AmGuard Insurance Company must produce more than 2,000 pages of documents in litigation over its handling of a $1 million underinsured motorist claim after a Pennsylvania appellate court found that the insurer had not adequately established attorney-client privilege or work-product protection.
The Superior Court of Pennsylvania affirmed a discovery order requiring AmGuard to provide the contested material to policyholder Ron Rheingold. The ruling does not decide Rheingold’s breach-of-contract or bad-faith claims, but it gives him access to records concerning how the insurer evaluated his claim and why it offered $100,000 before an arbitrator awarded him $985,000.
The decision turns on the way AmGuard supported its privilege position. The court did not hold that communications created during insurance arbitration are generally discoverable. It concluded that AmGuard relied on broad descriptions without explaining why protection applied to particular documents.
AmGuard issued Rheingold a commercial automobile insurance policy in California in January 2018. Ten days later, he was injured in a three-car collision and reported neck, back and shoulder injuries, as well as lost earnings.
The driver who struck Rheingold from behind carried liability insurance of $15,000 per injured person. Rheingold settled his claim against that driver for the available $15,000 and subsequently demanded the full $1 million uninsured and underinsured motorist benefit under his AmGuard policy.
Rheingold requested arbitration in December 2019. AmGuard offered $100,000 to settle the claim in March 2021 and argued during the arbitration that his injuries were not caused by the collision and that his medical expenses and lost earnings were exaggerated.
An arbitrator awarded Rheingold $985,000 in July 2021, representing the $1 million policy limit less the $15,000 paid under the other driver’s policy. The arbitrator also awarded attorneys’ fees and costs. According to the appellate opinion, a California court confirmed the award and AmGuard satisfied the judgment.
Rheingold then brought breach-of-contract and bad-faith claims in Luzerne County. He alleges that AmGuard failed to evaluate his claim objectively and fairly and did not promptly offer its reasonable value. Those allegations have not been decided.
During discovery, Rheingold sought material concerning AmGuard’s procedures for evaluating underinsured motorist claims, whether those procedures were followed and who participated in the decision to value his claim at $100,000.
AmGuard produced a four-page privilege log that grouped 379 withheld documents, spanning more than 2,000 pages, into five entries. One entry covered 250 documents and 1,538 pages of email correspondence between December 2019 and August 2022.
The remaining entries broadly described material concerning coverage and legal strategy, payments to outside lawyers, the selection and payment of experts and internal communications prepared in connection with the coverage dispute.
Rheingold challenged the log as insufficiently detailed, arguing that it did not identify individual authors, recipients and dates or provide enough information to assess whether privilege applied. AmGuard maintained that the documents arose from an adversarial arbitration and included protected communications, legal analysis and litigation strategy.
After reviewing the material privately, the trial court ordered AmGuard to produce it. The insurer appealed, arguing that the documents were protected by attorney-client privilege and the work-product doctrine.
The Superior Court accepted the interlocutory appeal under Pennsylvania’s collateral-order doctrine because compelled disclosure could irreparably defeat a valid privilege claim. It nevertheless upheld the production order because AmGuard had not met its burden of establishing that the asserted protections applied.
Judge Lane explained that a party invoking privilege must initially provide sufficient facts to show that the protection has been properly invoked. Unless that initial burden is met, responsibility does not shift to the party seeking disclosure to establish waiver or an exception.
The court found that AmGuard did not address particular documents by reference to their contents, dates, authors, recipients or purposes. Instead, the insurer generally asserted that its communications with counsel concerned settlement offers, valuation, legal analysis and strategy arising from the California arbitration.
That approach was insufficient under the Superior Court’s earlier decision in Fisher v. Erie Insurance Exchange. In that case, the court treated a privilege log as the principal means of establishing whether attorney-client or work-product protection applies and rejected similarly cursory descriptions.
The panel also stressed that it would not construct document-specific arguments for AmGuard. Its decision therefore rests on the insurer’s failure to support its position with sufficient analysis, rather than a general rule removing privilege from documents created during an insurance arbitration.
AmGuard separately argued that internal reserve information should not be produced because it could reflect the insurer’s assessment of the claim and inform legal strategy.
The Superior Court did not decide whether that information was otherwise discoverable. It found that AmGuard had not invoked attorney-client privilege or the work-product doctrine specifically in connection with the reserve material. The argument therefore fell outside the limited basis on which the interlocutory appeal could proceed.
The judgment consequently does not establish that insurance reserves are automatically discoverable when a policyholder alleges bad faith.
The immediate effect is that AmGuard must provide the contested documents as Rheingold’s contract and bad-faith action continues. Any significance the records ultimately have will depend on their contents and how they are used in the trial court.
The ruling does not establish that AmGuard acted in bad faith, breached the policy or improperly assessed Rheingold’s injuries. It also does not resolve the broader question raised by AmGuard in its reply brief: whether communications between an insurer and its lawyers during mandatory UIM arbitration form part of an adversarial legal proceeding or remain connected to ordinary claims handling.
The Superior Court expressly declined to reach that question because AmGuard had not first supported its privilege claims with sufficient document-specific analysis.
