First Coast Energy, L.L.P. v. Mid-Continent Casualty Company

Filing 76

ORDER granting in part 57 Motion for Reconsideration. Signed by Magistrate Judge Monte C. Richardson on 11/1/2013. (MOH)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
JACKSONVILLE DIVISION

FIRST COAST ENERGY, L.L.P.,
Plaintiff,
vs.

Case No: 3:12-cv-281-J-32MCR

MID-CONTINENT CASUALTY
COMPANY,
Defendant.
/
ORDER
THIS CAUSE is before the Court on Defendant's Objections to Order Dated May
15, 2013 (Doc. 57), which the Court shall treat as a Motion for Reconsideration. Plaintiff
filed a response to the objections (Doc. 61) on June 10, 2013. On October 10, 2013,
Judge Corrigan issued an Order (Doc. 74) in which he stated that “[b]ecause
Defendant’s objections raise an issue that is not directly addressed in the Magistrate
Judge’s Order, the Court has decided to treat the objections as a motion for
reconsideration, which should be heard in the first instance by the Magistrate Judge.”
Accordingly, the matter is ripe for judicial review.
I. BACKGROUND
Plaintiff, First Coast Energy, filed this first party bad faith suit against Defendant,
Mid-Continent Casualty Company, pursuant to Florida Statutes § 624.155. (Doc. 3).
The suit arises from Defendant’s denial of coverage under a Pollution Liability and
Environmental Damage Policy for costs related to the clean-up after a petroleum
contamination at one of Plaintiff’s gas stations. Id. The coverage determination issue

was litigated in state court, and resulted in a finding of coverage for the claim. (Doc. 3).
This finding was affirmed on appeal. See Mid-Continent Cas. Co., et al. v. First Coast
Energy, L.L.P., et al., 71 So.3d 899 (Fla. 1st DCA 2011). After receiving the favorable
ruling on coverage, Plaintiff filed this subsequent bad faith action in state court in
January, 2012. (Doc. 3). On March 14, 2012, Defendant removed the case to this
Court pursuant to 28 U.S.C. § 1332.
A. Plaintiff’s Motion to Compel
During pretrial discovery, Plaintiff propounded its first Requests for Production of
Documents, to which Defendant timely provided responses and objections. (Doc. 45).
On April 24, 2013, Plaintiff filed a Motion to Compel (Doc. 45) seeking an order directing
Defendant to provide more complete responses to eight (8) separate requests.
Specifically, Plaintiff took issue with Defendant’s withholding of documents on the basis
of the attorney-client privilege and the work product doctrine.
B. The Court’s Order on the Motion to Compel
On May 15, 2013, the undersigned issued an Order (Doc. 54) granting in part
and denying in part the Motion, with instructions to Defendant to produce any
documents previously withheld on the basis of work product contained in either the
claims files at issue in this case or any other insureds’ claims files, which related to
and/or illuminated the manner in which Defendant handled other Pollution Liability and
Environmental Damage claims in the general course of business. (Doc. 54, p.8).
Additionally, Defendant was instructed to provide the Court with copies for an in camera
review of the documents being withheld on the basis of the attorney-client privilege from
both Plaintiff’s claim file and any other insureds’ claims files which related to and/or

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illuminated the manner in which Defendant handled other Pollution Liability and
Environmental Damage claims in the general course of business. 1 (Doc. 54, p.9).
C. Defendant’s Objections to Order on Motion to Compel
Pursuant to Rule 72(a) of the Federal Rules of Civil Procedure, Defendant timely
filed objections to the Order granting in part and denying in part the Motion to Compel.
(Doc. 57). Defendant specifically objects to the Court’s Order insofar as it requires
Defendant to produce information from open and/or pending claims files.
II. ANALYSIS
Defendant’s primary concern with the Court’s Order is that it requires Defendant
to turn over documents from claim files in cases where coverage has yet to be
determined. Defendant cites numerous cases for the proposition that “an insurer’s
claim file is not discoverable until the insurer’s obligation to provide coverage has been
established.” (Doc. 57, p.5) (citing cases). Plaintiff responds that because it has
established coverage with respect to its claim with Defendant, it is entitled to discovery
of the other claim files as well. However, Plaintiff has pointed to and the undersigned
was unable to locate any caselaw permitting discovery of other claim files in which
coverage has not yet been determined. Indeed, in conducting its own research, the
Court is convinced Defendant’s position is correct. In Hurley Mayfair House Ass’n, Inc.
v. QBE Ins. Corp., 09-cv-80359, 2010 WL 472827, at *4 (S.D. Fla. Feb. 5, 2010), the
court held that in a bad faith claim where the plaintiff seeks punitive damages, the
plaintiff would be able to discover other insured claims files. The court observed that
the Florida Supreme Court had not issued a definitive ruling on the issue and therefore,
1

Along with this production, Defendant was instructed to provide the Court and Plaintiff with a
revised copy of its privilege log showing only those documents being withheld on the basis of
attorney-client privilege. (Doc. 54, p.9).

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the court had to predict how the Florida Supreme Court would rule on the applicability of
the attorney client privilege to other insured claim file materials. In so predicting, the
Hurley court held:
this court predicts that the Florida Supreme Court would
interpret Ruiz to permit discovery of other insured claim file
materials in the insurance bad faith context subject to the
same limitations governing discoverability of the
insured’s own claim file outlined in Ruiz.
Hurley Mayfair House Ass’n, Inc., 2010 WL 472827 at *4, n4 (emphasis added).
Accordingly, the undersigned finds that Plaintiff may discover information in other claim
files only after the coverage issue in those cases has been determined.
Having determined Defendant need not turn over material from open or pending
claim files, the Court must next determine whether Defendant has adequately shown
that the two claim files listed in its privilege log as being open/pending (claims FCE
1008 and 2015) are indeed open/pending. Plaintiff argues that claim FCE 2015 is no
longer open or pending. Plaintiff attached a copy of the Notice of Voluntary Dismissal in
the coverage litigation for that claim. Plaintiff states that after it filed its complaint in
state court in the coverage dispute, Defendant agreed to pay the claim. Defendant
acknowledges that claim FCE 2015 is “not currently the subject of coverage litigation,”
however asserts that it “lacks any determination as to coverage.” (Doc. 57, p.6).
Although the Court is skeptical that Defendant will be able to do so, it will permit
Defendant an opportunity to show claim 2015 is not subject to discovery. Defendant
shall file a legal memorandum of no more than ten pages citing to relevant legal
authority for the proposition that coverage has not been established with respect to
claim 2015. This memorandum shall be filed no later than November 8, 2013. Plaintiff
may file a responsive memorandum no later than November 15, 2013. Should

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Defendant find it cannot make a sufficient showing, Defendant shall produce responsive
documents from the claim 2015 file as directed below.
As for the remaining discovery, Defendant is hereby directed, to the extent it has
not already, to produce the information required by the Court’s May 15, 2013 Order
(Doc. 54) except that Defendant need not produce any material contained in files where
coverage has not yet been determined. Defendant shall produce this information no
later than November 22, 2013.
Accordingly, after due consideration, it is
ORDERED:
The Defendant's Motion for Reconsideration (Doc. 57) is GRANTED in part as
provided in the body of this Order.
DONE and ORDERED in Jacksonville, Florida this 1st day of November, 2013.

Copies furnished to:
Counsel of Record

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