Discovery of Files in Florida Hurricane Bad Faith Case.

   In previous posts here, including on July 15, 2009, I examined the treatment in recent cases by lower Florida Courts of the Florida Supreme Court's decision in Allstate Indemnity Co. v. Ruiz, 899 So. 2d 1121 (Fla. 2005).  In Ruiz, the Florida Supreme Court addressed the "application of work product privilege" in Insurer Bad Faith Cases.  The Supreme Court determined, in sum and in substance, that "in connection with evaluating the obligation to process claims in good faith under section 624.155 [Florida's Bad Faith Statute]" all materials in the First-Party Insurance Company's Claims File should be produced in discovery "up to and including the date of resolution of the underlying disputed matter and pertain[ing] in any way to coverage, benefits, liability, or damages" just as in a Third-Party Bad Faith Case filed at Florida Common Law "for failure to settle third-party cases."  Id. at 1129-30.

   The Ruiz holding was extended to compel production of other insureds' claims files in Mayfair House Association v. QBE Insurance Corp.,  Download Mayfair House Ass'n v. QBE Insurance Corp. (S.D. Fla. Case No. 09.80359 Opinion Filed February 5, 2010) also published as 2010 WL 472827 (S.D. Fla. February 5, 2010)(Westlaw subscription required to access Westlaw).  In that case, a one-Count Complaint alleged statutory Bad Faith in QBE's denial of windstorm coverage for damages allegedly caused by Hurricane Wilma.  The plaintiff in that case, Mayfair, alleged that QBE violated Fla. Stat. § 624.155(1)(b) (2007), which provided then and still provides now that any person may bring a civil action against an insurer when such person is damaged by, among other things, the insurer:

Not attempting in good faith to settle claims, when, under all the circumstances, it could and should have done so, had it acted fairly and honestly toward its insured and with due regard for her or his interests; ....

 Mayfair House Association v. QBE Insurance Corp., 2010 WL 472827 *1 (S.D. Fla. February 5, 2010).  Mayfair also alleged that QBE violated several provisions of Florida's Unfair Claim Settlement Practices Act, Fla. Stat. § 626.9541(1)(i).  Mayfair House Association v. QBE Insurance Corp., 2010 WL 472827 *2 (S.D. Fla. February 5, 2010).

   The plaintiff "sought production of QBE's claim file in the underlying coverage dispute with Mayfair House, together with the claim files of other insured condominium associations who also litigated windstorm damage claims against QBE arising our of Hurricane Wilma."  Mayfair House Association v. QBE Insurance Corp., 2010 WL 472827 *2 (S.D. Fla. February 5, 2010).  The U.S. District Court affirmed a Magistrate-Judge's Order compelling the production, but for different reasons, stated by the U.S. District Judge.

   The District Judge applied the Ruiz holding to mean that "the Florida Supreme Court effectively eliminated the attorney client privilege as a discovery shield in bad  faith insurance litigation between an insured and its insurance company with respect to all materials generated prior to resolution of the underlying disputed matter."  Mayfair House Association v. QBE Insurance Corp., 2010 WL 472827 *3 (S.D. Fla. February 5, 2010).

 

The holdings of many Courts which have addressed Discovery issues of this kind in Insurance Bad Faith Cases are collected and examined by Dennis J. Wall, "Litigation and Prevention of Insurer Bad Faith" § 8:6 (Third-Party Bad Faith Cases) and § 12:6 (First-Party Bad Faith Cases) (Shepard's McGraw-Hill First Edition; West Publishing  Co. Second Edition and 2010 Supplement).

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