25 Fla. L. Weekly Supp. 920a
Online Reference: FLWSUPP 2510BLUEInsurance — Automobile — Windshield replacement or repair — Prevailing competitive price — Discovery — Depositions — Insurer’s corporate representative — Scope of inquiry and documents required to be produced at deposition — Plaintiff made sufficient showing that, in context of what prices are “prevailing” and “competitive,” information regarding relationship between insurer and certain business entities was likely to lead to admissible evidence — Discussion of relevance-based and privilege-based objections, including insurer’s claim of trade secret protection
MY CLEAR VIEW WINDSHIELD REPAIR, INC (a/a/o Tracy Blue), v. GEICO GENERAL INSURANCE COMPANY. County Court, 17th Judicial Circuit in and for Broward County. Case No. 14-016965 COCE 51. December 1, 2017. Kathleen McCarthy, Judge. Counsel: Emilio R. Stillo and Andrew Davis-Henrichs, Emilio Stillo P.A., Davie; Mac Phillips, Phillip Tadros, P.A., for Plaintiff. Chandra Hosler, Law Office of David S. Dougherty, for Defendant.
ORDER ON DEFENDANT’S OBJECTIONSTO PLAINTIFF’S RULE 1.310DISCLOSURES AS IT RELATES TO SAFELITE
THIS CAUSE came before the Court on November 15, 2017 for hearing on Defendant’s Objections to Plaintiff’s Rule 1.310 Disclosures, and the Court, having reviewed the motion, Plaintiff’s Response to Defendant’s Objections to Plaintiff’s Rule 1.310 as it relates to “Safelite,” and entire court file; having reviewed the relevant legal authorities; having heard argument of counsel; and having been sufficiently advised in the premises,
ORDERS AND ADJUDGES as follows:
Background
The Plaintiff is an auto-glass repair provider who fixed Geico’s insured’s windshield. In exchange for the repair services, Geico’s insured assigned the benefits under the Geico policy to the Plaintiff to enable the Plaintiff to bill Geico directly for the repair work. The Plaintiff submitted its bill directly to Geico, and Geico paid less than the amount charged in reliance on its interpretation of the “Limit of Liability” language in the comprehensive portion of the policy, which states:
LIMIT OF LIABILITY
The limit of our liability for loss:
1 . Is the actual cash value of the property at the time of loss;
2. Will not exceed the prevailing competitive price to repair or replace the property at the time of loss, or any of its parts, including parts from non-original equipment manufacturers, with other of like kind and quality and will not include compensation for any diminution of value that is claimed to result from the loss. Although you have the right to choose any repair facility or location, the limit of liability for repair or replacement of such property is the prevailing competitive price which is the price we can secure from a competent and conveniently located repair facility. At your request, we will identify a repair facility that will perform the repairs or replacements at the prevailing competitive price.
(Emphasis added).
The Plaintiff suit and seeks declaratory relief relating to the interpretation of the limit-of-liability language, and for damages on a breach of contract theory. Specifically, the Plaintiff asserts that the policy is illusory as it relates to the purported “prevailing competitive price” and how it is applied to claims for windshield repairs such as the instant case. The Plaintiff further seeks as damages the difference between the amount it billed Geico for windshield repairs and the amount Geico paid. The Plaintiff contends that it is competent and conveniently located to the insured at the time of the loss, and that Geico secured its price upon receipt of its invoice. Thus, according to the Plaintiff, Geico’s obligation to pay the entire charge was triggered.
The Defendant contends that it could secure a cheaper price from a competent repair shop conveniently located to its insured at the time of loss; therefore, according to Geico, the cheaper price it says it could have secured is the “prevailing competitive price” and the most it had to pay under the policy.
On April 7, 2017, the Plaintiff served its Rule 1.310 Disclosures, which identified the areas of corporate inquiry about which the Plaintiff seeks deposition testimony from Geico, and includes various document requests. Geico objected to certain areas of inquiry and to the production of certain categories of documents. Pertinent to the hearing held on November 15, 2017 are the Plaintiff’s intentions to seek corporate testimony and documents relating to Safelite1.
At the hearing, both the Plaintiff and Geico agreed that the bulk of Geico’s objections to any information or material relating to Safelite fell into one or both of two categories — relevance and privilege. For the reasons set forth below, the Court agrees with the Plaintiff that the information regarding Safelite is reasonably calculated to lead to the discovery of admissible evidence. Accordingly, Geico’s relevance objections are OVERRULED. With respect to the privilege-based objections, the Court invokes the procedures and safeguards set forth below.
Relevance-Based Objections
“A “part[y] may obtain discovery regarding any matter, not privileged, that is relevant to the subject matter of the pending action, whether it relates to the claim or defense of the party seeking discovery or the claim or defense of any other party.” ” Nucci v. Target Corp., 162 So.3d 146, 152 (Fla. 4th DCA 2015) [40 Fla. L. Weekly D166], citing, Fla. R. Civ. Pro. 1.280(b)(1). “It is not ground for objection that the information sought will be inadmissible at the trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence.” Id. (emphasis in original). The concept of relevance in civil cases is broader in the discovery context than in a trial context, and a party may be permitted to discover relevant evidence that may ultimately be inadmissible at trial if it may lead to the discovery of admissible evidence. Allstate Ins. Co. v. Langston, 655 So.2d 91, 94 (Fla. 1995) [20 Fla. L. Weekly S217a], citing, Amente v. Newman, 653 So.2d 1030 (Fla. 1995) [20 Fla. L. Weekly S172a].
In this case, the primary issue involves the interpretation and construction of the term “prevailing competitive price.” Based on the information attached to Plaintiff’s Response to Defendant’s Objections to Plaintiff’s Rule 1.310 [Disclosures] as it Relates to Safelite, the Plaintiff made a sufficient showing that in the context of what prices are “prevailing” and “competitive”, it appears plainly obvious that information regarding Safelite AutoGlass is reasonably calculated to lead to the discovery of admissible evidence. For example, Safelite AutoGlass is a direct competitor of the Plaintiff and is actually recommended by Geico to insureds who seek a referral as to which repair facility to use. Safelite AutoGlass accepts Geico’s “prevailing competitive price” and comprises 70% of the glass marketplace in Florida. In other words, 70% of the auto-glass repaired for Geico’s insureds in Florida is performed by Safelite AutoGlass. Moreover, information from Safelite AutoGlass’s website shows that it charges between $167.36 and $174.29 for similar repair services for which the Plaintiff charged $85.20 in this case.
It is also clear to this Court that information relating to Safelite Solutions, LLC’s role in the handling and adjustment of this claim is equally reasonably calculated to lead to the discovery of admissible evidence. For example, the Plaintiff provided the Court with record evidence demonstrating various corporate representatives designated by Geico attested:
(1) Safelite Solutions, LLC was paid by Geico for its role in processing payments and compiling payment data for windshield claims;
(2) Safelite Solutions, LLC is paid $10 per claim as a third-party administrator with respect to auto-glass invoices Geico receives from other shops;
(3) Safelite Solutions, LLC provides out-of-network shops pricing information;
(4) Safelite Solutions, LLC’s records are relied upon as evidence by GEICO as examples of the prevailing competitive price;
(5) Safelite Solutions, LLC provides data to Geico as to charges in the community;
(6) Safelite Solutions, LLC has information concerning payment;
(7) Safelite Solutions, LLC provides data to GEICO as it relates to the prevailing competitive price; and
(8) Safelite Solutions, LLC provide records on which Geico relies for evidence as to prevailing competitive prices.
Additionally, if Geico cannot secure the “prevailing competitive price” without paying Safelite for administering the claim, then that expenditure should be factored into the “prevailing competitive price” analysis. Further, any additional consideration network repair shops receive as a result of various vertical and horizontal agreements between Geico and any Safelite entity is relevant to the computation of the “prevailing competitive price.”
For these reasons, this Court determines that the areas of inquiry in paragraphs 2, 6, 7, 8, 9, 11, 17, 18, 22, and 23 seek information that is reasonably calculated to lead to the discovery of admissible evidence, as do the documents sought in paragraphs 8-9, 12, 25, 27-31, 34-35, 43, 45-58 of the duces tecum requests. On the other hand, duces tecum requests 32-33, 36, 37 and 43, which relate to the appraisal and inspection provisions of the policy that Geico did not choose to invoke, are sustained.
Privilege-Based Objections
Geico’s position is that materials and information sought by duces tecum requests 8-9, 12, 27-30, 34-35, 45-48 are protected from disclosure as confidential, propriety and trade secret information, as are documents regarding and relating to Geico’s relationship with SGR Network, Safelite Solutions, Inc., Safelite Group, Inc (and its related entities). At this point, neither the Plaintiff nor the Court are in a position to address the sufficiency of those objections because Geico has not produced a privilege log.
In TIG Ins. Corp. v. Johnson, 799 So.2d 339 (Fla. 4th DCA 2001) [26 Fla. L. Weekly D2493a], the court confirmed a party’s obligation to serve a privilege log corresponding to privilege-based objections per Fla. R. Civ. P. 1.280(b)(5), and noted that the requirement is the same under Rule 26(b)(5) of the federal rules. The Advisory Committee Notes to Rule 26(b)(5) state that a party’s failure to produce a privilege log subjects a party to sanctions and may be viewed as a waiver of the privilege or protection. Id. at 340. This Court is not yet prepared to sanction Geico for its failure to produce a privilege log or hold that privilege-based objections are waived, but does hold that Geico must produce a privilege log corresponding to each privilege based objection within 60 days of this order. As noted by the court in TIG, the privilege log should:
describe the document’s subject matter, purpose for its production, and a specific explanation of why the document is privileged or immune from discovery. These categories, especially this last category, must be sufficiently detailed to allow the court to determine whether the discovery opponent has discharged its burden of establishing the requirements expounded upon in the foregoing discussion. Accordingly, descriptions such as ‘letter re claim,’ ‘analysis of claim,’ or ‘report in anticipation of litigation’-with which we have grown all too familiar-will be insufficient. This may be burdensome, but it will provide a more accurate evaluation of a discovery opponent’s claims and takes into consideration the fact that there are no presumptions operating in the discovery opponent’s favor. Any failure to comply with these directions will result in a finding that the plaintiff-discovery opponents have failed to meet their burden of establish the applicability of the privilege.
TIG, 799 So.2d at 341.
With respect to documents withheld based on the trade secret privilege, this Court will employ the procedure articulated by the Fourth District in Columbia Hospital (Palm Beaches) Ltd. Partnership v. Hasson, 33 So.3d 148 (Fla. 4th DCA 2010) [35 Fla. L. Weekly D1067a]. There, the court held that a trial judge first has to determine whether information requested in discovery constitutes a trade secret. That determination may be made by agreement of the parties or an in camera inspection by the trial court. Hasson, 33 So.3d at 150. If it is determined that the information sought does not contain trade secrets, it may be produced subject only to ordinary discovery objections. If, however, it is determined that the information does indeed contain trade secrets, then the court must require the party seeking production to show reasonable necessity for the requested materials. Id. If the party seeking production makes such a showing, the trial court may properly compel the production of these materials but must also take such protective measures as are required to protect the trade secrets, such as entering a confidentiality order. Id. at 151.
The identical issue regarding Geico’s claim of trade secret protection regarding Safelite materials was recently presented to the United States District Court for the Middle District of Florida in Government Employees Ins. Co., et. al. v. Clear Vision Windshield Repair, LLC, et. al., Case No. 6:16-cv-2077-Or1-28TBS. There, in an Order dated October 27, 2017, the court denied Geico’s motion for protective order regarding “confidential commercial information that are protected trade secrets, all regarding GEICO’s relationship with a vendor called Safelite Solutions, part of the Safelite Autoglass Group (“Safelite”). Order, p. 2. “The Court does not need to determine the validity of [Geico’s trade secret claim] because it has entered a Confidentiality Order which explicitly applies to materials (including testimony) alleged to be trade secrets (Doc. 73).”
Conclusion
Within 60 days of this Order, Geico shall produce a privilege log corresponding to each privilege based objection within 60 days of this order.
Within 60 days of this Order, Geico shall produce the following documents to the Court for an in camera inspection so the Court can determine whether the requested materials are trade secrets:
8.) All correspondence between Defendant and any third party billing consultant, analysts, providers, auditors, administrators, etc. engaged by Defendant for the past three years.
9.) Copies of all contracts between Defendant and any third party billing consultants, analysts, providers, auditors, administrators, etc. engaged by Defendant for the past three years.
12.) Any and all agreements Defendant has for administering and handling of windshield repair and/or replacement claims under the comprehensive provision of its policy with any third parties.
27.) A copy of any and all contract and/or agreements with Safelite Auto Glass, Safelite Group, Inc., and Safelite Solutions that are in effect, or were in effect at the time of the subject claim.
28.) A copy of any and all contracts and/or agreements with any and all windshield glass repair and replacements facility(s)/vendor(s), windshield glass administrators, windshield glass manufacturers and distributors that are in effect or were in effect at the time of the subject claim.
29.) Any and all telephone scripts or other documents used by Defendant or provided to SGC Network, Safelite Solutions, Inc. and/or Safelite Group, Inc. for use during a phone call or other communication with the insured or glass shop for the handling, servicing, and administering (e.g., payments) of glass claims.
30.) Any and all marker studies performed by SGC Network, Safelite Solutions, Inc. and/or Safelite Group, Inc., and any of its agents/entities to determine the reasonable, fair prevailing competitive price, and/or reimbursement amounts for glass, labor, kit/adhesive, molding and other items for auto glass claims in the State of Florida in the past three (3) years.
34.) Any and all documents, policies, procedures and/or papers given to Defendant from SGC Network, Safelite Solutions, Inc., and or Safelite Group, Inc., and any of its agents/entities on how to determine if a windshield or other auto glass must be repaired rather than replaced.
35.) Any and all documents provided to Defendant from SGC Network, Safelite Solutions, Inc., and/or Safelite Group, Inc., and any of its agents/entities pertaining to the subject auto glass claim.
45.) A copy of any invoice, receipt, or other document(s) representing an administrative fee and/or handling fee paid by Defendant to any third party vendor in the instant claim.
46.) A copy of any and all utilization reports showing the number of windshield/glass claims that are referred to Safelite and its affiliates and all other “in-network” facilities/vendors through Defendant’s call center on a monthly basis for the past 3 years.
47.) A list of the claims handled through Safelite and its affiliates for the past 3 years, and a list of claims handled outside Safelite for the past 3 years.
48.) A list of claims handled through in-network glass repair and replacement shops for the past 3 years and a list of claims handled through out-of-network glass repair and replacement shops for the past 3 years.
As noted above, the Court finds that these documents are reasonably calculated to lead to admissible evidence. The Court also finds that the Plaintiff sufficiently explained why it needs the information; it is clear that this information is critical to the determination of Plaintiff’s claims and Geico’s defenses in this case.
If, after the in camera inspection, the Court determines that the requested documents are trade secrets, the Court shall order the parties to jointly prepare a confidentiality order sufficiently protecting the trade secrets prior to ordering the production of these documents to the Plaintiff.
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1Plaintiff illustrated to the Court that there are two Safelite entities at issue, both of which fall under the same ownership umbrella: Safelite Solutions LLC and Safelite AutoGlass and Safelite Solutions, LLC. Safelite Solutions is a third-party claims administrator who purportedly provides analysis and data as to the “prevailing competitive price” to Geico and, according to Geico, “compiles payment data and facilitates payments.” Safelite AutoGlass is an auto-glass service provider and a direct competitor of the Plaintiff.