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 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.
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.
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.
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,
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.
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
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.
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 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
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.
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
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 from discovery.
It also moved for a protective order.
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
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.
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.
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.
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
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 ...