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Court Prevents Deposition of Counsel in Coverage Dispute (PA)

January 29, 2016

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<p dir="LTR" align="LEFT">In <em>JCT Leasing LLC. V. Travelers Casualty Insurance Company</em>, Plaintiffs sued their  insurer, seeking damages for breach of contract and bad faith arising out of a fire claim. Plaintiffs sought to depose defendant’s coverage counsel, and the court needed to evaluate whether attorney-client privilege barred his deposition.</p>
<p dir="LTR" align="LEFT">After plaintiffs submitted a claim to Travelers for fire at their property, Travelers retained Ernest Koshineg, Esq. to advise them on whether plaintiffs’ claim was covered. Upon advice from counsel, Travelers notified plaintiffs that it was rescinding their policy, as the policy was issued based on the representation that a sprinkler system was in the warehouse, when in fact there was not. Plaintiffs notified defendant that they intended to depose Koshineg and required him to bring materials he prepared while assisting in the claims investigation and policy rescission process. Defendant moved for a protective order, which was ultimately granted.</p>
<p dir="LTR" align="LEFT">Plaintiffs argued that Koshineg worked as part of the defendant’s claims adjusting team and should be considered to be an investigator for the insurer because he became involved so early on in the matter. But the Court found that Mr. Koshineg played a traditional lawyer’s role of providing legal advice to a client, and did not serve as a member of defendant’s claims investigation team and thus the attorney–client privilege applied.</p>
<p dir="LTR" align="LEFT">Plaintiffs further argued that even if privilege existed, it had been waived because the Vice President, who advised the plaintiffs of their policy rescission testified that in drafting the rescission letter, he relied on the advice of counsel. But the Court found that defendant had not waived the privilege because the defendants did not assert "reliance on course" as an affirmative defense to the lawsuit.</p>
Thanks to Chelsea Rendelman for her contribution to this post and please write to <a href="mailto:mbono@wcmlaw.com" target="_blank" rel="noopener">Mike Bono </a>for more information.

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