SNR Denton on Genovese v. Provident Life & Accident Insurance Co.: Florida Upholds Insurer’s Attorney-Client Privilege in Bad Faith Cases

SNR Denton on Genovese v. Provident Life & Accident Insurance Co.: Florida Upholds Insurer’s Attorney-Client Privilege in Bad Faith Cases

William Barker and Ronald Kent   By William T. Barker & Ronald D. Kent, Partners, SNR Denton

Florida law on attorney-client privilege in bad faith cases has been in doubt, after the Florida Supreme Court made a false start and a change of direction.  Other courts have disagreed whether the change of direction effectively abrogated the privilege for pre-denial communications in first-party cases.  The Florida Supreme Court has now resolved this issue by upholding the privilege.  This commentary examines the issue.

The commentary notes that:

Those with bad faith claims against insurers commonly view the insurer’s communications with its lawyers and the lawyers’ work product as especially valuable evidence for proving bad faith.  Indeed, when trying to compel production, they commonly describe this information as essential to proof of their claims.  Yet attorney-client communications and attorney work product are generally protected from discovery.  While bad faith plaintiffs have made substantial efforts to pierce these protections, sometimes successfully, insurers continue to resist discovery of privileged and work product materials, also with considerable success.

It examines the initial decision in Kujawa v. Manhattan National Life Insurance Co. that there was an adversarial relationship between an insurer and its insured on a first-party claim, such that establishment of a first-party bad faith claim did not abolish the work-product immunity or the attorney client privilege.  Then, in Allstate Indemnity Co. v. Ruiz, the court “receded from Kujawa.”   As the commentary explains:

The court noted the existence of two-types of bad faith suits: those involving failure to settle third-party party claims, thereby exposing the insured to an excess judgment, and those (authorized by the bad faith statute) where an insured sued for wrongful handling of first-party claims.  As the court viewed the law, insureds (and claimants standing in their shoes) could obtain complete discovery of the claim file (through the date of the excess judgment or a functionally equivalent settlement), unfettered by privilege and work product objections.  As it noted, this flowed from the insured’s right, as a client of defense counsel, to full access to defense counsel’s file.

In first party claims, too, claim file materials are essential to prosecution of bad faith claims, so, in the Ruiz court’s view, “there is simply no logical or legally tenable basis upon which to deny access to the very information that is necessary to advance such action but also necessary to fairly evaluate the allegations of bad faith-information to which they would have unfettered access in the third-party bad faith context.”

Other courts divided in interpreting Ruiz.  Some concluded that that the privilege would no longer protect attorney-client communications contained or reflected in a claim file prior to resolution of the claim.  Others concluded that protection of privileged communications in first-party bad faith cases was unaffected by Ruiz.  Genovese takes the latter position.

The commentary examines the decision and the puzzling concurring opinion by a majority of the court, which appears largely parallel to the opinion of the court.

Lexis.com subscribers can access the complete commentary, SNR Denton on Genovese v. Provident Life & Accident Insurance Co.: Florida Upholds Insurer’s Attorney-Client Privilege in Bad Faith Cases. Additional fees may be incurred. (approx. 9 pages)

If you do not have a lexis.com ID, you can purchase this commentary on the LexisNexis Store or you can access this commentary and additional Emerging Issues Analysis content through lexisONE Research Packages.

Lexis.com subscribers can access the Lexis enhanced version of Genovese v. Provident Life & Accident Ins. Co., 2011 Fla. LEXIS 621 (Fla. Mar. 17, 2011) with summary, headnotes, and Shepard’s.

Non subscribers can access the free unenhanced version of Genovese v. Provident Life & Accident Ins. Co., 2011 Fla. LEXIS 621 (Fla. Mar. 17, 2011) from lexisONE Free Case law.

William Barker and Ronald Kent are authors of New Appleman Insurance Bad Faith Litigation, Second Edition.

Access a free download from section 16.04 from New Appleman Insurance Bad Faith Litigation, Second Edition, Attorney-Client Privilege and Work Product Protection in Bad Faith Cases.

Access New Appleman Insurance Bad Faith Litigation, Second Edition on lexis.com.

Learn more about New Appleman Insurance Bad Faith Litigation, Second Edition at The Store.

Lexis.com subscribers can also access additional analysis by William Barker and Ronald Kent in When Can the Attorney-Client Privilege Be Pierced? In Dec2007-15 Appleman: Current Critical Issues in Insurance Law IV.

Lexis.com subscribers can access Applicability of the Attorney-Client Privilege to Communications Between the Insurer and Insured, 3-17 Appleman on Insurance § 17.04 and the complete set of Emerging Issues Analysis for Insurance Law.

Lexis.com subscribers can access the Lexis enhanced version of Kujawa v. Manhattan Nat'l Life Ins. Co., 541 So. 2d 1168 (Fla. 1989) with summary, headnotes, and Shepard’s.

Lexis.com subscribers can access the Lexis enhanced version of Allstate Indem. Co. v. Ruiz, 899 So. 2d 1121 (Fla. 2005) with summary, headnotes, and Shepard’s.

Non subscribers can access the free unenhanced version of Allstate Indem. Co. v. Ruiz, 899 So. 2d 1121 (Fla. 2005) from lexisONE Free Case law.

For more information about LexisNexis products and solutions connect with us through our corporate site.