State Farm Mutual Automobile Insurance Company v. Honorable Brian C. Edwards

CourtKentucky Supreme Court
DecidedJune 14, 2023
Docket2022 SC 0145
StatusUnknown

This text of State Farm Mutual Automobile Insurance Company v. Honorable Brian C. Edwards (State Farm Mutual Automobile Insurance Company v. Honorable Brian C. Edwards) is published on Counsel Stack Legal Research, covering Kentucky Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State Farm Mutual Automobile Insurance Company v. Honorable Brian C. Edwards, (Ky. 2023).

Opinion

RENDERED: JUNE 15, 2023 TO BE PUBLISHED

Supreme Court of Kentucky 2022-SC-0145-MR

STATE FARM MUTUAL AUTOMOBILE APPELLANT INSURANCE COMPANY

ON APPEAL FROM COURT OF APPEALS V. NO. 2021-CA-1131 JEFFERSON CIRCUIT COURT NO. 20-CI-005874

HONORABLE BRIAN C. EDWARDS, JUDGE APPELLEE JEFFERSON CIRCUIT COURT

AND

BETTY IRVIN; DEBORAH COMBS; AND KENTUCKY FARM BUREAU INSURANCE COMPANY REAL PARTIES IN INTEREST/APPELLEES

OPINION OF THE COURT BY JUSTICE KELLER

AFFIRMING

State Farm Mutual Automobile Insurance Company (State Farm) appeals

from the Court of Appeals’ denial of its petition for a writ of prohibition to

prevent Judge Brian C. Edwards of the Jefferson Circuit Court from enforcing

his discovery orders. After a thorough review of the record presented and the

applicable law, we affirm the Court of Appeals.

I. BACKGROUND

On June 5, 2018, Betty Irvin was involved in an automobile collision with

Deborah Combs. Combs was insured by State Farm. The day after the

accident, a State Farm Claim Specialist contacted Irvin, a 73-year-old widow, by phone and attempted to settle the claim. This phone conversation occurred

while Irvin was at the body shop recommended by State Farm, and Irvin alleges

that she is hard of hearing. Nevertheless, State Farm asserts that during this

phone conversation, State Farm and Irvin reached an oral agreement whereby

Irvin accepted $1,530.00 to settle the claim.

On October 12, 2020,1 Irvin filed suit in Jefferson Circuit Court against

Combs and State Farm.2 She asserted a negligence claim against Combs and a

third-party statutory bad faith claim under Kentucky’s Unfair Claims

Settlement Practices Act (the “UCSPA”), KRS 304.12-230, against State Farm.

Concurrently with filing her complaint, Irvin served interrogatories and

requests for discovery on State Farm.

On November 12, 2020, State Farm filed a motion to bifurcate for trial

the bad faith claim from the negligence claim and to stay discovery on the bad

faith claim until the negligence claim was resolved. State Farm argued that

because both Combs and State Farm asserted the oral settlement agreement as

a defense to the negligence claim, the trial court would first need to determine

whether the oral settlement agreement was enforceable.

1 In January of 2020, Irvin and another named plaintiff filed a class action lawsuit against State Farm. This lawsuit was removed to federal court, and Irvin eventually moved to dismiss it. Her motion was granted, and the lawsuit was dismissed without prejudice. 2 Irvin also named Kentucky Farm Bureau Insurance Company, her insurer, as a defendant; however, her claim against Farm Bureau is not relevant to this writ petition appeal.

2 On January 5, 2021, the trial court entered an order bifurcating the bad

faith claim against State Farm from the other claims. The order did not address

State Farm’s motion to stay discovery. State Farm subsequently filed an

“Amended Motion to Limit and Stay Discovery,” arguing that the trial court

should not only stay discovery on the bad faith claim but should also stay

discovery as to all issues except those related to the enforceability of the oral

settlement agreement. State Farm argued both that the failure to stay discovery

would result in a burdensome discovery process that might later prove moot

and also that the failure to stay discovery would require it to divulge privileged

information.

On February 19, 2021, the trial court entered an order denying State

Farm’s motion to limit and stay discovery. The trial court found “a preemptive

stay on discovery based on speculative concerns is not justified.” It further

stated, “The question regarding whether there was an agreement reached by

the parties is intertwined with the other factual questions in dispute. The

[c]ourt believes that this case is likely to progress more expeditiously without

an Order limiting or holding discovery in abeyance.” Finally, the trial court

instructed the parties that “if during the course of the Discovery process, a

party deems it necessary to seek a protective order in order to prevent the

disclosure of privileged information, as always, they may seek such relief from

this [c]ourt upon the demonstration of the requisite showing of good cause.”

For reasons that are not apparent from our limited record, on March 11,

2021, the trial court entered an order bifurcating the bad faith claim from the

3 “bodily injury claims . . . for purposes of trial” and staying discovery on the bad

faith claim until after the negligence claim was resolved. Then, on May 6, 2021,

the trial court entered an order vacating its prior orders entered on January 5

and March 11. This left the February 19 order denying State Farm’s motion to

limit and stay discovery as the most recent order to govern the case.

On May 27, 2021, State Farm served answers to Irvin’s interrogatories

and responses to her requests for production of documents. In doing so, State

Farm not only made numerous general objections, but also qualified its

response to almost every single discovery request with at least one individual

objection. Despite the trial court’s previous ruling, State Farm objected to

several requests on the basis that they were “not relevant to whether the oral

settlement agreement is enforceable.” Further, State Farm objected to several of

the requests as violative of the attorney-client privilege and work-product

doctrine but failed to move for a protective order as suggested by the trial

court.

On July 7, 2021, Irvin filed a motion “to compel State Farm to provide its

entire claims file and provide complete responses to the discovery served upon

it with the Complaint.” State Farm responded to this motion, arguing that Irvin

did not make a good faith effort to resolve the discovery dispute before filing the

motion, did not provide sufficient notice of the hearing on the motion, and did

not support the motion with an attached memorandum, all as required by local

rules. Then, on July 28, 2021, State Farm filed a supplemental response,

asserting that its discovery responses complied with the trial court’s previous

4 orders and that the trial court should stay further discovery on the bad faith

claim.

On August 20, 2021, the trial court entered an opinion and order

denying State Farm’s renewed motion to stay and granting Irvin’s motion to

compel. The trial court acknowledged that “Kentucky precedent does favor

bifurcation and a stay of discovery on bad faith claims until after the tort claim

is disposed of,” but found that “the unique intertwined nature of the claims

here makes such separation impractical.” The trial court went on to order

“State Farm to supplement its responses in accordance with [Irvin]’s Motion

within 20 days of issuance of this Order.”

On August 26, 2021, State Farm filed a motion to reconsider arguing

that once the trial court decided to deny its request for a stay of discovery, the

court should have considered the validity of the legal grounds upon which

State Farm objected to the discovery requests, including relevancy, breadth,

undue burden, attorney-client privilege, work-product doctrine, and trade

secrets.

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State Farm Mutual Automobile Insurance Company v. Honorable Brian C. Edwards, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-farm-mutual-automobile-insurance-company-v-honorable-brian-c-ky-2023.