Florida Middle District Rules Deposition Notice Seeking Testimony and Documents Concerning a Neighboring Insurance Claim is Not Relevant in First Party Breach of Contract Dispute

By Douglas M. Cohen

In two Hurricane Ian first party property insurance disputes, White Sand Props. of Ft. Myers Beach LLC v. Qbe Specialty Ins. Co., No. 2:23-cv-1149-JLB-KCD, 2024 U.S. Dist. LEXIS 90280 (M.D. Fla. May 20, 2024) and White Sand Props. of Ft. Myers Beach LLC v. Qbe Specialty Ins. Co., No. 2:23-cv-360-JLB-KCD, 2024 U.S. Dist. LEXIS 90283 (M.D. Fla. May 20, 2024) the Defendant/Insurer moved for protective orders based on the Plaintiffs’ notices of corporate representative deposition (under Fed. R. Civ. P. 30) which demanded, among other things, the corporate representative testify and produce documents concerning neighboring properties with separate insurance claims.  Defendant/Insurer moved for protective orders to preclude Plaintiffs’ counsel from questioning the corporate representative about neighboring properties and the adjustment of separate insurance claims, because those other properties and claims had no bearings on the claims and defenses in the respective subject cases.

The Court found that many courts have recognized that insurers’ conduct regarding other insurance claims is generally of no consequence in a first party breach of contract dispute. The reasoning: there are simply to many variables to render the information relevant or meaningful under Fed. R. Civ. P. 26. Why an insurer paid one claim but not another could turn on any number of things, such as different policy provisions.

The Court rejected Plaintiffs’ argument that the information was relevant because the Defendant/Insurer used the same engineering firm, and the properties were located mere feet from each other.  The Court found that mere proximity does not render the Defendant/Insurers’ conduct with a neighboring claim relevant, as the Defendant/Insurer could have reached different conclusions about damage based on structural differences and/or elevation differences. The Court found there was nothing on the record to suggest the neighboring insurance claim is relevant beyond pure conjecture, and discovery is not available to conduct fishing expeditions based on mere speculation. Accordingly, the Court granted Defendant/Insurers’ motions for protective order in part, ruling that Plaintiffs are prohibited from asking questions or seeking documents for neighboring properties as identified in the deposition notices.