Diamond v. Stratton

Leo Diamond was injured in a bus accident and hospitalized on life-support systems. Ultimately, Diamond’s family (plaintiffs) chose to remove the life-support measures, and Diamond died. A travel-insurance policy provided coverage for Diamond’s death if it had been caused by the bus accident. Diamond’s family submitted a claim to the insurance company (defendant). The company’s attorney wrote a letter declining payment and openly implying that Diamond’s family—not the bus—had actually killed Diamond. Diamond’s estate (plaintiff) and family sued the insurance company in federal district court. The complaint alleged the insurance company had (1) wrongfully denied coverage and (2) committed the intentional tort of intentional infliction of emotional distress (IIED) when its attorney sent the accusatory letter. To investigate the IIED claim, Diamond’s family requested a copy of the company’s claim file, including any communications between the company and its attorneys about the letter’s contents. The company asserted that its claim file and these communications were protected by the attorney-client privilege and work-product privilege and refused to produce them. The family moved to compel disclosure. After discussion, the parties agreed to allow the district court to review the disputed documents in camera, i.e., privately by the judge in the judge’s chambers. After the in camera review, the court found that the statements allegedly protected by the attorney-client privilege were (1) private attorney-client communications and (2) directly relevant to whether the company had intentionally inflicted emotional distress. The court also found that (1) several claim-file documents qualified as attorney work product and (2) the family had a strong need for these documents for the IIED claim. The court then considered whether to compel production of the disputed claim-file documents.