Determining the scope of discovery can be challenging, particularly when an insurance bad faith claim is involved. Courts often face the difficult decision of weighing the importance of preserving attorney-client privilege with the public policy rationale of protecting an insured against their insurer’s bad faith behavior. The Supreme Court of South Carolina recently recognized this dilemma by rejecting a hardline approach to bad faith discovery disputes and adopting a case-by-case analysis.
The case, In re Mt. Hawley Ins. Co.,1 arose out of a construction defect claim. ContraVest Construction Company (“ContraVest”) constructed a development in South Carolina and was later sued for alleged defective construction. ContraVest sought coverage for the lawsuit from its insurers, including Mount Hawley Insurance Company (“Mount Hawley”), which had provided excess commercial liability insurance to ContraVest during the relevant timeframe. Mount Hawley denied the claim, which prompted ContraVest to sue it for bad faith, breach of contract, and unjust enrichment.
Reprinted courtesy of Ashley L. Cooper, Saxe Doernberger & Vita, P.C. and Bethany L. Barrese, Saxe Doernberger & Vita, P.C.
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