Sunday, September 20, 2009

Order Allowing Discovery Of Financial Information Of Non-Party Quashed

In Rappaport v. Mercantile Bank (2D09-609), the Second District granted a petition for certiorari and quashed the trial court's order that "improperly authorized Mercantile Bank (the Bank) to obtain personal financial information and documents from a nonparty that are unrelated to any claim or defense in the pending action and that have not been shown to be reasonably calculated to lead to the discovery of admissible evidence."

The bank loaned $2,438,000 to Clearwater City Homes which Mr. Rappaport guaranteed.  Mrs. Rappaport did not guarantee the loan.  In October 2008, the bank sued Mr. Rappaport and Clearwater City Homes.  The noticed Mrs. Rappaport for deposition and the two defendants filed a motion for "protective order concerning the proposed deposition of Mrs. Rappaport, noting that she 'is not a party to the transaction or involved in the loan at issue in any respect.' CCH and Mr. Rappaport objected to the taking of Mrs. Rappaport's deposition on the ground that 'she does not maintain any information that is reasonably calculated to lead to the discovery of admissible evidence'."  The trial court denied the motion for protective order.
The Second District held:
"[P]ersonal finances are among those private matters kept secret by most people." Woodward v. Berkery, 714 So. 2d 1027, 1035 (Fla. 4th DCA 1998) (citing Winfield v. Div. of Pari-Mutuel Wagering, 477 So. 2d 544 (Fla. 1985)). The right of privacy set forth in article 1, section 23, of the Florida Constitution "undoubtedly expresses a policy that compelled disclosure through discovery be limited to that which is necessary for a court to determine contested issues." Id. at 1036. It follows "that the disclosure of personal financial information may cause irreparable harm to a person forced to disclose it, in a case in which the information is not relevant."
Although the discovery of Mrs. Rappaport's personal financial information might be relevant to a fraudulent transfer claim, the Bank has not made such a claim against Mrs. Rappaport in any pleading. The circuit court's order improperly allowed the Bank to "piggyback" the discovery that might be appropriate to a claim under the UFTA onto their contractual claims against CCH and Mr. Rappaport.
The circuit court's order departs from the essential requirements of law because the order requires Mrs. Rappaport, a nonparty, to disclose personal financial information that is neither relevant to the Bank's claims nor reasonably calculated to lead to the discovery of admissible evidence. To the extent that the circuit court's order requires Mrs. Rappaport to disclose her personal financial information, it undeniably violates her right to privacy. The disclosure of Mrs. Rappaport's personal financial information may cause irreparable harm which cannot be remedied on appeal. Accordingly, we quash the circuit court's order to the extent that it requires Mrs. Rappaport to provide information about her personal finances and to produce her personal financial records.


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