Residences ORC LLC v. Allianz Global Risks US Insurance Company

CourtDistrict Court, S.D. Florida
DecidedApril 29, 2025
Docket4:24-cv-10061
StatusUnknown

This text of Residences ORC LLC v. Allianz Global Risks US Insurance Company (Residences ORC LLC v. Allianz Global Risks US Insurance Company) is published on Counsel Stack Legal Research, covering District Court, S.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Residences ORC LLC v. Allianz Global Risks US Insurance Company, (S.D. Fla. 2025).

Opinion

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA

KEY WEST DIVISION

Case No. 4:24-cv-10061-GAYLES/GOODMAN

RESIDENCES ORC LLC,

Plaintiff,

v.

ALLIANZ GLOBAL RISKS US INSURANCE COMPANY,

Defendant. _______________________________/

ORDER ON DEFENDANT INSURANCE CARRIER’S PRIVILEGE CLAIMS CONCERNING PORTIONS OF ITS CLAIMS FILE

This lawsuit concerns a claim by a real property owner, Residences ORC LLC (“ORC”), who hired a general contractor to construct a luxury condominium project in Key Largo, Florida. To protect the project, ORC purchased a Builders Risk policy from Defendant, Allianz Global Risks US Insurance Company (“Allianz”). According to ORC, a severe rainstorm impacted the project, causing physical damage to the interior ductwork, metal framing, and drywall. The damage allegedly caused the project to be delayed, which, in turn, caused ORC to sustain a loss of at least $4.96 million. ORC submitted a delay-based claim to Allianz, which denied coverage, a decision which caused ORC to file this lawsuit. We need to resolve a discovery dispute which was generated after Allianz asserted objections to myriad document requests on the basis of

the work product doctrine and the attorney-client privilege. Allianz prepared a privilege log1 and, during a discovery hearing, the Undersigned required [ECF No. 28] Allianz to later file the purported work product

documents under seal. Because one of Allianz’s retained lawyers prepared some of the documents at issue, the Undersigned also required Allianz to file those materials under seal (and to file under seal the law firm’s bills to Allianz from the date of the law firm’s

retention to the date of the coverage denial letter). I also directed Allianz to file: Plaintiff’s demand letter and its response; its coverage denial letter; Plaintiff’s response to the coverage denial letter; Plaintiff’s Civil Remedy Notice (“CRN”); and its response to the CRN.

Although those documents were filed under seal, there is nothing confidential or privileged about them (as they were exchanged between the insured and the insurer), so this Order therefore need not be filed under seal.

The fundamental issues underlying the dispute are: (1) when did Allianz reasonably anticipate litigation (i.e., when did the work product protection begin, and did

1 Allianz later filed an updated privilege log [ECF No. 32]. In its under-seal filing of the documents subject to work product and attorney-client privilege claims, Allianz noted that some of those documents had, in fact, been produced to ORC after the discovery hearing. [ECF No. 33]. it begin before the presumptive start date of the coverage denial?); (2) whether Allianz’s counsel was providing legal advice in documents (or whether she was serving as a de facto

claims adjuster and/or factual investigator); (3) whether all of the privilege log entries contain information sufficient to allow Plaintiff to evaluate the merits of the privilege claim; (4) whether third parties who authored or received documents were on the Allianz

team investigating the claim, and, if so, whether the documents they exchanged with Allianz are entitled to work product protection (and, if so, when does the protection begin?).

Allianz, of course, has the burden of proving its work product doctrine claim and its attorney-client privilege assertion. After reviewing both the under-seal documents and the publicly-submitted materials, the Undersigned concludes that Allianz did not rebut the presumption -- and

that its work product protection therefore began on the day it denied the claim. Other related rulings are outlined below. Factual Background

The policy period for the insurance policy was May 3, 2019 to February 18, 2021. Work on the project began on or around May 13, 2019, and ORC says the anticipated completion date was February 18, 2021. According to the First Amended Complaint, a severe rainstorm impacted the

Project on June 2, 2020. [ECF No. 10, ¶ 19]. Craft Construction Company (“Craft”) was required to remediate damage sustained when water penetrated the roofing systems of the three building, causing physical damage to the interior ductwork, metal framing, and

drywall. Id. at ¶¶ 20–22. ORC claims that the unanticipated remediation and repair work (which had to be done out of sequence from the scheduled contract work), caused the Project completion to be delayed until December 31, 2021, a total of 213 days beyond the

February 18, 2021 project completion date. Id. at ¶¶ 23–25. At the hearing, Allianz and ORC provided the following relevant dates: February 1, 2022: ORC submits its initial claim

January 6, 2023: ORC’s counsel submits a demand letter March 22, 2024: Allianz denies the claim July 26, 2024: ORC files this lawsuit As we will discuss below, the rebuttable presumption in first party insurance

lawsuits filed by an insured against the carrier is that the carrier first anticipated litigation when it issued its coverage denial or decision -- and that documents created before the denial are not covered by the work product doctrine (but that documents created after the

denial do enjoy work product protection). ORC’s position is that Allianz’s work product protection begins on March 22, 2024, when it denied the claim. But Allianz contends that the presumption has been rebutted and that protection begins on January 6, 2023, when ORC’s counsel sent the initial

demand letter. But there are also other dates when Allianz may have first anticipated litigation (assuming that the presumption has been rebutted): when Allianz first retained outside

coverage counsel (on January 13, 2023, when Allianz’s outside counsel, Diane Barnes- Reynolds, received the file assignment); when Allianz responded to the demand letter from ORC’s counsel (on February 3, 2023); when ORC submitted its CRN to State of

Florida insurance regulators (on April 11, 2023); when Allianz’s outside counsel responded to the CRN with letters to Allianz’s counsel and insurance regulators (on June 9, 2023); when ORC’s attorney responded to the June 9, 2023 letter (on July 18, 2023);

when the Allianz claim handler responded to the July 18, 2023 letter (on August 1, 2023); or when Ms. Barnes-Reynolds reviewed a response from the Allianz claim analyst about preparation of a claim denial letter (on March 18, 2024). A post-hearing Order [ECF No. 29] expressly authorized Allianz to submit

affidavits or declarations in support of its work product doctrine and attorney-client privilege claims, but it did not do so (and the deadline has expired). Given this lack of participation, ORC could not have filed an authorized “response” (as there were no

affidavits or declarations to respond to in the Court record). In any event, additional details about the specifics of the events noted above will help the analysis of when Allianz anticipated litigation (assuming that a date other than the presumptive claim denial event is used). The January 6, 2023 Demand Letter This letter from ORC’s attorney demands that Allianz accept coverage and tender

payment. It mentions the damage caused by a June 2–4, 2020 rain event, the 213-day construction delay, the $4.373 million claim for “soft costs”, and asserts that the entire claim is expressly covered. It mentions Allianz’s March 21, 2022 letter, in which it said it

was “evaluating the occurrences” which triggered the delay. And it flags the lack of an update from Allianz for nine months. After reminding Allianz of its duty to handle the claim in good faith, the letter

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