When can a litigant seek discovery concerning an insurer’s business policies and practices? A recent decision by the Third District Court of Appeal addressed this issue. See General Star Indemnity Co. v. Atlantic Hospitality of Florida, LLC, No. 3D11-3199 (Fla. 3d DCA, July 25, 2012) (hereinafter, the “Opinion”). In General Star, the Court of Appeal considered an appeal of a lower court order which overruled an insurer’s objection to discovery requests that sought information regarding the insurer’s business practices and policies. The insured who was seeking the discovery submitted a claim to its insurer for property damage sustained after Hurricane Charlie. The insurer paid $1.4 million on the claim and the insured brought suit against the insurer claiming breach of contract, declaratory judgment and breach of implied covenant of good faith and fair dealing. Opinion at *2.
During the course of the litigation, the insured served requests for production of “all training manuals, company policy memoranda, and guidelines relating to the underwriting and administration of the subject insurance policies and/or estimating, adjusting and payment of claims under the subject insurance policies.” Id. The trial court overruled the insurer’s objection to the discovery request and the insurer appealed. Id.
On appeal, the insurer argued that the requests for production by the insured were for “classic bad faith materials” and that under Florida law such materials are not subject to production until the parties have resolved the underlying coverage claim. Id. The Court of Appeal agreed with the insurer, finding that “[b]ecause the discovery order under review compels the production of materials concerning the insurer’s business policies and practices before there has been a determination of coverage and the extent of loss, we grant the petition and quash the order.” Opinion at *3, citing GEICO General Insurance Co. v. Rodriguez, 23 So. 3d 1212 (Fla. 3d DCA 2009).
In making its ruling, the Court of Appeal cited to several Florida decisions that hold that discovery concerning an insurer’s business policies and practices is premature unless there has first been a determination regarding liability and extent of damages owed to the insured under the first party coverage. Opinion at *3, citing Phoenix Ins. Co. v. Trans World Forwarding, Inc., 19 So. 3d 430, 430 (Fla. 3d DCA 2009)(quoting Gov’t Emps. Ins. Co. v. Rodriguez, 960 So. 2d 794, 795 (Fla. 3d DCA 2007) (further citations omitted).