ALLSTATE INSURANCE COMPANY v. JESSE LEE RAY, AS PERSONAL RESPRESENTATIVE OF THE ESTATE OF DEBORAH L. VEILLEUX ( 2022 )

DISTRICT COURT OF APPEAL OF FLORIDA
SECOND DISTRICT
ALLSTATE INSURANCE COMPANY,
Petitioner,
v.
JESSE LEE RAY, as Personal
Representative of the Estate of
Deborah L. Veilleux, deceased,
Respondent.
No. 2D21-1020
September 16, 2022
BY ORDER OF THE COURT:
Upon consideration of the Respondent's Motion for
Clarification and/or Rehearing, this court grants the motion for
clarification, denies the motion for rehearing, withdraws the opinion
filed on January 19, 2022, and substitutes the following opinion in
its place. No further motions for rehearing will be entertained.
I HEREBY CERTIFY THE FOREGOING IS A TRUE COPY OF THE
ORIGINAL COURT ORDER.
MARY ELIZABETH KUENZEL
CLERK
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DISTRICT COURT OF APPEAL OF FLORIDA
SECOND DISTRICT
ALLSTATE INSURANCE COMPANY,
Petitioner,
v.
JESSE LEE RAY, as personal
representative of the Estate of
Deborah L. Veilleux, deceased,
Respondent.
No. 2D21-1020
September 16, 2022
Petition for Writ of Certiorari to the Circuit Court for Hillsborough
County; Caroline Tesche Arkin, Judge.
Daniel A. Martinez and Jennifer C. Worden of Martinez Denbo,
L.L.C., St. Petersburg, for Petitioner.
Brent Steinberg and Daniel L. Greene of Swope, Rodante P.A.,
Tampa, for Respondent.
KELLY, Judge.
Jesse Lee Ray, as personal representative of the Estate of
Deborah L. Veilleux (the Estate), brought this bad faith action
against Allstate Insurance Company for failing to settle and to
adequately defend a personal injury claim against the Estate.
Allstate seeks certiorari review of the order granting, in part, the
Estate's motion to compel production of documents Allstate
contends are attorney work product or that are protected by
attorney-client privilege. We grant Allstate's petition in part.
In 2006, Veilleux, the insured, was at fault in a crash with
Gerald Aloia. Veilleux died shortly after the accident. Aloia and the
Estate were unable to agree to the terms of a settlement within
Veilleux's policy limits. Because the case had not settled and
because Allstate believed the damages would exceed the policy
limits, it anticipated being sued for bad faith at the conclusion of
the tort litigation. It assigned Christine Brogan and George
Naftzinger as adjusters for the anticipated bad faith claim. It also
retained Martinez Denbo as outside counsel and assigned John
Connolly as in-house counsel.
Aloia's personal injury suit against the Estate went to trial on
damages, and the jury returned a verdict in favor of Aloia for
$44,932,206. The trial court, in ruling on the Estate's motion for a
new trial or for remittitur, allowed the Estate to elect either to have
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a new trial or to accept an $18 million verdict. Allstate chose to
accept the $18 million verdict on behalf of the Estate.
The Estate then sued Allstate for bad faith for failing to reach
a settlement and for breaching its duty to defend by rejecting the
opportunity to have a new trial and instead binding the Estate to an
$18 million debt. In its first request to produce, the Estate sought
documents that included communications between Connolly,
Brogan, Naftzinger, and Martinez Denbo and notes and documents
pertaining to those communications, all of which Allstate contends
pertain to the merits and defense of the bad faith action.
The court rejected Allstate's claims of work product and
attorney-client privilege as to items that existed "prior to the
conclusion of the underlying litigation" reasoning that such items
must relate to the handling of the underlying claim. The court
ordered production of the remaining documents in Allstate's
privilege log for in camera inspection so that it could determine
whether they related to the defense of the underlying tort claim and
therefore were discoverable. Allstate acknowledges that work
product materials relating to the underlying claim are discoverable
in a first-party bad faith action but argues that the trial court's
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order departed from the essential requirements of law when it held
that any documents predating the conclusion of the underlying
litigation necessarily pertained to the underlying tort litigation. We
agree.
In Allstate Indemnity Co. v. Ruiz, 899 So. 2d 1121, 1129-30
(Fla. 2005), the court explained that "all materials . . . contained in
the underlying claim and related litigation file material that was
created up to and including the date of resolution of the underlying
disputed matter and pertain in any way to coverage, benefits,
liability, or damages" are not protected by the work product
privilege. (Emphasis added.) Thus, the test is not simply when the
material was created, but whether it pertains to the processing or
litigation of the underlying claim. Id. at 1130-31. If it does, it is
discoverable. Id. To make this determination, the trial court will
have to examine the materials in camera to see if they fall into the
category of work product Ruiz held was discoverable in a bad faith
action. See id.; see also Alliant Ins. Servs., Inc. v. Riemer Ins. Grp.,
22 So. 3d 779, 781 (Fla. 4th DCA 2009) (holding that when a party
seeks to compel the disclosure of privileged documents, the party
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claiming the privilege is entitled to an in camera review of the
documents prior to disclosure).
While Ruiz eliminated work product protection for some
materials in the context of a bad faith action, it did not do away
with the attorney-client privilege in bad faith cases. See Genovese
v. Provident Life & Accident Ins. Co., 74 So. 3d 1064, 1066 (Fla.
2011). "[W]hen an insured party brings a bad faith claim against its
insurer, the insured may not discover those privileged
communications that occurred between the insurer and its counsel
during the underlying action." Id. at 1068. However, as explained
in Genovese, "cases may arise where an insurer has hired an
attorney to both investigate the underlying claim and render legal
advice." Id. Where a request implicates both the attorney-client
privilege and the work product privilege the trial court should
conduct an in camera inspection to determine if the requested
materials are in fact covered by the attorney-client privilege. See id."If the trial court determines that the investigation performed by the
attorney resulted in the preparation of materials that are required
to be disclosed pursuant to Ruiz and did not involve the rendering
of legal advice, then that material is discoverable." Id. Because the
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trial court here ordered the disclosure of the communications
Allstate asserts are privileged without first conducting an in camera
inspection to determine whether they involved materials
discoverable under Ruiz, we conclude that it departed from the
essential requirements of law.
Allstate also challenges the portion of the trial court's order
requiring it to produce all postjudgment materials it claims are
privileged for in camera inspection. However, as the Estate points
out, Allstate cannot establish irreparable harm in the production of
the documents for in camera inspection until the completion of the
trial court's inspection. See Walanpatrias Found. v. AMP Servs.
Ltd., 964 So. 2d 903, 905 (Fla. 4th DCA 2007) ("[A]n order requiring
production for an in camera inspection cannot display the
appropriate characteristic of permanent harm because a remedy is
available if and when the trial court enters a further order (after in
camera inspection) requiring dissemination of the protected matter to
the appropriate party or parties." (quoting Cebrian ex rel. Cebrian v.
Klein, 614 So. 2d 1209, 1210 (Fla. 4th DCA 1993))).
Accordingly, we grant Allstate's petition in part and quash that
portion of the order on review that requires the immediate production
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without in camera inspection of all materials listed in Allstate's
privilege log.
Petition granted in part; order quashed in part.
SILBERMAN and LUCAS, JJ., Concur.
Opinion subject to revision prior to official publication.
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