03-1506 LIBERTY V. KAUFMAN

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State: Florida

Court: Florida Third District Court

Docket No: 03-1506 LIBERTY V. KAUFMAN

Case Date: 09/22/2004

Preview:NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION AND, IF FILED, DISPOSED OF.

IN THE DISTRICT COURT OF APPEAL OF FLORIDA THIRD DISTRICT JULY TERM, 2004

LIBERTY MUTUAL FIRE INSURANCE COMPANY, Petitioner, vs. ROBERT S. KAUFMAN, Respondent.

** ** ** ** ** ** CASE NO. 3D03-1506 LOWER TRIBUNAL NO. 90-61023 CA 02

Opinion filed September 22, 2004. Writ of Certiorari to the Circuit Court for Dade County, Ronald Friedman, Judge. Billing, Cochran, Heath, Lyles & Mauro and Janis Brustares Keyser, for petitioner. Downs & Associates and David W. Brill; Daniel Stuzin, for respondent.

Before LEVY, FLETCHER, and RAMIREZ, JJ. LEVY, Judge. Liberty Mutual Fire Insurance Company (ALiberty Mutual@)

Petitions for a Writ of Certiorari, seeking to quash an Order of the trial court which requires the production of portions of its claim file. We grant the Petition for Certiorari. This case arises out of an underlying eviction proceeding brought by Robert S. Kaufman against two of his tenants. The tenants brought a counterclaim alleging negligent and intentional infliction of emotional distress. The eviction proceeding and the counterclaims were bifurcated for trial. During the eviction

trial, on January 12, 1990, Kaufman informed Liberty Mutual of the counterclaim litigation. Liberty agreed to defend Kaufman in the counterclaim under a reservation of rights. Specifically, Liberty informed Kaufman that it did not intend to cover the intentional claims in the counterclaim but that it would provide Kaufman a defense of the action and coverage for the unintentional acts. Accordingly, Liberty Mutual retained the services of the law firm of Kubicki Draper to represent Mr. Kaufman. During the proceedings, the tenants' counsel attempted to settle the matter for the policy limits. On June 25, 1990, the

trial judge expressed in open court that the tenants would prevail but the amount of damages was uncertain. At the time, a $25,000.00 settlement offer from the tenants was on the table. Kaufman claims that counsel did not inform him of the pronouncement in open court, but mentioned the incident, by letter, to Liberty Mutual.

Ultimately, on July 5, 1990, the trial court found in favor of the 2

tenants on their counterclaim and awarded damages of $310,000.00. Liberty subsequently denied coverage for the compensatory and punitive damages awarded against Kaufman based on an opinion letter from Kubicki, Draper opining that the verdict was based on the intentional conduct. In 1990, Kaufman filed the instant case against Liberty, seeking a declaratory decree of coverage, statutory coverage, damages for breach of contract, and damages for statutory bad faith. Kaufman also filed a separate malpractice action against Kubicki Draper. In 1995, the trial court granted Liberty=s motion for summary judgment as to the declaratory decree of coverage claim and the statutory coverage claim. The breach of contract and bad

faith claims, which center on whether Liberty properly conveyed settlement demands to Kaufman and whether Liberty provided an adequate defense to Kaufman, remain. During discovery, Kaufman requested that Liberty produce its entire claims file from the underlying litigation. Liberty objected to this request on the ground that the file was protected work product and attorney-client privilege. The matter was considered The general

before a general master on two separate occasions.

master found that each document in the claims file was protected, and recommended that no portion of the claims file should be produced. After Kaufman filed exceptions, the trial court appointed a special master to review the claims file in camera. The special 3

master reviewed the claims file, and issued three reports.

Liberty

filed exceptions to the reports. The trial court ultimately entered an omnibus order requiring the production of portions of Liberty=s claims file. Liberty Mutual petitions this Court for a Writ of Certiorari, challenging portions of the trial court's omnibus Order which order the production of several claims file documents. Specifically, Liberty suggests that because the trial court found that there was "no coverage" under the policy for the judgment against Kaufman, that Kaufman is precluded from compelling

production of the claims file. Alternatively, Liberty suggests that the parties did not enjoy a fiduciary relationship but were in adversarial Liberty. ATTORNEY CLIENT PRIVILEGE A liability insurer's relationship with its insured is positions within months after Kaufman contacted

fiduciary in nature. Doe v. Allstate Ins. Co., 653 So. 2d 371, 37374 (Fla. 1995); Eastern Airlines, Inc. v. U.S. Aviation

Underwriters, Inc., 716 So. 2d 340, 346 (Fla. 3d DCA 1998); Allstate v. American So. Home Ins. Co., 680 So. 2d 1114, 1116 (Fla. 1st DCA 1996). Thus, a liability insurer has a continuing duty to use the degree of care and diligence a person would exercise in the management of his or her own business when it undertakes to defend its insured. Doe v. Allstate, 653 So. 2d at 373-74; see also Shuster v. S. Broward Hosp. Dist. Physicians' Prof'l Liab. Ins. 4

Trust, 591 So. 2d 174 (Fla. 1992); Fla. Farm Bureau Mut. Ins. Co. v. Rice, 393 So. 2d 552 (Fla. 1st DCA 1980) review denied, 399 So. 2d 1142 (Fla. 1981). To this end, when an insurer accepts the defense obligations of its insured, certain interests of the insured and the insurer essentially merge. bar, among other things, the Such common interests privilege from

attorney-client

attaching to communications among the attorney, the insurer, and the insured. Allstate v. Am. S. Home Ins. Co., 680 So. 2d at 1116; Doe v. Allstate, 653 So. 2d at 373-74. Section 90.502, Florida Statutes, which protects attorney client communications, includes several exceptions to the attorneyclient privilege. Specific to the instant case, section 90.502(4), provides: (4) There is no lawyer-client privilege under this section when: * * * (c) A communication is relevant to an issue of breach of duty by the lawyer to his client . . . , arising from the lawyer-client relationship. * * * (e) A communication is relevant to a matter of common interest between two or more clients, . . . if the communication was made by any of them to a lawyer retained or consulted in common when offered in a civil action between the clients. . . .

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