King v. Allstate Ins. Co., 23,130.

Docket NºNo. 23,130.
Citation135 N.M. 206, 86 P.3d 631, 2004 NMCA 31
Case DateJanuary 30, 2004
CourtCourt of Appeals of New Mexico

David J. Berardinelli, Berardinelli & Associates, Santa Fe, NM, for Appellee.

David W. Frizzell, Simone, Roberts & Weiss, P.A., Albuquerque, NM, Bennett Evan Cooper, Jon T. Neumann, Steptoe & Johnson LLP, Phoenix, AZ, for Appellant.

Certiorari Denied, No. 28,511, March 5, 2004.



{1} Allstate Insurance Company (Allstate) petitioned this Court to issue a writ of error to review the trial court's order denying its motion for a protective order. We granted the petition in part to determine whether an order granting or denying a motion for a protective order is a collateral order and subject to review by writ of error. We hold that it is not. However, since we have exercised our discretionary jurisdiction to accept this appeal, we will reach the merits of the issues. We affirm the trial court's decision to deny the protective order requested by Allstate.


{2} In 1996, Frederick King (Plaintiff) was a passenger in a car that was involved in a collision in Santa Fe County. The complaint alleges that the collision was caused by Eloy Rael, who was insured by Allstate.1 In addition, the driver of the car in which Plaintiff was a passenger was also insured by Allstate. In 1997, Plaintiff filed suit against Mr. Rael and Allstate. The complaint alleged that Allstate failed and refused to negotiate a good faith settlement of his claim.

{3} In his amended complaint, Plaintiff alleges that Allstate's claims process was deliberately redesigned in the early 1990's to fraudulently enhance corporate profits through the use of unfair, fraudulent, or deceptive claims handling practices. Plaintiff alleges that among those practices is the use of a process that is designed to put an unfairly low value on claims. Plaintiff specifically alleges that this internal value, which is the maximum amount for which an agent can settle the case, is less than the value Allstate puts on claims in its communications with regulatory agencies. The amended complaint alleges in considerable detail the process used to develop an internal value for each claim and the various tactics used to force claimants to settle for the unfairly low amount. It specifically alleges that as part of this plan, Allstate developed personnel evaluation standards that "reward and advance Allstate employees who aggressively assist and promote Allstate's unlawful scheme." This case concerns the discovery of the Progress Development Summary (PDS) reports used annually by Allstate to evaluate its employees.

{4} In October 2000, Allstate filed a motion for a protective order under Rule 1-026(C) NMRA 2003. The motion asked that Plaintiff be denied discovery of the PDS reports. The motion argued, among other things, that ordering production of personnel files would be an invasion of privacy of Allstate employees. In addition, it asserted that the files were irrelevant, not likely to lead to the discovery of admissible evidence, and were "private, privileged and confidential."

{5} In response, Plaintiff pointed out that what he was seeking in discovery was not the personnel files but the PDS reports of Rita Finley (Ms. Finely) and Hal Palmer (Mr. Palmer), two Allstate employees who handled Plaintiff's claim. Plaintiff explained that the PDS would show, among other things, how the amount paid on claims related to the amount targeted for each claim referred to by the parties as a severity goal. The PDS would also show how much the employee saved Allstate by underpaying or not paying certain claims. Plaintiff argued that Allstate failed to establish good cause for a protective order as required by pointing to a " `clearly defined and serious injury' " that would be suffered in the absence of the protective order.

{6} Attached to Plaintiff's response was the affidavit of Linda Brown (Ms. Brown). Ms. Brown worked for Allstate from September 1987 until mid-March 1999. Ms. Brown stated that each Market Claim Office (MCO) had severity goals set by Allstate's home office. For part of the time Ms. Brown worked for Allstate, the severity goals were put in writing in the PDS reports. Later, the severity goals were not stated in the PDS reports, but were communicated orally. However, agents were still evaluated on their ability to meet the severity goals set by Allstate's home office. In addition, according to Ms. Brown, the market claim manager (MCM) and the various unit claims managers received reports comparing the monthly and yearly severity figures for each claims representative.

{7} Also attached was the deposition of Carla Kline (Ms. Kline). At the time her deposition was taken, Ms. Kline was working for Allstate as a Frontline Process Expert. Ms. Kline testified that severity goals were communicated to her and to the MCM, and that the MCM received bonuses.

{8} Ultimately, the trial court ruled that Allstate had not shown good cause either for withholding the PDS reports or for the issuance of a protective order restricting the dissemination of the PDS reports. Thus, the trial court ordered Allstate to produce the PDS reports in their entirety without redaction. Allstate did not attempt to appeal this order.

{9} Subsequently, Plaintiff requested and Allstate voluntarily produced the PDS reports of a number of other adjusters and supervisors. In addition, Allstate identified Jose Cornejo (Mr. Cornejo) as the Albuquerque MCM and Ron Bonner (Mr. Bonner) as the Special Investigations Unit (SIU) manager who supervised Mr. Palmer. However, Allstate objected to producing the PDS reports for Mr. Cornejo and Mr. Bonner on the ground that they were not relevant or likely to lead to the discovery of relevant evidence because Mr. Cornejo and Mr. Bonner do not handle individual claims and their compensation is not based on the handling of individual claims.

{10} Plaintiff filed a motion to compel production of the PDS reports for Mr. Bonner and Mr. Cornejo. Plaintiff's motion alleged that, based on materials already received during discovery, the corporate severity goals for each year would be set out in detail in the PDS reports for these managers. In particular, Plaintiff alleged that the discovery material showed that the SIU was treated as a profit center and that the PDS reports would indicate the goals set for referring claims to the SIU. Plaintiff also argued that the relevance objection raised by Allstate must give way to the liberal discovery allowed under the discovery rules.

{11} In response, Allstate again asserted the privacy rights of Mr. Bonner and Mr. Cornejo, as well as its own alleged right of self-critical analysis. In addition, Allstate continued to argue its relevance objection. Ultimately, Allstate moved for a protective order because, in its view, the information was not relevant and was private and confidential. Allstate did not attach a proposed protective order, but requested an order that would limit the use of the PDS reports of Mr. Bonner and Mr. Cornejo to this case and prohibit the dissemination of the PDS reports. Allstate argued that it had shown good cause for a protective order because the PDS reports for Mr. Cornejo and Mr. Bonner were not relevant and because of the strong privacy interest an employee has in his or her personnel file. The trial court ordered Allstate to produce the PDS reports in question and denied Allstate's request for a protective order.

{12} Allstate then petitioned this Court for a writ of error to review the trial court's order. The petition did not mention the proceedings in connection with the PDS reports of Mr. Palmer and Ms. Finley. In a footnote in its petition, Allstate did tell this Court that "Allstate had by oversight produced other employees' PDSs without a protective order in place." Allstate's summary of proceedings in its brief in chief mentions the proceedings concerning Mr. Palmer and Ms. Finley in passing.

Pretrial Orders Concerning Discovery Are Not Reviewable under Rule 12-503

{13} In Carrillo v. Rostro, 114 N.M. 607, 845 P.2d 130 (1992), our Supreme Court adopted the collateral order doctrine announced in Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 546-47, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949), and revived the writ of error as the procedural vehicle for the appeal. The Court noted that it was not necessarily adopting the U.S. Supreme Court's interpretation of the doctrine. Carrillo, 114 N.M. at 617 n. 9, 845 P.2d at 140 n. 9. In Carrillo, the Court indicated that:

The collateral order doctrine is a narrow exception, whose reach is limited to trial court orders affecting rights that will be irretrievably lost in the absence of an immediate appeal. To fall within the exception, an order must at a minimum satisfy three conditions: [1] It must conclusively determine the disputed question, [2] resolve an important issue completely separate from the merits of the action, and [3] be effectively unreviewable on appeal from a final judgment.

Id. at 613, 845 P.2d at 136 (internal quotation marks and citations omitted); see also Rule 12-503(E)(2) NMRA 2003. Rule 12-503 does not use the phrase "collateral order." However, it adopts the three criteria set out above. Thus, we refer to orders properly reviewable under Rule 12-503 as collateral orders.

{14} Despite the cautionary language in Carrillo that New Mexico courts remain free "to apply the doctrine as we deem appropriate," 114 N.M. at 617 n. 9,845 P.2d at 140 n. 9, Allstate has cited only one New Mexico decision that addresses the collateral order doctrine or refers to review by writ of error. Instead, Allstate has discussed at great length what it represents to be federal law concerning collateral orders. Included in this is a discussion of other federal procedures...

To continue reading

Request your trial
15 cases
  • Pincheira v. Allstate Insurance Co., 26,044.
    • United States
    • New Mexico Court of Appeals of New Mexico
    • 13 Junio 2007
    ...for writ of error was untimely filed. On the same day, this Court also filed King v. Allstate Insurance Co., 2004-NMCA-031, ¶¶ 13, 16-18, 135 N.M. 206, 86 P.3d 631, holding that orders compelling discovery cannot be reviewed by writ of error under Rule 12-503 NMRA. King also held that an or......
  • Pincheira v. Allstate Ins. Co., 30,490.
    • United States
    • New Mexico Supreme Court of New Mexico
    • 5 Agosto 2008
    ...Co., which held that an order granting or denying a motion for a protective order cannot be reviewed by writ of error. 2004-NMCA-031, ¶ 1, 135 N.M. 206, 86 P.3d 631. Instead, the Court held that such orders can be appealed only if they are certified by the trial court for an interlocutory a......
  • Breen v. State Taxation & Revenue Dep't, s. 30,066
    • United States
    • New Mexico Court of Appeals of New Mexico
    • 28 Agosto 2012 King v. Allstate Ins. Co. that an order compelling [287 P.3d 383]discovery is not ordinarily a collateral order. 2004–NMCA–031, ¶ 18, 135 N.M. 206, 86 P.3d 631. Yet, in King, this principle applied to the parties in a lawsuit, as the order in that case compelled discovery from a party in......
  • State ex rel. Balderas v. ITT Educ. Servs., Inc., A-1-CA-35204
    • United States
    • New Mexico Court of Appeals of New Mexico
    • 24 Abril 2018
    ...are not collateral orders warranting review under a Rule 12–503 NMRA writ of error. King v. Allstate Ins. Co. , 2004-NMCA-031, ¶ 19, 135 N.M. 206, 86 P.3d 631. Because this matter is more properly raised by interlocutory appeal, we now quash the writ of error, grant ITT’s application for in......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT