Wednesday, May 20, 2009

Bad Faith Discovery Must Wait Until Coverage Determination

In Granada Insurance Company v. Ricks (3D09-243), the Third DCA granted certiorari and quashed the circuit court's discovery order.

"Triangle Fire, Inc. and an injured plaintiff joined in seeking insurance coverage under a liability policy issued by Granada Insurance Company for an accident allegedly caused by Triangle’s negligence. The company denied coverage...the trial judge permitted the deposition to go forward regarding the 'policies and procedures concerning claims handling by Granada'." The Third DCA quashed the order "based upon the universally applied rule that discovery which concerns only potential issues of bad faith or other purported improprieties in defending the claim are wholly impermissible unless and until it is determined that the policy indeed provides coverage."

The Third DCA also rejected the plaintiff's argument that an employee of the insurer could be deposed to determine the employees interpretation of the policy. "However, the meaning of an insurance contract is a question of law, and thus not subject to opinion testimony, this contention is wholly without merit."


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