Florida Mediation Privilege- Maybe Not Absolute!
November 1, 2018
Many times insurance carriers believe that the mediation privilege codified in Section 44.405 of the Florida Statutes applies to all mediation-related communications and such communication may never be disclosed by anyone at any forum for any purpose whatsoever. However, based on recent trial court rulings, that may not be correct. As the enclosed Motion and Orders reflect, in the bad faith context, there may be occasions where a carrier wants to use offers made during mediation and Florida courts have held the mediation privilege is in fact inapplicable.
Still, carriers must be very careful regarding this issue as there are circumstances in which abrogation of the mediation privilege in a bad faith action would be disadvantageous. For example, if a carrier was engaged in mediation in a case where the plaintiff simultaneously asserted breach of contract and bad faith (e.g., the complaint claims both breach of contract and bad faith), the carrier’s counsel should be very careful to ensure that all communications with respect to that mediation may not be used by any party for any purpose in any forum or in any litigation, including extra contractual litigation, prior to attending mediation.
In Strong v. GEICO Gen. Ins. Co., 8:16-CV-1757-T-36JSS, 2017 WL 1006457, at *1 (M.D. Fla. Mar. 15, 2017), Plaintiff Patricia Strong filed a Complaint against Defendant GEICO General Insurance Company, alleging bad faith against Defendant in its handling of the underinsured and uninsured motorist claims arising from two motor vehicle accidents on January 24, 2011, and April 19, 2012. Plaintiff filed the bad faith action after the underlying breach of contract suit, Patricia B. Strong v. GEICO General Insurance Company, Case No. 13-007487-Cl, filed in the Circuit Court of the Sixth Judicial Circuit in Pinellas County, Florida (“underlying action”), resulted in settlement of both the January 24, 2011, and April 19, 2012, claims.
During the underlying action, the parties attended mediation on April 30, 2013, and February 24, 2014, but reached an impasse on both occasions. Plaintiff claimed that Defendant acted in bad faith by failing to settle within the available policy limits earlier when it “could have or should have done so” and failing to initiate and conduct settlement negotiations in good faith. Plaintiff also alleged that Defendant acted in bad faith because it “offered zero dollars to settle [the underlying action] before the Civil Remedy Notice was sent on May 24, 2013,” and “made no offer to settle [the underlying action] on or before July 25, 2013.”
On January 6, 2017, Defendant took Plaintiff’s deposition in the bad faith litigation. During the deposition, Plaintiff was asked questions regarding whether Defendant made an offer at mediation in the underlying action. Plaintiff’s attorney instructed Plaintiff not to answer, citing the mediation privilege provided in Section 44.405 of the Florida Statutes. Plaintiff’s attorney in the underlying action was later deposed on January 9, 2017. Similarly, Plaintiff’s attorney refused to answer questions regarding any offers Defendant made at mediation in the underlying action on the basis of the mediation privilege.
Defendant filed a Motion to Compel Plaintiff and her attorney to answer Defendant’s questions regarding whether Defendant made offers to settle at mediation in the underlying action and the amount of those offers. The court found that Plaintiff asserted claims in the Complaint which specifically relate to Defendant’s settlement offers, or lack thereof. As such, the proof of the Plaintiff’s claims and Defendant’s defense of those claims would necessitate the introduction of evidence concerning any settlement offers. Thus, the sword and shield doctrine applies, and allowing Plaintiff to assert that the mediation privilege applies to settlement offers made during mediation in the underlying action would hinder Defendant’s ability to present a full defense against Plaintiff’s bad faith allegations. see also, Bowdler v. State Farm Mut. Auto. Ins. Co., No. 2:13-CV-539-FTM-38, 2014 WL 2700672, at *2-3 (M.D. Fla. June 13, 2014) (finding activity logs containing summaries and analyses of communications during the underlying mediation fell outside the mediation privilege because both plaintiff and defendant participated in the mediation).
The aforementioned cases highlight the importance of hiring counsel familiar with extra contractual/bad faith claims and who can properly preserve privileges and argue defenses as the case progresses. We hope that you found these cases both helpful and insightful. Should you have any questions with respect to the foregoing, please do not hesitate to contact the undersigned.
Very Truly Yours,
JOHN BOND ATKINSON
TIFFANY A. BUSTAMANTE