A Crash and a Disputed Insurance Claim
In February 2020, Melissa Eddy was a passenger in a car driven by her husband, Alexis Eddy, when another driver crashed into their vehicle. The collision left Melissa with significant neck injuries that eventually required spinal surgery and $250,000 in medical bills. The other driver was determined to be at fault, and that driver’s insurance company offered and ultimately paid the Eddys the full $100,000 policy limit available under the liability coverage in June 2021.
The Eddys, though, believed that this amount did not fully compensate them for Melissa’s injuries. They therefore turned to their own insurance company, Farmers Property Casualty Insurance Company, which had issued an underinsured motorist policy providing up to $250,000 in coverage for injuries caused by drivers whose insurance was insufficient. In June 2021, the Eddys formally notified Farmers that the other driver’s insurance company had offered its policy limit of $100,000. The Eddys then submitted their claim for $150,000, providing extensive documentation including medical records, medical bills, and a written narrative from Melissa’s surgeon explaining that her spinal surgery was directly related to the injuries caused by the crash. The Eddys also provided medical releases, a Medicare questionnaire, and a list of medical providers so that the insurer could evaluate the claim.
Negotiations Break Down
In July 2021, Farmers offered $33,312 to settle the underinsured motorist claim. The Eddys rejected that offer and demanded approximately $148,000. Farmers responded with a slightly higher offer of $38,000.
By August 2021, the negotiations had stalled. The Eddys filed a lawsuit seeking to enforce the coverage under their policy. At that stage, the lawsuit was limited to the issue of insurance coverage. It did not include a claim that Farmers had acted in bad faith.
Several months later, the dispute was resolved. In late March 2022, Farmers offered to settle the claim for $150,000 if the Eddys would waive any potential bad faith claims against the company. The Eddys refused, and the following month, Farmers made the same $150,000 offer without that condition. The Eddys accepted the unconditional offer in April 2022, and the lawsuit was dismissed shortly afterward.
The Case Turns to the Insurance Company’s Files
The settlement did not end the legal dispute. In July 2022, the Eddys filed a second lawsuit against Farmers, this time alleging that the insurer had handled their claim in bad faith.
They argued that Farmers had delayed investigating and resolving the claim and had offered settlement amounts far below the value of Melissa Eddy’s injuries in the hope that the couple would eventually accept a low payment. The lawsuit sought compensatory damages, punitive damages, attorney fees, and interest.
Like many insurance bad-faith cases, the dispute quickly turned to the insurer’s internal records. The Eddys asked the court to require Farmers to produce its complete claims file for the accident. This file typically contains internal notes, evaluations of the claim, communications among insurance employees, and sometimes communications with attorneys advising the insurer.
The Eddys argued that the file would reveal whether Farmers had handled the claim fairly or whether it had delayed payment without reasonable justification. Farmers produced some materials but refused to turn over documents created after August 27, 2021, the date when the first lawsuit had been filed. The company argued that those documents were protected by attorney-client privilege, a rule courts follow which keeps confidential communications between a lawyer and client private, and by the work product doctrine, a legal tradition that protects a lawyer’s notes, strategies, and other materials prepared in anticipation of litigation.
For consumers who claim that an insurer acted in bad faith, the company’s internal records often play a central role. These records may be the primary, sometimes the only, evidence of whether an insurer acted reasonably or improperly delayed payment of a claim. This documentation can reveal how thoroughly the claim was investigated and what criteria the company used in making its decision.
The Ohio Supreme Court Interprets the Statute
The dispute over access to the insurance company’s files eventually reached the Ohio Supreme Court. For years, courts had issued decisions that often allowed people suing insurers for bad faith to obtain large portions of the company’s internal claims file.
In this case, however, the Supreme Court said that those earlier court decisions do not control the issue. Instead, the justices interpreted an Ohio statute that protects communications between an insurance company and its lawyers.
Under that law, those communications cannot automatically be turned over in a lawsuit. A person suing an insurance company must first show some evidence that the company may have acted improperly. If that initial showing is made, a judge can then review the documents privately and decide whether any of them should be shared.
The court indicated that notes and strategies lawyers create while preparing for a lawsuit are usually protected; this is known as the work product doctrine. Those materials are only released in unusual situations when the consumer provides a strong reason to see them, backed up by evidence. Attorney-client privilege covers confidential communications between a client and an attorney made for the purpose of obtaining legal advice, but not ordinary business discussions. One of the questions in the case was what qualifies as the “work product” of an attorney. The insurance company argued that once the lawsuit was filed in August 2021, the entire claims file became part of the legal preparation for the case and should therefore be protected from disclosure.
Applying those principles, the Ohio Supreme Court ruled that the lower court should not have ordered Farmers to produce its entire claims file up to the date the claim was paid. Instead, the trial court must determine whether the Eddys can first demonstrate bad faith. If they can, the judge must then examine the disputed documents privately to determine if they may be shared with the Eddys.
The Court reversed the lower court’s decision and sent the case back to the trial court for further proceedings.
What the Decision Means for Consumers
Although the case arises from a single car accident and insurance claim, the ruling could affect many future disputes between policyholders and insurance companies.
Bad faith claims often depend on evidence of how an insurer evaluated a claim and why it made particular decisions. Those details frequently appear only in the insurer’s own internal records.
The Supreme Court’s decision makes clear that people suing an insurance company for bad faith can no longer automatically obtain the company’s internal communications with its lawyers. Instead, they must first present some evidence suggesting the insurer may have acted improperly. Only after that showing can a judge review the documents privately and decide whether any of them should be released.
The decision reshapes how insurance bad-faith cases may proceed in Ohio. For policyholders, it may make obtaining internal records more difficult; for insurers, it reinforces the protections surrounding communications with attorneys and materials prepared during litigation.