Our Miami homeowners insurance coverage attorneys are well aware of the advantages the Florida Legislature has bestowed on the insurance industry by bifurcating the issues of liability and claim value from bad faith litigation. This legislation created a strategic advantage by permitting insurers to have the jury shielded from learning extensive details about sharp practices in an insurer’s adjusting process when considering liability. Since the determination of damages can have a subjective component, insurance companies vigilantly leverage the bifurcation advantage by uniformly opposing attempts by policyholders to introduce evidence of its wrongful conduct and policy adjustment patterns.
In this blog, our Florida property damage attorneys review an appellate court decision demonstrating how insurers use the bifurcation process to shield juries from their bad faith practices. In State Farm Florida Insurance Company v. Marascuillo, the policyholders originally filed a sinkhole claim related to the covered property (“the 2004 claim”). The insurance company hired an engineering firm to investigate the claim and conduct testing. The engineering company concluded sinkhole activity occurred and suggested compaction grouting as a remedy. The insurer paid the estimated cost of this remedial approach to the sinkhole activity. However, the policyholders hired a different engineering firm to remediate the sinkhole issues by way of grouted piers as opposed to compaction grouting.
The homeowners filed another claim for sinkhole activity with their insurer in 2010 (“the 2010 claim”). State Farm denied the claim and opposed the coverage lawsuit based on the contention that the 2010 claim was the result of faulty remediation of the 2004 claim. The policyholders sought discovery of documents from the 2004 claims file. State Farm responded by seeking a protective order. The insurance carrier justified its opposition to the discovery request based on the premise the information was irrelevant because the lawsuit only involved liability.
The policyholders responded that the insurance company should not be able to prevent discovery of the claims file related to the 2004 claim because the case had been resolved with regard to both coverage and value of the claim without litigation. The homeowners also contended the information in the claims file was relevant because the purported basis for denying the 2010 claim was a failure of the policyholders to perform the earlier repairs recommended by the insurer’s expert when handling the 2004 claim.
The appellate court upheld the trial judge, who ruled the documents in the 2004 claim file were particularly relevant because the basis for the denial was improper remediation of the damage from the 2004 claim. However, the court refused to grant access to documents that were prepared in anticipation of litigation subject to qualified work-product privilege. The court rejected the policyholders’ contention that the claim file lost protection under this privilege because the file closed without any litigation materializing. Rather, the court ruled that a claims file retains its qualified immunity even if no litigation develops and subsequent litigation is not related to an earlier lawsuit.
While there are strategies for obtaining information and documents that can be valuable in the claims file, this case demonstrates how difficult it can be to obtain such materials. Our experienced Miami insurance claims lawyers have experience navigating these types of discovery disputes. The information and documents obtained through the discovery process frequently constitute a valuable part of a successful lawsuit against a recalcitrant insurer.
Greenberg, Stone, & Urbano: Seeking Maximum Recovery for Policyholders from Homeowners Insurance Companies
Our Miami property damage attorneys at Greenberg, Stone & Urbano will tenaciously pursue the full compensation our clients are entitled to under the law. For over 130 collective years, our firm has assisted homeowners with damage claims across South Florida. We seek to obtain compensation for your tangible and intangible damages. Our skill and dedication have earned us an AV rating from Martindale-Hubbell and recognition as one of South Florida’s top firms by the Miami Herald. Call us at (888) 499-9700 or (305) 595-2400 or visit our website to schedule your initial consultation.