Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Richardson v. Government Employees Insurance Co.

Court of Appeals of Washington, Division 2

October 3, 2017


          MELNICK, J.

         We granted Government Employees Insurance Company's (GEICO) motion for discretionary review of the trial court's discovery order compelling GEICO to produce privileged post-litigation[1] documents and information regarding Christine Richardson's underinsured motorist (UEVI) bad faith claim. We conclude that the trial court abused its discretion by issuing the discovery order because it misapplied the law. We decline to award fees to either party. We reverse and remand.


         On February 11, 2010, Richardson suffered multiple injuries after being involved in a motor vehicle accident. The at-fault driver settled and paid her United Services Automobile Association (USAA) insurance policy limits of $25, 000 to Richardson.

         As a result of the accident, Richardson incurred $38, 000 in medical bills. At the time of the accident, Richardson had an insurance policy with GEICO for $35, 000 in personal injury protection (PIP) coverage, and $50, 000 in first-party underinsured motorist (UEVI) coverage. Richardson filed a claim for PIP benefits and submitted her medical bills to GEICO for payment. GEICO began to pay Richardson's PIP medical benefits. In July, GEICO required her to submit to a medical examination. Based on the examination, GEICO continued paying for chiropractic care for 12 additional weeks, but stopped paying for massage or physical therapy.

         When GEICO stopped paying for Richardson's medical treatment, Richardson retained an attorney and demanded PIP arbitration. GEICO retained attorney Sharon Dear. In October 2011, the PIP arbitrator awarded Richardson her PIP policy limit of $35, 000.

         The following year, Richardson filed a UEVI claim with GEICO. In December, GEICO sent a letter to Richardson stating that it had been waiting for additional medical records to complete its evaluation of her claim but had not received them. Based on the records it did receive, GEICO determined that the underlying settlement, which included $25, 000 from the at-fault driver's policy limits and $35, 000 from Richardson's PIP limits, fully compensated Richardson, and it denied her UEVI coverage.

         On August 19, 2013, Richardson filed a complaint against GEICO alleging, among other claims, bad faith relating to GEICO's handling of the PIP and UEVI claims. She alleged that GEICO breached its duty to deal in good faith when it arbitrarily and wrongfully denied her claim for PIP and UEVI benefits.

         In April 2014, GEICO completed its responses to Richardson's first set of interrogatories and requests for productions. It made several objections claiming both attorney-client privilege and attorney work product. Richardson filed a motion to compel and argued that GEICO waived the attorney-client privilege. She further argued that her claims file was discoverable. GEICO moved for a protective order.

         On July 16, the trial court entered an order after an in camera review of the documents GEICO submitted on Richardson's PIP and UTJVI claims. It ordered the disclosure of all documents[2] submitted for its review, subject to a protective order. The trial court relied on Cedell v. Farmers Ins. Co. of Washington, 176 Wn.2d 686, 295 P.3d 239 (2013).

         GEICO moved for reconsideration and clarification. The trial court denied the motion. While it found that GEICO's attorney was not engaged in claims adjustment work, "[t]he insured can pierce the attorney-client privilege through an exception such as civil fraud, " which Richardson asserted in her motion to compel. Clerk's Papers (CP) at 107. The court determined that the privilege was waived as to both the PIP and UTM claims because Richardson demonstrated that "a reasonable person would have a reasonable belief that an act of bad faith has occurred and after in camera review." CP at 107. Accordingly, GEICO produced the claims files in their entirety.

         In April 2015, Richardson deposed an employee designated by GEICO to testify on its behalf. During the deposition, GEICO's lawyer directed the employee to not answer questions related to any post-litigation conduct. The parties later conferred on the issue but could not resolve the dispute.

         In November, Richardson filed a motion to compel answers to her deposition questions. She also issued a subpoena to depose Dear. GEICO moved to quash Dear's subpoena, preclude her deposition, and protect her litigation file[3] from discovery. It also moved for a protective order.

         The trial court ordered GEICO to produce a copy of Dear's litigation file for in camera review and requested supplemental briefing regarding Dear's litigation file. It ordered GEICO to provide the court with a list of documents from Dear's file that were generated after August 19, 2013, and had not previously been submitted for in camera review.

         On February 9, 2016, after Richardson filed another motion to compel and GEICO responded with another motion for a protective order, the trial court ordered GEICO to provide Richardson with all documents from Dear's litigation file that the court had most recently reviewed in camera. It stated that it "will not disturb . . . prior rulings regarding the issue of waiver of attorney-client privilege." CP at 611. The court denied GEICO's subsequent motion for reconsideration.

         On February 25, after Richardson filed a renewed motion to compel discovery, the trial court entered an order. It stated that no cases in Washington addressed whether a bad faith claim could be based on an insurance company's post-litigation conduct. The trial court concluded that, under certain circumstances, the majority of the states that have decided the issue permit evidence of post-litigation conduct to be used at trial.

         The trial court determined that the weight of Washington authority would "tend toward the conclusion that an insurance company has an ongoing duty of good faith and fair dealing to its policy holders, even after a lawsuit has been commenced." CP at 957. It limited its determination to "an ongoing duty to act fairly in evaluating and resolving claims with their insured." CP at 957. It did not give Richardson the "authority to carte blanche invade [GEICO]'s work-product and/or attorney-client privilege." CP at 957.

         The court's discovery order stated:

ORDERED that [Richardson] may pursue discovery involving activities occurring after August 19, 2013 to present. [Richardson's] access to this discovery is limited as follows:
1. The responsive discovery must involve one or more employees of GEICO. There is no discovery authorized which solely involves the activities of Defense Counsel.
2. The responsive discovery must relate to one or more of the following:
a. An evaluation and/or investigation of [Richardson's] claim to the extent new information is being considered.
b. Consideration of a strategy to prolong litigation or increase costs of litigation to Plaintiff, c. The refusal to settle the case.

CP at 957 (footnote omitted). The court clarified:

This limitation is only as to discovery which might be otherwise considered "privileged." The Court has previously ruled that post August 19, 2013 activities are not per se privileged. Anything not covered by work-product and/or attorney client privilege should be ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.