Summary
The Supreme Court of Florida addresses the discoverability of insurer claim-file materials in first-party bad-faith litigation. It holds that claim-processing materials created through resolution of the underlying coverage dispute are generally discoverable and recedes from its prior decision in Kujawa, which had supported different discovery rules for first- and third-party bad-faith actions. The court quashes the district court’s decision and remands for further proceedings.
Topics
Practice areas
Questions Presented
- Whether claim-file materials generated in connection with the underlying coverage dispute are discoverable in a statutory first-party insurance bad-faith action despite a claim of work-product protection.
- Whether Florida law should continue to distinguish between first-party and third-party bad-faith actions for purposes of discovery.
- Whether the Supreme Court should recede from Kujawa v. Manhattan National Life Insurance Co.
Holdings
- In a first-party bad-faith action under section 624.155, all materials, including documents, memoranda, and letters, contained in the underlying claim and related litigation files that were created up to and including resolution of the underlying disputed matter and pertain in any way to coverage, benefits, liability, or damages are discoverable.
- Materials prepared after resolution of the underlying disputed matter and initiation of the bad-faith action may be subject to production upon a showing of good cause or pursuant to a court order following in-camera inspection.
- Florida courts may not apply different discovery rules to substantively identical first-party and third-party bad-faith actions based on the nature of the underlying claim.
- The court receded from Kujawa to the extent that it treated first-party and third-party bad-faith actions differently for discovery purposes and protected first-party claim-file materials from production on that basis.
Key quotations
“We therefore hold, as does the substantial weight of authority elsewhere on the question, that the claim file is and was properly held producible in this first-party case.” (899 So. 2d at 1129-30)
“Consistent with the analysis outlined, we hold that in connection with evaluating the obligation to process claims in good faith under section 624.155, all materials, including documents, memoranda, and letters, contained in the underlying claim and related litigation file material that was created up to and including the date of resolution of the underlying disputed matter and pertain in any way to coverage, benefits, liability, or damages, should also be produced in a first-party bad faith action.” (899 So. 2d at 1130)
“In accordance with our decision today, work product protection that may otherwise be afforded to documents prepared in anticipation of litigation of the underlying coverage dispute does not automatically operate to protect such documents from discovery in the ensuing, or accompanying, bad faith action.” (899 So. 2d at 1131)
Factual background
An Allstate agent added an Oldsmobile Cutlass to the Ruizes' policy but mistakenly deleted coverage for their Chevrolet Blazer without notifying them. Joaquin Ruiz later had an accident while driving the Blazer, and Allstate initially denied collision coverage. The Ruizes filed a statutory first-party bad-faith action and, after Allstate admitted coverage, sought production of claim files, investigative materials, manuals, and the agent's file concerning the handling of the underlying claim.
Procedural history
The Ruizes sued Allstate and related parties for statutory bad faith under section 624.155, negligence, and vicarious liability after an Allstate agent improperly deleted a covered vehicle from their policy and Allstate initially denied collision coverage. After Allstate admitted coverage, the trial court ordered production of claim and investigative materials following an in-camera review. The Fourth District granted certiorari in part, affirming production of some materials but holding that other materials were protected work product. The Supreme Court quashed the district court's decision, receded from Kujawa, and remanded for review consistent with its newly articulated discovery rule.
Remand instructions
The district court must carefully review each requested document in light of the Supreme Court's holding concerning discoverability of underlying claim and related litigation materials in first-party bad-faith actions.