19 Fla. L. Weekly Supp. 875a
Online Reference: FLWSUPP 1910CASTInsurance — Discovery — Claims file privilege — Following in camera inspection, all documents in claims file are protected by claims file privilege until issue of coverage is resolved
FABIO CASTANEDA, Plaintiff, vs. CITIZENS PROPERTY INSURANCE COMPANY, Defendant.County Court, 17th Judicial Circuit in and for Broward County. Case No. 12-4774 COCE (53). July 19, 2012. Robert W. Lee, Judge. Counsel: Laura M. Watson, Fort Lauderdale; and David B. Pakula, Southwest Ranches, for Plaintiff. Cristian D. Valois, Fort Lauderdale, for Defendant.
AMENDED SECOND ORDER ONIN CAMERA INSPECTION
THIS CAUSE came before the Court for in camera inspection of documents as set forth in this Court’s Order of April 19, 2012, and the Court’s having reviewed the documents, the entire Court file, and the relevant legal authorities, and the Court’s being sufficiently advised in the premises, the Court finds as follows:
On March 29, 2012, the Defendant filed its Motion for Protective Order and Notice of Objection to Request to Produce at Deposition. The Plaintiff’s Request to Produce requested 22 separately numbered items. The Defendant set its Motion and Notice of Objection for hearing for April 19, 2012. At the hearing, the Court entered a detailed order as to disposition of all items, but finding that items numbered 5, 8, 11 and 17 required an in camera inspection due to Defendant’s claim of privilege.
As a result, the Court entered an Order requiring that the “Defendant must produce doc[ument]s responsive to 5, 8, 11 & 17 to Court under seal within 30 days of Order.” At the hearing, the Court directed the Defendant to produce these items to the Court directly to chambers under seal.
By cover letter dated May 17, 2012, accompanied with a copy of the Defendant’s Second Notice of Compliance, the Defendant timely complied. For purposes of the in camera inspection, the Court focuses on the Defendant’s assertion that items responsive to these requests are protected by the claims file privilege and/or work product privilege.
The Court received the items provided by the Defendant, 186 pages which were [fortunately for the Court] separately bates-stamped. They were comprised of the items listed on attached Exhibit A [Editor’s Note: Exhibit A Omitted].
As for the claims-file privilege, the Court notes that the Defendant has not yet filed an answer to the complaint. However, in his complaint, the Plaintiff has specifically alleged that he has “made demand for outstanding benefits for losses under the policy but the Defendant has denied coverage under the policy” (Complaint ¶9). As a result, before the Court can reach the question of whether the work-product privilege is implicated, the parties must first resolve the coverage issue in this case. See State Farm Fla. Ins. Co. v. Ramirez, 86 So.3d 1198 (Fla. 3d DCA 2012) [37 Fla. L. Weekly D1051a] (“claims file documents are protected [until] the issue of coverage [is] resolved”).
In this case, all the documents produced were represented to the Court as comprising the Defendant’s “claims file.” As this Court has previously noted in other cases, the Court is becoming increasingly concerned in handling in camera inspections of this nature that insurers are beginning to routinely place otherwise clearly discoverable items in its “claims file” and then assert that because it is now in the “claims file,” it does not have to be produced even if completely relevant to the issues before the Court. Indeed, in this case, after a review of the documents, it appears to the Court that many of the 186 pages would not survive a claim of work-product privilege because “[a]n insurance company’s claims investigation in its early stages is conducted in the ordinary course of business [. . .].” Cotton States Mutual Ins. Co. v. Turtle Reef Associates, Inc., 444 So.2d 595, 596 (Fla. 4th DCA 1984). As more recently stated by the same court, “[t]here must be some specific matter reasonably indicating litigation beyond the general business prospects of eventually being sued.” Neighborhood Health Partnership, Inc. v. Peter F. Merkle, M.D., P.A., 8 So.3d 1180, 1184 (Fla. 4th DCA 2009) [34 Fla. L. Weekly D766a] (emphasis added). Nevertheless, in the instant case, the Court finds, as stated by the Ramirez court, that the documents in the Defendant’s claim file are in fact “claims file documents.”
This Court is unsure why the appellate courts have recognized a blanket “claims file” privilege for the insurance industry that goes beyond a mere work product analysis, but the appellate courts clearly appear to have done so. See State Farm Florida Ins. Co. v. Aloni, No. 4D11-4798 (Fla. 4th DCA July 18, 2012) [37 Fla. L. Weekly D1701b]. But cf. Fla. Stat. §90.501(3) (2011) (privileges against disclosure of information must be created only by statute or under the Constitution). Indeed, very often information in a claims file not protected by the work-product privilege is in fact relevant to the issues in a case, even if the dispute is one of “coverage.” Moreover, this Court is unsure why trial courts are required to conduct in camera inspections of documents when a claims-file privilege is asserted if it does not matter what is in the file. But again, the appellate case law requires the in camera inspection to be done. One possible reason is for the trial court to confirm whether a privilege log is sufficiently detailed so that the opposing party — here, the Plaintiff — can be on notice if the asserting party — here, the Defendant — attempts to use one of these otherwise privileged documents, which then might trigger a claim of waiver.
As a result, the parties to this case are reminded that the Defendant cannot assert a claims-file or work-product privilege as to particular documents, and then attempt to use the documents either as a sword or shield to defend its position in the case. As noted by Professor Ehrhardt:
When a party injects into litigation issues that necessarily require exploration of otherwise privileged matters, a waiver of that privilege will be implied. Fairness requires that a party not be permitted to affirmatively insert an issue into the case and then assert a privilege to protect information that is relevant to the issue raised.
C. Ehrhardt, Ehrhardt’s Florida Evidence §507.1 (2011). Moreover, Professor Ehrhardt further discussed the possibility that disclosure of a single item claimed to be privileged may well result in a finding that all other items “relating to the same subject matter” be disclosed. As he noted, “[a] person should not permitted to disclose a specific communication and prohibit the disclosure of other communications regarding the same subject.” Id. Cf. Eastern Air Lines, Inc. v. Gellert, 431 So.2d 329, 332 (Fla. 3d DCA 1983) (waiver of privilege occurs upon disclosure of confidential information).
As a result, the items submitted by the Defendant shall remain under seal without prejudice to the Plaintiff’s renewing its request if and when the coverage issue is resolved. Moreover, the Defendant is placed on notice that it may be barred from using any of the above documents to support its position in this case, or may be faced with the possibility that it has waived the claims file and work product privileges if it attempts to do so. A final ruling on that issue, however, is left for another day.
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