Case 3:10-cv-00518-TJC-JBT Document 12 Filed 10/28/10 Page 1 of 25

UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF FLORIDA
JACKSONVILLE DIVISION

HERBERT WILLIAMS CASE NO. 3:10-cv-518-J-32JBT

and FLORIDA HYDRO, INC.,

Plaintiffs,
vs.

ILLINOIS UNION INSURANCE

COMPANY,

Defendant
_________________________________/

PLAINTIFFS’ MOTION TO COMPEL (1) PRODUCTION OF DOCUMENTS

RESPONSIVE TO THEIR FIRST REQUEST FOR PRODUCTION AND (2) BETTER
ANSWERS TO THEIR FIRST SET OF INTERROGATORIES

Plaintiffs, Herbert Williams and Florida Hydro, Inc., by and through undersigned

counsel, and pursuant to Federal Rule of Civil Procedure 37 and Middle District of Florida Local

Rule 3.04(a), move this Court for the entry of an Order compelling Defendant, Illinois Union

Insurance Company (“Illinois Union”), to produce documents responsive to their First Request

for Production and to provide better answers to their First Set of Interrogatories, as follows:1

I. INTRODUCTION AND BACKGROUND

This is an action for damages for breach of contract arising out of the Defendant’s

wrongful failure to defend and indemnify the Plaintiffs for loss arising from a third-party claim,

covered under Illinois Union liability policy number BMI20036234 (the “Policy”). The

1
Undersigned counsel certifies that Plaintiffs have attempted, without success, to resolve this discovery dispute with
opposing counsel pursuant to Middle District of Florida Local Rule 3.01(g). See Letter from R. H. Lumpkin to R. S.
Newman, of 9/30/10; Email from R. H. Lumpkin to R. S. Newman, of 10/6/10; Email from R. H. Lumpkin to R. S.
Newman, of 10/11/10; and Email from R. H. Lumpkin to R. S. Newman, of 10/14/10 (attached as Composite
Exhibit A).
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Plaintiffs filed suit against Illinois Union on June 17, 2010 [D.E. 1], and Illinois Union filed its

answer and affirmative defenses on July 28, 2010 [D.E. 8].

On August 5, 2010, the Plaintiffs propounded their First Request for Production and First

Set of Interrogatories on Illinois Union (attached as Composite Exhibit B). The Defendant

requested and received a fifteen-day extension to respond. On September 20, 2010, Illinois

Union served its response (without an accompanying privilege log) and answers, both containing

numerous objections, and produced less than fifty pages of documents that the Plaintiffs already

had. (The Defendant’s response and answers are attached as Composite Exhibit C).

In an effort to resolve the matters raised by Illinois Union’s objections without court

intervention, the Plaintiffs sent a detailed letter to the carrier on September 30, 2010, outlining

the deficiencies in the Defendant’s discovery responses. Illinois Union, however, has refused to

withdraw its unsubstantiated objections, file an amended response and answers, produce

documents responsive to the Plaintiffs’ requests, and/or serve a privilege log.

The Plaintiffs respectfully request that this Court enter an Order (a) overruling Illinois

Union’s objections to the Plaintiffs’ First Request for Production and First Set of Interrogatories;

(b) compelling Illinois Union to immediately produce all documents responsive to Request Nos.

2-6 and 8-12; and (c) compelling Illinois Union to immediately provide better answers to

Interrogatory Nos. 2-3 and 5-8.

II. ARGUMENT

Pursuant to Middle District of Florida Local Rule 3.04(a), the Plaintiffs’ requests and

interrogatories, and Illinois Union’s responses and answers are set forth verbatim below,

followed by the reasons production and better answers must be compelled. We first address the

carrier’s failure to produce a privilege log, as it alone justifies the relief requested by this motion.

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A. Illinois Union Waived Any Privilege Objections It May Have Had By

Electing Not To Provide A Privilege Log

Florida federal courts recognize that where “a general objection of privilege is made

without attaching a proper privilege log, the objection of privilege may be deemed waived.”

Consumer Elec. Ass’n v. Compras and Buys Magazine, Inc., No. 08-21085-CIV, 2008 WL

4327253, at *3 (S.D. Fla. Sept. 18, 2008); see Horowitch v. Diamond Aircraft Indus., Inc., No.

6:06-CV-1703-Orl-19JGG, 2007 WL 1192401, at *2-4 (M.D. Fla. Apr. 23, 2007). The party

resisting discovery bears the burden of demonstrating the applicability of the privilege or

immunity and is required to produce a log or index of the withheld information detailing “the

authors and their capacities, the recipients (including copy recipients) and their capacities, the

subject matter of the document, the purpose for its production, and a detailed, specific

explanation of why the document is privileged or immune from discovery.” Universal City Dev.

Partners, Ltd. v. Ride & Show Eng’g, Inc. 230 F.R.D. 688, 695 (M.D. Fla. 2005). Without a

privilege log, there is simply no information available to a requesting party (or a court) to

determine the nature of the allegedly protected documents being withheld.

Federal courts have long recognized that a failure to substantiate privilege/immunity

objections can (and should) result in a waiver of such objections. See, e.g., Pitts v. Francis, No.

5:07cv169/RS/EMT, 2008 WL 2229524, at *4-5 (N.D. Fla. May 28, 2008) (holding that a party

waived its privilege objections by failing to produce a privilege log); Capital Corp. Mergers &

Acquisitions, Inc. v. Arias Co., Ltd., No. 6:04-CV-158-ORL-28JGG, 2006 WL 1208012, at *3

(M.D. Fla. May 4, 2006) (a privilege log is due at the time of the written discovery response to

avoid waiver of the privilege); Eureka Fin. Corp. v. Hartford Acc. and Indem. Co., 136 F.R.D.

179, 184 (E.D. Cal. 1991) (holding that when the “responding party states a general objection to

an entire discovery document on the basis of privilege, or generally asserts a privilege objection

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within an individual discovery response, the resulting ‘blanket objection’ is decidedly improper”

and can result in waiver of the claimed privileges); Peat, Marwick, Mitchell & Co. v. West, 748

F.2d 540, 541-42 (10th Cir. 1984) (holding that a blanket, non-specific attorney-client privilege

or work product objection was insufficient and effected a waiver of the privilege).

Illinois Union’s Response to the Plaintiffs’ First Request for Production was not

accompanied by a privilege log, and the carrier has yet to provide one more than five weeks

later. Illinois Union has accordingly waived its right to assert privileges and should be

compelled to produce all withheld discovery. We now turn to the specific requests and

interrogatories at issue.

B. Illinois Union’s Responses/Objections To Request Nos. 2-6 And 8-12 Are

Legally Improper

Request No. 2: Your entire claim and/or investigative file(s) pertaining to the
Claims, whether local, field, regional or home office, including files held by any
entity affiliated, contractually or otherwise, with You. This Request includes but
is not limited to the claim file jacket(s), notes, daily diaries, statistical and coding
information, letters, reports, photographs with original negatives, invoices and
billing, records of phone calls, emails, or other Documents.
Response to Request No. 2: Objection. Plaintiff’s request is irrelevant,
immaterial, overbroad, premature, violative of attorney-client and/or work
product privileges. Plaintiff is not entitled to request such materials until the
merits of claim for benefits (i.e. – Plaintiff’s breach of contract claim) have been
fully and finally adjudicated. See, for example, Allstate Insurance Company v.
Shupack, 335 So. 2d 620 (Fla. 3d DCA 1976). See also, Allstate Indemnity
Company v. Ruiz, 899 So. 2d 1121 (Fla. 2005); XL Specialty Insurance Company
v. Aircraft Holdings, LLC, 929 So. 2d 578 (Fla. 1st DCA 2006); and Old
Republic National Title Insurance Company v. Homeamerican Credit, Inc., 844
So. 2d 818 (Fla. 5th DCA 2003).

Reason(s) To Compel Production

Illinois Union’s boilerplate objections are ineffective and should thus be overruled. A

party has the burden of proving the basis for its objections and cannot shirk its discovery

obligations through conclusory, boilerplate statements. See, e.g., AIG Centennial Ins. Co. v.

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O’Neill, No. 09-cv-60551-WJZ, at 22 (S.D. Fla. Oct. 18, 2010) (discovery order) (refusing to

consider overbreadth and burdensomeness objections where the insurer provided no support for

those assertions) (attached as Exhibit D); Oliver v. City of Orlando, No. 6:06-cv-1671-Orl-

31DAB, 2007 WL 3232227, at *2 (M.D. Fla. Oct. 31, 2007) (an objection that a request is

unduly burdensome, irrelevant, overbroad, or oppressive must be specifically described); Cutrale

Citrus Juices USA, Inc. v. Zurich Am. Ins. Group, No. 5:03-cv-420-Oc-10GRJ, 2005 WL

5177325, at *1 (M.D. Fla. June 8, 2005) (finding that a generalized and inadequate objection,

“by itself, falls far short of satisfying Defendants’ burden of proof”); Viking Yacht Co. v.

Affiliated FM Ins. Co., 07-80341-CIV-Marra/Johnson, at 3-5 (S.D. Fla. Feb. 7, 2008) (discovery

order) (“to even merit consideration, an objection must show specifically how a discovery

request is overly broad, burdensome or oppressive, by submitting evidence or offering evidence

which reveals the nature of the burden”) (attached as Exhibit E).

This District routinely holds that an insured is entitled to a carrier’s claim file in a

coverage action. See, e.g., St. Joe Co. v. Liberty Mut. Ins. Co., No. 3:05-cv-1266-J-25MCR,

2006 WL 3391208, at *2-3 (M.D. Fla. Nov. 22, 2006); Auto Owners Ins. Co. v. Totaltape, Inc.,

135 F.R.D. 199, 201-04 (M.D. Fla. 1990); Cutrale Citrus Juices USA, Inc. v. Zurich Am. Ins.

Group, No. 5:03-cv-420-Oc-10GRJ, 2004 WL 5215191, at *2 (M.D. Fla. Sept. 10, 2004). The

state court citations provided by Illinois Union are of no consequence here: “Florida state court

cases regarding the discoverability of claims files are not binding on federal courts.” St. Joe

Co., 2006 WL 3391208, at *3 (emphasis added). “While several Florida courts have held that

claims files are off limits until coverage has been proven, federal courts regularly permit

discovery of an insurer’s claims file.” Id. (emphasis added).

Information in the claims file “could reasonably lead to other matters that could bear on,

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any issue that is or may be in the case,” and, thus, is relevant. Id.; see also Auto-Owners Ins. Co.

v. Southeast Floating Docks, Inc., 231 F.R.D. 426, 430 (M.D. Fla. 2005) (relevance is “construed

broadly to encompass any matter that bears on, or that reasonably could lead to other matter that

bears on, any issue that is or may be in the case”). The party resisting discovery bears the burden

to show that the requested information is not relevant. See Gober v. City of Leesburg, 197

F.R.D. 519, 521 (M.D. Fla. 2000) (holding that the party trying to avoid discovery “must

demonstrate to the court that the requested ... information either do[es] not come within the broad

scope of relevance defined pursuant to Fed. R. Civ. P. 26(b)(1) or else [is] of such marginal

relevance that the potential harm occasioned by discovery would outweigh the ordinary

presumption in favor of broad disclosure”). The discovery provisions of the Federal Rules of

Civil Procedure “require the disclosure of all relevant information” so that the parties may fully

develop and crystallize concise factual issues for trial and so that “the ultimate resolution of

disputed issues in any civil action may be based on a full and accurate understanding of the true

facts.” U.S. v. Lowe, No. 3:08-cv-475-J-16MCR, 2008 WL 4500224, at *1 (M.D. Fla. Oct. 3,

2008); see also Lerer v. Ferno-Wash., Inc., No. 06-CV-81031, 2007 WL 3256585, at *3 (S.D.

Fla. Nov. 2, 2007) (citing Burns v. Thiokol Chem. Corp., 483 F.2d 300, 304 (5th Cir. 1973)).2

Relevance for purposes of discovery “is much broader than relevance for trial purposes . . . .

Discovery should ordinarily be allowed . . . unless it is clear that the information sought has no

possible bearing on the subject matter of the action.” Dunkin Donuts Inc. v. Mary’s Donuts,

Inc., No. 01-0392-Civ-Gold, 2001 WL 34079319, at *2 (S.D. Fla. Nov. 1, 2001) (emphasis

added). Put succinctly, the Federal Rules “permit fishing for evidence as they should.” Jeld-

Wen, Inc. v. Nebula Glasslam Int’l, Inc., 248 F.R.D. 632, 639 (S.D. Fla. 2008) (emphasis added)

2Decisions rendered in the Fifth Circuit prior to close of business on September 30, 1981, are binding precedent. See
Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc).

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(quoting Fed. R. Civ. P. advisory committee’s notes); O’Neill, No. 09-cv-60551-WJZ, at 6

(same). Thus, any documents within an insurer’s claims file that are not protected either by the

attorney-client privilege or the work product doctrine – unless waived, as is the case here – are

discoverable. See St. Joe Co., 2006 WL 3391208, at *3.

Illinois Union objects that this request seeks documents that are attorney-client privileged

and/or work product protected. The carrier, however, has failed to provide the Plaintiffs with a

privilege log that would allow for an evaluation of those assertions. See supra pages 3-4.

Further, there is no blanket protection of the claims file, as either attorney-client or work product

protected. See St. Joe Co., 2006 WL 3391208, at *3; see also 1550 Brickell Assoc. v. QBE Ins.

Corp., No. 07-22283-CIV, 2008 WL 4279538, at *1 (S.D. Fla. July 8, 2008) (the claims file is

not afforded a blanket privilege). “Instead, it is treated like any other collection of documents,

which may contain both discoverable and undiscoverable components.” 1550 Brickell, 2008 WL

4279538, at *1. Without a privilege log there is simply no information available to the Plaintiffs

(or to this court) to determine the nature of the allegedly protected documents being withheld.

The burden of establishing attorney-client privilege rests on the party asserting the

privilege. See Tyne v. Time Warner Entm’t Co., L.P., 212 F.R.D. 596, 598 (M.D. Fla. 2002).

When that party is a corporation, its claims of privilege are subject to a heightened level of

scrutiny “to minimize the threat of corporations cloaking information with the attorney-client

privilege in order to avoid discovery.” S. Bell Tel. & Tel. Co. v. Deason, 632 So. 2d 1377, 1383

(Fla. 1994) (emphasis added). In Deason, the Supreme Court of Florida held that for a

communication to fall within the attorney-client privilege, it must satisfy five requirements: (1)

the communications would not have been made but for the contemplation of legal services; (2)

the employee making the communication did so at the direction of his or her corporate

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supervisor; (3) the superior made the request of the employee as part of the corporation’s effort

to secure legal advice or services; (4) the content of the communication relates to the legal

services being rendered, and the subject matter of the communication is within the scope of the

employee’s duties; and (5) the communication is not disseminated beyond those persons who

because of the corporate structure, need to know its contents. Id.; see also St. Joe Co., 2006 WL

3391208, at *4. Illinois Union has failed to sustain its burden.

Florida law holds that the attorney-client privilege does not extend to communications

with attorneys performing claims-handling or investigatory functions. This is because “in the

insurance context, ‘no privilege attaches when an attorney performs investigative work in the

capacity of an insurance claims adjuster, rather than a lawyer . . . .” Cutrale Citrus Juices, 2004

WL 5215191, at *3; see also Deason, 632 So. 2d at 1383-1384; St. Joe Co., 2006 WL 3391208,

at *5 (“When an attorney is not acting in the capacity of a legal advisor – for instance, when an

attorney is providing purely business advice – then the communications are not protected.”);

1550 Brickell, 597 F. Supp. at 1337 (citing Bankers Ins. Co. v. Fla. Dep’t of Ins. & Treasurer,

755 So. 2d 729 (Fla. 1st DCA 2000)) (attorney client privilege did not apply to communications

between an insurer and an attorney retained “to assist [the insurer] in developing the

investigation, securing Examinations Under Oath and . . . propounding documents requests and

things of that nature . . .” because these were “activities of someone whom would be hired even

if litigation were not remotely contemplated”); St. Joe Co. v. Liberty Mut. Ins. Co., No. 3:05-CV-

1266-J-25MCR, 2007 WL 141282, at *3 (M.D. Fla. Jan. 16, 2007); W. Nat’l Bank of Denver v.

Employers Ins. of Wassau, 109 F.R.D. 55, 57 (D. Colo. 1985) (holding the portions of the file of

a law firm retained by an insurer reflecting the factual investigation of a claim by the attorneys

are not work product); Chicago Meat Processors, Inc. v. Mid-Century Ins. Co., No. 95 C 4277,

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1996 WL 172148, at *3 (N.D. Ill. Apr. 10, 1996) (“[i]n the insurance context, to the extent that

an attorney acts as a claims adjuster, claims process supervisor, or claims investigation monitor,

and not as a legal advisor, the attorney-client privilege does not apply”). “Just because a

communication is between an attorney and a client does not mean the privilege automatically

arises; the relevant question is whether an attorney was retained to render legal services.” St. Joe,

2006 WL 3391208, at *5; see also Bankers Ins. Co. v. Fla. Dep’t of Ins., 755 So. 2d 729 (Fla. 1st

DCA 2000) (holding no privilege exists where the attorney is “a conduit” for the insurer).

The work product doctrine only shields discovery of documents or information “prepared

in anticipation of litigation or for trial.” FED. R. CIV. P. 26(b)(3). “A party must anticipate

litigation at the time the documents were drafted for [work product] protections to apply.

Materials or documents drafted in the ordinary course of business are not protected.” Milinazzo

v. State Farm Ins. Co., 247 F.R.D. 691, 698 (S.D. Fla. 2007); see also CSK Transp., Inc. v.

Admiral Ins. Co., No. 93-132-CIV-J-10, 1995 WL 855421, at *2 (M.D. Fla. July 20, 1995).

Therefore, a court needs “to determine when the document was created, and why it was created.”

Milinazzo, 247 F.R.D. at 698. The fact that litigation did in fact occur, that a party has consulted

or retained an attorney, that a party has undertaken an investigation, or engaged in negotiations

over the claim is insufficient to establish a reasonable anticipation of litigation . . . .” Harper v.

Auto-Owners Ins. Co., 138 F.R.D. 655, 660 (S.D. Ind. 1991). As the party asserting the

protection, Illinois Union has the burden of proving the applicability of the work product

doctrine. See Grand Jury Proceedings v. U.S., 156 F.3d 1038 (10th Cir. 1998). To overcome

the Harper presumptions, Illinois Union must demonstrate, by specific evidentiary proof of

objective facts: (1) that it reasonably anticipated litigation when each document was generated or

received; (2) that the document was prepared and used solely to prepare for that litigation; and

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(3) that the document was not created to arrive at or buttress a tentative claims decision. See

Harper, 138 F.R.D. at 664. Illinois Union has failed to sustain its burden as to this protection as

well.

Florida federal courts have determined that in the insurance context, “documents

constituting any part of a factual inquiry into or evaluation of a claim, undertaken in order to

arrive at a claim decision, are produced in the ordinary course of an insurer's business and,

therefore, are not work product.” Cutrale Citrus Juices, 2004 WL 5215191, at *2 (citing

Harper, 138 F.R.D. at 662); see also St. Joe Co., 2006 WL 3391208, at *7. Florida federal

courts also hold that there is a rebuttable presumption that documents prepared before a final

decision on an insured’s claim are prepared in the ordinary course of business and are not work

product. See O’Neill, No. 09-cv-60551-WJZ, at 18-19; Royal Bahamian Ass’n, Inc. v. QBE Ins.

Corp., No. 10-21511-CIV-MORENO/GOODMAN, 2010 WL 3452368, at *1 (S.D. Fla. Sept. 3,

2010); Essex Builders Group, Inc. v. Amerisure Ins. Co., No. 6:04-CV-1838-Orl-22JGG, 2006

WL 1733857, at *2 (M.D. Fla. June 20, 2006); Cutrale Citrus Juices, 2004 WL 5215191, at *2;

1550 Brickell, 597 F. Supp. 2d at 1336; U.S. Fid. & Guar. Co. v. Liberty Surplus Ins. Corp., 630

F. Supp. 2d 1332, 1337-38 (M.D. Fla. 2007); Milinazzo, 247 F.R.D. at 701.

Documents created up until the date the Plaintiffs filed suit – June 17, 2010 – are

accordingly not work product protected, as the carrier had not yet made its final decision on the

Plaintiffs’ claims. In fact, the insurer continues to evaluate entitlement to defense costs. See,

e.g., Email from N. Ron to J. Middleton of 8/20/09; Letter from J. Adler to R. Hugh Lumpkin of

4/28/10; Letter from J. Adler to R. Hugh Lumpkin of 6/24/10; Letter from J. Adler to J.

Middleton of 9/1/09 (attached as Composite Exhibit F). Also, the insurer’s official statement

letter regarding coverage for the settlement, dated September 1, 2009, cannot be construed as a

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“final decision” on the Plaintiffs’ claims for two reasons: First, the letter contains language that

suggests that it was not meant to operate as a “final” denial of the claim for the settlement

amount. Second, the insurer was still investigating and evaluating the Plaintiffs’ claim for

defense costs at that point.

The carrier even stated in its September 1, 2009, letter that “[a]fter you have reviewed the

letter, if there is additional information that you would like me to consider, please forward same

to me.” Letter from J. Adler to J. Middleton of 9/1/09 (Composite Exhibit F). The Plaintiffs did

exactly that and responded, providing additional information and explaining, among other things,

why the settlement is covered under the Policy. Further, the fact that the Plaintiffs disagreed

with Illinois Union’s preliminary coverage positions does not, without more, create a reasonable

anticipation of litigation. See Harper, 138 F.R.D. at 659-60 (“Because litigation can be

anticipated, in a general sense, at the time almost any incident occurs . . . ,” courts interpreting

Rule 26(b)(3) “require a more substantial and specific threat of litigation before a party’s

anticipation will be considered reasonable and justifiable motivating force.”). As is often the

case, various discussions and negotiations between an insurer and its insureds take place before it

becomes apparent that litigation is necessary to resolve a coverage dispute.

Regarding the second reason, see, e.g., Email from N. Ron to J. Middleton of 8/20/09

(“[P]lease submit copies of all invoices incurred since [July 2, 2009]. Based upon . . . my review

of the bills, we can further discuss an allocation for defense fees incurred since claim

submission.”); Letter from J. Adler to R. Hugh Lumpkin of 4/28/10 (“[P]lease provide us with

copies of defense fees and costs invoices related to this matter”); Letter from J. Adler to R. Hugh

Lumpkin of 6/24/10 (“[I]n order to properly consider reimbursement for defense costs, please

provide information explaining the services that were provided by each of the two law firms

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defending this matter and why it was necessary to have two law firms. How did their roles

differ? Please explain what services were provided in the defense of Herbert Williams. Again,

please provide this information as soon as possible so that the carrier can make an appropriate

determination for purposes of allocating defense costs.”) (Composite Exhibit F).

Thus, because the Defendant continues to actively evaluate the Plaintiffs’ claims, Illinois

Union is only entitled to work product protection for documents created after June 17, 2010. See

Royal Bahamian, 2010 WL 3452368, at *2-3.

Request No. 3: All Documents Relating to the Claims and/or to the Policy
and/or to the Plaintiffs in the possession, custody and/or control of You or Insurer
Counsel.

Response to Request No. 3: Objection. Plaintiff’s request is neither clear,

concise nor reasonably particularized. Plaintiff’s request is overly broad. See,
Section III.A.1., Middle District Discovery (2001) at 10. Additionally, Plaintiff’s
request is vague, irrelevant, immaterial, premature, violative of attorney-client
and/or work product privilege. Plaintiff seeks the same materials included within
those requested in Request 2 above. And, for the same reasons, is not entitled to
same.
Without waiving such objections, Defendant attaches as Composite Exhibit “B”
(IU-000027 through IU-000076) correspondence in its possession regarding
unprivileged or unprotected communications by and between the insured, its agent
and counsel and the carrier.

Reason(s) To Compel Production

The Plaintiffs’ request is clear, concise, and reasonably particularized, as it seeks a

certain, limited category of documents: documents that are related to the Claims, the Policy,

and/or to the Plaintiffs, which are all terms defined in the Plaintiffs’ First Request for Production.

Moreover, the Defendant’s response is wholly improper: “[I]t is common practice for a

party to assert boilerplate objections and then state that . . . the party will respond to the

discovery request, ‘subject to or without waiving the objection.’ Such an objection and answer

preserves nothing and wastes the time and resources of the parties and the court. Further, this

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practice leaves the requesting party uncertain as to whether the opposing party has fully

answered its request.” Martin v. Zale Del., Inc., No. 8:08-CV-47-T-27EAJ, 2008 WL 5255555,

at *2 (M.D. Fla. Dec. 15, 2008) (emphasis added).

With respect to the remainder of Illinois Union’s response, see Reason(s) To Compel

Production of Request No. 2.

Request No. 4: All notes, logs, minutes, memoranda, emails, or other

Documents reflecting any decisions, meetings, discussions or deliberations by or
on behalf of You concerning the Claims and/or the Policy and/or to the Plaintiffs.

Response to Request No. 4: Other than documents produced in response to

Request 3 above, Defendant adopts and incorporates by reference the same
objections as set forth in its responses to Request for Production 2 and 3.

Reason(s) To Compel Production

See Reason(s) To Compel Production of Request Nos. 2 and 3.

Request No. 5: All Documents Relating to Communications by and between

You and the Plaintiffs Relating to the Policy and/or to the Claims.

Response to Request No. 5: Other than documents produced in response to

Request 3 above, Defendant adopts and incorporates by reference the same
objections as set forth in is responses to Request for Production 2 and 3.

Reason(s) To Compel Production

See Reason(s) To Compel Production of Request Nos. 2 and 3.

Request No. 6: All Documents Relating to Communications by and between

You and any other Person or entity, including, but not limited to, Plaintiffs’
Defense Counsel, regarding the Plaintiffs and/or the Policy and/or the Claims.

Response to Request No. 6: Defendant adopts and incorporates by reference its

response to Request 3 above. More particularly, Defendant objects to the
production of documents relating to “any other person or entity” because the only
such documents in Defendant’s possession involve communications with counsel
and/or documents that were created in connection with communications with
counsel and, therefore, those documents are protected by the attorney-client
and/or work product privileges.

Reason(s) To Compel Production

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See Reason(s) To Compel Production of Request Nos. 2 and 3.

Request No. 8: All Documents in Your possession, custody, or control that You
relied on in denying coverage in whole or in part for the Claims.

Response to Request No. 8: See, Defendant’s response to Request for

Production 1, above.

Reason(s) To Compel Production

Illinois Union refers only to the Policy in its Response to Request No. 1. The Plaintiffs

asked in their September 30, 2010, letter to Illinois Union that the insurer confirm that it did not

consider any Document, other than the Policy, in making its determination(s) as to the Claims.

The carrier indicated in an email from R. S. Newman to R. H. Lumpkin, of 10/14/10 that its

Response to Request No. 8 requires clarification. The Plaintiffs request that the carrier

accordingly file an amended response to Request No. 8.

Request No. 9: All communications between You and the Florida Department of
Insurance, or any Florida government agency or official, at any time between
1980 and 2006 Relating to the adoption, interpretation, approval for use, or
application of the Employment Exclusion.

Response to Request No. 9: Objection. Overbroad, harassing, irrelevant,

immaterial, not appropriately limited in time or scope inasmuch as Plaintiff’s
request spans 26 years and the policy form and endorsements at issue in this
proceeding were not printed for circulation and use until June and July, 2005.

Reason(s) To Compel Production

Based on Illinois Union’s response that “the policy form and endorsements at issue in this

proceeding were not printed for circulation and use until June and July, 2005,” the Plaintiffs

agreed in their September 30, 2010, letter to limit Request No. 9 to the time period of 2005 to the

present, and requested that the carrier confirm that that alteration fully addresses the insurer’s

overbroad, harassing, immaterial and “not appropriately limited in time or scope” objections.

Illinois Union did not respond.

Illinois Union’s relevancy objection to this request is improper. See Reason(s) To

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Compel Production of Request No. 2. Courts routinely require insurers to produce this type of

documentation. See, e.g., Nat’l Union Fire Ins. Co. of Pittsburgh, Pa. v. F. Vicino Drywall II,

Inc., et al., No. 10-60273-CIV-GOLD/MCALILEY (S.D. Fla. Oct. 22, 2010) (discovery order)

(compelling production of communications with state departments of insurance, insurance

regulators, and insurance trade organizations) (attached as Exhibit G); Mach. Movers, Riggers &

Mach. Erectors Local 136 Defined Contribution Pension Plan v. Fid. & Deposit Co. of Mary,

No. 06 C 2439, 2007 WL 3120029, at *2-3 (N.D. Ill. Oct. 19, 2007) (communications with

insurance industry associations).

The information the Plaintiffs have requested plainly would help in resolving the disputed

issues in this case, because it bears on how Illinois Union has interpreted the exclusion at issue in

its past dealings with regulators and insurance industry associations. Such information includes

Illinois Union’s relevant correspondence with state regulators and insurance industry

associations showing how it marketed policies containing the exclusion and information about

how Illinois Union has handled other claims raising similar coverage issues. These materials

could be important to evaluating the merits of Illinois Union’s position in this case.

Request No. 10: All Communications between You and any insurance trade
association, including, but not limited to, the National Bureau of Casualty
Underwriters, Mutual Insurance Rating Bureau, American Mutual Insurance
Alliance, Insurance Services Office, Inc., American Insurance Association, the
Insurance Information Institute, the Insurance Rating Board, the Insurance Rating
Bureau, and any of their predecessors, between 1980 and 2006 Relating in whole
or in part to the Employment Exclusion.

Response to Request No. 10: Defendant adopts and incorporates by reference its
objections to Request for Production 9, above.

Reason(s) To Compel Production

See Reason(s) To Compel Production of Request No. 9.

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Request No. 11: All underwriting manuals or guidelines Relating in whole or in

part to the Employment Exclusion in use between 2006 and the present, including
any modifications thereto.

Response to Request No. 11: Objection. Defendant’s manuals, guidelines and

other similar materials, if any, are not subject to discovery in a proceeding of this
nature until the merits of Plaintiff’s claim for benefits have been fully and finally
determined. See, Allstate Indemnity Company v. Ruiz, 899 So. 2d 1121 (Fla.
2005) and Old Republic National Title Insurance Company v. Homeamerican
Credit Inc., 844 So. 2d 818 (Fla 5th DCA 2003).

Reason(s) To Compel Production

Based on the Defendant’s Responses to Request Nos. 9 and 10 that “the policy form and

endorsements at issue in this proceeding were not printed for circulation and use until June and

July, 2005,” the Plaintiffs modified this request to the time period of 2005 to the present in their

September 30, 2010, letter to Illinois Union.

Request No. 11 seeks common interpretive materials, which are routinely ordered

produced in coverage cases involving policy interpretation. See F. Vicino Drywall, No. 10-

60273-CIV-GOLD/MCALILEY (compelling production of underwriting manuals and

guidelines, and other interpretive materials, including home or regional office directives and

bulletins); O’Neill, No. 09-cv-60551-WJZ, at 15, 21-23 (granting motion to compel production

of underwriting and other interpretive materials); Del Monte Fresh Produce v. Ace Am. Ins. Co.,

No. 00-4792-CIV-Huck/Turnoff, at 4-5 (S.D. Fla. Sept. 3, 2002) (discovery order) (same)

(attached as Exhibit H); Milinazzo, 24 F.R.D. at 703 (recognizing that where policy terms are

potentially ambiguous, “underwriting related documents could be used to resolve that

ambiguity”); Viking Yacht, No. 07-80341-CIV-MARRA/JOHNSON, at 4; Totaltape, 135 F.R.D.

at 203 (insurer’s claims manual and policy interpretation guidelines are relevant to insured’s

breach of contract claim; granting motion to compel production of insurer’s claim manuals and

guidelines); Allstate Ins. Co. v. Levesque, No. 8:08-CV-2253-T-33EAJ, 2010 WL 376777, at *1-
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2 (M.D. Fla. Jan. 26, 2010) (claims handling materials relating to plaintiff’s claim discoverable

in breach of contract suit).

Such materials would illuminate the meaning – and possible ambiguity – of the exclusion

at issue, the “Employment Exclusion,” and may confirm the interpretation advanced by the

Plaintiffs or at least that their interpretation is reasonable. Under Florida law, any such

ambiguity in an insurance policy must be construed in favor of coverage. Documentary evidence

showing Illinois Union’s own impression of how its Policy must be interpreted and applied

would also provide insight for the Court’s determination as to whether Illinois Union breached its

Policy here.

Because the exclusion at issue is potentially susceptible to different interpretations, the

Plaintiffs are entitled to explore whether the Defendant internally agrees with their interpretation.

See Del Monte, No. 00-4792-CIV-Huck/Turnoff, at 4-5; Viking Yacht, No. 07-80341-CIV-

MARRA/JOHNSON, at 4 (“drafting history and extrinsic evidence of interpretative materials is

discoverable at this early stage of litigation when questions concerning ambiguity have not been

resolved”). Illinois Union’s internal construction of the exclusion upon which it is relying to

deny coverage and the terms of the Policy that may have been negotiated or modified are thus

relevant and discoverable in this case.

Federal courts in jurisdictions following Florida’s interpretive principles also routinely

order production of documents bearing on the interpretation of insurance policy language. See,

e.g., Chubb Custom Ins. Co, No. 2:07-CV-1285, 2009 WL 243034, at *8-9 (S.D. Ohio Jan. 30,

2009) (underwriting materials relevant and discoverable); Taco, Inc. v. Fed. Ins. Co., No. 07-

27S, 2007 WL 4269810, at *3 (D.R.I. Nov. 30, 2007) (finding insurer’s internal underwriting

and claims manuals were relevant and discoverable since such materials were germane to the

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interpretation of the policies and exclusions at issue); ALP Corp. v. Aetna Cas. & Sur. Co, 91

F.R.D. 10, 14-15 (D. Md. 1980) (compelling production of defendant’s claims manuals,

interpretive and investigative materials concerning defendant’s interpretation of inventory

exclusion in plaintiff’s policy and rejecting trade secret objection); Young v. Liberty Mut. Ins.

Co., No. 3:96-CV-1189 (EBB), 1999 WL 301688, at *5 (D. Conn. Feb. 16, 1999) (“To facilitate

a full understanding of the meaning of an insurance policy’s terms, many courts have allowed

discovery of the drafting history and interpretations of standard form CGL policy language,

reinsurance information, and other insured’s claims.”); Arkwright Mut. Ins. Co. v. Nat’l Union

Fire Ins. Co., No. 90 CIV. 7811, 1993 WL 437767, at *1-2 (S.D.N.Y. Oct. 26, 1993) (drafting

history documents are discoverable); Champion Int’l Corp. v. Liberty Mut. Ins. Co., 129 F.R.D.

63, 67 (S.D.N.Y. 1989) (finding that liability insurers’ drafting history documents, claims

manuals, and instructions to sales personnel on how to market and sell policies were

discoverable as clearly germane to interpretation of policy at issue).

As in Viking Yachts and Del Monte, federal courts recognize that interpretive materials

are discoverable in insurance coverage disputes prior to any finding of ambiguity by the court

and regardless of whether either party specifically claimed the policy language to be ambiguous.

See Young, 1999 WL 301688, at *5 (“even if the Court were to ultimately conclude that the CGL

policies at issue were unambiguous, this should not prevent the plaintiffs from discovering

evidence which may present an ambiguity in the CGL policies at issue”); Arkwright, 1993 WL

437767, at *1-2 (holding that, even where neither party had claimed the policy to be ambiguous,

the parties’ contrasting interpretations of key provisions was sufficient to make drafting history

of policy relevant and discoverable); Nestle Food Corps. v. Aetna Cas. & Sur. Co., 135 F.R.D.

101, 105-106 (D. N.J. 1990) (holding drafting history and interpretations of policy language

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relevant and discoverable though there had not yet been a finding of ambiguity).

Request No. 12: All home or regional office bulletins or directives Relating to
the use, interpretation, pricing for and/or interpretation of the Employment
Exclusion.

Response to Request No. 12: Objection. Defendant’s bulletins, directives or

other similar materials, if any, are not subject to discovery in a proceeding of this
nature until the merits of Plaintiff’s claim for benefits have been fully and finally
determined. See, Allstate Indemnity Company v. Ruiz, 899 So. 2d 1121 (Fla.
2005) and Old Republic National Title Insurance Company v. Homeamerican
Credit Inc., 844 So. 2d 818 (Fla 5th DCA 2003).

Reason(s) To Compel Production

See Reason(s) To Compel Production of Request No. 11.

C. Illinois Union’s Answers/Objections To Interrogatory Nos. 2-3 And 5-8 Are

Legally Improper

Interrogatory No. 2: Identify every one of Your employees or Agents, former or

current, who participated in the offer, negotiation, sale, assembly, underwriting,
drafting or preparation of the Policy, and with respect to each such Person,
describe the nature of his or her involvement, the Date(s) of that involvement,
position held at the time of his or her involvement and presently, his or her full
name, the name of the Person’s present employer, and his or her current business
address. If the Person is no longer employed by You, and You do not know the
Person’s current whereabouts, please provide the Person’s last known address,
telephone number, and date of birth.

Answer to Interrogatory No. 2: Illinois Union objects to the instant

interrogatory on the grounds that it is irrelevant, immaterial, unduly burdensome,
requires undue time, labor and expense for compliance and is beyond the scope of
the issues framed by the Plaintiff’s Complaint, to wit: whether the Defendant
breached a duty to defend and indemnify under the policy issued to the Plaintiff.
(See Paragraph 31 of Plaintiff’s Complaint). Plaintiff’s Complaint raises no issue
regarding the “offer, negotiation, sale, assembly, underwriting, drafting or
preparation of the policy.” Accordingly, Defendant should not be required to
respond and/or Plaintiff’s Interrogatory should be limited in scope to address the
issues actually raised in the Complaint.

Reason(s) To Compel Better Answer

The discovery sought by this interrogatory is not irrelevant or immaterial, and addresses

matters that bear on the issues in this case – whether the carrier breached its duty to defend and

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indemnify the Plaintiffs. Interrogatory No. 2 seeks identification of persons whom the Plaintiffs

can depose to clarify the type of coverage they purchased from Illinois Union and to provide

additional insight into the interpretation of the Policy’s provisions and exclusions. These

individuals might also shed light on Illinois Union’s solicitation of the Plaintiffs to purchase the

Policy and will inform as to what factors were considered by Illinois Union in setting the

Policy’s premium.

This interrogatory is not unduly burdensome; it is narrowly tailored and does not impose

an excessive burden. As the party resisting discovery, Illinois Union is required to establish how

the request imposes an undue burden. See Gober, 197 F.R.D. at 521. It has failed to do so. In

Baine v. General Motors Corp., 141 F.R.D. 328 (M.D. Ala. 1991) the court explained the

contours of this objection: “The law applicable to an objection to production on grounds of

burdensomeness [sic] and expense is fairly clear. The mere fact that producing documents would

be burdensome and expensive and would interfere with the party’s normal operations is not

inherently a reason to refuse an otherwise legitimate discovery request.” Id. at 330 (emphasis

added). Simply put, Illinois Union has improperly objected merely because locating responsive

persons might involve some effort and expense on its part. See Checkers Drive-In Rests., Inc. v.

Titan Holdings, LLC, No. 6:06-cv-300-Orl-28KRS, 2007 WL 1877826, at *1 (M.D. Fla. June 28,

2007) (dismissing “unduly burdensome” objection in absence of supporting evidence); St. Paul

Reinsurance Co. v. Comm. Fin. Corp., 198 F.R.D. 508, 511-13 (N.D. Iowa 2000) (holding that

“the mere statement by a party that the interrogatory or request for production was overly broad,

burdensome, oppressive and irrelevant is not adequate to voice a successful objection,” and that

evidence or affidavits are required to support such objections); see also Kooima v. Zacklift

Intern., Inc., 209 F.R.D. 444, 447 (D. S.D. 2002) (“boilerplate objections are unacceptable”).

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This information is readily available within Illinois Union’s record keeping system and can be

produced without the extraordinary effort implied by the carrier. Illinois Union, after all, chose

the methods by which it creates, stores, and maintains claim documents and information and

cannot now be heard to complain of the expense associated with producing them.

In its Rule 26 Disclosures, Illinois Union identified Daniel O’Connor and Veronica

DeVoe as witnesses likely to possess knowledge relative to the application, brokering,

placement, procurement and submissions related to the Policy. The Plaintiffs requested in their

September 30, 2010, letter that the Defendant confirm that no other of Illinois Union’s

Employees or Agents (as those terms are defined in the Plaintiffs’ First Set of Interrogatories),

former or current, participated in the offer, negotiation, sale, assembly, or preparation of the

Policy. Illinois Union has not responded.

Interrogatory No. 3: Identify every one of Your employees or Agents, former or

current, who was or is involved, directly or indirectly, in the investigation,
handling, review, adjustment and/or analysis of the Claims, and with respect to
each such Person, please identify that person, describe the nature of his or her
involvement, the Date(s) of that involvement, and position held at the time of his
or her involvement and presently. If the Person is no longer employed by You,
and You do not know the Person’s current whereabouts, please provide the
Person’s last known address, telephone number, and date of birth.

Answer to Interrogatory No. 3: George T. Glavas, Esq., Natalia Ron, Esq.

As described in Defendant’s Rule 26 Initial Disclosure, Mr. Glavas responded on
behalf of the insurer to the initial notice received on or about 3/8/07. Ms. Ron
responded on behalf of the carrier following the notification received from
Attorney James Middleton on 7/2/09.

Reason(s) To Compel Better Answer

The Plaintiffs requested in their September 30, 2010, letter that the Defendant confirm

that no other of Illinois Union’s supervisors, directors, managers, or administrators, former or

current, were involved in the investigation, handling, review, adjustment and/or analysis of the

Claims, as those terms are defined in the Plaintiffs’ First Set of Interrogatories. Illinois Union

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has not responded.

Interrogatory No. 5: Please quote verbatim any provision of the Policy upon
which you rely to limit or exclude coverage in this matter. With respect to each
such provisions, identify who drafted that provision, and state the date when it
was first used by You.

Answer to Interrogatory No. 5: Please refer to the at issue policy, Endorsement

#2, Paragraphs 2a and 3. See, also, Section C “Exclusions,” Paragraphs f.i. and
f.ii. Illinois Unions is unable to identify the person or persons who drafted the
provisions referenced above and, likewise, is unable to provide the date these
provisions were first used in an Illinois Union policy. Illinois Union can state,
however, that the policy form and the endorsement were not available for
inclusion in insurance policies, in general, until June and July, 2005, respectively.

Reason(s) To Compel Better Answer

Illinois Union states that it is “unable to identify the person or persons who drafted the

provisions referenced above and, likewise, is unable to provide the date these provisions were

first used in an Illinois Union policy.” Illinois Union, however, has a duty in this District to

ensure that a “reasonably inquiry” has been made, “including a review of documents likely to

have information necessary to respond to interrogatories.” Middle District Discovery (2001) at

16. The Plaintiffs requested in their September 30, 2010, letter that the Defendant identify and

describe the efforts employed by Illinois Union to comply with this requirement. Illinois Union

has not responded.

Interrogatory No. 6: Identify every one of Your employees or Agents, former or

current, who has been deposed or who has otherwise testified in the past five (5)
years concerning the construction, interpretation, meaning or application of any
Policy provisions that You intend to rely on to limit or avoid coverage in this
litigation or that You intend to rely on in support of any of Your affirmative
defenses.

Answer to Interrogatory No. 6: Illinois Union is not aware of the identities of

former or current agents who may have testified in the past five (5) years
regarding the subject mater described in this Interrogatory. Illinois Union does
not maintain records that would permit it to identify such employees or agents as
described in the Interrogatory. Despite the foregoing, as the construction,
interpretation, meaning and application of the policy terms at issue herein are

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questions of law for the Court and, therefore, the testimony of such individuals
regarding their understanding of the construction, interpretation, meaning or
application of the policy terms is irrelevant and immaterial to this proceeding.

Reason(s) To Compel Better Answer

See Reason(s) to Compel Better Answers to Interrogatory Nos. 2 and 5; Reason(s) to

Compel Production of Request Nos. 11 and 12.

Interrogatory No. 7: Identify any appraiser, adjuster, accountant, consultant, or

other professional retained, contacted, or used by You in connection with the
Claims, and include the name of any entity that employed that Person at the
relevant time. Also state whether that Person provided You with any reports,
draft reports, photographs, diagrams, sketches, estimates, videotapes, renderings,
measurements or other information, Documents or calculations. If so, describe
the nature of the information provided and provide the Dates on which these
Documents were provided to You.

Answer to Interrogatory No. 7: Claims professionals used by Illinois Union in

connection with the notice and the claim were George T. Glavas, Esq. and Natalia
Ron, Esq.

Reason(s) To Compel Better Answer

Illinois Union has only partially responded to this interrogatory. The Plaintiffs requested

in their September 30, 2010, letter that the carrier identify whether George T. Glavas, Esq. and/or

Natalia Ron, Esq. provided Illinois Union with any reports, draft reports, photographs, diagrams,

sketches, estimates, videotapes, renderings, measurements or other information, Documents or

calculations (as those terms are defined in the Plaintiffs’ First Set of Interrogatories). And if so,

to describe the nature of the information provided and the Dates on which those Documents were

provided. Illinois Union has chosen not to respond.

Interrogatory No. 8: Identify every third party with whom You communicated
regarding the Plaintiffs and/or the Policy and/or the Claims, and describe the
subject and substance of those Communications.

Answer to Interrogatory No. 8: Prior to the denial of coverage for the claim,
Illinois Union had received and transmitted communications with the
Plaintiff/insured, Herbert Williams, his insurance agent and attorneys for the

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Plaintiff/insured in the underlying litigation including, but not limited to, James
Middleton and Deb Kurcher. The subject matter of such communications,
generally, included matters relating to the filing of the initial complaint, the
second amended complaint, notification of the settlement, the insured’s obligation
to defend and an allocation of defense expenses. Subsequent to the 8/20/09 denial
of the claim for coverage, Illinois Union communicated with counsel, Joel Adler.
The subject and substance of those communications is protected by the attorney-
client and work product privileges. The nature of the communications took the
form of e-mails, telephone conversations and correspondence, all of which were
performed in anticipation of litigation relative to the denial of coverage for the
underlying claim.

Reason(s) To Compel Better Answer

See Reason(s) to Compel Production of Request No. 2.

III. CONCLUSION

The Plaintiffs, Herbert Williams and Florida Hydro, Inc., respectfully request that this

Court enter an Order (a) overruling the objections raised by Defendant, Illinois Union Insurance

Company, with respect to the Plaintiffs’ First Request for Production and First Set of

Interrogatories; (b) compelling Illinois Union to immediately produce all withheld discovery that

is the subject of the Plaintiffs’ First Request for Production; (c) compelling Illinois Union to

immediately provide better answers to the Plaintiffs’ First Set of Interrogatories; and (d)

awarding any further relief this Court deems equitable, just and proper.

Respectfully submitted,
VER PLOEG & LUMPKIN, P.A.
100 S.E. Second Street, Thirtieth Floor
Miami, FL 33131-2158
(305) 577-3996 (305) 577-3558 facsimile

By: /s/ R. Hugh Lumpkin, Esq.

R. Hugh Lumpkin
Florida Bar No. 308196
hlumpkin@vpl-law.com
Ashley B. Hacker
Florida Bar No. 71924
ahacker@vpl-law.com
Counsel for Plaintiffs
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CERTIFICATION OF GOOD FAITH EFFORT TO CONFER

Pursuant to Local Rule 3.01(g), and as evidenced by the attached correspondence

(Composite Exhibit A), undersigned counsel certifies that they have conferred with opposing

counsel in a good faith effort to resolve the issues raised in this motion, but have been unable to

reach a resolution.

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true and correct copy of the foregoing was electronically

filed with the Clerk of Court on this 28 day of October and served on all counsel of record via

CM/ECF electronic filing.

/s/ R. Hugh Lumpkin, Esq.

R. Hugh Lumpkin, Esq.

SERVICE LIST

Joel Adler, Esq.

Robert Scott Newman, Esq.
MARLOW, CONNELL, ABRAMS, ADLER, NEWMAN & LEWIS
4000 Ponce De Leon Boulevard, Suite 570
Coral Gables, Florida 33146

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