STATE FARM V. PUIG & PUIG

SUPREME COURT CASES

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State: Florida

Court: Florida Third District Court

Docket No: 10-2104

Case Date: 03/23/2011

Preview:Third District Court of Appeal
State of Florida, January Term, A.D. 2011
Opinion filed March 23, 2011. Not final until disposition of timely filed motion for rehearing. ________________ No. 3D10-2104 Lower Tribunal No. 06-26728 ________________

State Farm Florida Insurance Company,
Petitioner, vs.

Rene Puig and Sylvia Puig,
Respondents.

A Writ of Certiorari to the Circuit Court for Miami-Dade County, Barbara Areces, Judge. Carlton Fields, and Paul L. Nettleton and Nancy C. Ciampa, for petitioner. Jeffrey N. Golant (Pompano Beach), for respondents.

Before ROTHENBERG, LAGOA, and EMAS, JJ. ROTHENBERG, J. In their first-party bad faith action against State Farm Florida Insurance

Company ("State Farm"), the plaintiffs, Rene and Sylvia Puig ("the Puigs"), moved to compel State Farm to produce its entire claim file. The trial court granted the Puigs' motion, and State Farm now seeks a writ of certiorari quashing the trial court's order. We conclude that the trial court misapplied the Florida Supreme Court's holding in Allstate Indemnity Co. v. Ruiz, 899 So. 2d 1121 (Fla. 2005), in the following two ways: (1) by impermissibly compelling, over State Farm's assertions of work product protection, the production of claim file

documents prepared after resolution of the underlying litigation; and (2) by failing to give any consideration to State Farm's assertions of attorney-client privilege. Accordingly, we grant the petition in part, and deny the petition in part. BACKGROUND AND PROCEDURAL HISTORY Hurricane Wilma damaged the Puigs' home in October 2005. The Puigs submitted a timely claim to State Farm seeking to recover approximately $234,000. State Farm acknowledged coverage under the policy, but only paid out approximately $49,000. In December 2006, the Puigs commenced an action for declaratory judgment seeking to establish entitlement to a larger payout. The underlying litigation concluded on February 25, 2008, when the trial court confirmed an appraisal award of approximately $106,000 in favor of the Puigs. In November 2006, and again in March 2007, the Puigs filed notice that they intended to file a bad faith action against State Farm. In February 2009, the Puigs

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filed a supplemental complaint for statutory bad faith and defamation. The Puigs requested the production of State Farm's entire claim file. State Farm objected, but did produce what it considered to be the non-privileged portions of the file, along with a privilege log. The Puigs moved to compel the production of the entire claim file "as of February 25, 2008." After the first hearing, the trial court reserved ruling, but ordered State Farm to produce the documents identified in its privilege log for an in camera review. At the next hearing on the motion, the trial court compelled the production of all claim file documents, citing as authority the Florida Supreme Court's opinion in Ruiz. On July 15, 2010, the trial court issued an amended order compelling State Farm's production of the entire claim file, despite State Farm's assertions that they were protected by the work product doctrine and by the attorney-client privilege. Notably, over State Farm's assertions of work product protection, the trial court's order compelled the production of documents prepared subsequent to February 25, 2008, after the underlying litigation over the Puigs' claim had concluded. This petition followed. JURISDICTION "To receive certiorari jurisdiction over a non-final, non-appealable order, a petitioner must show two prerequisites. First, that the order caused irreparable harm which cannot be remedied on appeal following final judgment; and second,

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that the order departed from the essential requirements of the law." Fuller v. Truncale, 50 So. 3d 25, 27 (Fla. 1st DCA 2010); see also Allstate Ins. Co. v. Boecher, 733 So. 2d 993, 999 (Fla. 1999) (quoting Allstate Ins. Co. v. Langston, 655 So. 2d 91, 94-95 (Fla. 1995)) ("[C]ertiorari is the appropriate remedy when a discovery order `departs from the essential requirements of law, and thus causes material injury to the petitioner throughout the remainder of the proceedings, effectively leaving no adequate remedy on appeal.'"). ANALYSIS 1. The Correct Portion of the Order The trial court ordered State Farm to produce a number of claim file documents prepared prior to the conclusion of the underlying litigation. State Farm failed to produce a number of those documents, asserting they were protected under the work product doctrine. However, in Ruiz, 899 So. 2d at 1129-30, the Florida Supreme Court clearly held that all work product material in the claim and litigation files "that was created up to and including the date of resolution of the underlying disputed matter" must be produced in a first-party bad faith action. Thus, despite State Farm's assertions of protection, the trial court correctly compelled State Farm to produce the work product materials in its claim file that were prepared on or before February 25, 2008, and we deny the petition as to that portion of the trial court's order.

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2. The Trial Court's First Departure From the Essential Requirements of Law The trial court departed from the essential requirements of law by compelling the production of State Farm's work product materials prepared after the conclusion of the underlying litigation. Admittedly, those materials "may be subject to production upon a showing of good cause or pursuant to an order of the court following an in camera inspection." Id. at 1130 (emphasis added). However, in this case, the Puigs' motion to compel production was specifically limited to claim file documents prepared "as of February 25, 2008, the date the [trial court] confirmed the appraisal award." The Puigs made no showing of good cause, special relevance, or need. See id. (holding that work product materials prepared after the conclusion of the underlying litigation may be subject to production upon good cause shown). Furthermore, the Puigs did not even request the court to compel the production of post-February 25, 2008 claim file documents. See Homestead-Miami Speedway, LLC v. City of Miami, 828 So. 2d 411, 413 (Fla. 3d DCA 2002) (striking portion of order providing relief that was neither pled nor requested); Fed. Nat'l Mortg. Ass'n v. Blocker, 728 So. 2d 306, 307 (Fla. 1st DCA 1999) (finding that an order granting relief that was not requested, noticed, or litigated constitutes a departure from the essential requirements of the law). Thus, we conclude that the trial court departed from the essential requirements of the law by compelling the production 5

of claim file documents prepared after the conclusion of the underlying litigation. 3. The Trial Court's Second Departure From the Essential Requirements of Law The trial court also departed from the essential requirements of law when it agreed with the Puigs that the Ruiz case entirely eliminated an insurer's ability to assert its attorney-client privilege in a first-party bad faith action. This decision

amounted to a complete misunderstanding of Ruiz. As Justice Wells stated in a separate opinion: "I emphasize that the only issue being decided in this case is the discovery of work product in the claims file pertaining to the underlying insurance claim." Ruiz, 899 So. 2d at 1132 (Wells, J., concurring in part and dissenting in part) (emphasis added). Also, in the years following the Ruiz

decision, every other district court of appeal has held that the attorney-client privilege continues to exist and be available to insurers that are defending statutory bad faith claims, see West Bend Mut. Ins. Co. v. Higgins, 9 So. 3d 655, 658 (Fla. 5th DCA 2009); Progressive Express Ins. Co. v. Scoma, 975 So. 2d 461, 465 (Fla. 2d DCA 2007); Liberty Mut. Fire Ins. Co. v. Bennett, 939 So. 2d 1113, 1114 (Fla. 4th DCA 2006); XL Specialty Ins. Co. v. Aircraft Holdings, LLC, 929 So. 2d 578, 583 (Fla. 1st DCA 2006).1

We note that just prior to our opinion being released, the Florida Supreme Court issued its opinion in Genovese v. Provident Life & Accident Insurance Co., No. SC06-2508 (Fla. Mar. 17, 2011), holding that "the attorney-client privilege is applicable in the first-party bad faith context." Id. at *4. 6

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We agree with the First, Second, Fourth, and Fifth Districts. In Ruiz, the Florida Supreme Court held that in the bad-faith context, the normally automatic work product protection afforded to certain claim file documents will not bar their production. Ruiz, 899 So. 2d at 1131. However, that decision did not add a firstparty bad faith exception to the statutory protection of confidential

communications between attorneys and their clients. See

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