1550 Brickell Associates v. Q.B.E. Insurance Corporation

Filing 333

ORDER granting in part 287 Defendant's Motion in Limine to Preclude Claims Handling Evidence. Signed by Judge Joan A. Lenard on 12/22/2010. (mhz)

1 5 5 0 Brickell Associates v. Q.B.E. Insurance Corporation

D o c . 333

UNITED STATES DISTRICT COURT S O U T H E R N DISTRICT OF FLORIDA C A S E NO. 07-22283-CIV-LENARD/GARBER 1 5 5 0 BRICKELL ASSOCIATES, Plaintiff, v. Q B E INSURANCE CORPORATION, D e f e n d a n t. ________________________________/

O R D E R GRANTING IN PART DEFENDANT'S MOTION IN LIMINE TO P R E C L U D E EVIDENCE OF, OR REFERENCES TO, CLAIMS HANDLING P R A C T I C E S , BAD FAITH OR GOOD FAITH AND FAIR DEALING (D.E. 287) T H IS CAUSE is before the Court on Defendant QBE Insurance Corporation's M o tio n in Limine to Preclude Evidence of, or References to, Claims Handling Practices, Bad F a ith or Good Faith and Fair Dealing ("Motion," D.E. 287), filed on July 6, 2010. On July 2 3 , 2010, Plaintiff 1550 Brickell Associates filed its response in opposition to Defendant's M o tio n ("Response," D.E. 298), to which Defendant filed its reply ("Reply," D.E. 302) on A u g u s t 2, 2010. Having considered the Motion, Response, Reply, related pleadings, and the r e c o rd , the Court finds as follows. I. B a c k gro u n d

T h is case involves Plaintiff's attempt to collect the proceeds of an insurance policy u n d e rw ritte n by Defendant after Hurricane Wilma severely damaged a pair of insured

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b u ild in g s near downtown Miami. Plaintiff originally brought this action alleging breach of c o n tra c t and breach of the duty of good faith and fair dealing.1 (See D.E. 1.) On September 1 7 , 2009, the Court stayed and administratively closed this action pending the Florida S u p r e m e Court's resolution of the issue certified to it by the Eleventh Circuit as to whether F lo rid a law recognizes a claim for breach of the implied warranty of good faith and fair d e a lin g by an insured against its insurer based on the insurer's failure to investigate and a ss e ss the insured's claim within a reasonable period of time. (See D.E. 252.) That question r e m a in s pending. Plaintiff subsequently moved to reopen this case and voluntarily dismiss its good faith claim in order to proceed to trial. (See D.E. 253.) On January 5, 2010, the C o u rt granted Plaintiff's request, permitted Plaintiff to voluntarily dismiss the good faith c l a im , and reopened this case. As such, only Count I (breach of contract) and Count III (d e c la ra to ry relief) of Plaintiff's Complaint remain at issue. II. D e fe n d a n t 's Motion

D e f en d a n t moves to preclude Plaintiff from presenting any evidence of (or reference to ) its claims handling practices, bad faith, or good faith and fair dealing. Defendant c o n ten d s that any evidence related to its claims handling procedures is irrelevant as this is n o w only a breach of contract action. Defendant further contends that such evidence would c o n f u se the issues, mislead the jury, and prejudice Defendant. Thus, Defendant asks such e v id e n c e be excluded pursuant to Rules 401 and 403 of the Federal Rules of Evidence.
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Count III of the Complaint additionally seeks a declaratory judgment that the City of Miami's determination as to the need to replace certain windows and sliding glass doors is binding. -2-

In response, Plaintiff argues that Defendant's Motion is vague and overbroad as to the ev iden ce it seeks to exclude. Plaintiff also contends that evidence related to Defendant's claim s handling is relevant and "germane" to its lawsuit. (Response at 2.) In reply, Defendant takes issue with Plaintiff's characterization of claims handling e v id e n c e as "germane" to its case and states that such evidence is unnecessary to resolve w h e th e r Plaintiff has a covered loss and whether Defendant breached the contract by not p a yin g the covered loss. Defendant argues such evidence is relevant in a bad faith action but n o t a breach of contract action. Thus, Defendant reiterates that evidence of its claims h a n d lin g practices is irrelevant, unfairly prejudicial, and confusing. III. D is c u s s io n

R u le s 401-403 of the Federal Rules of Evidence set forth the basic rules controlling th e admissibility of evidence. Rule 401 defines "relevant evidence" as "evidence having any te n d e n cy to make the existence of any fact that is of consequence to the determination of the a c tio n more probable or less probable than it would be without the evidence." Only relevant e v id e n c e is admissible under Rule 402. Finally, pursuant to Rule 403, "[a]lthough relevant, e v id e n c e may be excluded if its probative value is substantially outweighed by the danger of u n f a ir prejudice, confusion of the issues, or misleading the jury, or by considerations of u n d u e delay, waste of time, or needless presentation of cumulative evidence." Another court in this District was recently presented with the same exact issue in v o lv in g the same Defendant in Royal Bahamian Association, Inc. v. QBE Insurance

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C o r p o r a tio n , 2010 U.S. Dist. LEXIS 115304 (S.D. Fla. Oct. 25, 2010). In that case, the M a g is tra te Judge ruled that evidence pertaining to Defendant's handling of the claim at issue a n d any other claims handling practices was irrelevant and presented a real danger that t e s tim o n y would "morph the proceeding into a not-yet filed bad faith claim, thereby p re ju d icin g Defendant." Id. at *6-7. Other courts have similarly held such evidence is ir r e l e v a n t and/or prejudicial in an action solely for breach of contract. See Kennedy v. P r o v id e n t Life and Accident Ins. Co., 2009 U.S. Dist. LEXIS 93387 at *4-6 (S.D. Fla. 2009) ( " U n d e r both Florida and Kentucky law, documents and testimony regarding the insurer's c la im s handling or general business practices are irrelevant to the issue of whether the insu red is entitled to the coverage claimed and may only be relevant to a claim of bad faith"). T h e Court finds persuasive the reasoning in Royal Bahamian and Kennedy. This is n o longer a bad faith case. All that remains for the jury to determine is whether (1) Plaintiff's d a m a g e s from Hurricane Wilma are covered under the insurance policy such that Defendant b re a ch e d the contract by failing to pay and (2) whether the City of Miami's determination as to the need for replacement of certain items is binding. (See Amended Joint Pretrial S tip u la tio n , D.E. 311.) Evidence pertaining to Defendant's claims handling practices or a lle g e d bad faith with regard to this claim is irrelevant. Such evidence also carries a high risk o f prejudice and could very easily confuse the issues for the jury. Nevertheless, as Plaintiff p o in ts out in its brief, without any concrete proffer of evidence or testimony sought to be ex clud ed the Court necessarily leaves open whether any evidence relevant to Plaintiff's

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c la im s but also touching upon Defendant's claims handling practices might be admissible at tr ia l. Accordingly, it is ORDERED AND ADJUDGED that Defendant QBE Insurance C o rp o ra tio n 's Motion in Limine to Preclude Evidence of, or References to, Claims Handling P ra c tice s, Bad Faith or Good Faith and Fair Dealing (D.E. 287), filed on July 6, 2010 is G R A N T E D IN PART. DONE AND ORDERED in Chambers at Miami, Florida this 22nd day of December, 2010. _________________________________ J O A N A. LENARD UNITED STATES DISTRICT JUDGE

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