Gunn v. Automobile Insurance Co. of Hartford

DISSENTING OPINION BY

LALLY-GREEN, J.:

¶ 11 respectfully dissent. First, I would hold that the trial court’s order was ap-pealable under Pa.R.A.P. 313. As the Majority notes, an appealable collateral order: (1) is separable from and collateral to the main cause of action; (2) implicates a right that is too important to be denied review; and (3) presents a question where the claim will be irreparably lost if review is postponed until final judgment in the case. Pa.R.A.P. 313.

¶ 2 In the instant case, Barbara Gunn filed a UIM claim and a bad faith claim concurrently. Appellant filed a motion to sever the bad faith claim and to stay that claim, and any discovery thereon, pending resolution of the UIM claim. The trial court denied that motion, and ordered that both actions should proceed simultaneously, including for discovery purposes. As the Majority notes, that scheduling order is separable from and collateral to the merits of either the UIM claim or the bad faith claim. Thus, the first prong of Rule 313 is met.

*513¶ 3 I would further hold that the second prong is met. Our Courts have routinely held that a colorable claim of privilege and/or disclosure of confidential material will pass the second prong of the test. See T.M. v. Elwyn, Inc., 950 A.2d 1050 (Pa.Super.2008) (collecting cases); Berkeyheiser v. A-Plus Investigations, Inc., 936 A.2d 1117 (Pa.Super.2007).

¶4 The trial court’s order implicates these claims. Bad faith actions explore the process by which the insurer handles the underlying claim. That process may commonly include reliance on privileged and otherwise-confidential information. The trial court’s discovery order carries a significant risk that such information will be disclosed prematurely, before there is even an adverse ruling on the underlying claim. In my view, there would most often be no basis for a bad faith claim if the trial court rules in the insurer’s favor on the underlying claim. Yet, insurers will be routinely compelled to disclose confidential material during the underlying litigation simply because the plaintiff chooses to raise a bad faith claim along with the UIM claim. As the Wisconsin Court of Appeals explained:

In litigating a claim of bad faith, the [insured] will be entitled to discovery of [the insurer’s] work product and attorney/client material containing information relevant as to how the [insured’s] claim was handled. This information would include [the insurer’s] internal determination to deny benefits, its evaluation as to how a jury may value the [insured’s] claim and its approach to settlement. This information would not be available to the [insured] if they were proceeding solely on a claim for UIM benefits.

Dahmen v. Am. Family Mut. Ins. Co., 2001 WI App 198, 247 Wis.2d 541, 635 N.W.2d 1, 5 (Ct.App.2001). I am also concerned that insurers will be forced into unfair settlements as a result of having to litigate and provide discovery on both claims at the same time. These concerns go beyond the individual parties before this Court. Indeed, they implicate the handling of all UIM/bad faith claims litigated concurrently in Pennsylvania. Thus, I would hold that the trial court’s order satisfies the “importance” prong of Rule 313.

¶ 5 Finally, I would hold that the third prong is met. If the insurer is forced to prematurely disclose confidential and/or privileged information, that claim would be irreparably lost if review is postponed until final judgment. See T.M.; Berkeyheiser.

¶ 6 Thus, I would hold that the trial court’s order is appealable and collateral. On the merits, I would further hold that the highly regarded trial court abused its discretion in failing to stay the bad faith claim and discovery thereon. For the reasons outlined above, I am of the view that bad faith claims (and discovery thereon) should be routinely stayed until the resolution of the underlying UM/UIM claim. I would hold that the benefits of judicial economy and efficiency cited by the trial court are generally outweighed by the danger of unfair prejudice to the insurer. Thus, I respectfully dissent.