People’s Trust Must Hand Over Underwriting Manuals in Claims Litigation, Court Says

January 27, 2022

A property insurer must give up its underwriting manuals in a claims dispute, a Florida appeals court said Wednesday.

In People’s Trust Insurance Co. vs. Theodore Foster, the 1st District Court of Appeals in Tallahassee declined to quash a trial court’s ruling that required the carrier to divulge its underwriting manuals, as requested by the homeowner. Although lawyers for the Deerfield Beach-based insurer argued that previous court rulings have “categorically” prohibited the discovery of manuals in breach-of-contract cases, the appeal judges disagreed.

“This sweeping characterization of the cases isn’t correct,” the court said.

“Although courts in a number of cases have quashed the premature discovery of insurers’ business practices, claims files, underwriting files, underwriting manuals, and the like in breach-of-contract actions, there is no categorical legal rule prohibiting discovery of underwriting manuals in breach of contract cases, especially if they are relevant,” Judge Timothy Osterhaus wrote in the opinion.

People’s Trust did not show that the circuit court had violated a clearly established principle of law, and trade-secret arguments were not presented, the judge wrote.

Foster, the policyholder, filed the breach-of-contract suit after People’s denied his claim that a water pipe had leaked and damaged his home. The insurer said the pipe damage predated the policy. The plaintiff, as part of the lawsuit, then requested People’s underwriting manuals, hoping to show information about the extent of its property inspections.

The circuit court granted Foster’s motion. People’s objected and filed the writ of certiorari with the 1st DCA.

The decision snaps something of a win streak for People’s in Florida’s appeals courts. The courts in 2021 ruled 17 times in favor of the insurer, the company’s chief marketing officer said. Last month, the 3rd DCA found that homeowners were bound by their People’s policy, which requires the use of the insurer’s chosen contractors to make repairs.

Attorneys in the Foster case could not be reached for comment Wednesday.

Topics Lawsuits Claims Underwriting

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