Combined With Florida Insurance Reform, Recent Florida Appellate Court Ruling Affords Insurers Significant Shield Against Costly Discovery And Bad Faith Claims

• Jurisdiction: Florida,United States
• Law Firm: Crowell & Moring
• Subject Matter: Insurance, Litigation, Mediation & Arbitration, Insurance Laws and Products, Trials & Appeals & Compensation
• Author: Ms Laura Foggan and Adam J. Singer
• Published date: 17 February 2023

On February 8, 2023, Florida's intermediate appellate court quashed a trial court order that had erroneously compelled discovery of work product materials from an insurer's claim file in a breach of contract action concerning property damage to its insureds' home. Family Security Ins. Co. v. Stein, et. al., No. 4D22-1468 (Fla. 4^th DCA Feb. 8, 2023). After the insurer asserted work product protection for certain claim file materials sought in discovery, the trial court granted the insureds' motion to compel and ordered the insurer to produce its field adjuster loss report, nonfinal estimate, and supporting documentation. Florida's District Court of Appeal then stepped in, granting the insurer's petition for a writ of certiorari and quashing the trial court order.

In quashing the trial court's order, the appellate court made clear that "an insurer's claim file constitutes work product and is protected from discovery prior to a determination of coverage." Opinion at 2 (quoting State Farm Fla Ins. Co. v. Aloni, 101 So. 3d 412, 414 (Fla. 4th DCA 2012)). The court had no trouble finding that the adjustor's loss report, nonfinal estimate, and supporting documentation all fell squarely within the category of protected work product generated during an insurer's investigation of a claim. It therefore concluded that the trial court's order compelling production of the claim file materials "constitute[d] a departure from the essential requirements of law resulting in irreparable harm" and quashed the order. Opinion at 1.

The significance of this ruling comes into focus when linked to Florida's recent insurance reform legislation, Senate Bill No. 2-A, enacted on December 16, 2022. With that reform now in place, a property insurer in Florida cannot be sued for bad faith unless the insured has first "established through an adverse adjudication by a court of law that the property insurer...