Factual Background
Washington’s state courts, like Nevada’s, require mandatory disclosure of all insurance or indemnity policies that may be liable to satisfy all or part of a possible judgment in a civil action. Wash. Sup. Ct. Civ. R. 26(b)(2). The requirement reads similarly to NRCP 16.1(a)(1)(A(iv)’s mandatory disclosure for the same type of information.
In 2021, the plaintiff in a personal injury action captioned Jok v. Safelite Fulfillment, Inc. (Order attached below) served discovery requests on a defendant seeking the identification and disclosure of the insurance information that should have been automatically disclosed. Defendants, through counsel, disclosed a $5.0 Million policy. The disclosure was signed by attorney Robert D. Lee at the Cozen O’Connor law firm.
Plaintiff conducted three years of litigation, made strategic decisions, engaged in settlement discussions, and determined a trial budget based on the single disclosed policy. Plaintiff made a policy demand based on the understanding that $5 Million was the total amount of available insurance coverage.
On August 1, 2024, over four months before trial, defendant’s counsel learned of the existence of an additional $25 Million Travelers policy. Counsel did not disclose the policy until December 6, 2024, the Friday before trial started and nearly three years after the initial disclosure. The jury awarded plaintiff $11,250,000 in damages. After trial, plaintiff’s counsel moved for sanctions against defendants and their counsel under Rule 26(g), asking that the sanction be paid to a charity.
Defense counsel claimed they did not learn of the existence of the policy until after the close of discovery and immediately produced the policy upon learning of its existence. The court ruled, sanctioning the firm in the amount of $1 Million. After the court heard and ruled on the motion for sanctions, other attorneys for defendants served a supplemental discovery response disclosing a second $25 Million excess Everest National policy which was “on top of the $25 million Travelers policy.” Cozen O’Connor asked the court to reduce the amount of the sanction, and included email correspondence showing that Lee asked defendant’s broker for a copy of “the” applicable policy at the beginning of the case. The email correspondence also showed the court for the first time that Lee learned of the $25 Million Travelers policy in August 2024.
Legal Discussion and Holding
Wash. Sup. Ct. Civ. R. 26(g) is substantively similar to NRCP 26(g) in that it includes language requiring each signer of a discovery pleading to certify certain things to the court. The rule reads:
The signature of the attorney or party constitutes a certification that the attorney or the party has read the request, response, or objection, and that to the best of their knowledge, information, and belief formed after a reasonable inquiry it is: (1) consistent with these rules and warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law; (2) not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation; and (3) not unreasonable or unduly burdensome or expensive, given the needs of the case, the discovery already had in the case, the amount in controversy, and the importance of the issues at stake in the litigation.
Further, and importantly for the analysis of this case, Wash. Sup. Ct. Civ. R. 26(g) provides “[i]f a certification is made in violation of the rule, the court, upon motion or upon its own initiative, shall impose upon the person who made the certification, the party on whose behalf the request, response, or objection is made, or both, an appropriate sanction, which may include an order to pay the amount of the reasonable expenses incurred because of the violation, including a reasonable attorney fee.” Emphasis added.
The court found that under Rule 26(g) Cozen O’Connor firm automatically certified the insurance disclosure was complete. The certification was false, however, as the firm failed to perform a reasonable inquiry into whether the response was complete. The court further found that without a meaningful sanction, insurance companies and defense counsel are likely to continue failing to make insurance disclosures and then claim there was “just a mistake and that there has been no prejudice to the plaintiff—i.e., no harm, no foul.”
What makes the failed disclosure more egregious, the court found, is that the plaintiff has no other way of independently discovering the policies except to rely on the completeness of disclosures and veracity of counsel’s certification that they made a reasonable inquiry. As one commentator remarked, “[f]orcing the plaintiff to prove specific prejudice under those circumstances would perversely reward the defendant’s action; because plaintiff did not know about the additional insurance, she would not be able to say how things would have changed.” Ian Samson, Ensuring you get all the Insurance Information, Advocate (May 2025).
The court considered other sanctions, but because the matter already proceeded to trial, they were not appropriate. Nor would an award of fees and costs be sufficient to deter similar acts, the court found. Because defense counsel did not look for a policy that could easily have been found, then provided the court with a false declaration, the court issued a $1,000,000 sanction against the Cozen O’Connor firm to be paid to the American Red Cross. If the sanction was not paid within 30 days, it must be paid within a year, but will accrue interest at the rate of 10% per year.
Implications Under Nevada Law
The Obligation to Disclose Insurance Policies
The plain language of NRCP 16.1(a)(1)(A)(iv) requires disclosure of any insurance agreement that may be liable to pay a portion of a judgment. See also Vanguard Piping v. Eighth Jud. Dist. Ct., 129 Nev. 602, 605, 309 P.3d 1017, 1018 (2013). The disclosure must be made “without awaiting a discovery request.” NRCP 16.1(a)(1)(A) (emphasis added). Therefore, in Nevada, one need not send a separate discovery request in order for a defendant to be obligated to disclose applicable insurance policies. The Supreme Court in Vanguard made clear it is not up to the defendant or its insurance company to decide how much insurance coverage to disclose. Under current NRCP and Supreme Court precedent, any and all policies must be disclosed.
Rule 26(g)’s Automatic Certification
Under NRCP 26(g), counsel automatically certifies (similar to the automative Rule 11 certification) that all discovery filingsare: 1) complete and correct as of the time it is made; and 2) “consistent with these rules and warranted by existing law”. NRCP 26(g)(1)(B)(i). The certification applies to initial mandatory disclosures as well as all other discovery pleadings. It applies to “[e]very disclosure and report made under Rules 16.1 . . . and every discovery request, response, or objection.” Emphasis added. Thus, in Nevada, an attorney signing an initial disclosure is certifying to the court that they have made an inquiry and therefore believe the disclosure is complete.
A defendant’s initial mandatory disclosures certify accuracy regarding the disclosure of the existence of “any” insurance policy that may be liable to pay a portion of a judgment. These disclosures allow “counsel for all parties to make a realistic evaluation of the case, so that settlement and litigation strategy are based on knowledge of the size of the fund that is available for the satisfaction of any judgment obtained, rather than speculation.” Sakakibara v. Spectrum Gaming Group, LLC (D. Nev. 2010) 2010 WL 2947381, at *2.
Moreover, because the certification speaks as of the time it is made, a false declaration cannot be undone by supplementation. Once counsel has violated Rule 26(g), the mandatory nature of the sanction must attach. Equal Emp. Opportunity Comm’n v. Bok Fin. Corp., No. CIV 11-1132 RB/LFG, 2013 WL 11955289 at *3 (D. N.M. Mar. 1, 2013) (“Stated differently, the Rule 26(g) certification, like the assurance attributed to Abraham Lincoln, is that the attorney’s word is the attorney’s bond.”) (citing FRCP 26(g) Advisory Committee Notes).
Rule 26(g) Sanctions are Mandatory Against Signing Counsel
Rule 26(g)’s plain language applies personally to counsel who signs the pleading. The Federal Advisory Committee Notes reported that “Ruled 26(g) makes explicit the authority judges now must impose appropriate sanctions and requires them to use it.” Morrison v. Quest Diagnostics, 2016 WL 355120 at *5 (D. Nev. Jan. 27, 2016). According to the Advisory Notes, Rule 26(g) is designed to curb discovery abuse by explicitly encouraging the imposition of sanctions. Wiideman v. Bayer, 996 F.2d 1230 (9th Cir. 1993) (citing FRCP 26 Advisory Notes).
Sanctions are mandatory when counsel violates Rule 26(g) without substantial justification. Rule 26(g)(3). See also Wiideman v. Bayer, 996 F.2d 1230; Cache La Poudre Feeds, LLC v. Land O’Lakes, Inc., 244 F.R.D. 614, 638 (D. Colo. 2007) (cleaned up).
What Constitutes a Reasonable Inquiry?
A reasonable inquiry requires, at a minimum, a reasonable procedure to distribute discovery requests to all employees and agents of the party potentially possessing responsive information, and for counsel to account for the collection and subsequent production of the information to the opposing party. Mitschke v. Gosal Trucking, Ltd., No. 2:14-CV-1099-JCM-VCF, 2016 WL 8732417 at *1 (D. Nev. Jan. 22, 2016); Acosta v. Wellfleet Commc’ns, LLC, No. 216CV02353GMNGWF, 2018 WL 664779 at *7 (D. Nev. Feb. 1, 2018).
When a dispute arises regarding the completeness of a search undertaken, particularly when there is an absence of information that would have been expected to be included, the responding party must come forward with an explanation of the search conducted with sufficient specificity to allow the court to determine whether a reasonable search was performed. Shaw v. Davis, WL 3892326 at *4 (D. Nev. 2021).
Reasonable inquiry requires counsel, at a minimum, to:
1) Distribute the discovery requests in dispute to its employees and agents potentially possessing responsive information, and to account for the collection and subsequent production of the information to the opposing party;
2) To assure that an answering party actually makes a reasonable inquiry, the court may also order it to provide the requesting party with declarations or affidavits detailing the nature of its reasonable inquiry to locate responsive documents;
3) The duty to make a reasonable inquiry under Rule 26(g) is satisfied if the investigation and the conclusions drawn therefrom are reasonable under the circumstances. It is an objective standard similar to the one imposed by Rule 11.
Wiideman v. Bayer, 996 F.2d 1230 (9th Cir. 1993) (Cleaned up); Resendez v. Smith’s Food & Drug Centers, Inc., No. 2:15-CV-00061-JAD, 2015 WL 1186684 at *3 (D. Nev. Mar. 16, 2015) (citing National Ass’n of Radiation Survivors v. Turnage, 115 F.R.D. 543, 554–56 (N.D. Cal. 1987)).
Nevada Court Sanctions Counsel for Failure to Disclose an Insurance Policy
Nevada’s U.S. District Court, deciding a matter on analogous facts and under the Federal Rule 26(g), held that failure to disclose an insurance policy warrants a Rule 26(g) sanction against signing counsel. Sakakibara v. Spectrum Gaming Grp., LLC, No. 2:09-CV-02000-HDM, 2010 WL 2947381 at *3 (D. Nev. July 22, 2010).
The Takeaway
This case should serve as a cautionary tale; counsel has an affirmative obligation to diligently and reasonably inquire whether disclosures are complete and accurate. This obligation attaches to mandatory insurance disclosures. Sanctions are mandatory under NRCP 26(g) for failure to disclose any policy. Extra efforts should be made to ensure compliance with these disclosure and certification requirements.
But wait! There’s more . . . Rethinking the Vanguard decision