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Case Bulletin – Supreme Court of Appeals of West Virginia Rules to Protect Identity of Non-Party Insureds in Unfair Trade Practices Claim

In the case State ex rel. State Farm Mutual Automobile Ins. v. Hon. Jeffrey D. Cramer, Judge; William Bassett and Sarah Bassett, William and Sarah Bassett sued their insurer, State Farm, after William Bassett was denied the available $100,000 in liability coverage in three applicable policies for his uninsured motorists coverage claim. State Farm eventually settled all of Bassett’s claims against it, except for the unfair claim settlement practices claim in which Bassett alleged that State Farm routinely failed to present commercially reasonable options of additional uninsured motorist coverage to its policyholders as required by law. Bassett alleged in the suit filed in the Circuit Court of Wetzel County that State Farm’s misconduct constituted a general business practice.

 

In the course of the proceedings, the Circuit Court granted Bassett’s motion to compel answers to interrogatories. The interrogatories at issue asked for the names, addresses, and telephone numbers of State Farm insureds in West Virginia who may have experienced difficulties regarding their uninsured motorists coverage. Basset asserted he sought this information because he believed these individuals were potential fact witnesses through which Basset could establish that State Farm’s business practices violated the law.

 

State Farm  subsequently asked the Supreme Court of Appeals of West Virginia to prohibit the enforcement of the order granting Bassett’s discovery request. State Farm argued to the Supreme Court that enforcement of the order  would allow Bassett to contact over 400 non-party State Farm policyholders without their prior consent, which it alleged would violate their right to privacy. In the alternative, State Farm asked the Court to redact the non-party insureds’ identifying information or preclude Bassett from contacting the non-party insureds without their prior consent. The Supreme Court of Appeals of West Virginia ruled in favor of State Farm, finding that the circuit court committed error by failing to bar the disclosure of the names, addresses, and telephone numbers of State Farm’s other insureds.

 

In explaining its ruling, the Supreme Court noted that the basis of Bassett’s claim was that State Farm’s uninsured selection/rejection form was materially different from the Insurance Commissioner’s prescribed form. To that end, State Farm could provide the form it provided to the non-party insureds and could disclose, numerically, when and how often State Farm paid additional coverage in connection with the form it used. However, the disclosure of the names, addresses, and telephone numbers of the non-party insureds was unwarranted in the context of Bassett’s claim, which the Supreme Court observed centered on the selection/rejection form. The Court further noted in footnote 9 that the non-party insureds had not consented to the release of their names, addresses, and telephone numbers.