Attendees at this week's National Society of Professional Insurance Investigators in Cincinnati, Ohio heard from a panel of attorneys about legal trends in five Midwestern states, including Indiana, Michigan, Missouri, Ohio, and Wisconsin.

Thomas Haley, partner at Jennings Taylor Wheeler & Haley law firm, spoke on behalf of Indiana and noted several cases that seemed to indicate a pattern of broader discovery requests. In one case, Allstate v. Scrogham, the insurer faced thousands of dollars in sanctions for not producing documents in a suitable time frame.

"If you haven't gotten [this type of request], you will get one," said Haley. "It's problematic to respond to, but there are ways we can work to limit some of these approaches by the plaintiff's lawyer. Here were some of the discovery requests that were sent to the insurance company:

The entire claim file, including paper files and electronic files;

All documents related to any computer program used to analyze the value of the case or to assist in any type of settlement assessment;

All documents the insurer used to try to control its claim costs;

All documents related to the employment compensation, the personnel files, the performance and evaluation summaries of all people on behalf of the insurance company who were involved in the claim;

Their salaries, personnel manuals and documents relating to their performance and compensation;

All training materials, training manuals, claim manuals, publications, newsletters, organizational documents, insurance company corporate filings, all documents related to your archives and record-retention and storage policies;

All documents related to prior bad-faith claims and lawsuits filed against the insurer; and

All documents for prior depositions and affidavits that have been used in bad-faith litigation against the insurer."

Haley recommended that insurers work on obtaining the information even if it is fighting the discovery request. If it waits until judgment and loses, it could face even stiffer sanctions than the ones Allstate encountered by a judge, who likely would have issues with insurance companies waiting until after judgment to comply with the discovery request.

Kurt Meyer, partner at Gregory and Meyer law firm, said that while there has not been drastic changes in Michigan law over the past year, there was evidence that the state's insurance commissioner was going to influence trends in the future.

"What we are seeing is a little more active and aggressive behavior by the insurance commissioner in our state," said Meyer. "In Michigan, unlike many states, in insurance disputes concerning appraisal, issues of causation have to be resolved in a declaratory judgment action before the matter of the amount of loss is submitted to the appraisal panel pursuant to the statute and policy. Recently, a bulletin issued by the insurance commissioner said that causation issues will be solved by the appraisal panel, contrary to the published case law in the state of Michigan. It also said that if insurance carriers refuse to appraise causation issues, it will be considered an unfair trade practice and action will be taken against the carrier, including possible suspension or revocation of their license to write insurance in the state of Michigan."

Shawn Cormier, partner at the law firm of Davis & Young, updated attendees on legal trends and changes in Ohio. She said that she expected a belt tightening concerning fraud issues in the state, which already has resulted in a bill that will restrict some medical professionals from contacting accident victims.

"Voters were a little fed up with corruption and scandal," said Cormier. "I think we'll see fraud being addressed, such as a continuing of trying to limit contact by chiropractors and direct solicitation. I think you're going to see the department of insurance, the legislative branch, and the judicial branch cracking down more on fraud than they have in the past."

Robert Cockerham, attorney at Brown & James law firm in Missouri, said an issue of vexatious refusal to pay had come to the forefront of his state in the last year.

"There have been some significant cases in Missouri. One is Dhyne v. State Farm, which involved an uninsured motorist case. The victim was struck by an uninsured motorist, no question about it, she was not at fault. State Farm did not pay and decided to continue to investigate and look at the case and look at it and look at it until they were sued by Dhyne for not paying. Just before it went to trial, State Farm settled the case and paid her the money under the policy that was due. Dhyne said that's not good enough and sued for vexatious refusal to pay."

Cockerham went on to explain that State Farm eventually lost the case and had to pay for vexatious refusal to pay because it was deemed that, even though the company had paid the claim, it had not paid the interest that could have been earned on the money it waited so long to pay.

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