State Farm Fire & Casualty Co. v. Superior Court

The trial court ordered petitioner State Farm Fire and Casualty Company, a defendant in the underlying insurance bad faith action brought by real parties in interest Melvin and Darlene Black, to produce four letters it had exchanged with its retained counsel in connection with the Blacks’ claim. State Farm contends the letters are protected from discovery by the attorney-client privilege. We agree and grant peremptory relief.

State Farm issued a standard homeowners’ insurance policy to the Blacks. The Blacks filed a claim for policy benefits, contending their residence had sustained physical damage. Although State Farm initially rejected the claim, it later compromised its position and agreed to pay some money if the Blacks would execute an agreement releasing State Farm from all liability.

The Blacks then filed the underlying action for damages for breach of the implied covenant of good faith and fair dealing and breach of the statutory duties prescribed by Insurance Code section 790.03, subdivision (h). They also served State Farm with a request for identification and production of documents. State Farm produced its claims file in response to the request, but withheld…