Seeking Protective Orders as to Corporate Representative Depositions in Declaratory Actions on Insurance Coverage

Florida Rule of Civil Procedure 1.280(b)(1) provides that a party may obtain discovery regarding any matter, not privileged, that is relevant to the subject matter of the pending action. However, the court may for good cause, issue an “order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense that justice requires” including an order that the discovery not be had. See Fed. R. Civ. P. 1.280(c)

 

Under Florida law, the construction of an insurance policy is a question of law to be determined by the court. E.g., Jones v. Utica Mut. Ins. Co., 463 So.2d 1153, 1157 (Fla.1985). An unambiguous insurance contract must be construed according to its plain terms, without resorting to extrinsic evidence. See Taurus Holdings, Inc. v. U.S. Fidelity and Guar. Co.., 913 So.2d 528, 532 (Fla.2005)(emphasis added). If after construing the policy, the court finds that more than one interpretation is possible, it must resolve the ambiguity against the insurer who drafted the language of the insurance contract. Auto–Owners Ins. Co. v. Anderson, 756 So.2d 29, 34 (Fla.2000). 

 

In sum, if the policy provisions at issue are unambiguous, they will be enforced as written; and, if the policy provisions are ambiguous, they must be construed strictly against the insurance company and in favor of the insured. Therefore, any discovery pertaining to an insurer’s handling of the claim, an insurer’s interpretation of the policy, and/or the insurer’s marketing and/or business practices, are irrelevant to a determination of whether the damages at issue fall within the terms of the policy’s coverage, and an insurer should move for a protective order as to any request for such discovery. See Allstate Ins. Co. v. Swain, 921 So.2d 717, 719 (Fla. 3d DCA 2006) (quashing orders which compelled discovery concerning, inter alia, drafting, marketing and interpretation of insurance policy, holding that construction of policy is a matter of law and if it is ambiguous, the ambiguity will be resolved against the insurer; therefore, the requested discovery was “completely unnecessary to the determination of the coverage issue.”); 

 

Additionally, an insurance carrier should seek a protective order as to any request for deposition of its Corporate Representative which seeks information as to the insurer’s handling of the claim, an insurer’s interpretation of the policy, and/or the insurer’s marketing and/or business practices. See Accord Deni Assoc. of Florida, Inc. v. State Farm Fire & Cas. Ins. Co., 711 So.2d 1135 (Fla.1998). See Diamond State Ins. Co. v. His House, Inc., No. 10-20039-CIV, 2011 WL 146837, at *4 (S.D. Fla. Jan. 18, 2011)(Holding that deposition of insurer’s corporate representative on topics such as policies, issuance and procurement of policies, underwriting considerations, application for insurance, and handling of claim, are irrelevant to the resolution of this declaratory action on insurance coverage, and denying motion to compel deposition). 

Because declaratory actions are based on the policy language, the deposition of an insurance carrier’s corporate representative is often prohibited. See, Am. Empire Surplus Lines Ins. Co. v. The Warehousing Co., Case No. 13-14028-CIV-Moore/Lynch, 2013 WL 12182045 (S.D. Fla. Nov. 27, 2013)(explaining that deposition should not go forward and protective order appropriate, when requesting party failed to show the corporate representative would have new information to underlying facts.) 

 

Therefore, all insurance professionals and counsel representing insurance professionals should keep this in mind if you receive request for any such discovery in your declaratory judgment actions.