On October 30, 2013 Judge Martinez of the Western District of Washington permitted the policyholder in a long-running bad faith case to take the deposition of the carrier’s former coverage counsel, Joanne Henry, about the coverage analysis that she performed for the carrier leading to the carrier denying the tender of defense. This decision relied heavily on the landmark 2011 Cedell decision from the Washington Supreme Court which, broadly speaking, abrogated in part the attorney-client privilege where the attorney was acting as an adjuster, taking on one of the “quasi-fiduciary” roles of a potentially defending insurer. Judge Martinez held that because the policyholder had reason to believe that Ms. Henry did the entire coverage investigation herself, in addition to performing legal analysis of the policy, the policyholder could take her deposition, although the carrier could object if a question that genuinely intruded into the privilege was asked.
