How many good news from Florida have we seen lately, particularly in the area of bad faith litigation. Not too many… However, the Florida Supreme Court has declared that the liberal rules that it adopted a few years ago requiring disclosure of work product in first party bad faith cases does not apply with respect to attorney-client privileged communications.
In connection with evaluating the obligation to process claims in good faith under Section 624.155, all materials, including documents, memoranda, and letters, contained in the underlying claim and related litigation file material that was created up to and including the date of resolution of the underlying disputed matter and pertaining in any way to coverage, benefits, liability or damages, should also be produced in a first-party bad faith action.
Further, all such materials prepared after the resolution of the underlying disputed matter and initiation of the bad faith action may be subject to production upon a showing of good cause or pursuant to an order of the court following an in camera inspection.
Now the Florida Supreme Court has ruled in Genovese v. Provident Life & Accident ins. Co., No. SC06-2508 (Fla. March 17, 2011) that its holding in Ruiz does not similarly require insurers to disclose attorney-client privileged communications. The court held that the attorney-client privilege and work product doctrine are distinct concepts and that the heightened protection required for communications between insurers and their outside counsel precludes discovery of these materials even in cases of bad faith. The court declared therefore that, “When an insured party brings a bad faith action against its insurer, the insured may not discover those privileged communications that occurred between the insurer and its counsel during the underlying action.”The court cautioned, however, that there might be situations in which an insurer has hired counsel to both investigate the underlying claim and render legal advice. Accordingly, where a claim of privilege is asserted, a trial court should conduct an in camera inspection to determine whether the sought after materials are truly protected by the attorney-client privilege so that work performed by lawyers that do not involve the rendering of legal advice may be discovered. Further, the Supreme Court emphasized that its opinion was not intended to preclude discovery in the event that an insurer waives the privilege, as by relying on the “at issue” doctrine.