When Must the Subrogating Carrier Give Deposition Testimony?

Last month’s newsletter discussed a case where Travelers Insurance brought a subrogation action against Daimler and others, involving an allegedly defective truck which caused a fire. [1]    Last month’s column talked about the court’s ruling with respect to when, and how much, of a carrier’s file must be turned over during litigation.

A second issue which arose in that case concerned whether a representative of the subrogating carrier must give deposition testimony.  In federal practice, where a party is a corporation, the opposing attorney serves a “Rule 30(b)(6)” notice setting forth the areas in which the party wants to ask questions and leaving it to the other side to designate a person who will testify as to the designated categories. 

Daimler served a 30(b)(6) demand that Travelers produce a representative to answer questions about their subrogation claim.  Travelers resisted, and filed a motion to prevent this deposition from occurring.  Travelers’ attorneys argued that no one at Travelers had direct knowledge regarding the facts leading up to the fire and that any information regarding the cause of the fire was given to Travelers from its attorneys and therefore was privileged.  Further, Travelers argued that a deposition of its representative was unnecessary since interrogatory responses and the testimony of the insureds/subrogors already provided sufficient information regarding the fire. 

The Court disagreed and ruled that a representative of Travelers must testify.  The Court noted that to the extent Travelers lacked direct knowledge regarding the facts leading up to the fire, whoever was to be deposed could obtain that information from its insured and/or review of its file.  The Travelers representative could prepare for the deposition by consulting “documents, past employees or other sources.”  The Court noted one case where an insurance company was sanctioned for producing a witness that was inadequately prepared to answer questions.  While the Court granted Daimler’s request for a deposition, the Court cautioned that the testimony would be “limited in scope to the underlying facts in support of Travelers’ claims” and that this witness could not be asked to give “opinion” testimony.

Bottom Line: Your insured, and perhaps others such as neighbors and local firefighters and investigators, has the most knowledge regarding a loss and the facts leading up to a loss.   However, in subrogation cases, the subrogating carrier still has an obligation, if requested, to produce a carrier-witness to testify.  In my experience, oftentimes the defense will not request the deposition of the carrier.  Or, if a deposition is requested, the adjuster (either an employee of the carrier or an independent adjuster working for the carrier) will be produced to testify as to damages only, not liability.   Per this court ruling, if the defense really wants to depose the subrogating carrier on liability, they are entitled to a deposition of the person within the carrier who has been overseeing subrogation efforts.   Counsel should be careful to be sure the carrier representative does not give an “opinion” (i.e., as to the cause of the fire).   If your subrogation manager works far away from where the case is venued, consideration should be given as to the use of “Skype” or other remote-video technology to limit costs, if all parties are agreeable.

[1]  Travelers v. Daimler Trucks et al, 2015 U.S. Dist. LEXIS 48760,  SDNY Civil Action No.: 14-CV-1889 (April 14, 2015)