in the first district court of appeal tallahassee, …
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IN THE FIRST DISTRICT COURT OF APPEAL TALLAHASSEE, FLORIDA
Case No. ___________
PEOPLE’S TRUST INSURANCE COMPANY,
Petitioner,
vs.
THEODORE R. FOSTER,
Respondent.
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PETITION FOR WRIT OF CERTIORARI ---------------------------------------------------------------- DIRECTED TO THE FOURTH JUDICIAL CIRCUIT,
IN AND FOR DUVAL COUNTY, FLORIDA L.T. CASE NO. 2019-CA-008132
Patrick M. Chidnese Bickford & Chidnese, LLP 307 S. Willow Ave. Suite 100 Tampa, FL 33606 [email protected]
Brett R. Frankel Alexander S. Beck People’s Trust Insurance Company 18 People’s Trust Way Deerfield Beach, FL 33441
Daniel J. Maher Cole, Scott & Kissane P.A. 9150 South Dadeland Blvd. Suite 1400 Miami, FL 33156
Filing # 123448558 E-Filed 03/19/2021 06:39:44 PM
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TABLE OF CONTENTS
Page
INTRODUCTION ............................................................................ 1
BASIS FOR INVOKING JURISDICTION ........................................... 1
FACTS UPON WHICH PETITIONER RELIES .................................... 6
NATURE OF THE RELIEF SOUGHT .............................................. 11
ARGUMENT IN SUPPORT OF THE PETITION ................................ 11
As A Matter Of Law, PTIC’s Underwriting Manuals Are Categorically Protected From Disclosure During This Coverage Litigation ................................................................................... 11
PTIC’s Underwriting Manuals Are Subject To Trade Secret Privilege ..................................................................................... 16
CONCLUSION .............................................................................. 20
CERTIFICATE OF SERVICE ......................................................... 21
CERTIFICATE OF TYPEFACE COMPLIANCE ................................ 21
ii
TABLE OF AUTHORITIES Cases Page(s) Allstate Ins. Co. v. Langston, 655 So. 2d 91 (Fla. 1995) .......................................................... 12 Am. Bankers Ins. Co. of Fla. v. Wheeler, 711 So. 2d 1347 (Fla. 5th DCA 1998) ...................................... 5, 8 Am. Exp. Travel Related Services, Inc. v. Cruz, 761 So. 2d 1206 (Fla. 4th DCA 2000) ........................................ 19 Arthur Finnieston, Inc. v. Pratt, 673 So. 2d 560 (Fla. 3d DCA 1996) ............................................ 19 Bd. of Trs. of Internal Improvement Tr. Fund v. Am. Educ. Enters.,
LLC, 99 So. 3d 450 (Fla. 2012) ................................................... 2 Bright House Networks, LLC v. Cassidy, 129 So. 3d 501 (Fla. 2d DCA 2014) ............................................ 17 Craig-Myers v. Otis Elevator Co., 45 Fla. L. Weekly D2190 (Fla. 1st DCA Dec. 14, 2020) ................ 2 Florida Residential Prop. & Cas. Joint Underwriters Ass’n v. Sanchez,
693 So. 2d 68 (Fla. 3d DCA 1997).......................................... 5, 14 Gen. Caulking Coating Co. v. J.D. Waterproofing, Inc., 958 So. 2d 507, 508 (Fla. 3d DCA 2007) .............................. 18-19 Gen. Star Indem. Co. v. Atl. Hosp. of Florida, LLC, 93 So. 3d 501 (Fla. 3d DCA 2012)...................................... 2, 7, 12 Gov’t Employees Ins. Co. v. Rodriguez, 960 So. 2d 794 (Fla. 3d DCA 2007) .............................. 4, 8, 12, 14 Grooms v. Distinctive Cabinet Designs, Inc., 846 So. 2d 652 (Fla. 2d DCA 2003) ............................................. 6
iii
Gulfcoast Spine Inst., LLC v. Walker, 46 Fla. L. Weekly D308 (Fla. 2d DCA Feb. 5, 2021) .............. 18, 19 Hartford Insurance Company v. Mainstream Construction Group, 864 So. 2d 1270 (Fla. 5th DCA 2004) .............................. 4, 12, 13 Homeowners Choice Prop. & Cas. Ins. Co. v. Mahady, 284 So. 3d 582 (Fla. 4th DCA 2019) ...................................... 3, 15 KPMG LLP v. State, Dept. of Ins., 833 So. 2d 285 (Fla. 1st DCA 2002) ..................................... 18, 20 Laser Spine Inst., LLC v. Greer, 144 So. 3d 633 (Fla. 1st DCA 2014) ........................................... 18 Liberty Mut. Ins. Co. v. Farm, Inc., 754 So. 2d 865 (Fla. 3d DCA 2000) ............................................. 5 Old Republic Nat. Title Ins. Co. v. HomeAmerican Credit, Inc., 844 So. 2d 818 (Fla. 5th DCA 2003) .................................... 4-5, 8 Phoenix Ins. Co. v. Trans World Forwarding, Inc., 19 So. 3d 430 (Fla. 3d DCA 2009)...................................... 7-8, 12 Sheets v. Standard Fire Ins. Co., 15-80940, 2015 WL 13273087 (S.D. Fla. Nov. 4, 2015) .............. 14 State Farm Fire & Cas. Co. v. Valido, 662 So. 2d 1012 (Fla. 3d DCA 1995) .................................. 5, 8, 14 State Farm Florida Ins. Co. v. Gallmon, 835 So. 2d 389 (Fla. 2d DCA 2003) ...................................... 4-5, 8 State Farm Florida Ins. Co. v. Desai, 106 So. 3d 5 (Fla. 3d DCA 2013) ................................................ 3 State Farm Florida Ins. Co. v. Hill, 45 Fla. L. Weekly D2634 (Fla. 3d DCA Nov. 25, 2020) ............ 3, 13
iv
State Farm Florida Ins. Co. v. Seville Place Condo. Ass’n, Inc., 74 So. 3d 105 (Fla. 3d DCA 2011)............................................... 3 State Farm Mut. Auto. Ins. Co. v. Cook, 744 So. 2d 567 (Fla. 2d DCA 1999) .................................... 5, 8, 14 State Farm Mut. Auto. Ins. Co. v. O’Hearn, 975 So. 2d 633 (Fla. 2d DCA 2008) ........................................ 4, 14 State Farm Mut. Auto. Ins. Co. v. Tranchese, 49 So. 3d 809 (Fla. 4th DCA 2010) ................................. 3-4, 7, 12 Uniroyal Goodrich Tire Co. v. Eddings, 673 So. 2d 131 (Fla. 4th DCA 1996) .................................... 19-20 Wal-Mart Stores E., L.P. v. Endicott, 81 So. 3d 486 (Fla. 1st DCA 2011) .................................... 6, 17-18 Westco, Inc. v. Scott Lewis’ Gardening & Trimming, Inc., 26 So. 3d 620 (Fla. 4th DCA 2009) ........................ 6, 16-17, 18-19 Statutes Fla. Stat. §688.002(4) ................................................................... 16 Fla. Stat. §90.506 ........................................................................ 19
1
INTRODUCTION
Petitioner People’s Trust Insurance Company (“PTIC”), pursuant
to Rules 9.030(b)(2)(A) and 9.100, Florida Rules of Appellate
Procedure, petitions the Court to quash an order compelling PTIC to
produce internal underwriting manuals to its insured, Respondent
Theodore R. Foster (“Foster”).
Under a legion of authority, certiorari should issue to prevent
this improper and premature bad faith discovery. In addition,
certiorari is appropriate because PTIC’s underwriting manuals
contain confidential trade secret information. The Court should
accept jurisdiction, grant PTIC’s Petition, and quash the order under
review.
BASIS FOR INVOKING JURISDICTION
By its “Order on Plaintiff’s Motion to Compel Better Answers to
Interrogatories, Better Responses to Request to Produce and Motion
to Overrule Defendant’s Objections to Plaintiff’s Discovery” dated and
rendered February 17, 2021 (the “Order Compelling Production”), the
trial court compelled PTIC to produce its “underwriting manual(s) in
2
effect at the time of the issuance or renewal of all policies issued to
[Foster].” (Appx. pp. 6, ¶ 14, 32 ¶ 10).1
A writ of certiorari will issue where the petitioner establishes
“(1) a departure from the essential requirements of the law, (2)
resulting in material injury for the remainder of the case (3) that
cannot be corrected on postjudgment appeal.” Craig-Myers v. Otis
Elevator Co., 45 Fla. L. Weekly D2190, at *1 (Fla. 1st DCA Dec. 14,
2020) (quoting Bd. of Trs. of Internal Improvement Tr. Fund v. Am.
Educ. Enters., LLC, 99 So. 3d 450, 454 (Fla. 2012)). The final two
elements form the jurisdictional threshold that a petitioner establish
irreparable harm, i.e., harm that cannot be remedied on final appeal.
See id.
For the past twenty-five years, Florida appellate courts have
consistently issued certiorari to quash “discovery relating to an
insurer’s business practices and policies” during insurance coverage
litigation. Gen. Star Indem. Co. v. Atl. Hosp. of Florida, LLC, 93 So.
3d 501, 502–03 (Fla. 3d DCA 2012) (granting petition for writ of
certiorari and quashing order compelling the production of manuals
1 Citations to the Appendix are in the form (Appx. p. __).
3
and guidelines relating to underwriting, among other items); see, e.g.,
State Farm Florida Ins. Co. v. Hill, 45 Fla. L. Weekly D2634 (Fla. 3d
DCA Nov. 25, 2020) (“In first-party disputes concerning coverage
under a homeowners’ insurance policy, this Court has consistently
granted certiorari and quashed discovery orders that permitted
insureds to obtain their insurers’ claims handling policies, practices,
procedures, manuals or guidelines.”); Homeowners Choice Prop. &
Cas. Ins. Co. v. Mahady, 284 So. 3d 582, 583 (Fla. 4th DCA 2019)
(“We therefore grant the petition and quash the trial court’s order
allowing discovery of the claim files and underwriting file at this
time.”); State Farm Florida Ins. Co. v. Desai, 106 So. 3d 5, (Mem)–6
(Fla. 3d DCA 2013) (granting petition for writ of certiorari and
quashing order directing the production of claim manuals and
guidelines, along with other discovery); State Farm Florida Ins. Co. v.
Seville Place Condo. Ass’n, Inc., 74 So. 3d 105, 109 (Fla. 3d DCA
2011) (on rehearing en banc) (recognizing that premature bad faith
discovery may present irreparable harm for purposes of certiorari
review); State Farm Mut. Auto. Ins. Co. v. Tranchese, 49 So. 3d 809,
809 (Fla. 4th DCA 2010) (granting petition for writ of certiorari and
quashing discovery order compelling insurer to respond to discovery
4
involving claims handling procedures and business practices); State
Farm Mut. Auto. Ins. Co. v. O’Hearn, 975 So. 2d 633, 638 (Fla. 2d DCA
2008) (granting petition for writ of certiorari and quashing order
requiring the production of underwriting file contents before liability
and the extent of damages were determined); Gov’t Employees Ins.
Co. v. Rodriguez, 960 So. 2d 794, 795 (Fla. 3d DCA 2007) (granting
petition for writ of certiorari and quashing order requiring the
production of “general claims handling practices and procedures,”
including manuals); Hartford Insurance Company v. Mainstream
Construction Group, 864 So. 2d 1270 (Fla. 5th DCA 2004) (“Although
certiorari is ordinarily not available to review an order denying a
motion to dismiss, it is available when, as here, irreparable injury
may occur by premature discovery of an insurer’s internal business
records and claim files.”); Old Republic Nat. Title Ins. Co. v.
HomeAmerican Credit, Inc., 844 So. 2d 818, 819 (Fla. 5th DCA 2003)
(granting petition for writ of certiorari and quashing order compelling
production of documents relating to “business policies and practices
regarding the handling of claims”); State Farm Florida Ins. Co. v.
Gallmon, 835 So. 2d 389, 390 (Fla. 2d DCA 2003) (granting petition
for writ of certiorari and quashing order requiring production of
5
company policies and manuals, among other items); State Farm Mut.
Auto. Ins. Co. v. Cook, 744 So. 2d 567, 568 (Fla. 2d DCA 1999)
(granting petition for writ of certiorari and quashing order denying
protective order covering insurer’s internal operating manuals,
among other materials); Liberty Mut. Ins. Co. v. Farm, Inc., 754 So. 2d
865, 866–67 (Fla. 3d DCA 2000) (granting petition for writ of
certiorari and quashing order requiring insurer to produce discovery
involving “the insurer’s business practices); Am. Bankers Ins. Co. of
Fla. v. Wheeler, 711 So. 2d 1347, 1348 (Fla. 5th DCA 1998) (granting
petition for writ of certiorari and quashing trial court order requiring
the production of claims handling manuals and materials); Florida
Residential Prop. & Cas. Joint Underwriters Ass’n v. Sanchez, 693 So.
2d 68 (Fla. 3d DCA 1997) (granting petition for writ of certiorari and
quashing order “directing disclosure of its underwriting guidelines
and five years worth of similar claim documents”); State Farm Fire &
Cas. Co. v. Valido, 662 So. 2d 1012, 1013 (Fla. 3d DCA 1995)
(granting petition for writ of certiorari and quashing order requiring
production of manuals, guidelines, and documents concerning
claims handling procedures as irrelevant).
6
In addition, “[o]rders improperly requiring the disclosure of
trade secrets or other proprietary information often create
irreparable harm and are thus appropriate for certiorari review.”
Westco, Inc. v. Scott Lewis’ Gardening & Trimming, Inc., 26 So. 3d 620,
622 (Fla. 4th DCA 2009); see Wal-Mart Stores E., L.P. v. Endicott, 81
So. 3d 486, 491 (Fla. 1st DCA 2011) (“This type of harm is known as
‘cat out of the bag’ harm because once the documents are
disseminated, a privacy or trade secret interest has been invaded
which cannot be remedied on direct appeal.”); Grooms v. Distinctive
Cabinet Designs, Inc., 846 So. 2d 652, 654 (Fla. 2d DCA 2003)
(“Orders improperly requiring the disclosure of trade secrets or
other proprietary information often create irreparable harm and are
thus appropriate for certiorari review.”).
FACTS UPON WHICH PETITIONER RELIES
On November 13, 2019, Foster sued his insurer, PTIC, for
“material breach” of his property insurance policy. (Appx. pp. 11-
12).2 Along with the initial Complaint, Foster served PTIC with a
series of discovery requests. (Appx. pp. 23-33). Foster’s “Request to
2 Citations to the Appendix are in the form (Appx. p. __).
7
Produce” under Rule 1.350, Florida Rules of Civil Procedure, sought
as its final request the following category of documents:
10. Defendant’s underwriting manual(s) in effect at the time of the issuance or renewal of all policies issued to Plaintiff.
(Appx. p. 32). On December 26, 2019, PTIC answered the Complaint
and asserted defenses. (Appx. p. 34).
On September 30, 2020, PTIC responded to Foster’s “Request
to Produce.” (Appx. p. 43). PTIC provided specific legal authority in
support of its objection to the production of “manuals, guidelines,
and other similar materials”:
PTI objects to producing, as insurer work product and impermissible bad faith discovery, privileged and otherwise irrelevant business practices and procedures manuals, guidelines, and other similar materials. See Allstate Ins. Co. v. Langston, 655 So. 2d 91 (Fla. 1995) (recognizing that discovery requests for internal memoranda on claims handling procedures are irrelevant while coverage issue remains undetermined); Gen. Star Indem. Co. v. Atl. Hosp. of Fla., LLC, 93 So. 3d 501, 503 (Fla. 3d DCA 2012) (holding that discovery order requiring insurer to produce underwriting guideline materials was a departure from the essential requirements of law causing irreparable harm for which an appeal could not remedy); State Farm Mut. Auto. Ins. Co. v. Tranchese, 49 So. 3d 809, 810 (Fla. 4th DCA 2010)(holding that “. . . until the obligation to provide coverage and damages has been determined, a party is not entitled to discovery related to . . . business policies or practices regarding handling of claims.”); Phoenix Ins. Co. v. Trans World Forwarding,
8
Inc., 19 So. 3d 430 (Fla. 3d DCA 2009)(holding that discovery concerning an insurer’s business practices is premature “until there has been a determination of liability and extent of damages owed . . .”)(citing Gov’t Employees Ins. Co. v. Rodriguez, 960 So. 2d 794 (Fla. 3d DCA 2007)); Allstate Ins. Co. v. Swain, 921 So. 2d 717, 718-19 (Fla. 3d DCA 2006)(holding that documents concerning insurance policy drafting and marketing, and training of employees and agents, were irrelevant and “completely unnecessary to the determination of the coverage issues presented”); Gov’t Employees Ins. Co. v. Rodriguez, 960 So. 2d 794, 795-96 (Fla. 3d DCA 2007)(holding that discovery order compelling production of internal claims handling guidelines departed from the essential requirements of law during first-party coverage dispute); Old Republic Nat’l Title Ins. Co. v. Homeamerican Credit Inc., 844 So. 2d 818, 819-20 (Fla. 5th DCA 2003)(holding that order requiring disclosure of documents concerning insurer’s business policies and practices was premature before determination on coverage issue); State Farm Fla. Ins. Co. v. Gallmon, 835 So. 2d 389, 390 (Fla. 2d DCA 2003)(quashing order compelling insurer to produce company policies and manuals as being irrelevant and otherwise protected as insurer work product); State Farm Mut. Auto. Ins. Co. v. Cook, 744 So. 2d 567, 568 (Fla. 2d DCA 1999)(holding that an insurer’s “internal manuals are also protected from discovery until and unless the bad faith claims are prosecuted”)(citing State Farm Fire and Cas. Co. v. Valido, 662 So. 2d 1012, 1013 (Fla. 3d DCA 1995)); Am. Bankers Ins. Co. of Fla. v. Wheeler, 711 So. 2d 1347, 1348 (Fla. 5th DCA 1998)(holding that discovery order compelling production of claim file materials and guidelines, and desk adjuster’s personnel file, departed from the essential requirements of law in first-party coverage dispute).
(Appx. p. 45) (emphasis in original).
9
Likewise, PTIC cited specific legal authority in support of PTIC’s
objection to producing “trade secret and other proprietary
information”:
PTI objects to producing materials containing privileged trade secret and other proprietary information. See Fla. Stat. §90.506; Fla. Stat. §688.002(4); Gen. Caulking Coating Co. v. J.D. Waterproofing, Inc., 958 So. 2d 507, 508 (Fla. 3d DCA 2007).
(Id.) (emphasis in original). PTIC also provided a separate objection
to Foster’s specific request number 10: “Objection: irrelevant;
overbroad; insurer work product; claim file privilege.” (Appx. p. 48).
On October 8, 2020, Foster filed “Plaintiffs’ [sic] Motion to
Compel Better Answers to Interrogatories, Better Responses to
Request to Produce and Motion to Overrule Defendant’s Objections
to Plaintiffs’ Discovery” (the “Motion to Compel”). (Appx. p. 49). The
two-paragraph Motion to Compel requested that the trial court order
PTIC “to provide better responses to Plaintiffs’ Request to Produce
numbered one through ten (1-10) and overrule Defendant’s
Objections.” (Id.). The Motion to Compel neither explains the
deficiencies in PTIC’s response nor does it provide any legal basis to
overrule PTIC’s objections. (See id.).
10
On February 8, 2021, PTIC filed a response in opposition to the
Motion to Compel. (Appx. p. 71). PTIC explained that its counsel
attempted to confer with Foster’s counsel about the Motion to
Compel. (Appx. p. 72, ¶¶ 4-6). Foster’s counsel failed to explain the
“vaguely outlined” arguments in the Motion to Compel, in violation of
the trial court’s administrative procedures and Rule 1.380, Florida
Rules of Civil Procedure. (Appx. p. 73, ¶¶ 9-11.). Instead, Foster
“proceeded to set a hearing in lieu of providing more specific
information.” (Id., ¶ 12). By notice dated October 28, 2020, Foster’s
counsel set the Motion to Compel for a non-evidentiary hearing on
February 10, 2021.3 (See Appx. p. 91).
3 Although the hearing was not transcribed, a transcript is not necessary to review the trial court’s decision to overrule PTIC’s objections following the non-evidentiary hearing. See Rollet v. de Bizemont, 159 So. 3d 351, 357–58 (Fla. 3d DCA 2015) (“Where the hearing at issue is non-evidentiary and consists only of legal argument, the failure to provide a transcript is not necessarily fatal to appellate review.”); Doan v. Amelia Retreat Condo. Ass’n, Inc., 604 So. 2d 1292, 1293–94 (Fla. 1st DCA 1992); see, e.g., Zuckerman v. A & B Window & Glass, Inc., 930 So. 2d 632 (Fla. 3d DCA 2005) (granting certiorari in the absence of a transcript where the issue on review was a “legal issue”); Reinoso v. Fuentes, 932 So. 2d 536, 536–37 (Fla. 3d DCA 2006) (permitting review of legal issue in the absence of a transcript where the legal deficiency was apparent from the face of the pleadings). As explained below, Foster’s request for PTIC’s underwriting manuals is improper on its face and in its entirety.
11
On February 17, 2021, the trial court entered its Order
Compelling Production. (Appx. pp. 4-6). The trial court overruled
PTIC’s objections and ordered production of PTIC’s underwriting
manual:
14. As to Plaintiff’s Request to Produce number ten (10), Defendant’s objections are overruled.
(Appx. p. 6).
NATURE OF THE RELIEF SOUGHT
PTIC respectfully requests the Court issue a writ of certiorari
quashing the trial court’s Order Compelling Production because
PTIC’s underwriting manuals are categorically protected from
disclosure in this litigation. In addition, the Court should quash the
Order Compelling Production because PTIC’s underwriting manuals
constitute proprietary trade secret information.
ARGUMENT IN SUPPORT OF THE PETITION
As a Matter of Law, PTIC’s Underwriting Manuals Are Categorically Protected from Disclosure During This Coverage Litigation
An insurer’s underwriting manuals, company policies, and
guidelines are not discoverable “unless there has been a
determination of liability and extent of damages owed the insured
under the first-party insurance policy.” Gen. Star Indem. Co, 93 So.
12
3d at 502 (quoting Phoenix Ins. Co. v. Trans World Forwarding, Inc.,
19 So. 3d 430, 430 (Fla. 3d DCA 2009) (quoting Rodriguez, 960 So.
2d at 795)); see Tranchese, 49 So. 3d at 810 (“[U]ntil the obligation
to provide coverage and damages has been determined, a party is not
entitled to discovery related to the claims filed or to the insurer’s
business policies or practices regarding handling of claims.”); Phoenix
Ins. Co., 19 So. 3d at 430–31 (noting that until liability and the extent
of damages is resolved, discovery “directed to an insurer’s business
practices” is premature); Mainstream Const. Group, Inc., 864 So. 2d
at 1272–73 (noting that “an insured is not entitled to discover an
insurer’s claim file or documents relating to the insurer’s business
policies or claims practices until coverage has been determined . . .
.”); see, generally, Allstate Ins. Co. v. Langston, 655 So. 2d 91, 93–95
(Fla. 1995) (“The materials Langston sought in paragraphs 3, 4, and
5 of her discovery request—internal procedural memos, claims
manuals, and standards for proper investigation of claims—do, as
the district court noted, appear irrelevant.”).
Stated differently, an insured is not entitled to discover an
insurer’s “business policies or claims practices” until a claim for bad
faith accrues. See Mainstream Const. Group, Inc., 864 So. 2d at 1272-
13
73; Farm, Inc., 754 So. 2d at 866–67 (holding that discovery directed
to the insurer’s business practices is premature and not discoverable
until a bad faith claim has accrued). “If there is no insurance
coverage, nor any loss or injury for which the insurer is contractually
obligated to indemnify, the insurer cannot have acted in bad faith in
refusing to settle the claim.” Mainstream Const. Group, Inc., 864 So.
2d at 1272. Such premature discovery, if permitted, causes
irreparable harm to the insurer. Id. at 1271; see supra, pp. 3-6.
On its face, Foster’s request for PTIC’s “underwriting manual(s)
in effect at the time of the issuance or renewal of all policies issued
to [Foster]” targets PTIC’s internal business practices. (Appx. p. 32).
These records are not subject to disclosure until a claim for bad faith
accrues, if ever.4 See Hill, 45 Fla. L. Weekly D2634, at *1 (collecting
cases regularly quashing discovery orders compelling the production
of materials including manuals and guidelines in first-party
insurance coverage disputes); O’Hearn, 975 So. 2d at 637 (holding
4 Such discovery remains improper and subject to certiorari review even where the insured does not expressly plead a claim for bad faith. Hill, 45 Fla. L. Weekly D2634, at *2 (Fla. 3d DCA Nov. 25, 2020) (“While the Hills note they have not pled a bad faith claim in this action, their requested discovery with respect to section 627.70131(5)(a) is nevertheless impermissible.”).
14
that materials contained in underwriting or claim file are not
discoverable until the insurer’s liability and damages are finally
determined); Rodriguez, 960 So. 2d at 796 (granting certiorari and
quashing order compelling the production of general practices and
procedures because internal procedures are immaterial in the
absence of a bad faith claim); Cook, 744 So. 2d at 568 (granting
certiorari and quashing order denying protective order because the
insurer’s “internal manuals are also protected from discovery until
and unless the bad faith claims are prosecuted”); Florida Residential
Prop. & Cas. Joint Underwriters Ass’n, 693 So. 2d 68 (quashing order
compelling production of underwriting guidelines during the
coverage dispute); Valido, 662 So. 2d at 1013 (quashing “in its
entirety” an order compelling production of manuals, guidelines and
documents in first-party insurance coverage dispute); accord Sheets
v. Standard Fire Ins. Co., 15-80940, 2015 WL 13273087, at *2 (S.D.
Fla. Nov. 4, 2015) (applying Florida law and concluding that discovery
requests directed to underwriting policies and procedures “are
unrelated to the issues of coverage or damages, and relate only to the
issue of bad faith”).
15
For example, in Homeowners Choice Property & Casualty
Insurance Company v. Mahady, Florida’s Fourth District Court of
Appeal quashed discovery requests seeking information contained in
the insurer’s claim and underwriting files. Like Foster, the insureds
sued their property insurer for breach of contract. 284 So. 3d at 582.
The insureds propounded discovery requests implicating the
underwriting and claim files. Id. at 583. The trial court “summarily
overruled” the insurer’s objections regarding the underwriting file.
Id.
The Fourth District noted that although the trial court failed to
make sufficient findings to overrule the insurer’s work product
objections, remand was unnecessary because “these discovery
requests are facially improper, in their entirety.” Id. at 584
(emphasis added). The court quashed the trial court’s order
overruling the insurer’s objections because the requests regarding
the claim and underwriting files “are improper on their face.” Id.
PTIC objected to Foster’s discovery seeking “impermissible bad
faith discovery,” including “manuals, guidelines, and other similar
materials.” (Appx. p. 45) (emphasis in original). PTIC provided
specific legal citations in support of its objection, including many of
16
the authorities cited in this Petition. (Id.). PTIC specifically objected
to Foster’s request as “irrelevant” and “overbroad,” both of which are
borne out by the unbroken wave of authority holding that PTIC’s
internal business practices are not subject to disclosure. (Appx. p.
48). Foster’s request and the trial court’s Order Compelling
Production are both improper on their face. See Mahady, 284 So. 3d
at 583. The Court should grant this Petition and quash that portion
of the Order Compelling Production overruling PTIC’s objections and
requiring PTIC to produce its underwriting manuals.
PTIC’s Underwriting Manuals Are Subject to Trade Secret Privilege
In addition, certiorari is appropriate to review the Order
Compelling Production because PTIC’s underwriting manuals
constitute privileged trade secret materials. See Fla. Stat.
§688.002(4) (defining trade secrets to include methods, techniques,
and processes).
Where a party objects to the production of trade secret
information, a trial court must first determine if a trade secret exists.
See Lewis Tree Serv., Inc. v. Asplundh Tree Expert, LLC, 45 Fla. L.
Weekly D2228, at *3 (Fla. 2d DCA Sept. 25, 2020) (“To ensure that
this privilege is properly protected, courts have set forth a three-step
17
analysis for trial courts to undertake when faced with a claim that a
discovery request seeks the production of protected trade secret
information. In the first step, the trial court must determine whether
the information requested constitutes or contains trade secret
information.”). If the existence of a trade secret is disputed, the trial
court must conduct in camera review or hold an evidentiary hearing.
See id.; Bright House Networks, LLC v. Cassidy, 129 So. 3d 501, 505–
06 (Fla. 2d DCA 2014) (“When a party objects to the disclosure of a
trade secret, first a court must determine whether the requested
information is, in fact, a trade secret. . . . Usually this determination
requires the trial court to perform an in camera review of the
information.”).
This Court recognizes that internal policy manuals rise to the
level of privileged trade secrets. In Wal-Mart Stores E., L.P. v. Endicott,
81 So. 3d 486, the Court held that the disclosure of “portions of Wal–
Mart’s Pharmacy Operations Manual” would cause irreparable harm
notwithstanding that “Wal–Mart has not expressly pointed to a
document or a set of documents which it believes would cause
irreparable harm . . . .” Id. at 488, 490. Given the proprietary nature
of Wal-Mart’s internal operations manual, like PTIC’s underwriting
18
manuals here, the Court granted certiorari relief and quashed the
order compelling disclosure. Id. at 491.
Once a trial court determines that requested material
constitutes a trade secret, this Court requires the trial court to make
“particularized findings” establishing the requesting party’s
“reasonable necessity for production despite the existence of trade
secrets.” KPMG LLP v. State, Dept. of Ins., 833 So. 2d 285, 286 (Fla.
1st DCA 2002); see Laser Spine Inst., LLC v. Greer, 144 So. 3d 633,
633–34 (Fla. 1st DCA 2014) (granting petition for writ of certiorari
and quashing order compelling disclosure of trade secret documents
without including “particularized findings” on the necessity of the
production); see also Gulfcoast Spine Inst., LLC v. Walker, 46 Fla. L.
Weekly D308 (Fla. 2d DCA Feb. 5, 2021) (“Any ordered disclosure
must be supported by findings.”); Lewis Tree Serv., Inc., 45 Fla. L.
Weekly D2228, at *3; Gen. Caulking Coating Co., Inc. v. J.D.
Waterproofing, Inc., 958 So. 2d 507, 509 (Fla. 3d DCA 2007)
(“Because the order under review makes no specific findings as to
why it deemed the requested information not to be protected by the
trade secret privilege we find that ‘it departs from the essential
requirements of the law for which no adequate remedy may be
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afforded to petitioners on final review.’”) (quoting Arthur Finnieston,
Inc. v. Pratt, 673 So. 2d 560, 562 (Fla. 3d DCA 1996)). This follows
from section 90.506, Florida Statutes, which requires a court to take
appropriate protective measures. Lewis Tree Serv., Inc., 45 Fla. L.
Weekly D2228, at *3.
PTIC objected to Foster’s requests and provided legal authority
in support, including section 90.506, Florida Statutes. (Appx. p. 45).
The Order Compelling Production improperly orders PTIC to produce
its internal underwriting manuals, which are subject to trade secret
protection. See Wal-Mart Stores E., L.P., 81 So. 3d at 490. Before
summarily overruling PTIC’s objection, at a minimum, the trial court
should have conducted an in camera review or held an evidentiary
hearing. See Am. Exp. Travel Related Services, Inc. v. Cruz, 761 So.
2d 1206, 1210 (Fla. 4th DCA 2000) (granting petition for writ of
certiorari and directing trial court to conduct an in camera inspection
of American Express’s “Internal Credit Authorizations Manual” to
determine “(1) whether the Manual constitutes a ‘trade secret’; and if
so (2) whether the necessity for the production of the Manual
outweighs the interest in maintaining its confidentiality”); Uniroyal
Goodrich Tire Co. v. Eddings, 673 So. 2d 131, 132 (Fla. 4th DCA 1996)
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(granting petition for writ of certiorari and remanding for an
evidentiary hearing as to whether “quality assurance manual” for a
manufacturing plant was entitled to trade secret protection). If the
trial court then found PTIC’s underwriting manuals to contain trade
secrets, the trial court would be required to make “particularized
findings” overruling PTIC’s privilege. KPMG LLP, 833 So. 2d at 286.
To the extent the Court does not quash the Order Compelling
Production because it constitutes premature bad faith discovery, the
Court should quash the Order Compelling Production because it
improperly compels the production of trade secret materials. At a
minimum, the Court should remand for the trial court to conduct a
sufficient in camera or evidentiary hearing.
CONCLUSION
For the foregoing reasons, PTIC respectfully requests the Court
grant PTIC’s Petition for issuance of a writ of certiorari quashing the
trial court’s Order Compelling Production.
Respectfully submitted,
/s/ Patrick M. Chidnese Patrick M. Chidnese Florida Bar No. 089783 [email protected] Bickford & Chidnese, LLP
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307 S. Willow Avenue, Suite 100 Tampa, FL 33606 Tel: 813-576-0095
Attorney for Petitioner
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on March 19, 2021, I electronically
filed the foregoing with the Florida Courts E-Portal system, which will
automatically provide copies to all counsel of record, and via USPS
pursuant to Rule 9.420 (c). I also served a copy of the foregoing via
electronic mail on the following:
Mark A. Nation, Esq. The Nation Law Firm 570 Crown Oak Centre Dr. Longwood, FL 32750 [email protected] [email protected] [email protected] [email protected]
/s/ Patrick M. Chidnese Attorney
CERTIFICATE OF TYPEFACE COMPLIANCE
I HEREBY CERTIFY that the size and style of type used in this
Answer Brief is Bookman Old Style in 14 Point Type and that it
contains 4,108 words.
/s/ Patrick M. Chidnese Attorney