Is Work Product Protected by Attorney-Client Privilege When The Insurer’s Corporate Representative Is A Testifying Expert

Written by: Elizabeth Fulton, Esq.

In February 2019, the Supreme Court of Texas considered whether the Insurer’s corporate representative was required to turn over drafts of affidavits and e-mails with outside counsel to the opposing party when he was designated as a testifying expert by the insurance company.  Reversing the lower court, the Texas Supreme Court weighed its state discovery rules governing testifying experts against the attorney-client privilege, and found in favor of the privilege. In re City of Dickinson, 62 Tex. Sup. Ct. J. 467(Tex. 2019). In reaching this conclusion, the court determined that the protections afforded by attorney-client privilege could not be diluted by the rules governing expert discovery, finding the email communications and affidavit drafts were protected by attorney-client privilege and, thus, were not subject to compelled discovery even though the corporate representative had been designated as a testifying expert

Case Background

The City of Dickson, Texas filed a first party action against its property insurer, Texas Windstorm Insurance Association, arising from a dispute over amounts owed under its policy following damage the City sustained during Hurricane Ike. In the course of litigation, the City filed a motion for summary judgment on the issue of causation. In response to the City’s motion, Texas Windstorm included the affidavit of its corporate representative and senior claims examiner. The affidavit provided both factual and expert opinion testimony on Texas Windstorm’s behalf, and the City sought to obtain emails between the examiner and Texas Windstorm’s counsel that discussed the contents of the examiner’s affidavit.

The City argued it was entitled to the documents based on a Texas Rule of Civil Procedure that provides that an opposing party is entitled to discover all documents … provided to, reviewed by, or prepared by or for an expert in anticipation of a testifying expert’s testimony.[1] The trial court agreed and ordered Texas Windstorm to produce the emails. Texas Windstorm subsequently filed a writ of mandamus in the appellate court, arguing that the documents were attorney-client privileged. The appellate court agreed with Texas Windstorm, prompting the City to file its own writ to the Texas Supreme Court.

In ruling in favor of Texas Windstorm, the Texas Supreme Court relied heavily on the specific wording of Rule 192.3(a) and Rule 192.3(e)(6), stating:

While subsection (e) provides that a party “may discover” testifying-expert materials, nothing in its language permits such discovery when the materials are attorney–client privileged. See Tex. R. Civ. P. 192.3(e)(6). To the contrary, subsection (a) confirms that, absent some specific provision otherwise, Rule 192.3 does not require the disclosure of information that is attorney–client privileged. Because the rule does not specifically prohibit the use of the attorney–client privilege for testifying-expert materials, if material is privileged it may be withheld.

In re City of Dickinson, 568 S.W.3d 642, 646 (Tex. 2019)

The Texas Supreme Court declined to carve out any additional exceptions to the rules governing privileged documents and took the approach that expert discovery was permissive by use of the word “may.” Thus, it is likely that were an insurer to raise the same argument in opposition to producing this information, the courts of Georgia and South Carolina would reach the same conclusion as the Texas Supreme Court, as their discovery rules contain language nearly identical to Texas.[2]

Conclusion

More often than not, coverage disputes, especially in first-party bad faith litigation, turn on whether the insurer followed its own policies and procedures and whether or not its claims professionals acted reasonably in adjusting the claim. Accordingly, sometimes the best (if not the only) person to testify as to whether the insurer’s representative acted appropriately is someone within the company. The Dickinson decision affords not only insurers but other specialized industries the comfort that they may disclose expert witnesses within the company without fear of inadvertent disclosure of their trial strategy through use of the discovery rules governing testifying experts.

[1] See Tex. R. Civ. P. 192.3(e)(6); 194.2(f)(4)(A).

 

[2] See, S.C.. R. Civ. P. 26(b)(1) and 26(b)(4); O.C.G.A. 9-11-26(b)(1) and O.C.G.A. 9-11-26(b)(4)