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POST-LITIGATION CONDUCT: DISCOVERABILITY AND ADMISSIBILITY
By Mike Abourezk
Often, in a bad faith case, an insurer will assert attorney-client privilege and work-product to prevent discovery of post-litigation conduct in the underlying (e.g., contract or workers' compensation)case. The insurer will allege that evidence of post-litigation conduct by it or its attorney can not be used to show bad faith and is inadmissible. Generally, the insurer fails to mention that there is a split among jurisdictions, and South Dakota has followed those jurisdictions which permit reliance on post-litigation misconduct as a basis for bad faith. (Emphasis added).
See also, Kyriss v. Aetna Life and Cas. Co., 624 F.Supp. 1130, 1133 (D. Mont.1986) (District court concluded that evidence of insurer's litigation conduct in bad faith action must be considered.); Sobley v. Southern Natural Gas Co., 302 F.3d 325, 335 (5th Cir. 2002), reh'g and reh'g en banc denied, 48 Fed. Apx. 919 (5th Cir. 2002) ("evidence of post-denial conduct by the insurer is relevant under Mississippi law to establish a claim for bad faith denial of insurance coverage, . . .."); T.D.S. Inc. v. Shelby Mutual Insurance Co., 760 F.2d 1520, (11th Cir. 1985), rehearing denied, 769 F.2d 1485 (11th Cir.1985)(evidence of insurer's litigation conduct admitted into evidence); Home Ins. Co. v. Owens, 573 So.2d 343 (Fla. App. 4th Dist. 1990) (evidence of insurer's answer to a complaint and response to admission that denied coverage introduced in first-party bad faith action); Gooch v. State Farm Mut. Auto Ins. Co., 712 N.E. 2d 38, 42-43 (Ind. App.1999) (evidence of post-litigation conduct admissible because it showed insurer's continuing "refusal to further investigate a matter brought to its attention in order to give its counsel the factual predicate upon which to rest its Motion to Dismiss"); Southerland v. Argonaut Ins. Co., 794 P.2d 1102, 1106 (Colo. App.1990)(post-litigation misconduct relevant to show insurer's pattern in dealing with insurance claimant); O'Donnell ex. rel. Mitro v. Allstate Ins. Co., 734 A.2d 901, 906 (Pa. Super. 1999)(bad faith suits "may extend to the misconduct of an insurer during the pendency of litigation); Tucson Airport Authority v. Certain Underwriters at Lloyd's, London, 918 P.2d 1063, 1066 (Ariz. App. Div. 2 1996)(insured's claim was based on "a course of 'wrongful and tortious'" conduct evidenced by the insurer's actions and communications during the coverage actions.")
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