INSURANCE: INSOLVENCY PROCEEDINGS; CIVIL PROCEDURE: DISCOVERY: APEX DOCTRINE: TRIAL COURT DEPARTED FROM ESSENTIAL REQUIREMENTS OF LAW BY ORDERING INSURANCE COMMISSIONER TO SUBMIT TO DEPOSITION TO ANSWER HYPOTHETICAL QUESTIONS WHETHER HE WOULD HAVE RECOMMENDED INSTITUTING INSOLVENCY PROCEEDING ONE YEAR EARLIER IF ACCOUNTING FIRM PREPARED ACCURATE FINANCIAL STATEMENTS: THIS EVIDENCE COULD BE FURNISHED BY EXPERTS OR LOWER LEVEL EMPLOYEES: ASKING AGENCY HEADS TO ANSWER HYPOTHETICAL QUESTIONS VIOLATES SEPARATION OF POWERS AND COULD DISTRACT PUBLIC OFFICIALS FROM THE PERFORMANCE OF THEIR DUTIES; APPEALS: CERTIORARI

Florida Office of Insurance Regulation v. Florida Department of Financial Services, ___ So. 3d ___, 40 Fla. L. Weekly D638 (Fla. 1st DCA March 12, 2015)

The Florida Department of Financial Services (DFS), as the receiver of three insolvent insurance companies, sued an accounting firm for failing to prepare accurate financial statements. The Department alleged that if the Office of Insurance Regulation (OIR) had received accurate financial statements, it would have provided the Department with the recommendation to initiate delinquency proceeds one year earlier, which would have avoided harm to the insurance companies and consumers. Based on these allegations, the trial court ruled that the accounting firm was entitled to depose the Commissioner of Insurance, who is the head of OIR, but the appellate court granted OIR’s petition for certiorari and quashed the trial court’s order. The Apex doctrine prevents litigants from deposing high ranking government or corporate officials unless no viable alternative exists. Although no Florida court has adopted the Apex doctrine when discovery has been sought from high ranking corporate officials, it has been applied to high ranking government officials to avoid deterring people from accepting positions as public servants and violating the separation of powers doctrine. The court concluded that the Commissioner’s testimony was unnecessary because the evidence in question could be supplied by expert witnesses on insurance insolvency and “subordinates within OIR who work on recommendations concerning insolvency referrals.” In addition, posing hypothetical questions to high ranking government officials could detract from their ability to perform their public duties and violate the separation of powers between the three branches of government.

To read more briefs in the Insurance category of the Kashi Law Letter, please click here, http://www.kashilawletter.com/category/insurance/.

To read more briefs in the Civil Procedure: Discovery category of the Kashi Law Letter, please click here, http://www.kashilawletter.com/category/civil-procedure/discovery/.

To read more briefs in the Evidence category of the Kashi Law Letter, please click here, http://www.kashilawletter.com/category/evidence/.

To read more briefs in the Appeals: Certiorari category of the Kashi Law Letter, please click here, http://www.kashilawletter.com/category/appeals/certiorari/.