Thursday, September 17, 2009

Appellate Division all but states that judges are crazy to deny motion to sever and stay 93A claim against insurer

In my last post I discussed the decision of the Massachusetts Appellate Division in Rodriguez v. Alvelo, 2009 WL 2438328 (Mass. App. Div.) to uphold the trial judge's decision not to sever a 93A claim against an insurer from the underlying claim against the insured.

The court also addressed the insurer's request that discovery against it be stayed. The insurer argued that it was entitled to a stay until after the adjudication of the underlying action to protect it from the irreparably prejudicial disclosure of confidential, privileged information contained in its claims file.

The court stated that the insurer "has an undeniably legitimate, if not compelling, interest" in protecting its work product, privileged communications, and other information the disclosure of which would prevent or impair its full defense of the underlying claim.

The court noted that there are non-precedential decisions on both sides of the issue (which many plaintiffs' and insurance defense attorneys can easily recite, having copied the same briefs over and over).

The court held that trial judges have discretion to decide whether discovery against an insurer should be stayed until resolution of the underlying matter. It noted that discovery of privileged or otherwise protected material is not allowed. It held, however, that the insurer in this case made no showing that materials in its file were not discoverable. Rather, the insurer had filed a "general motion to sever and stay" simultaneously with its answer, at a point at which there had been no request for any discovery of any kind by the plaintiff. The trial court therefore did not abuse its discretion in denying the motion.

The court then all but begged the insurer to move the trial judge to reconsider the decision, and the trial judge to do so:

In so ruling, we caution that prejudicial error would almost certainly result from any order for complete or unbridled discovery in this case. Having rejected the simpler, arguably more expeditious alternative of immediately severing and staying Rodriguez's G.L. c. 93A case, the trial judge has shouldered the potentially more time-consuming, labor-intensive tasks of scrutinizing Rodriguez's anticipated discovery requests and Premier's expected motions for protective orders, of fairly balancing the parties' competing discovery rights and interests, and of ruling in careful compliance with governing discovery rules. Permissible, practical procedures, including in camera review . . . of specific documents under seal identified by Premier as qualifying for protection, are available and must be undertaken by the trial judge. Nor is the judge precluded from reconsidering the question of a severance and stay, at least early in the procedures.


Arizona Auto Insurance said...

I've read in the Wall Street Journal one person claim that MA has the best health insurance set up in the country. Is this true, in your opinion. Or, at least do you feel it's a good plan?

Nina Kallen said...

This is off-topic to my blog, which focuses on liability insurance, not medical insurance. However, because as a self-employed individual I spend a lot of time considering what medical insurance is best for my family, I will share my (non-legal) thoughts:

What is great about the Massachusetts system is that anyone who can afford medical insurance can sign up for any health plan regardless of pre-existing conditions. That means that my family can have a very cheap plan with a very high deductible, comfortable in the knowledge that we can switch back to a regular plan should there be a medical problem which will cause us to incur higher medical bills. The only risk is a sudden event, such as a car accident, which will require emergency room treatment without time to switch plans beforehand.

What I just described has been the situation for at least a decade and I believe longer--I think it was instituted under Governor Dukakis in the 1980's.

Massachusetts instituted health care reform a couple of years ago which I hate. It is now illegal to be uninsured in Massachusetts. However, there is absolutely no assistance for middle class families like my own. In fact, the high deductible plan that we use may be deemed unacceptable under the current plan.

At the same time, I know several people who have moved to Massachusetts simply for the health insurance offered to low income people. These are people who are capable of working, are employable even in this economy, do not have young kids, and choose not to work. Yet I am paying for them to have their knee operated on. I say this as a proud liberal/progressive who used to work with homeless families. I would scoff at conservatives who would claim that people moved to Massachusetts because of our "generous" welfare programs. But this is what I am observing first hand.