Erickson | Sederstrom's attorneys’ practice in Nebraska, Iowa, Kansas, Missouri, and South Dakota. We represent insurance carriers across the nation. Each state has its own discovery rules and caselaw regarding the discoverability of pre-suit investigation, claims files, etc. It is vitally important for our clients to be cognizant of differing interpretations in order to protect their investigations, statements, evaluations, reserves, etc.

Nebraska

“Insurance report or other communication made by an insured to his liability insurer, concerning an event which may be made basis of claim against him covered by policy, is privileged communication, as being between attorney and client, if policy requires company to defend him through its attorney, and communication is intended for information or assistance of attorney in so defending him; burden is on party opposing discovery to show that the material sought is privileged.” Shahan v. Hilker, 241 Neb. 482, 488 N.W.2d 577 (1992).
“The weight of authority appears to support the rule that a statement by an insured to his liability insurer is privileged. According to the weight of authority, a report or other communication made by an insured to his liability insurance company, concerning an event which may be made the basis of a claim against him covered by the policy, is a privileged communication, as being between attorney and client, if the policy requires the company to defend him through its attorney, and the communication is intended for the information or assistance of the attorney in so defending him.” Brakhage v. Graff, 190 Neb. 53, 56, 206 N.W.2d 45, 47–48 (1973).
The work product doctrine protects documents and tangible items prepared in anticipation of litigation. Greenwalt v. Wal-Mart Stores, Inc., 253 Neb. 32 (1997).

Missouri

Incident report prepared by an employee of a company for insurance purposes in anticipation of litigation was protected from discovery by the attorney-client privilege. Ratcliff v. Sprint Missouri, Inc., 261 S.W.3d 534 (Mo. Ct. App. 2008). In support of its holding, the court noted that “a communication made between an insured to his liability insurer during the course of an existing insured-insurer relationship is privileged under the attorney-client privilege.” Id. Further, the work product privilege precludes discovery of materials involving counsel in anticipation of litigation, including an attorney’s mental impressions. Id.
Statements made by an insured to its insurer are privileged. State ex rel. Cain v. Barker, supra. Cain. State ex rel. Day v. Patterson, 773 S.W.2d 224, 227 (Mo. Ct. App. 1989)
Ordinary work product is discoverable only through a showing of a substantial need for the materials and that the party cannot obtain the material through any other means. Fed. R. Civ. P. 26(b)(3).
Opinion work product has absolute immunity unless there are extraordinary circumstances such as the attorney was engaged in illegal conduct. In re Murphy, 560 F.2d 326, 336 [n. 19] (8th Cir. 1977).
Any communication between insured and insurer which relates to the former's duty to report incidents and the latter's duty to defend and to indemnify falls within the attorney-client privilege and is excluded from discovery. V.A.M.R. 56.01(b)(1). Id.

Kansas

K.S.A. 60-226(B)(1), paralleling Rule 26(b)(1), F.R.Civ.P., makes ordinary documents routinely discoverable.
Investigation done by an insurance company before litigation and not under counsel, is made in the ordinary course of business of the insurance company and not in anticipation of litigation or for trial. Statements of witnesses taken during the course of such initial investigations are subject to discovery under (B)(1). Henry Enterprises, Inc. v. Smith, 225 Kan. 615, 592 P.2d 915 (1979). Held that an initial investigation of a claim made by an insurance company prior to commencement of litigation and not requested by counsel is discoverable. Id.
A party may obtain discovery of documents upon a showing of substantial need. The court shall protect against disclosure of the mental impression, conclusion, opinions, or legal theories of an attorney or other representative of a party concerning the litigation. Id.
Reports which were made at the instigation of insurance companies prior to the commencement of litigation, and neither requested by nor made under the guidance of counsel, were made in the ordinary course of business of the insurance companies involved and not in anticipation of litigation or for trial, and were therefore generally discoverable. Rules Civ.Proc., K.S.A. 60–226(b). Indep. Mfg. Co. v. McGraw-Edison Co., 6 Kan. App. 2d 982, 637 P.2d 431 (1981).

Iowa

Iowa Rule of Civil Procedure 1.503(3) allows for discovery of documents and tangible things created in anticipation of litigation or for trial only upon a showing that the party seeking discovery has a substantial need or is unable without undue hardship to obtain the substantial equivalent to the materials by other means. Iowa R. Civ. P. 1.503.
When invoking work-product privilege, the “overarching inquiry in determining whether a document was prepared in anticipation of litigation is whether the document can fairly be said to have been prepared or obtained because of the prospect of litigation.” Wells Dairy, Inc. v. Am. Indus. Refrigeration, Inc., 690 N.W.2d 38 (Iowa 2004). The work product doctrine would not protect a document created in the normal course of business and not in anticipation of litigation, but can reach documents prepared because of litigation even if they also were prepared in connection with a business transaction or served a business purpose. Id. Therefore, if a document would have been created in essentially the same form regardless of litigation, it cannot fairly be said that it was created “because of” actual or impending litigation. Id.

South Dakota

The attorney work product doctrine was inapplicable to documents prepared by an insurance company in connection to its investigation of an automobile-motorcycle collision involving insured, where defendant had a substantial need for such documents, and there was no showing that the information contained in insurer's file up to the time the lawsuit was commenced was prepared in anticipation of litigation rather than in the ordinary course of insurer's business. Lamar Advert. of S.D., Inc. v. Kay, 267 F.R.D. 568 (D.S.D. 2010).
Under South Dakota law, attorney-client privilege did not apply to protect an insurer’s claims file from disclosure when the file was not prepared in anticipation of litigation. Id.
As a general rule, investigative materials assembled by insurance companies are not protected by the work product privilege. Id. “The inchoate possibility, or even the likely chance of litigation, does not give rise to the work product privilege.” Id.

In summary, Nebraska and Missouri recognize a version of the insurer-insured privilege. For the most part, pre-suit materials are going to be protected. If opposing counsel shows substantial need, the Court may allow discovery of materials that are otherwise unavailable (i.e. scene photographs, scene or damage photographs).

However, Kansas, Iowa, and South Dakota may not be as favorable. In Kansas, the Henry Industries decision is very important for insurers to be familiar with. Essentially, the Court held “in anticipation of litigation” requires an affirmative retention of counsel. While it may seem obvious that an accident with liability defenses and millions of dollars in damages presumably anticipates litigation, the Court determined that an investigation done by an insurance company before litigation, and not under counsel's direction, is made in the ordinary course of business and not “in anticipation of litigation or for trial.” Iowa and South Dakota have similar rulings.

To be safe, we implore our insurance clients to contact us immediately upon notification of accidents and pending investigations. A simple e-mail retaining Erickson | Sederstrom as counsel and a reply, such as “we have been retained and will now coordinate the investigation in anticipation of litigation,” will protect your file. Please do not hesitate to contact any of our litigation team for these services. Mr. Quandt is a member of TIDA (the Trucking Industry Defense Association) and offers rapid response services.