Discovery in Suits Against Insurers are Aggressive and Expensive
Post 4837
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The USDC conducted a discovery conference with the parties concerning their discovery disputes. Federal discovery rules are accorded a broad and liberal treatment to achieve their purpose of adequately informing litigants in civil trials. At some point discovery yields diminishing returns, needlessly increases expenses, and delays the resolution of the parties’ dispute. Finding a just and appropriate balance in the discovery process is one of the key responsibilities of the Court.
In Kwame Moore v. Western World Insurance Company, Civil Action No. 3:23-cv-3029-KHJ-MTP, United States District Court, S.D. Mississippi, Northern Division (July 12, 2024) the USDC dealt with discovery disputes between parties who could not resolve their differences.
THE DISCOVERY RULE
Federal Rule of Civil Procedure 26(b)(1) provides that: “Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefits.”
FACTUAL BACKGROUND
According to Defendant, “Plaintiff has failed to produce emails, text messages and other documents which Western World knows were sent to Plaintiff.” As an example, Defendant stated that in response to a subpoena, Tom Weems (a third party who provided a report to Plaintiff indicating that hail caused damage to Plaintiff’s building) produced text messages between he and Plaintiff, which have not been produced by Plaintiff in response to requests for such information.
Plaintiff, through counsel, asserts that he has “conducted a search of his files and has no other documents to produce” and “cannot produce documents he does not have.”
Ordinarily, the representation of a party’s attorney that no additional documents exist is sufficient to defeat a motion to compel absent credible evidence that the representation is inaccurate. At this time the record does not establish that Plaintiff did or did not conduct a reasonable search. Plaintiff does not explain what efforts he made to find and produce responsive information or why responsive information he once possessed is no longer in his possession. Defendant has also not made this showing. Thus, Defendant has not demonstrated that Plaintiff is unlawfully withholding responsive information despite Plaintiff’s representations. Without more, counsel’s representation that Plaintiff does not possess responsive information is sufficient to defeat the Motion to Compel.
The denial of the Motion to Compel, however, was issued without prejudice to Defendant’s right to reassert it if Defendant can show Plaintiff possesses the information, failed to conduct a reasonable search, wrongfully disposed of the information, or otherwise violated his duties in discovery.
Defendant also requested that the Court compel a forensic examination of Plaintiff’s computers, cellphones, and mail servers. The Court found that the request is premature. If Plaintiff no longer possesses this information, the Court cannot determine whether a forensic examination is warranted. Thus, this request was denied without prejudice.
The Court also noted that Plaintiff also argued that he should not be required to produce duplicative documents which are already in Western World’s possession. However, it is not a bar to the discovery of relevant material that the same material may be in the possession of the requesting party or obtainable from another source. That Plaintiff makes this objection is curious given Plaintiff’s representations that he has no such information, duplicative or otherwise. To the extent Plaintiff is withholding responsive information based on this or any other objection, the Court grants the Motion to Compel.
On or before July 22, 2024, Plaintiff shall produce any responsive information previously withheld based on this objection or inform Defendant in writing that he is not withholding information based on this objection.
ZALMA OPINION
Before I retired from the practice of law I was an active insurance litigator and dealt with multiple annoying and overbroad discovery disputes designed to cost the insurer or the policyholder, rather than obtain information that would assist in the trial of the matter. The bludgeon of discovery became a weapon used to force a settlement unfavorable to the insurer or policyholder to avoid excessive attorneys fees and costs. The court tried to calm the excesses.
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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Happy Law Day
ZIFL – Volume 30, Issue 9 – May 1, 2026
Read the full article at https://www.linkedin.com/pulse/zalmas-insurance-fraud-letter-may-1-2026-barry-zalma-esq-cfe-2tywc, see the video at at and at https://zalma.com/blog plus more than 5300 posts.
THE SOURCE FOR THE INSURANCE FRAUD PROFESSIONAL
ZIFL – Volume 30, Issue 9 – May 1, 2026
Zalma’s Insurance Fraud Letter (ZIFL) continues its 30th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year and is written by Barry Zalma.
DOJ Creates National Fraud Enforcement Division
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On April 7, 2026, the Acting Attorney General, Todd Blanche, issued a memorandum establishing the Department of Justice National Fraud Enforcement Division (NFED). The memo describes an ambitious, but perhaps redundant, vision for this ...
When Abalone Died As a Result of Multiple Causes The Efficient Proximate Cause Requires Payment
Post number 5345
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In American Abalone Farms, LLC v. Star Insurance Company et al., H052643, California Court of Appeals, Sixth District (April 27, 2026) the Court of Appeals dealt with an insurance coverage issue that required application of the efficient proximate cause doctrine.
FACTS
American Abalone Farms, LLC ("American Abalone" ) operates an aquaculture farm in Santa Cruz County, California, raising abalone in tanks. In August 2020, the CZU Lightning Complex Fires led to a prolonged power outage and road closures near the farm. As a result, the farm’s water pumps failed, causing the death of most of the ...
Breach of a Specific Condition Precedent Is a Complete Defense
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In United Services Automobile Association and State Farm Mutual Automobile Insurance Company v. Anthony Wenzell, 2026 CO 25 (Colo. Apr. 27, 2026) Anthony Wenzell was rear-ended in a car accident. He had a significant prior 2014 accident that required back surgery.
Wenzell claimed underinsured-motorist (UIM) benefits under three policies: (1) the tortfeasor’s liability policy, (2) his own primary UIM policy with State Farm, and (3) an excess UIM policy issued by USAA (under his brother’s policy, which contained an “other insurance” clause making USAA’s coverage excess over any collectible insurance).
After receiving the claims, both USAA and State Farm repeatedly requested that Wenzell execute comprehensive medical-release authorizations so they could obtain his full medical records and ...
It is Fraud to Make the Same Claim Twice
Read the full article at https://www.linkedin.com/pulse/fraud-make-same-claim-twice-barry-zalma-esq-cfe-c4g8c and at https://zalma.com/blog.
Chutzpah: After Being Paid for a New Roof Insured Makes Second Claim For Same Damages
Post number 5347
No One is Entitled to be Paid for the Same Loss Twice
In Mohammed Ali Khalili v. State Farm Lloyds, No. 14-25-00611-CV, Court of Appeals of Texas (April 30, 2026) Khalili maintained a State Farm Lloyds homeowners insurance policy for decades. In 2008 he filed a roof-damage claim; State Farm paid him to replace the entire roof (shingles and gutters). Khalili never replaced the roof and repeated his claim.
BACKGROUND
In 2021 he filed a second roof claim. State Farm’s inspectors found the roof “very old” with extensive non-storm-related damage. The claim was denied because (1) the damage did not exceed the deductible and (2) State Farm had already paid for a full roof replacement.
PROCEDURAL HISTORY
State Farm filed motion for summary...
It is Fraud to Make the Same Claim Twice
Read the full article at https://www.linkedin.com/pulse/fraud-make-same-claim-twice-barry-zalma-esq-cfe-c4g8c and at https://zalma.com/blog.
Chutzpah: After Being Paid for a New Roof Insured Makes Second Claim For Same Damages
Post number 5347
No One is Entitled to be Paid for the Same Loss Twice
In Mohammed Ali Khalili v. State Farm Lloyds, No. 14-25-00611-CV, Court of Appeals of Texas (April 30, 2026) Khalili maintained a State Farm Lloyds homeowners insurance policy for decades. In 2008 he filed a roof-damage claim; State Farm paid him to replace the entire roof (shingles and gutters). Khalili never replaced the roof and repeated his claim.
BACKGROUND
In 2021 he filed a second roof claim. State Farm’s inspectors found the roof “very old” with extensive non-storm-related damage. The claim was denied because (1) the damage did not exceed the deductible and (2) State Farm had already paid for a full roof replacement.
PROCEDURAL HISTORY
State Farm filed motion for summary...
What Must be Done after Notice of a Claim is Received by the Insurer
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A first party property policy does not insure property: it insures a person, partnership, corporation or other entity against the risk of loss of the property. Before an insured can make a claim for indemnity under a policy of first party property insurance the insured must prove that there was damage to property the risk of loss of which was insured by the policy. The obligation imposed on the insured ...