Federal Judge Rejects Insurer’s Effort to Add Materials To Claims File on Eve of Trial
A federal judge in Arizona refused an insurer’s effort eight days before trial to supplement the underlying claim file in a bad faith litigation. The insurer sought to add approximately 60 pages of documents from the insured’s primary care physician and neurologist, which the insurer argued were not included in the original production of the claims file approximately two years earlier due to a “copying error.” The court rejected the insurer’s reasons for the late production of documents, and excluded the proffered supplemental documents from the trial.
Plaintiff submitted a claim for disability benefits related to a head injury, and the claim was accepted by his insurer. The insurer later terminated benefits, concluding that plaintiff was no longer disabled, and the plaintiff then brought a claim for benefits and bad faith. Plaintiff alleged, among other things, that the insurer failed to obtain all relevant medical records regarding his condition prior to terminating his benefits.
Eight days before trial was to start, the insurer informed plaintiff’s counsel that he intended to add the materials to the claim file that would be introduced as an exhibit at trial. Plaintiff’s counsel asked the court to exclude the additional documents, arguing that the records were not timely disclosed, that there was no justification for the late production, and that the late production was harmful to plaintiff’s case.
The court noted that plaintiff had been arguing for two years that information was not in the claim file that should have been, and that plaintiff’s expert opined regarding missing documentation in the claim file. The court ruled that it would be inappropriate to let the insurer add the documents into the claim file so late in the litigation. The court accepted the insurer’s explanation that inadvertence led to the copying error, but ruled that such inadvertence could not justify the failure related to “the single most important exhibit in this case,” specifically the claim file. The court also rejected the insurer’s argument that the plaintiff should have deduced earlier that the documents were part of the claim file. The court considered other remedies besides exclusion of the documents, such as allowing them in and providing an instruction to the jury, but the court concluded that exclusion was the most appropriate remedy.
This case reinforces the critical role of what often seems the most routine and mundane of tasks – production of the claims file and related documents. Both insurers and their counsel should check and recheck to make sure that all relevant documents have been appropriately produced.
To read the full opinion, please visit: McClure v. Country Life Ins. Co., No. CV-15-02597-PHX-DLR, 2017 WL 3719880 (D. Ariz. Aug. 28, 2017)