The Game Of Cat And Mouse With Insurers In Florida Asserting That Their Claim File Materials Are Completely Protected From Disclosure

Mar 14, 2011 By Shaun Marker Condominium Associations

During litigation in Florida first-party property insurance disputes, insurers often withhold their entire claims files from discovery by relying the work product doctrine. The claim file contains reports, estimates, photos and other information that is pertinent to the issues in a coverage dispute between a policyholder and its insurer. Insurers attempt to shield the entirety of the claim file from production in discovery where there should be disclosure between the parties. On the flip side, insurers often litigate issues regarding whether policyholders fully complied with their requests for documents and information in compliance with the policy of insurance. It would seem fair and logical that such disclosure would be a two way street, but insurers assert that it is definitely a one way street. When an insurer claims privilege to its entire claim file, the policyholder has no choice but to litigate that issue to obtain any information.

Recently, the U.S. District Court for the Northern District of Florida ruled that an insurer’s claim files are not automatically entitled to protection under the work product doctrine in a first-party insurance dispute. Bartram, LLC v. Landmark American Ins. Co., No. 10-28, 2011 WL 528206 (N.D. Fla. Feb. 4, 2011). The claim in that case involved damages to an apartment complex in Gainesville, Florida, as a result of alleged construction defects. The Plaintiff submitted claims to the builder’s risk insurers for payment. The plaintiff filed suit against the Defendant insurers seeking a declaratory judgment that its losses were covered under the policies and alleging breach of contract by the Defendants in failing to pay for the losses. The Defendant had not formally denied the Plaintiff’s claims at the time suit was filed. A discovery dispute arose between the parties in the lawsuit, where the insurer claimed that each request for production was protected by the work product doctrine. The Plaintiff sought an order compelling the insurer to produce the responsive documents, including the claim file.

The Court held that the date which triggers the application of the work product doctrine in a first-party property coverage dispute is the date of the formal denial of the claim by the insurer. An insurer that wishes to withhold documents prepared before that date must show that the documents were prepared in anticipation of litigation for the work product protection to apply.

Recognizing that there was no denial of coverage before the suit was filed, the Court ordered the insurers to produce all documents prepared before the date the suit was filed, with the exception of any attorney-client communications.

The insurers had refused to produce these documents before the Plaintiff filed a Motion to Compel their production with the Court. In reading the case, the insurers even conceded in their response to the Plaintiff’s motion that they should have produced the documents prepared before the suit was filed. The insurers withheld the production of those documents for so long and then simply conceded that they should have produced them when it went before the Court. It should be noted that the lawsuit was filed in February 2010, and the Order compelling the production of those documents was issued in February 2011. It seems that withholding the documents for a year during the litigation, only to concede that they should have been produced should yield some kind of consequence, yet there were none addressed in the Court’s ruling.

Insurers that choose to wrongfully withhold this type of information essentially attempt to force policyholders to litigate the breach of contract case with their arms tied behind their backs. Fortunately, the District Court did order the production of the documents, so the policyholder may not be forced to litigate under such constraints. It should be noted that Florida state courts may apply a different rule regarding the work product privilege in first-party property claim disputes.

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