This blog is shortly and sweetly aimed at making sure policyholder advocates do not lose sight of the contractual discovery forest for the “extra-contractual discovery” trees. The substance of this post is not breaking news … rather, this post is a friendly reminder to policyholder advocates that extra-contractual (i.e., bad faith) discovery may be available in contractual disputes.

Florida policyholders, at least in federal court, are not precluded from obtaining discovery in a contract dispute merely because the discovery may also bear on the disposition of a bad faith dispute. For example, the Southern District of Florida federal court recently held:

[The insurance company] has sought a protective order on Plaintiff’s request for ‘all documents and all claims files relating in any way to the insured… .’ … [T]hese claim files are ‘relevant to the extent they relate to Plaintiff’s breach of contract claim. [The insurance company] is correct in its argument that, to the extent that items in the claim file relate only to the bad faith … claim, they are premature and not yet discoverable [in this contractual dispute]. Nevertheless, [the insurance company] made no effort to separate any contended documents that are relevant for both the breach of contract claim and the bad faith … claim from those that are only relevant to the bad faith … claim. Thus, [the insurance company] did not make ‘specific demonstration of facts in support of the request’ for protective order. Hence, [the insurance company] has not shown the Court that it has ‘good cause’ so as to be entitled to a protective order. Thus, [the insurance company’s] motion for protective order is DENIED to the extent that any discovery requests are relevant to the extent that they do not relate solely to a claim that [the insurance company] acted in bad faith in refusing to defend or cover [the insured].1

You will note that Mobley was a third-party case, but the principle also holds true in the first-party context. In sum, the view being that overlap between contractual and extra-contractual discovery does not automatically prevent the policyholder from obtaining such discovery in the contractual dispute.

Do not get engrossed by routine or preconceived notions – think outside the box in your discovery campaign.

To read previous posts in my series on dynamite discovery decisions, click here.

1 Mobley v. Capitol Specialty Ins., No. 13-20636-CIV, 2013 WL 3794058 at *5 (S.D. Fla. Jul. 19, 2013) (internal citations omitted and emphasis in original).