ROBIN S. ROSENBAUM, Magistrate Judge.
This matter is before the Court on Plaintiff's Motion to Compel Defendant to Respond to Plaintiff's Interrogatories and Request for Production over Defendant's Blanket Objections ("Plaintiff's Motion to Compel") [D.E. 36], referred to me by the Honorable Robert N. Scola, Jr. [D.E. 25]. The Court has reviewed Plaintiff's Motion, Defendant's Response, and Plaintiff's Reply, as well as the other materials in the case file. For the reasons that follow, the Court grants Plaintiff's Motion to Compel.
In October 2005, a building owned by Plaintiff All Moving Services, Inc., ("AMS") was damaged by Hurricane Wilma. The building was covered by a property-insurance policy issued to AMS by Defendant Stonington Insurance Company ("Stonington"). After AMS submitted a claim to Stonington, a dispute arose between the parties concerning the amount of AMS's insured loss. AMS filed a breach-of-contract action against Stonington in state court, and the parties agreed to resolve their dispute through an appraisal process. In June 2007, a neutral umpire issued an appraisal award of $858,400. Over AMS's objections, the state court later confirmed that award.
In May 2011, AMS filed this diversity action alleging that Stonington engaged in various bad-faith conduct during its handling of AMS's claim, in violation of Fla. Stat. § 624.155. See D.E. 1. AMS's Complaint seeks compensatory damages, punitive damages, and attorney's fees and costs. See id. at 7-8.
Stonington moved to dismiss, arguing principally that AMS cannot maintain a bad-faith action because there has been no threshold finding that Stonington breached its insurance contract with AMS. See D.E. 9 at 6-7. AMS opposed that motion, based in part on its contention that the appraisal award established the validity of AMS's insurance claim, thereby allowing AMS to bring a bad-faith action regarding Stonington's handling of the claim. See D.E. 18 at 7-9. Judge Zloch denied Stonington's motion to dismiss, finding that the legal issues raised in the motion were "more properly addressed in a Motion For Summary Judgment, when discovery may present the Court with a full record upon which it may address and decide said issues." D.E. 22.
After the case was reassigned to Judge Scola, Stonington moved to bifurcate AMS's bad-faith claim, requesting that the Court first determine certain "threshold issues," including whether Stonington breached the parties' insurance contract. D.E. 33 at 2. Seeing no valid reason for the proposed bifurcation, Judge Scola denied Stonington's motion. See D.E. 39 at 1. "As evidenced by the arguments asserted in [Stonington's] recently filed motion for summary judgment," Judge Scola explained, "it appears that [Stonington] can adequately argue what it perceives as threshold legal issues while also arguing ultimate issues for the Court's consideration." Id.
Meanwhile, during discovery, AMS served five interrogatories and seven production requests on Stonington. Stonington objected to all the interrogatories and production requests, mainly on the ground that they were premature because they sought information concerning the merits of AMS's bad-faith claim. This objection is based on the same argument raised by Stonington in its motion to dismiss, motion to bifurcate, and motion for summary judgment—that AMS cannot bring a bad-faith action because certain threshold legal requirements have not been met. AMS now moves to compel Stonington to respond to the interrogatories and production requests, which AMS contends are relevant to issues properly before the Court.
Rule 26(b) of the Federal Rules of Civil Procedure governs the scope of discovery. That rule provides, in relevant part, that "[p]arties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense . . . . Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence." Fed. R. Civ. P. 26(b)(1). The Advisory Committee Notes to Rule 26 indicate that "[t]he purpose of discovery is to allow a broad search for facts, the names of witnesses, or any other matters which may aid a party in the preparation or presentation of his case." Fed. R. Civ. P. 26(b) advisory committee notes (1946). Indeed, the Advisory Committee Notes approvingly cite language from a case stating that "the Rules . . . permit `fishing' for evidence as they should." Id. (alteration in original) (citation omitted); see also Hickman v. Taylor, 329 U.S. 495, 507 (1947) ("No longer can the time-honored cry of `fishing expedition' serve to preclude a party from inquiring into the facts underlying his opponent's case.").
The courts have long recognized the wide scope of discovery allowed under the Federal Rules of Civil Procedure. As the Eleventh Circuit's predecessor court noted,
Burns v. Thiokol Chem. Corp., 483 F.2d 300, 304 (5th Cir. 1973)
Of course, the scope of permissible discovery is not unbounded. Requested discovery must be relevant, and it must not impose an undue burden or be unreasonably cumulative, under the standards described in Rule 26(b)(2)(C). Finally, even if the discovery sought meets all these requirements, an opposing party generally may not be compelled to respond to it if that party invokes and demonstrates the applicability of an appropriate privilege or protection.
AMS moves to compel Stonington to respond to the following five interrogatories:
D.E. 43-2 at 5-9. AMS also seeks to compel Stonington to produce seven categories of documents:
D.E. 43-1 at 3-4.
Stonington objected to all of these interrogatories and production requests as follows:
D.E. 36 at 3; D.E. 43 at 3.
AMS contends that its discovery requests are relevant to its bad-faith claim under Fla. Stat. § 624.155, including its request for punitive damages under that statute. Section 624.155 provides that "[a]ny person may bring a civil action against an insurer when such person is damaged" by the insurer's commission of certain specified acts. Fla. Stat. § 624.155(1). As relevant here, these acts include violating Fla. Stat. § 626.9541(1)(i) (prohibiting various unfair claim-settlement practices) and "[n]ot attempting in good faith to settle claims when, under all the circumstances, [the insurer] could and should have done so, had it acted fairly and honestly toward its insured and with due regard for her or his interests." Fla. Stat. § 624.155(1)(a)1, (b)1. In addition to recovering compensatory damages and attorney's fees, see id. § 624.155(4), an insured may obtain punitive damages if "the acts giving rise to the violation occur with such frequency as to indicate a general business practice" and those acts are either "[w]illful, wanton, and malicious" or "[i]n reckless disregard for the rights of any insured." Id. § 624.155(5).
Here, AMS's Complaint alleges that Stonington failed to make a timely, good-faith determination of AMS's insured loss, requiring AMS to seek state legal remedies.
Stonington argues that AMS's proposed discovery concerning its bad-faith claim is premature because AMS has not yet established that Stonington breached the insurance contract. This argument relies on the principle that "an insured's underlying first-party action for insurance benefits against the insurer necessarily must be resolved favorably to the insured before the cause of action for bad faith in settlement negotiations can accrue." Blanchard v. State Farm Mut. Auto. Ins. Co., 575 So.2d 1289, 1291 (Fla. 1991). In particular, the Supreme Court of Florida has held that a claim under § 624.155 alleging failure to settle in good faith is "premature until there is a determination of liability and extent of damages owed on the first-party insurance contract." Vest v. Travelers Ins. Co., 753 So.2d 1270, 1276 (Fla. 2000); see Blanchard, 575 So. 2d at 1291.
AMS contends, however, that its bad-faith claim is ripe because the appraisal process established Stonington's obligation to pay benefits to AMS and the amount of that obligation. Indeed, another Court in this District has held that when parties have used an appraisal process to determine the amount of benefits owed under an insurance contract, "an appraisal award may be a sufficient determination of liability and damages for [the insured's] bad faith claim to proceed." Tropical Paradise Resorts, LLC v. Clarendon Am. Ins. Co., No. 08-60254-CIV, 2008 WL 3889577, at *2 (S.D. Fla. Aug. 20, 2008). And while Stonington maintains that the appraisal award here is not a proper basis for AMS's bad-faith action, see D.E. 35 at 4-7 (Motion for Summary Judgment), the Court has not yet adopted that position.
Stonington further notes that several of AMS's discovery requests seek information about Stonington's handling of other insureds' claims. As AMS acknowledges, these requests concern its request for punitive damages and, in particular, whether Stonington's alleged bad-faith acts in handling AMS's claim "occur with such frequency as to indicate a general business practice." Fla. Stat. § 624.155(5). Stonington contends that these requests are irrelevant here because AMS's insurance claim is "unique" and "[t]here is no allegation or suggestion that similar occurrences happened even one other time, let alone formed a pattern and practice of Stonington's claim handling." D.E. 43 at 10. According to Stonington, the allegations in AMS's Complaint regarding Stonington's business practices "track the statutory verbage" but "have no mission or consequence to the unique facts of this case." Id. at 11.
Stonington's arguments contesting the sufficiency of AMS's punitive-damages allegations would be properly raised in a dispositive motion. See, e.g., Mayfair House Ass'n, Inc. v. QBE Ins. Corp., No. 09-80359-CIV, 2009 WL 2132704, at *4-*5 (S.D. Fla. July 14, 2009) (denying motion to dismiss or strike punitive-damages allegations in bad-faith action). But though Stonington has filed a motion to dismiss and a motion for summary judgment—both of which challenge certain damages sought by AMS, see D.E. 9 at 9; D.E. 35 at 10-11—neither motion raises any issue concerning AMS's request for punitive damages.
Stonington also asserts that some of AMS's production requests seek documents protected by the attorney-client and work-product privileges. To the extent that Stonington wishes to assert a privilege claim for any of the requested documents, however, Stonington must make appropriately specific objections and produce a privilege log in response to AMS's requests. See Fed. R. Civ. P. 26(b)(5)(A); S.D. Fla. L.R. 26.1(g)(3)(B), (C).
Finally, to the extent that Stonington otherwise objects to AMS's interrogatories and production requests as unduly burdensome, Stonington offers no factual support for that claim. To assert an undue-burden objection, a party must explain specifically how the proposed discovery is unduly burdensome. See Bank of Mong. v. M & P Global Fin. Servs., Inc., 258 F.R.D. 514, 519 (S.D. Fla. 2009). Also, "claims of undue burden should be supported by a statement (generally an affidavit) with specific information demonstrating how the request is overly burdensome." Id. (citation omitted). Because Stonington has provided no facts showing that AMS's requested discovery would impose an undue burden, the Court overrules this objection.
As detailed above, Plaintiff's Motion to Compel Defendant to Respond to Plaintiff's Interrogatories and Request for Production over Defendant's Blanket Objections [D.E. 36] is
Moreover, in its Response to the Motion to Compel, Stonington moves for "a protective order preventing the requested discovery." D.E. 43 at 11. That motion is improper because it was not filed within 30 days after AMS served its discovery requests . See S.D. Fla. L.R. 26.1(h)(1). In any event, since AMS is entitled to the requested discovery, the Court declines to issue a protective order.
