New Rules For Discovery In Florida

Posted on May 9, 2011 by Mike Aylward

There hasn't been much good news from Florida lately, particularly in the area of bad faith litigation.  In a rare bright note, however, the Florida Supreme Court has declared that the liberal rules that it adopted a few years ago requiring disclosure of work product in first party bad faith cases does not apply with respect to attorney-client privileged communications.

In Allstate Indemnity Co. v. Ruiz, 899 So.2d 1121 (Fla. 2005, the court had declared 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 pertaining in any way to coverage, benefits, liability or damages, should also be produced in a first-party bad faith action.” Further, all such materials prepared after the 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 an order of the court following an in camera inspection.”

Now the Florida Supreme Court has ruled in Genovese v. Provident Life & Accident ins. Co., No. SC06-2508 (Fla. March 17, 2011) that its holding in Ruiz does not similarly require insurers to disclose attorney-client privileged communications. The court held that the attorney-client privilege and work product doctrine are distinct concepts and that the heightened protection required for communications between insurers and their outside counsel precludes discovery of these materials even in cases of bad faith. The court declared therefore that, “When an insured party brings a bad faith action against its insurer, the insured may not discover those privileged communications that occurred between the insurer and its counsel during the underlying action.”

The court cautioned, however, that there might be situations in which an insurer has hired counsel to both investigate the underlying claim and render legal advice. Accordingly, where a claim of privilege is asserted, a trial court should conduct an in camera inspection to determine whether the sought after materials are truly protected by the attorney-client privilege so that work performed by lawyers that do not involve the rendering of legal advice may be discovered. Further, the Supreme Court emphasized that its opinion was not intended to preclude discovery in the event that an insurer waives the privilege, as by relying on the “at issue” doctrine.

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Florida Supreme Court Withdraws Opinion On CD Issues

Posted on June 20, 2008 by Mike Aylward
Has there ever been a court that certifies more insurance issues to state courts than today’s Eleventh Circuit? (well, yes, there’s the Fifth Circuit too). Now a state court, after initially answering a question concerning insurance coverage for construction defect claims, has changed its mind and tossed the file back to the federal courts due to a lack of clarity with respect to a key factual question.


Back in December, the Florida Supreme Court had answered a certified question from the Eleventh Circuit in Auto-Owners Ins. Co. v. Pozzi Window Co., No. SC06-779 (Fla. December 20, 2007) that a lawsuit brought against a contractor for water damage caused by the defective installation of windows at a multi-million dollar house in Coconut Grove was not covered since CGL policies do not cover the cost of repair and replacement of defective work.

In Pozzi Window Co. v. Auto-Owners Ins. Co., 446 F.3d 1178 (11th Cir. 2006), the Eleventh Circuit certified to the Supreme Court the issue of whether the defective windows were completed works such that the cost of repairing or replacing the defective windows fell within the scope of the policy’s coverage for claims within the “products/completed operations hazard.” In light of recent Florida appellate decisions that have split on the issue of whether repair or replacement costs are covered under a CGL policy, the Eleventh Circuit asked the Florida Supreme Court to answer whether a standard CGL policy that included coverage for claims within the products/completed operations hazard would cover a general contractor’s liability to a third party for the cost of repairing or replacing defective work by its subcontractor. Unlike its opinion J.S.U.B., the Florida Supreme Court observed that in this case, while the defective installation of the windows was an “occurrence,” the cost of repairing and removing defective work was not a claim for “property damage.”

Last week, however, the Florida Supreme Court withdrew its December 20, 2007 opinion and declared in Auto Owners Ins. Co. v. Pozzi Window Co., No. SCO6-779 (Fla. June 12, 2008) that it was unable to answer the Eleventh Circuit’s certified question owing to the fact that the court had failed to clarify whether the water damage resulted from defective installation, for which there would not be coverage, or defects in the installed windows themselves. In keeping with its  opinion  in U.S. Fire Ins. Co. v. JSUB, the Supreme Curt noted that if the windows were not defective prior to their installation, coverage would exist for the cost of repair or replacement of the windows because there was physical injury to tangible property (the windows) caused by their defective installation by a subcontractor. However, a different result would follow if the windows were in a defective condition before being installed and the damage to the completed project was therefore caused by defective windows rather than faulty installation alone.

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