CHARLESTON – Two years after the state Supreme Court of Appeals ruled that Erie Insurance Property and Casualty did not have to disclose its reserves to a woman who accused the insurer of bad faith, the Justices ruled that Erie had to after all.

The five Justices agreed last month that since their first order, plaintiff Elizabeth Murfitt satisfied the requirements to compel disclosure.

The Justices denied Erie's petition for a writ of prohibition against Ohio Circuit Judge James Mazzone, who ordered disclosure last year.

Murfitt sued Erie after settling a negligence claim with a driver that Erie insured. She had suffered a shattered wrist requiring multiple surgeries.

She alleged that Erie intentionally undervalued her claim in its settlement offer.

She asked Mazzone to compel Erie to produce reserves information regarding the claim.

In 2005 Mazzone directed Erie to disclose reserve amounts and dates on which they were placed.

Erie appealed. The Supreme Court of Appeals blocked Mazzone's order, ruling that Murfitt did not show that the information was relevant.

Murfitt renewed the motion and brought it to Mazzone at a hearing last year. He determined that the information was relevant.

He rejected Erie's argument that it was privileged work product. He wrote that insurers do not set reserves for purposes of litigation.

He wrote that Erie employees set reserve amounts, not attorneys.

Erie appealed again last August, asserting privilege for work product.

Robert Behling, Robert Dapper Jr., and Christopher Jacobs of Pittsburgh represented Erie. Christopher Regan and James Bordas III of Wheeling represented Murfitt.

In denying the writ, Justice Joseph Albright wrote that the Court distinguished fact work product from opinion work product and individual claim reserves from aggregate reserves.

"The pivotal issue regarding when reserves information is subject to broader protection is whether the information is prepared in anticipation of particular litigation," he wrote. "When individual case reserves information is set by an attorney or by a non-lawyer representative with the primary intent of preparing for litigation, then the individual case reserves information is subject to protection from discovery as opinion work product ...

"However, aggregate reserves documents not developed primarily in anticipation of specific litigation but produced for general business purposes are not protected by the work product rule."

Justice Larry Starcher wrote a concurring opinion to scold Erie. He wrote that Erie offered a "low ball" settlement of $47,000 and dragged the claim out for two years.

He wrote that Erie's offer "jumped by a factor of ten in the days before trial."

He wrote that Erie settled on the second day of trial for $800,000.

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