awarded McCallum the jurisdictional maximum of $50,000.

Following the arbitration award, McCallum filed a lawsuit against Allstate, alleging, among other things, bad faith violations of the Consumer Protection Act. During discovery, she requested Allstate provide documentation of its claim handling process because she believed they documented a national policy to drag out the claims process.

Allstate sought a protective order to keep its documents private, claiming that they are confidential, commercial information and/or trade secrets. To support its motion, Allstate submitted declarations from its assistant vice president, Christine Sullivan, and a local claims representative, Robert Bjorback.

The trial court granted the protective order.

However, McCallum deposed Bjorback and Sullivan as to their declarations, during which “Bjorback admitted that he had no knowledge as to how much time, manpower, or financial recourses Allstate spent to prepare its manuals and procedures. Bjorback also testified in his deposition that he had no knowledge of Allstate’s competitors’ business practices, leading McCallum to conclude that, contrary to his declaration statements, Bjorback had no idea whether Allstate’s processes are unique or that its competitors would want them,” court documents state.

As a result of those statements, the trial court vacated the protective order. Allstate opposed the order, claiming that arguing that the trial court abused its discretion when it granted the order because McCallum misrepresented the facts.

The Appeals Court found that “Allstate did not show specific prejudice or harm for any of the documents; thus, it did not establish good cause to limit the scope of discovery,” court documents state. It affirmed the trial court’s order.

For information, visit http://www.courts.wa.gov/opinions/index.cfm?fa=opinions.showOpinion&filename=366240MAJ.

Source: Washington Courts

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