Pepperwood of Naples Condominium Association, Inc. v. Nationwide Mutual Fire Insurance Company
Filing
47
ORDER granting in part and denying in part 23 Plaintiff's Motion to Compel Defendant to Provide Better Responses to Plaintiffs First Request for Production Served With the Complaint. (a)Plaintiff's Motion to Compel Requests Nos. 4, 25, 2 7, 33, 35, 36, 37, 38, and 39 is GRANTED in part and DENIED in part. (i)Nationwides deadline to respond to Requests Nos. 33, 35, 36, 37, 38, and 39 shall be two (2) weeks following this Court's entry of a protective order of confidentiality. (ii )Nationwide shall provide the documents listed on its privilege log with respect to Request No. 4 that the Court ordered be provided to the Court for in camera review on or before October 12, 2011. (b) Plaintiff's Motion to Compel Requests Nos. 2, 6, 24, 26, 28, 29, 30,31, and 34 is DENIED. Nationwide shall provide responses to the requests for production that do not require the entry of a protective order of confidentiality in accordance with this Order on or before October 30, 2011. If N ationwide asserts that any documents are privileged, confidential, or trade secret, a proper privilege log shall be produced by this date.Defendant's request for attorneys fees, costs, and interest is DENIED at this time subject to reconsideration if appropriate, including any failure to comply with this Order. Signed by Magistrate Judge Sheri Polster Chappell on 10/3/2011. (LMH)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
PEPPERWOOD OF NAPLES CONDOMINIUM
ASSOCIATION, INC.,
Plaintiff,
-vs-
Case No. 2:10-cv-753-FtM-36SPC
NATIONWIDE MUTUAL FIRE INSURANCE
COMPANY,
Defendant.
______________________________________
ORDER
This matter comes before the Court on Plaintiff’s Motion to Compel Defendant to Provide
Better Responses to Plaintiff’s First Request for Production Served With the Complaint (Doc. #23)
filed on August 17, 2011. Defendant filed its Response in Opposition to Plaintiff’s Motion to
Compel Defendant to Provide Better Responses to Plaintiff’s First Request for Production (Doc.
#30) on September 9, 2011. The Plaintiff is asking this Court to overrule Defendant’s objections
to and compel Defendant to provide better answers to Plaintiff’s First Request for Production of
Documents. The Motion is now ripe for the Court’s review.
BACKGROUND
In the Complaint, Plaintiff Pepperwood of Naples Condominium Association, Inc. alleges
that in 2004 and again in 2005, Pepperwood’s insured property, consisting of 5 two-story buildings
with 64 units located in Naples, Florida, sustained substantial damages as a result of hurricane and/or
hurricane force winds from Hurricane Wilma and ensuing damages. (Doc. #2, ¶8). Nationwide was
notified of the loss and began adjusting the claim in October 2005. Id. at ¶10. Nationwide
acknowledged the loss was covered, but failed to promptly tender all insurance benefits. Id. at ¶13.
As a result, Pepperwood was required to retain the services of an insurance claim
professional to assist in obtaining the owed insurance benefits. (Doc. #2, ¶14). Nationwide’s failure
to acknowledge full coverage and to promptly tender all insurance benefits resulted in Pepperwood
incurring the expense of retaining a Public Adjuster to assist in submitting the insurance claim to
Nationwide. Id.
On or about April 18, 2008, Pepperwood states because Nationwide refused to tender owed
insurance benefits, Pepperwood demanded appraisal. Id. at ¶15. At that time, Nationwide had
tendered approximately $30,270.20. Id. On May 19, 2010, a Final Appraisal Award was entered,
awarding Pepperwood $1,901,645.06 (Replacement Cost) and $1,535,468.28 (Actual Cash Value).
Id. On June 17, 2010, after the appraisal, Nationwide tendered an additional $1,391,675.64 in owed
insurance benefits to Pepperwood. Id.
On or about November 8, 2010, Pepperwood filed its Complaint for Unfair Methods of
Competition and Unfair or Deceptive Acts or Practices (Doc. #2). Pepperwood alleges that
Nationwide breached the Insurance Policy covering Pepperwood’s insured properties and the fair
claims handling statutes. Id. at ¶¶18-21.
DISCUSSION
The Federal Rules of Civil Procedure allow discovery of any relevant, non-privileged
material that is admissible or reasonably calculated to lead to admissible evidence. Fed. R. Civ. P.
26(b)(1). Courts interpret relevancy “broadly to encompass any matter that bears on, or that
reasonably could lead to other matter[s] that could bear on, any issue that is or may be in the case.”
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Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978). Discovery requests are not only
limited to the issues raised in the pleading, nor limited only to evidence that would be admissible at
trial. Oppenheimer Fund, Inc. at 351. However, “discovery, like all matters of procedure, has
ultimate and necessary boundaries.” Id. “Courts have long held that ‘[w]hile the standard of
relevancy [in discovery] is a liberal one, it is not so liberal as to allow a party to roam in the shadow
zones of relevancy and to explore a matter which does not presently appear germane on the theory
that it might conceivably become so.’” Henderson v. Holiday CVS, L.L.C., 2010 U.S. Dist. Lexis
80660 at *6 (S.D. Fla. Aug. 9, 2010) (quoting Food Lion, Inc. v. United Food & Commercial
Workers Intern. Union, 103 F.3d 1007, 1012–13 (D.C. Cir. 1997)). “[T]he Federal Rules of Civil
Procedure allow for broad discovery that does not need to be admissible at trial.” Martin v. Zale
Delaware, Inc., 2008 WL 5255555, *2 (M.D. Fla. Dec. 25, 2008) (citing Fed. R. Civ. P. 26(b)).
The Federal Rules state that, “[t]he party upon whom the request [for production] is served
shall serve a written response within 30 days after the service of the request.” Fed. R. Civ. P. 34(b).
Likewise, a party upon whom interrogatories have been served has 30days to respond either by filing
answers or objections to the propounded interrogatories. Fed. R. Civ. P. 33(b). If the serving party
does not receive a response to their interrogatories and request for production, then the serving party
may request an order compelling disclosure. Fed. R. Civ. P. 37(a). Whether or not to grant the
motion to compel is at the discretion of the trial court. Commercial Union Insurance Co. v.
Westrope, 730 F.2d 729, 731 (11th Cir. 1984).
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Plaintiff’s First Request for Production of Documents
On December 15, 2010, Plaintiff served its First Request for Production on Nationwide. On
March 25, 2011, Nationwide served its Response. No documents were produced at this time,
however, Nationwide stated it would produce documents. On June 3, 2011 - nearly six months after
Plaintiff had served its Requests - Nationwide served its Supplemental Response to Pepperwood’s
First Request for Production, attaching a four-page privilege log with 24 separate entries as “Exhibit
A.” (Doc. #23-3). Nationwide has produced documents on a DVD that contain ten separate PDF
files, totaling 11,236 pages.
Plaintiff alleges that Nationwide failed and/or refused to respond by not providing any
relevant or material evidence and/or information responsive to the certain requests for production.
Specifically addressed in its Motion, Plaintiff alleges that Nationwide failed and/or refused to
respond to the following requests for production in Plaintiff’s First Request for Production of
Documents: 2, 4, 6, 24, 25, 26, 27, 28, 29, 30, 31, 33, 34, 35, 36, 37, 38, and 39. The Court will
address each in turn:
Request for Production No. 2 states: Copies of all documentation, of whatever
kind or nature, in your possession, custody or control (excluding privileged or
protected documents) concerning prior or subsequent insurance claim(s) made by
NATIONWIDE’S insured, PEPPERWOOD, to either NATIONWIDE or some other
insurance carrier regarding its claim of loss, including but not limited to, copies of
any insurance policies, recorded statements, documentation of the claim such as
proofs of loss, reports or memoranda by the insurance adjuster regarding the extent
of damage and the reasons for payment or denial of the claim and copies of any and
all letters to or from the insurance carrier which deny the claim, address the claim,
or propose no coverage, as well as copies of all correspondence to or from the
insured regarding the claim(s).
Response: Objection. This Request is vague regarding “prior or subsequent insurance
claims . . . regarding its claim of loss.” Additionally, it seeks information that is
irrelevant and not reasonably calculated to lead to the discovery of admissible
evidence.
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Pepperwood argues that the information is relevant because Nationwide has asserted in this
litigation that the damages to the Pepperwood buildings were pre-existing and therefore not covered
losses. Pepperwood would use the documentation provided in response to this Request to show that
Nationwide knew that claimed damages were true and proper hurricane wind damage that should
have been timely paid. In other words, Pepperwood is trying to show that there are no other claims
that were filed for the damages that are the subject of this litigation prior to Hurricane Wilma.
Nationwide further argues in its briefing that as this Request reads, it seems to seek documents
regarding a prior or subsequent Pepperwood claim arising from the insurance claim that is the
subject of this litigation. Nationwide argues that Pepperwood does not request, as Pepperwood
suggests in its Motion, any other claims that Pepperwood made to Nationwide on other matters.
Nationwide’s objections are well taken. This Request is ambiguous and vague as to whether
documentation regarding the claims at issue in this litigation is sought or documentation regarding
other claims. Therefore, Plaintiff’s Motion to Compel this Request is due to be denied.
Request for Production No. 4 states: Copies of all correspondence, notices, reports
or other communications between you and your representatives and PEPPERWOOD
or its representatives regarding the hurricane damage at PEPPERWOOD’S insured
property located at 4955 Pepper Circle B, 4693 Rattlesnake Hammock Road D, 4967
Rattlesnake Hammock Road E, 4957 Pepper Circle C, and 4973 Pepper Circle F,
Naples, Collier County, Florida.
Response: Please see the documents produced in response to Request #1.1
Pepperwood argues that Nationwide has withheld 24 categories of documents under a claim
of either attorney-client privilege or work product protection. On June 3, 2011, Nationwide served
1
Nationwide’s response to Request No. 1 was as follows: “The claim
files (excluding privileged and protected documents) are being scanned
and Bates Numbered, and upon return from the undersigned’s vendor will
be forwarded under separate cover along with a Privilege Log identifying
any redactions.”
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its Verified Answers to Plaintiff’s First Set of Interrogatories wherein its answer to Interrogatory No.
4 asserted that it anticipated litigation in the contract case on September 16, 2008, and in the bad
faith case on December 11, 2008. Pepperwood argues that all information and/or documentation in
existence before the date of anticipation of litigation in the bad faith case (December 11, 2008) must
be produced by Nationwide if not listed in the privilege log. And all documents listed on the
privilege log after December 11, 2008, may be discoverable if good cause is shown.
The elements of the attorney-client privilege are: (1) Where legal service advice of any kind
is sought, (2) from a professional legal advisor in his capacity as such, (3) the communications
relating to that purpose, (4) made in confidence, (5) by the client, (6) are at his instance permanently
protected, (7) from disclosure by himself or by the legal advisor, (8) except the protection may be
waived. Universal City Development Partners, Ltd. v. Ride & Show Engineering, Inc., 230 F.R.D.
688, 690 (M.D. Fla. 2005) (quoting International Telephone and Telegraph Corp. v. United
Telephone Co., 60 F.R.D. 177, 184-85 (M.D. Fla. 1973)). The attorney-client privilege is only
available when all the elements are present. Universal City Development Partners, Ltd., 230 F.R.D.
at 690 (citing Provenzano v. Singletary, 3 F. Supp. 2d 1353, 1366 (M.D. Fla. 1999) aff’d, 148 F.3d
1327 (11th Cir. 1998)). The party asserting the privilege has the burden of proving the existence of
the privilege. United States v. Schaltenbrand, 930 F.2d 1554, 1562 (11th Cir. 1991). The privilege
extends to communications from an attorney to his client, as well as the reverse. Knights Armament
Co. v. Optical Systems Technology, Inc., 2009 WL 331608 *2 (M.D. Fla. Feb. 10, 2009) (citing U.S.
v. Pepper’s Steel & Alloys, Inc., 1991 WL 1302864 * 3 (S.D. Fla. Mar.19, 1991)).
Nationwide asserts that none of the items listed on its privilege log identify documents
evincing any communication between Nationwide and Pepperwood. Rather, all of the items on the
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privilege log identify communication between Nationwide and its underlying defense counsel, or
notes regarding defense strategy, that are protected. Nationwide further asserts that all of the entries
on the privilege log (Doc. #23-3) are dated after December 11, 2008 - the date it anticipated
litigation in the bad faith case. Therefore, Nationwide is objecting to the production of the
documents that were not produced and to the production of the redactions that are listed in the
privilege log. It also argues that before any production is ordered to take place, the Court should
conduct an in camera inspection of the redacted pages.
It has been noted that since the Florida Supreme Court’s holding in Allstate Indem. Co. v.
Ruiz, 889 So.2d 1121 (Fla. 2005), that “it is clear that Florida recognizes no privilege or limitation
with respect to claim file materials in such an action.” Cozort v. State Farm Mutual Auto Ins. Co.,
233 F.R.D. 674, 676 (M.D. Fla. 2005). In Cozort, the court went on to make key findings and
conclusions with regard to discovery of privileged and work product materials in the context of a bad
faith case that the Court finds applicable in the instant case:
The Court agrees with the Florida Supreme Court that, in the context of bad faith
actions, the only evidence of the claim itself is the entire claim file, including the
impressions and advice of counsel. This meets the substantial need and undue
hardship tests, sufficient to require production over an assertion of work product
immunity.
***
For the same reasons set forth by the Florida Supreme Court in Ruiz, this Court holds
that the mental impressions of State Farm’s counsel are directly at issue here, and
thus, exceptional circumstances justify invading the opinion work product immunity
pertaining to any such documents created as part of the coverage litigation.
***
With respect to assertions of attorney-client privilege, State Farm fares no better . .
. . The Florida court used broad language to clarify that ‘all materials’ must be
produced. ‘All materials’ necessarily includes materials between the insurance
company and its counsel regarding coverage issues. Thus to the extent Ruiz
implicates a claim of attorney-client privilege, Ruiz is applicable in this diversity suit
under FRE 501. As such, Plaintiff is entitled to production of all claim file or
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litigation file materials pertaining to coverage issues, despite State Farm’s assertion
of attorney-client privilege.
Cozort, 233 F.R.D. at 676-77. Thus, the court in Cozort directed State Farm to produce all claim
file documents or litigation file materials pertaining to the coverage dispute - including those alleged
to be protected by the work product doctrine and attorney-client privilege - and was directed to
submit an amended privilege log with respect to documents relating solely to the bad faith lawsuit.
Id. at 677. See also Mayfair House Assoc., Inc. v. QBE Ins. Corp., 2010 WL 472827, *3 (S.D. Fla.
Feb. 5, 2010) ([I]n Ruiz, the Florida Supreme Court effectively eliminated the attorney client
privilege as a discovery shield in bad faith insurance litigation between an insured and its insurance
company with respect to all materials generated prior to resolution of the underlying disputed
matter.”).
In this case, the Court has reviewed the privilege log submitted by Nationwide. (Doc. #23-3).
It appears that out of the thousands of pages that were produced by Nationwide to Pepperwood, very
few pages were redacted. The Court notes that even though there was no underlying lawsuit filed
with regard to coverage with regard to Pepperwood’s claims, there was a period of time during which
coverage was disputed. Pepperwood had made its claim in October 2005, and there was a period of
time when Nationwide was investigating and adjusting the claim, and the appraisal period,
culminating in an appraisal award being issued in 2008. This lawsuit was filed on November 11,
2010. Based on the Florida Supreme Court’s holding in Ruiz and the court’s findings in Cozort, this
Court finds that Nationwide’s claims of privilege and work product protection with regard to
documents generated prior to the filing of this bad faith lawsuit - the period during which coverage
was disputed - are not well taken and these documents in unredacted form are due to be produced
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to Pepperwood.2 As Nationwide may be entitled to assert the attorney-client privilege and work
product protection for documents created after this lawsuit was filed, the Court will conduct an in
camera review of documents on the privilege log that are dated after the filing of this lawsuit,
specifically NATIONWIDE-000010, 000011, and 000012, in order to determine the objections are
proper. Therefore, Plaintiff’s Motion to Compel this request is due to be granted in part and denied
in part.
Request for Production No. 6 states: Copies of all documents in your possession,
custody, or control (excluding privileged or protected documents) relating to
PEPPERWOOD’S insured property located at 4955 Pepper Circle B, 4693
Rattlesnake Hammock Road D, 4967 Rattlesnake Hammock Road E, 4957 Pepper
Circle C, and 4973 Pepper Circle F, Naples, Collier County, Florida, which is the
subject matter of this litigation including but not limited to: photographs, videotapes,
photographic and videotape logs related to such photographs or videotapes, sketches,
drawings, field notes, reports relied upon by you, reports prepared by you or prepared
for you or on behalf of NATIONWIDE regarding PEPPERWOOD’S October 24,
2005, claim and/or hurricane damage.
Response: Please see the documents produced in response to Request #1. Objection.
This Request is vague with respect to temporal scope. Subject to this objections, and
without waiver of the same, please see the documents produced in response to
Request #1. Additionally, the files of Nationwide's appraiser (excluding privileged
and protected documents) are being scanned and Bates Numbered, and upon return
from the undersigned’s vendor will be forwarded under separate cover along with a
Privilege Log identifying any redactions.
Pepperwood argues that any documents withheld from the appraiser’s file should be
produced. Pepperwood explains that no documents related to Nationwide’s appraiser - Jose Palacios
with Peninsula Insurance Bureau, a third party - are listed on the privilege log. The Court notes that
even though no documents related to Nationwide’s appraiser are listed on the privilege log, the
2
Specifically, these would be bates numbered documents: NATIONWIDE000061, 000063, 000072, 000117, 000328, 000330, 000331, 000332, 000336,
000421, 000423, 000424, 000429, 000495, 000497, 000498, 000504, 000590,
000592, 000593, 000598, and 000834 (Doc. #23-3).
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appraiser’s file was produced, which totaled approximately 9,726 pages. (Doc. #23-3, p. 2).
Therefore, it appears that Nationwide is not withholding or redacting any information from the
appraiser’s file based on privilege and/or work-product doctrine. Indeed, Nationwide asserts in its
briefing that any document that is responsive to this Request would be contained in the claims files
and/or appraiser’s file that were produced and that no documents responsive to this Request were
withheld. The items listed on the privilege log (Doc. #23-3) were all from Nationwide’s claims files,
not from the appraiser’s file, and the propriety of those objections are discussed by the Court with
regard to Request No. 4. Therefore, Pepperwood’s objections to Nationwide’s response to this
Request is not well taken and the Motion to Compel this Request is due to be denied.
Request for Production No. 24 states: With respect to Interrogatory No. 18, served
concurrently with this Request for Production of Documents, produce any and all
documents or records, in whatever form, which you base your response to this
Interrogatory.
Response: Not applicable in light of the objections made to Interrogatory #18.
Moreover, NATIONWIDE objects to the disclosure of any documents containing
information regarding core information security issues, which have no impact on
claims handling, but which could compromise the security of NATIONWIDE’S
information systems, on the basis of internal security, confidential information, and
trade secret.
The Court previously denied Plaintiff’s Motion to Compel Interrogatory No. 18 by Order
dated September 20, 2011 (Doc. #35). Therefore, the Motion to Compel Request No. 24 is due to
be denied.
Request for Production No. 25 states: With respect to Interrogatory No. 19, served
concurrently with this Request for Production of Documents, produce any and all
documents or records, in whatever form, which you base your response to this
Interrogatory.
Response: Not applicable in light of the objections made to Interrogatory #19.
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The Court previously granted in part and denied in part Plaintiff’s Motion to Compel
Interrogatory No. 19 by Order dated September 20, 2011 (Doc. #35). Therefore, the Motion to
Compel Request No. 25 is due to be granted in part and denied in part subject to the Court’s findings
regarding that interrogatory.
Request for Production No. 26 states: With respect to Interrogatory No. 20, served
concurrently with this Request for Production of Documents, produce any and all
documents or records, in whatever form, which you base your response to this
Interrogatory.
Response: Not applicable in light of the objections made to Interrogatory #20.
The Court previously denied Plaintiff’s Motion to Compel Interrogatory No. 20 by Order
dated September 20, 2011 (Doc. #35). Therefore, the Motion to Compel Request No. 26 is due to
be denied.
Request for Production No. 27 states: With respect to Interrogatory No. 21, served
concurrently with this Request for Production of Documents, produce any and all
documents or records, in whatever form, which you base your response to this
Interrogatory.
Response: Not applicable in light of the objections and response made to
Interrogatory #21.
The Court previously granted in part and denied in part Plaintiff’s Motion to Compel
Interrogatory No. 21 by Order dated September 20, 2011 (Doc. #35). Therefore, the Motion to
Compel Request No. 27 is due to be granted in part and denied in part subject to the Court’s findings
regarding that interrogatory.
Request for Production No. 28 states: With respect to Interrogatory No. 22, served
concurrently with this Request for Production of Documents, produce any and all
documents or records, in whatever form, which you base your response to this
Interrogatory.
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Response: Not applicable in light of the objections and response made to
Interrogatory #22.
The Court previously denied Plaintiff’s Motion to Compel Interrogatory No. 22 by Order
dated September 20, 2011 (Doc. #35). Therefore, the Motion to Compel Request No. 28 is due to
be denied.
Request for Production No. 29 states: With respect to Interrogatory No. 23, served
concurrently with this Request for Production of Documents, produce any and all
documents or records, in whatever form, which you base your response to this
Interrogatory.
Response: Not applicable in light of the objections made to Interrogatory #23.
The Court previously denied Plaintiff’s Motion to Compel Interrogatory No. 23 by Order
dated September 20, 2011 (Doc. #35). Therefore, the Motion to Compel Request No. 29 is due to
be denied.
Request for Production No. 30 states: With respect to Interrogatory No. 20, served
concurrently with this Request for Production of Documents, produce any and all
documents or records, in whatever form, which you base your response to this
Interrogatory.
Response: Not applicable in light of the objections made to Interrogatory #24.
Moreover, NATIONWIDE objects to the disclosure of any documents containing
information regarding core information security issues, which have no impact on
claims handling, but which could compromise the security of NATIONWIDE’S
information systems, on the basis of internal security, confidential information, and
trade secret.
The Court previously denied Plaintiff’s Motion to Compel Interrogatory No. 24 by Order
dated September 20, 2011 (Doc. #35). Therefore, the Motion to Compel Request No. 30 is due to
be denied.
Request for Production No. 31 states: Copy of the complete paper and electronic
claim file, cover to cover, from the home office, regional and local (including “field”
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file) regarding the claim that is the subject of this matter (excluding attorney-client
privileged and/or work product protected documents), including but not limited to:
Response: Objection. This Request (and all of its subparts) is harassing and
burdensome with respect its request for the “complete paper and electronic claim file,
cover to cover, from the home office, regional and local (including field file).”
Subject to this objection, and without waiver of the same, please see the documents
produced in response to Request #1.
a. All letters, memoranda and other forms of written or computerized
communication to or from any employee of Defendant,
NATIONWIDE, relating in any way to the processing of the claim at
issue in this action;
Response: Please see the documents produce din response to Request
#1.
b. All written or computerized records of any oral communication,
whether in person or by telephone, to or from any employee of
Defendant, NATIONWIDE, relating in any way to the processing of
the claim at issue in this action;
Response: Please see the documents produced in response to Request
#1.
c. All written or computerized communications and written or
computerized records of oral communications, whether in person or
by telephone, between any employee of Defendant, NATIONWIDE,
and Plaintiff relating in any way to the claim at issue in this action;
Response: Please see the documents produced in response to Request
#1.
d. All written or computerized communications and written or
computerized records of oral communications, whether in person or
by telephone, between any employee of Defendant, NATIONWIDE,
and any third party relating in any way to the claim at issue in this
action;
Response: Please see the documents produced in response to Request
#1.
e. All written or computerized records of any investigation conducted
in connection with the claim at issue in this action;
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Response: Please see the documents produced in response to Request
#1.
f. All written or computerized communications and written or
computerized records of oral communications, whether in person or
by telephone, to or from any employee of Defendant, NATIONWIDE,
relating in any way to the decision to deny Plaintiffs claim;
Response: Please see the documents produced in response to Request
#1.
g. All written or computerized communications and written or
computerized records of oral communications, whether in person or
by telephone, between Plaintiff and any employee of Defendant,
NATIONWIDE, relating in anyway to the decision to deny Plaintiffs
claim;
Response: Please see the documents produced in response to Request
#1.
h. All written or computerized communications and written or
computerized records of oral communications, whether in person or
by telephone, between any employee of Defendant, NATIONWIDE,
and any third party relating in any way to the decision to deny
Plaintiffs’ claim;
Response: Please see the documents produced in response to Request
#1.
i. All other written or computerized documents pertaining to the claim
at issue in this litigation;
Response: Please see the documents produced in response to Request
#1.
j. The file folders in which the preceding documents are kept;
Response: Objection. This Request is harassing and burdensome with
respect its request for the “file folders.”
k. Reports and correspondence;
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Response: Please see the documents produced in response to Request
#1.
l. Tapes—video and audio;
Response: None are known to exist at this time.
m. Photographs—original negatives.
Response: Please see the documents produced in response to Request
#1 with respect to photographs. No original negatives are known to
exist at this time.
Nationwide again asserts that all of the information requested here is included in the
Pepperwood claims files and adjuster’s file that have already been produced to Pepperwood. It
appears that these files have been produced in electronic form. Pepperwood’s only basis for
compelling a response to this Request is the arguments it made in support of Requests Nos. 4 and
6, above. With regard to these Requests, Pepperwood seeks disclosure of the redacted portions of
the claims files and documents allegedly withheld from Nationwide’s appraiser’s file. As discussed
above, Nationwide is not withholding or redacting any information from the appraiser’s file based
on privilege and/or work-product doctrine and the privilege log complies with the rules regarding
the proper information to be included in a privilege log and that based on the assertions made by
defense counsel, the information redacted was dated after litigation was anticipated in this matter and
involved communications with defense counsel regarding strategy. Therefore, Plaintiff’s Motion
to Compel this request is due to be denied.
Request for Production No. 33 states: All first property claims manuals – printed
or electronic, bulletins, memoranda, directives, letters, and other forms of written or
computerized communication directed to claims personnel, claims mangers, claims
supervisors, or any other person acting on behalf of Defendant, NATIONWIDE, in
the handling of first party real property and/or hurricane claims in the State of Florida
from the years of 2004 through 2009, that refer or relate in any way to the handling
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of claims generally or to the handling of claims of like character to the claim at issue
in this action, including, without limitation:
a. The documents reflecting NATIONWIDE claim settlement policies as they
existed at the time PEPPERWOOD submitted its October 24, 2005 claim;
b. The documents reflecting any subsequent changes of policy;
c. Hurricane loss handling procedures;
d. Supervisor’s and manager’s manuals in first party real property and/or hurricane
cases in the state of Florida;
e. “Historical” copies and procedures to retain them.
Response: Objection. This Request is overbroad in both subject and temporal scope.
This Request is vague with respect to subpart e. Moreover, this Request seeks
proprietary, confidential and trade secret protected materials. Subject to these
objections, and without waiver of the same, NATIONWIDE will produce documents
responsive to this Request that were effective during the pendency of
PEPPERWOOD’S claim upon the entry of an appropriate protective order.
Nationwide’s objection with respect to temporal scope is well taken as this Court has
previously determined that the relevant timeframe is 2005-2008. (Doc. #35, p. 19). With regard to
subject scope, the Court agrees that there is no limitations on the documents that have been
requested, as the Request does not simply request first property claims manuals, it requests any other
printed or electronic bulletins, memoranda, directives, letters, and other forms of written or
computerized communicated directed to claims personnel, claims managers, claims supervisors, or
any other person . . . that refer or relate in any way to the handling of claims generally. Additionally,
this Request is not limited to commercial windstorm claims.
The Court agrees that this request is overbroad. Therefore, the Court limits this request to
applicable claims manuals regarding commercial windstorm claims for the 2005-2008 timeframe in
the State of Florida. These documents do not need to be produced though until the Court has entered
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a protective order of confidentiality, as discussed in the Court’s September 10, 2011 Order. (Doc.
#35). To the extent that Nationwide will assert any objections to this Request based on privilege,
confidentiality, or trade secret, a proper privilege log must be produced to Pepperwood. Therefore,
Plaintiff’s Motion to Compel this Request is due to be granted in part and denied in part, subject to
the limitations set forth by the Court.
Request for Production No. 34 states: ORIGINAL claims files relating to every
reported hurricane claim in the state of Florida, to NATIONWIDE from 2004
through 2009, and/or a print out of such claims.
Response: Objection. This Request is overbroad in both subject and temporal scope.
Additionally, this Request is unduly burdensome. Moreover, this Request seeks the
discovery of irrelevant information that is not reasonably calculated to lead to the
discovery of admissible evidence.
Pepperwood argues that this Request is relevant because Pepperwood has pled facts in its
Complaint that the bad faith claims handling violations allegedly perpetrated here were done as a
general business practice and that facts relating to prior occurrences similar to those underlying the
instant insurance claim are relevant and material and, therefore, subject to discovery. Thus,
Pepperwood is requesting the original claim file for every reported hurricane claim in the State of
Florida made to Nationwide from 2004 through 2009, and/or a print out of such claims. Recognizing
that such Request would be voluminous, Pepperwood has offered to offset the costs of pulling these
files by reimbursing one-half of any reasonable costs incurred by Nationwide in responding to this
Request.
Nationwide objects and responds that the Request is overbroad and burdensome. Indeed, the
Court takes judicial notice that in a six-week period starting August 13, 2004, Florida was hit by four
hurricanes (Charley, Frances, Ivan, and Jeanne). Nationwide asserts in its Brief that these hurricanes
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resulted in more than 1.6 million claims being filed in Florida by March 2005.3 Further, Nationwide
asserts with respect to the relevancy of this Request that the only claim currently pending in this case
is one for compensatory damages to Pepperwood for Nationwide’s alleged violations of Florida
insurance law with respect to Pepperwood’s claims. Nationwide argues that the thousands of claim
files requested by Pepperwood in this Request would not have any relevance whatsoever as to
whether Nationwide handled Pepperwood’s claim in bad faith or not. With regard to general
business practice, Nationwide argues that even if Pepperwood is alleging that Nationwide’s
violations of Florida law against Pepperwood were done as a general business practice, the only
significance of general business practice under Florida Statute section 624.155, is the availability,
if the allegation if proven, of the recovery of punitive damages. And in the instant case there is no
claim for punitive damages and therefore any discovery regarding general business practice is
irrelevant.
Plaintiff filed a one-count Complaint in this case for Unfair Claims Practices pursuant to
Florida Statute §§ 624.155 & 626.9541. (Doc. #2). In its prayer for relief Pepperwood requests
actual and compensatory damages, interest and pre-judgment interest, costs, attorney’s fees, and
disgorgement of all unlawful or illegitimate monies Defendant profited from its bad faith claims
handling practices.
Even though Plaintiff’s Complaint does not specifically indicate that punitive damages are
being sought in its prayer for relief it does state a one count for Unfair Claims Practices pursuant to
3
It is not clear if this is the number of claims submitted to
Nationwide alone, or this is the number of insurance claims made to all
insurance companies in the State of Florida by March 2005. In any event,
given the number of hurricanes in 2004 and the resulting devastation, the
Court assumes that the number of claims made to Nationwide from 2004-2009
would be substantial.
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Florida Statute § 624.155 and states in its Complaint: “Upon information and belief, the
aforementioned acts, omissions, and statutory violations by NATIONWIDE has occurred with such
frequency as to indicate a general business practice and said acts were performed willfully, wantonly,
and maliciously in reckless disregard for the rights of its insured, PEPPERWOOD.” (Doc. #2, ¶ 50).
This language tracks the punitive damages subsection (5) of § 624.155, so this Court assumes that
Pepperwood is making a claim for punitive damages in this matter and seeks discovery in order to
establish a general business practice.
The Court finds that Pepperwood’s Request No. 34, as stated, is clearly overbroad and
burdensome. There has been no effort by Pepperwood to limit this request whatsoever and as a
result they are essentially seeking any claim file arising out of a hurricane in the State of Florida for
a five-year period. This could include residential claims made on a single-family home to damage
done to commercial property. And there has been virtually no showing by Pepperwood - other than
more than a general hunch - that Nationwide wrongfully denied even some of these claims such that
Pepperwood could use the information to show a bad faith general business practice. This is the type
of request that earns the label of a “fishing expedition” that is disfavored by the courts. Pepperwood
has made no specific showing to the Court that such an overbroad request would encompass relevant
and discoverable information. Therefore, Plaintiff’s Motion to Compel Request No. 34 is denied.
Request for Production No. 35 states: Copies of all information and
documentation on NATIONWIDE’S claims’ handling personnel, adjusters and
supervisors involved with PEPPERWOOD’S claim, including but not limited to the
following information:
a. Job descriptions;
b. Original application for employment;
c. Annual performance evaluations;
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d. History of salary and promotions/demotions;
e. Educational records (Including company courses), including Curriculum (taped
or written) used for these courses;
f. Letters of commendation or complaint;
g. Memberships in professional organizations, codes of ethics.
Response: Objection. This Request is overbroad in both subject and temporal scope.
Moreover, this Request seeks the discovery of irrelevant information that is not
reasonably calculated to lead to the discovery of admissible evidence. Additionally,
this Request seeks proprietary, confidential and trade secret protected materials, and
should the preceding objections be overruled, a privilege log will be provided and the
responsive documents will be produced upon the entry of an appropriate protective
order.
Pepperwood argues that this Request is limited to only those individuals who were involved
with Pepperwood’s insurance claim and as such is limited in scope. It also asserts that this
information is relevant because these individuals “would be those that had the most financial interest
in low balling the claim or refusing to timely pay owed insurance benefits,” which Pepperwood pled
in their Complaint. With regard to burden, Pepperwood states there was only a limited number of
Nationwide employees on the Pepperwood file(s). Nationwide seemingly disagrees in their Brief,
asserting that the request is not narrowly tailored and essentially requests personnel files for anyone
whose name appears anywhere in the claim file.
The Court finds this information is relevant to Plaintiff’s claims as pled. But Nationwide’s
objection to the scope is well taken. The Court doubts the relevancy of the personnel files for all
employees at Nationwide who worked on Pepperwood’s claims to this bad faith case. Therefore,
the Court finds that Nationwide shall produce the personnel files for the adjusters and supervisors
who worked on Pepperwood’s claims that are the subject of this litigation. This information is not
due to be produced though until a protective order of confidentiality is entered by this Court. To the
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extent that Nationwide will assert any objections to this Request based on privilege, confidentiality,
or trade secret, a proper privilege log must be produced to Pepperwood. Therefore, Plaintiff’s
Motion to Compel this Request is due to be granted in part and denied in part, subject to the
limitations set forth by the Court.
Request for Production No. 36 states: Copies of personnel or “H.R.” (Human
Resources) manuals for NATIONWIDE’S first party real property and/or hurricane
claims’ handling personnel, adjusters and supervisors for the State of Florida from
2004 through 2009, including, but not limited to:
a. Job descriptions;
b. Salary grade classifications;
c. Criteria for promotion/demotion;
d. Performance evaluations and activity review;
e. Performance-based compensation plans;
f. Incentive programs and retirement funds;
g. Profit-sharing and stock ownership.
Response: Objection. This Request is overbroad in both subject and temporal scope.
Moreover, this Request seeks the discovery of irrelevant information that is not
reasonably calculated to lead to the discovery of admissible evidence. Additionally,
this Request seeks proprietary, confidential and trade secret protected materials, and
should the preceding objections be overruled, a privilege log will be provided and the
responsive documents will be produced upon the entry of an appropriate protective
order.
The Court finds this information is relevant to Plaintiff’s claims as pled. But Nationwide’s
objection to the scope is well taken. The Court doubts the relevancy of the Human Resource
manuals for all employees at Nationwide who worked on Pepperwood’s claims to this bad faith case.
Therefore, the Court finds that Nationwide shall produce the human resource manuals for adjusters
and supervisors who worked on Pepperwood’s claims that are the subject of this litigation from
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2005-2008. This information is not due to be produced though until a protective order of
confidentiality is entered by this Court. To the extent that Nationwide will assert any objections to
this Request based on privilege, confidentiality, or trade secret, a proper privilege log must be
produced to Pepperwood. Therefore, Plaintiff’s Motion to Compel this Request is due to be granted
in part and denied in part, subject to the limitations set forth by the Court.
Request for Production No. 37 states: Copies of loss reserve history with regard
to PEPPERWOOD’S claim including, but not limited to:
a. Original reserves and all changes;
Response: Please see the documents produced in response to Request #1.
b. Methods and criteria for setting reserves.
Response: Objection. This Request is overbroad in temporal scope. Additionally,
this Request seeks proprietary, confidential and trade secret protected materials, and
should the preceding objection be overruled, a privilege log will be provided and the
responsive documents will be produced upon the entry of an appropriate protective
order.
In support of this Request, Pepperwood argues that in analyzing Nationwide’s alleged bad
faith refusal to timely pay insurance proceeds owed, this Court must look to see whether Nationwide
had reasonable and probable cause for its refusal to pay a claim, as determined by the facts and
circumstances and the knowledge held by the insurer at the time of refusal. Nationwide responds
that all of this information was produced in response to Request for Production No. 1 - the claim file
materials.
This information was also requested by Pepperwood in Interrogatories 5 and 5A to Plaintiff’s
First Set of Interrogatories. With regard to these Interrogatories, this Court previously found that
reserve information is relevant and is contained in the Reserve/Payment Detail Reports within the
claims files. Therefore, Nationwide has complied with its obligation to identify where the
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information was available in response to subsection (a) of this Request. But it is not clear that the
Reserve/Payment Detail Reports would include information regarding subsection (b) of this Request,
which requests Nationwide’s methods and criteria for setting reserves. It appears that Nationwide
has not produced documents detailing this information because it objects in its Response and Brief
that this information is entitled to proprietary, confidential, and trade secret protection.
“The calculation of insurance reserves is an accounting technique by which insurance
companies estimate the maximum potential liability on a claim.” 1550 Brickell Associates v. QBE
Insurance Corp., 2011 WL 9506, *3 (S.D. Fla. Jan. 3, 2011). The Court finds that the information
in response to subsection (b) would be relevant and discoverable in a bad faith case. This
information is not due to be produced though until a protective order of confidentiality is entered by
this Court. To the extent that Nationwide will assert any objections to this Request based on
privilege, confidentiality, or trade secret, a proper privilege log must be produced to Pepperwood.
Therefore, Plaintiff’s Motion to Compel this Request is due to be granted in part and denied in part,
subject to the limitations set forth by the Court.
Request for Production No. 38 states: Copies of videotaped, recorded, or written
training materials for first party property and/or hurricane claims’ handling of
NATIONWIDE personnel, adjusters and supervisors in the State of Florida from 2004
through 2009, including, but not limited to:
a. Real Property (including hurricane) loss adjusting;
b. Disputed claims;
c. Coverage interpretation.
Response: Objection. This Request is overbroad in both subject and temporal scope.
Additionally, this Request seeks proprietary, confidential and trade secret protected
materials, and should the preceding objections be overruled, a privilege log will be
provided and the responsive documents will be produced upon the entry of an
appropriate protective order.
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The Court agrees that this Request is overbroad, but finds it is relevant to Plaintiff’s claims.
Therefore, the Court limits this request to applicable training materials for adjusters and supervisors
who worked on Pepperwood’s claims that are the subject of this litigation from 2005-2008. These
documents do not need to be produced though until the Court has entered a protective order of
confidentiality, as discussed in the Court’s September 10, 2011 Order. (Doc. #35). To the extent
that Nationwide will assert any objections to this Request based on privilege, confidentiality, or trade
secret, a proper privilege log must be produced to Pepperwood. Therefore, Plaintiff’s Motion to
Compel this Request is due to be granted in part and denied in part, subject to the limitations set
forth by the Court.
Request for Production No. 39 states: Copy of employee handbooks for
NATIONWIDE’S first party property and/or hurricane claims’ handling personnel,
adjusters and supervisors in the State Florida from 2004 through 2009, including, but
not limited to:
a. Orientation manual or booklet;
b. Benefits;
c. Profit-sharing, stock ownership and incentive plans;
d. Company philosophies and policies in handling first party property and/or
hurricane claims.
Response: Objection. This Request is overbroad in both subject and temporal scope.
Additionally, this Request seeks proprietary, confidential and trade secret protected
materials, and should the preceding objections be overruled, a privilege log will be
provided and the responsive documents will be produced upon the entry of an
appropriate protective order.
The Court agrees that this Request is overbroad, but finds it is relevant to Plaintiff’s claims.
Therefore, the Court limits this request to applicable employee handbooks for adjusters and
supervisors who worked on Pepperwood’s claims that are the subject of this litigation from 2005-24-
2008. These documents do not need to be produced though until the Court has entered a protective
order of confidentiality, as discussed in the Court’s September 10, 2011 Order. (Doc. #35). To the
extent that Nationwide will assert any objections to this Request based on privilege, confidentiality,
or trade secret, a proper privilege log must be produced to Pepperwood. Therefore, Plaintiff’s
Motion to Compel this Request is due to be granted in part and denied in part, subject to the
limitations set forth by the Court.
Accordingly, it is now
ORDERED:
(1)
Plaintiff’s Motion to Compel Defendant to Provide Better Responses to Plaintiff’s
First Request for Production Served With the Complaint (Doc. #23) is GRANTED in part and
DENIED in part.
(a)
Plaintiff’s Motion to Compel Requests Nos. 4, 25, 27, 33, 35, 36, 37, 38, and
39 is GRANTED in part and DENIED in part.
(i)
Nationwide’s deadline to respond to Requests Nos. 33, 35, 36,
37, 38, and 39 shall be two (2) weeks following this Court’s
entry of a protective order of confidentiality.
(ii)
Nationwide shall provide the documents listed on its privilege
log with respect to Request No. 4 that the Court ordered be
provided to the Court for in camera review on or before
October 12, 2011.
(b)
Plaintiff’s Motion to Compel Requests Nos. 2, 6, 24, 26, 28, 29, 30,
31, and 34 is DENIED.
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(2)
Nationwide shall provide responses to the requests for production that do not require
the entry of a protective order of confidentiality in accordance with this Order on or before October
30, 2011. If Nationwide asserts that any documents are privileged, confidential, or trade secret, a
proper privilege log shall be produced by this date.
(3)
Defendant’s request for attorneys fees, costs, and interest is DENIED at this time
subject to reconsideration if appropriate, including any failure to comply with this Order.
DONE AND ORDERED at Fort Myers, Florida, this
Copies: All Parties of Record
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1stday of October, 2011.
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