Elder Abuse Did Not Arise Out of Alleged Bad Faith
Following denial of coverage for property damage caused by a fire suspected to have been set by arson, insureds sued their insurer on multiple claims and its insurer’s attorneys for invasion of privacy and financial elder abuse. The privacy claims arose out of the alleged improper disclosure of the insured’s tax returns to the insurer and its accountants despite the assertion they were privileged. After the attorney obtained dismissal of both claims, the Appellate Court reinstated the privacy claims against him. The court found the transmittal of the insureds' tax returns constituted communicative conduct protectable by litigation privilege. It also determined factual disputes exist on the issues of whether the attorney's alleged conduct was protected by the litigation privilege and the seriousness of the alleged invasion of privacy. It further held the insureds adequately alleged a legally protected privacy interest. However, the court could not countenance a claim for financial elder abuse arising from the insurer's alleged bad faith denial of the claim. This is a case that explores the strategic minefield when an insured’s claim is denied and the perils faced by insurance defense counsel.