U.S. DISTRICT COURT GRANTS INSURED’S MOTION TO COMPEL PRODUCTION OF OTHER, NEARBY ROOF DAMAGE CLAIM FILES

October 16, 2018

Last week, the United States District Court for the Western District of Texas, El Paso Division, granted the insured’s motion to compel Nationwide Mutual Insurance Company to produce its claim investigation file concerning a property separate from the property underlying the lawsuit.  In Crossland v. Nationwide Mutual Insurance Co., No. EP-18-CV-00085-DCG, 2018 WL 4905354 (W.D. Tex. [El Paso Division], Oct. 09, 2018, mem. op.), Nationwide denied Crossland’s property-damage claim. Consequently, Crossland sued Nationwide for claims of breach of contract and breach of the duty of good faith and fair dealing. During litigation, Crossland sought documents from Nationwide’s internal claim investigation file regarding a separate building that Crossland owned. Crossland contended that the documents were relevant because the separate building was damaged during the same storm that damaged the building at issue in the lawsuit and Nationwide paid the claim on the separate building while denying the claim on the building at issue. Nationwide objected to Crossland’s request for documents on the grounds that the claim investigation file for the separate building was neither relevant nor reasonably calculated to lead to the discovery of admissible evidence.  

 In support of its argument that the outside claim file was irrelevant, Nationwide relied on cases where courts have previously denied requests for outside claim files on the reasoning that the outside claims (1) “arose in [a] different factual context and could involve different policy terms or a different type of policy and (2) unrelated third-party matters cannot reasonably support whether a different claim was undervalued.” The court, however, granted Crossland’s motion to compel concluding that Crossland’s discovery sought documents for a building “where the factual circumstances were remarkably similar to the building at issue.” In finding the previous cases distinguishable, the court reasoned that the separate building was owned by Crossland, located within two miles of the building at issue in the lawsuit, and also sustained roof damage in the same storm. The court further reasoned that comparison of the files “would provide Crossland with an understanding of why the roof damage on the two buildings resulted in different claim outcomes.”