The insurer supported its arguments that such discovery is not discoverable with numerous citations to state court cases that stand for the general proposition that discovery related to bad faith claims is improper in a first-party insurance breach of contract action. Nevertheless, consistent with Buckley Towers Condominium, Inc., v. QBE Insurance Corp., 2008 WL 2645680 (S.D. Fla. June 26, 2008), the Court found that the questions were relevant to whether an insurer's initial determination that damages did not exceed deductible was reasonable and also to rebut claims of fraud alleged by insurer. The Court explained "[t]hat there is some overlap with this evidence and evidence that is relevant to a bad faith claim is of no consequence where, as here, the probative value of that evidence to the breach of contract claim outweighs any prejudice to [the insurer]."
In addition, the Court found that insurance company's counsel's instructions to deponent not to answer based on relevancy and objections to form did not comply with federal rules of procedure or applicable authorities and cited Federal Rule of Civil Procedure 30, which provides, in relevant part:
What this case reminds us is that just because Florida state court cases tell us generally that claims handling procedures and other such issues are not normally discoverable at the breach of insurance contract stage, the federal courts will look to its procedural rules to decipher what is and what is not discoverable. Rule 30 is very limited on what is not discoverable. Therefore insurers will need to be extra vigilant in the affirmative defenses it chooses to employ in defending a breach of contract action in Florida, as more than just the original contractual dispute itself may be at issue in discovery.
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