"And if I don't get the things I am after… I'm going to scream!"—Veruca Salt

There are few examples of evidence more consistently pursued, yet of questionable relevance, than an insurer's claim file. First-party litigations are often, at least initially, defined by the insured's pursuit of the insurer's claim file, reserve information, and information on "related claims." The underlying rationale for this pursuit could range from a sincere belief that such materials are discoverable simply because of the contractual relationship between the parties, to the overt pursuit of such materials as a point of leverage to secure a more advantageous result.

It is not uncommon for a complaint in a declaratory judgment action to include a cause of action premised on bad faith, or stated differently, a claim for breach of good faith and fair dealing. Arguably, the inclusion of such a claim creates a basis for an insured to argue for wide-ranging discovery. From the insurer's view, it is understandable to assess, and ultimately minimize, the potential exposure of such a claim given the difficulty in establishing bad faith under New York law; however, the real exposure may not be the alleged damages but rather the implications for discovery moving forward. Insurers should handle such claims proactively and consider a pre-answer motion to dismiss a bad faith cause of action even where the plaintiff's chance of success on such a claim as minimal. Dismissing a bad faith claim limits the scope of the coverage action and may obviate the argument in favor of expanded discovery.