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Second DCA Refuses to Allow Insurer to Obtain Settlement Information from Settling Co-Defendant

July 18, 2016

In Allen v. State Farm Florida Ins. Co., 2D15-3114 (Fla. 2d DCA June 10, 2016), a sinkhole plaintiff sued two insurers for the same damage and then settled with one of them before trial. The non-settling insurer wanted to discover the terms of the other insurer’s settlement because “it would be helpful to know how much has actually been paid.” The trial judge granted the motion, and the policyholder sought relief from the Second DCA. The appellate court held the terms of that settlement were private, they were not admissible at trial, and thus the information was not discoverable. 

This opinion shows a risk in litigating sinkhole claims that span multiple policy years with differing insurer coverage or uncertain dates of loss. State Farm wanted the information to avoid a double recovery and for purposes of its setoff defense. But the details of the settlement were not admissible under Florida statute section 46.015, which says the fact that any person has settled out of a lawsuit shall not be made known to the jury. And to prevent double recovery, the appellate court directed the trial court, in post-trial proceedings, to set off any duplicative recovery against the jury’s verdict before a judgment is entered. 

State Farm also wanted the information to assist it in the negotiating of the dispute. But the Court found that purpose to be insufficient to overcome the goal of maintaining the privacy of the parties. This decision highlights the limited nature of relief that is available with a petition for a writ of certiorari.

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