Aleyssa Marie Arroyo Marrero ("Petitioner") seeks certiorari review of the circuit court's orders, which completely prohibit the parties from engaging in any discovery related to Petitioner's affirmative defense that the underlying personal injury claims were settled prior to suit being filed. Because the trial court relied upon inapplicable law and the orders banning all discovery effectively eviscerate her settlement defense, Petitioner has demonstrated both a departure from the essential requirements of law and irreparable harm as to both issues raised in the petition. Accordingly, we grant the petition and quash the orders.

The Automobile Accident

The underlying personal injury action arose from a 2015 three-vehicle crash. Petitioner drove a vehicle that collided with one driven by Diann McMurtrie, which in turn collided with a car driven by Terence Rea ("Respondent") in which his son, Jack, was a passenger. Both Respondent and his son claimed to have been injured in the collision. Ms. McMurtrie, the driver of the third vehicle, is not directly involved in this matter, but she also claimed to have been injured.

Presuit Settlement Correspondence

Within a few months of the accident, the Reas and Ms. McMurtrie asserted claims against Petitioner and her insurer, Foremost Group Insurance ("Foremost"). Petitioner's liability limits through Foremost were $10,000 per person and $20,000 per occurrence. Attorney Nicholas Panagakis submitted a settlement demand by letter to Foremost on behalf of Respondent and his son Jack. The February 5, 2016, demand letter requested payment of full policy limits within a limited time period and provision of certain documentation that would confirm ownership of Petitioner's vehicle, the lack of other insurance, and other matters. Mr. Panagakis’ letter advised Foremost that a condition of settlement was approval of the settlement with Petitioner and waiver of subrogation rights by State Farm Mutual Automobile Insurance Company ("State Farm"), Respondent's insurer for uninsured/underinsured coverage.

Most uninsured/underinsured policies require the insured to obtain the insurance company's permission to settle with the tortfeasor so that there is no dispute about whether the tortfeasor was uninsured/underinsured or had collectible assets which the insurer could later pursue by way of subrogation. If the insurer withholds permission to settle or refuses to waive its subrogation rights, there are optional procedures, which are not at issue in this case.

Foremost, through its adjustor, Pablo Andrade, responded by letter on February 15, 2016, to Attorney Panagakis, stating that Foremost would tender full policy limits, and referencing his discussion with Attorney Panagakis’ case manager, Melissa Ulloa, in which Andrade had requested a global settlement conference which would attempt to resolve all claims asserted by the Reas and Ms. McMurtrie against Petitioner within her modest liability limits. On March 1, 2016, Mr. Andrade sent another letter to Attorney Panagakis referencing another conversation with Ms. Ulloa, confirming settlement of Respondent's claim for $5,700, which forwarded the settlement check and general release.

Those settlement checks were not cashed, nor was the release signed and returned. Foremost sent replacement checks when the initial checks became outdated or stale.

Although a settlement conference, as such, apparently did not take place, a letter dated March 4, 2016, from Attorney Panagakis to State Farm announced that a global settlement had been reached with Foremost so that Respondent and Jack Rea each received $5,700, while Ms. McMurtrie received $8,500. State Farm responded with its letter dated March 11, 2016, waiving its subrogation rights and authorizing the Reas’ settlement with Petitioner.

Suit Filed in Circuit Court, Removed to Federal Court

Two years later, in March 2018, Respondent, represented by Attorney Panagakis, filed suit against Petitioner in circuit court, asserting that Petitioner negligently collided with Ms. McMurtrie's vehicle, causing it to collide with Respondent's vehicle, injuring both of the Reas. In the same suit, Respondent sued State Farm, alleging breach of the underinsured motorist insurance contract and claiming bad faith. State Farm then removed the action to federal district court on the basis of diversity jurisdiction.

Federal District Court Litigation and Rulings

In June 2018, Petitioner filed a motion for summary judgment, asserting that Respondent's claims against her had been settled in 2016. As evidence in support of her motion for summary judgment, Petitioner filed copies of the various letters referred to above. Respondent opposed the summary judgment, claiming no settlement had been reached. Respondent filed copies of additional settlement-related correspondence, together with affidavits from both Attorney Panagakis and Respondent that essentially said that Panagakis did not have authority to settle the Reas’ claims for $5,700 each nor was he authorized to settle unless State Farm actually reached a settlement agreement on the Reas’ underinsured claims, as well. Respondent argued to the federal district court that there were disputed issues of material fact that made the settlement defense inappropriate for summary judgment. While the action was pending in federal court, Respondent deposed Foremost's adjustor, Mr. Andrade, and inquired about Andrade's correspondence or conversations with Attorney Panagakis and Melissa Ulloa, Panagakis’ assistant/case manager, regarding settlement. On January 9, 2019, the federal district court entered an order denying Petitioner's motion for summary judgment because there appeared to be disputed factual issues. The federal court order noted that ordinarily, resolution of those factual issues would occur at trial. However, the federal court stated that it would lack diversity jurisdiction to entertain the suit further, unless it could determine that a settlement had been reached, because both Petitioner and Respondent were residents/citizens of Florida. The federal court noted that it was obliged to resolve that jurisdictional question by making a determination regarding the settlement issue, and advised that it would hold an evidentiary hearing for that purpose.

In response to a scheduling order from federal court, Petitioner and Respondent filed a written joint stipulation on April 12, 2019, in which they both stated that no further discovery would be required in order to permit resolution of the settlement/jurisdictional issues. The federal court accepted the stipulation and on May 23, 2019, entered its order, in which it noted that Foremost's letter responding to the initial demand letter was not a mirror-image, point-by-point acceptance of the original demand letter, nor were the checks cashed or release signed. The federal district judge denied Petitioner's motion stating that "the Court cannot conclude that it is more likely than not that [Respondent] settled his claim against [Petitioner]." Based on that finding, the federal court determined that diversity was lacking, which in turn meant that the district court lacked subject matter jurisdiction. On May 23, 2019, the federal court entered its order remanding the case back to circuit court and vacating its prior substantive orders, including its order denying Petitioner's motion for summary judgment on the settlement issue.

Post-remand Circuit Court Litigation

Once the case had been remanded, Petitioner filed a motion for summary judgment in circuit court, which was essentially identical to the motion she had filed in federal court, asserting that Respondent's claims against her had been settled presuit in 2016. Respondent served a set of interrogatories on Petitioner that included at least one question asking Petitioner to explain the factual basis for her settlement defense with the further request that she identify all documents and witnesses supporting that defense.

Later, Respondent filed a response to Petitioner's motion for summary judgment in which he argued no settlement had been reached because the supposed acceptance letter from Foremost did not mirror the initial demand letter. Respondent filed his own summary judgment motion seeking to defeat the settlement defense based on the non-mirror image argument.

Petitioner's Intent to Depose Respondent and Counsel

Petitioner notified Respondent of her intention to depose Respondent, Attorney Panagakis, and the assistant/case manager, Ms. Ulloa. Petitioner ultimately filed a motion to compel these depositions. Respondent filed a motion to determine the scope of discovery necessary for his summary judgment and an alternative motion for protective order to prohibit those depositions from going forward. Respondent argued in his motion and during the hearings held on the motion that Petitioner was judicially estopped from pursuing discovery in circuit court because of the parties’ joint stipulation in federal court that no additional discovery was needed to resolve the settlement defense summary judgment motion. Respondent also argued that the attorney-client privilege barred depositions of Respondent and his attorney regarding settlement. Orders Precluding Discovery

Following two hearings, the circuit court issued two orders on June 26, 2020. The first order granted Respondent's motions and prohibited Petitioner from deposing Respondent, his lawyer, and the case manager based upon the application of the doctrine of judicial estoppel flowing from the parties’ federal court stipulation. The circuit court also ruled that those depositions would violate the attorney-client privilege regarding their discussions regarding settlement.

The second order denied Petitioner's motion to compel these depositions and denied her motion for protective order in which she had requested that Respondent should not be allowed to question her about settlement issues when deposing her. In response to Petitioner's motion for rehearing, the trial court entered amended orders, "to clarify that neither party shall conduct additional discovery on the issue of [Petitioner's] settlement defense." The orders would allow Petitioner to depose Respondent on relevant topics other than settlement. The trial court granted Petitioner's motion to stay all discovery and proceedings related to her settlement defense.

Certiorari: Availability and Standard of Review

When conducting certiorari review of a nonfinal order, the district court must determine whether (1) the lower court departed from the essential requirements of the law; (2) the petitioner will suffer a material injury for the rest of the case; and (3) there is no adequate remedy on post-judgment appeal. See Holmes Reg'l Med. Ctr., Inc. v. Dumigan , 151 So. 3d 1282, 1284 (Fla. 5th DCA 2014) (citing Allan & Conrad, Inc. v. Univ. of Cent. Fla. , 961 So. 2d 1083, 1087 (Fla. 5th DCA 2007) ). The last two requirements "are often combined into the concept of ‘irreparable harm.’ " Id. (citing Citizens Prop. Ins. Corp. v. San Perdido Ass'n , 104 So. 3d 344, 351 (Fla. 2012) ).

"[A]ppellate courts will only grant certiorari relief where a trial court's order constitutes a departure from the essential requirements of the law, and causes a party to suffer material injury throughout the remaining proceedings that cannot be adequately remedied by appeal." Towers v. City of Longwood , 960 So. 2d 845, 847–48 (Fla. 5th DCA 2007). If the order can be corrected on appeal from the final judgment, the appellate court lacks jurisdiction, and the petition must be dismissed rather than denied. See Cohen v. D.R. Horton, Inc. , 121 So. 3d 1121, 1124 (Fla. 5th DCA 2013) ; Bared & Co. v. McGuire , 670 So. 2d 153, 156 (Fla. 4th DCA 1996).

Irreparable harm is jurisdictional and must be found before a court may even consider whether there has been a departure from the essential requirements of law. See O'Neill v. O'Neill , 823 So. 2d 837, 839 (Fla. 5th DCA 2002). Only if the petition demonstrates clearly that the appellate court has jurisdiction by virtue of irreparable harm not correctable on plenary appeal will the court move on to the question of whether the trial court departed from the essential requirements of law. See Avco Corp. v. Neff , 30 So. 3d 597, 601 (Fla. 1st DCA 2010) ; O'Neill , 823 So. 2d at 839.

Nonfinal orders that permit discovery are an example of the type of interlocutory order that, under appropriate circumstances, may be reviewed by a writ of certiorari. See Fla. E. Coast Ry., L.L.C. v. Jones , 847 So. 2d 1118 (Fla. 1st DCA 2003) ; Delta Health Grp., Inc. v. Williams , 780 So. 2d 337 (Fla. 5th DCA 2001) (interlocutory orders compelling responses to interrogatories); Miami Heart Inst. v. Reis , 638 So. 2d 530 (Fla. 3d DCA 1994).

Those situations are often described as "letting the cat out of the bag," because there is no practical way to eliminate knowledge or information gained by an opponent through what is later ruled to be inappropriate discovery.

On the other hand, certiorari jurisdiction to review orders denying discovery is frequently found to be lacking, because the prejudice can often be remedied following appeal, and thus the requisite element of irreparable harm does not exist. See , e.g. , Citizens Prop. Ins. Corp. v. San Perdido Ass'n, 104 So. 3d 344, 351–52 (Fla. 2012) ; Plantz v. John , 170 So. 3d 822 (Fla. 2d DCA 2015), review denied , 2016 WL 1394470 (Fla. 2016) ; Damsky v. Univ. of Miami , 152 So. 3d 789, 792 (Fla. 3d DCA 2014) ; Goslin v. Preisser , 148 So. 3d 869 (Fla. 1st DCA 2014). "For a denial of discovery to constitute material, irreparable harm, thus conferring certiorari jurisdiction, the denial must ‘effectively eviscerate [ ] a party's claim, defense, or counterclaim.’ " CQB, 2010, LLC v. Bank of N.Y. Mellon , 177 So. 3d 644, 646 (Fla. 1st DCA 2015) (alteration in original) (quoting Giacalone v. Helen Ellis Mem'l Hosp. Found., Inc. , 8 So. 3d 1232, 1234 (Fla. 2d DCA 2009) ).

Settlement Defense Eviscerated by Order Banning Discovery

Cases in which irreparable harm has been held to result from the denial of discovery often involve situations in which the evidence to be gleaned, or its equivalent, can be obtained only from the discovery the trial court has denied. See, e.g., Hepco Data, LLC v. Hepco Med., LLC , 301 So. 3d 406 (Fla. 2d DCA 2020) (holding that trial court's blanket denial of motion to compel depositions of allegedly material witnesses effectively eviscerated petitioners’ right to defend against declaratory judgment action concerning rights to data collected from patented medical device and to prosecute their counterclaim); Acevedo v. Drs. Hosp., Inc ., 68 So. 3d 949, 951 (Fla. 3d DCA 2011) (issuing writ of certiorari where information petitioners sought was material and no other documents could be substituted therefore); Kmart Corp. v. Sundmacher , 997 So. 2d 1158 (Fla. 3d DCA 2008) (granting certiorari review of denial of store's motion to compel customer to produce privileged photographs of condition of floor at time of slip and fall, where photos had been taken ten years earlier, scene had changed in the interim, and photos were best evidence of condition of floor at time of slip and fall); Duran v. MFM Grp., Inc. , 841 So. 2d 500 (Fla. 3d DCA 2003) (granting certiorari and quashing order denying motion to compel deposition testimony of material witness who had information going to a fact affecting merits of case and about which no other witness could testify).

Settlement is a recognized defense, and there is certainly some record evidence that a settlement was contemplated in this case. Here, Respondent initially disputed Petitioner's claim that a settlement had occurred by asserting that his attorney lacked authority to settle his and his son's claims on the terms reflected in Attorney Panagakis’ March 2016 letter to State Farm. As noted above, affidavits from both Respondent and his attorney asserting lack of settlement authority were filed in federal court.

We express no opinion on whether a settlement was reached.

Furthermore, Respondent and his attorney asserted in their affidavits that there was at least one condition precedent to settlement that was not set forth in the initial demand letter nor in Attorney Panagakis’ letter to State Farm. Thus, Respondent and his attorney are clearly material witnesses and perhaps the only witnesses, in addition to Ms. Ulloa, who can address the matters asserted by Respondent in avoidance of Petitioner's settlement defense. Furthermore, other witnesses that Petitioner indicated she may depose, such as Ms. McMurtrie's counsel or State Farm's adjustor, might have information relevant to whether a settlement was reached. Thus, the trial court's order banning all discovery into whether a settlement was reached clearly has eviscerated Petitioner's settlement defense, which has resulted in irreparable harm.

Departure From Essential Requirements of Law

Judicial Estoppel Inapplicable

The trial court based its decision to prohibit all discovery into the settlement issue in part on the doctrine of judicial estoppel. That decision was in turn based upon the parties’ joint stipulation in federal court that no further discovery was needed before the federal court could rule on the settlement issue raised in Petitioner's motion for summary judgment. As will become clear, the trial court departed from the essential requirements of law when it applied judicial estoppel here.

As the Florida Supreme Court explained in Blumberg v. USAA Casualty Insurance Co. , 790 So. 2d 1061, 1066 (Fla. 2001) :

Judicial estoppel is an equitable doctrine that is used to prevent litigants from taking totally inconsistent positions in separate judicial, including quasi-judicial, proceedings." Smith v. Avatar Properties, Inc. , 714 So. 2d 1103, 1107 (Fla. 5th DCA 1998). The doctrine prevents parties from "making a mockery of justice by inconsistent pleadings," American Nat'l Bank v. Federal Deposit Ins. Corp. , 710 F.2d 1528, 1536 (11th Cir.1983), and "playing fast and loose with the courts." Russell v. Rolfs , 893 F.2d 1033, 1037 (9th Cir.1990).

In Florida, judicial estoppel encompasses the following four elements:

[1] A claim or position successfully maintained in a former action or judicial proceeding [2] bars a party from making a completely inconsistent claim or taking a clearly conflicting position in a subsequent action or judicial proceeding, [3] to the prejudice of the adverse party, [4] where the parties are the same in both actions, subject to the "special fairness and policy considerations" exception to the mutuality of parties requirement.

Because of the basis for our decision, we do not need to conduct a detailed analysis of whether proceedings in the same lawsuit, while pending on removal to federal court and then later pending on remand in circuit court, constitute "former" or "prior" and "subsequent" proceedings, which is an essential prerequisite to the application of judicial estoppel.

Salazar-Abreu v. Walt Disney Parks & Resorts U.S., Inc. , 277 So. 3d 629, 631 (Fla. 5th DCA 2018) (alteration in original) (original footnote omitted) (quoting Grau v. Provident Life & Accident Ins. Co. , 899 So. 2d 396, 400 (Fla. 4th DCA 2005) ).

Stated differently, Florida's rule is that "[j]udicial estoppel applies when a party in a current proceeding has successfully maintained an inconsistent position in a prior proceeding to the prejudice of the adverse party in the current proceeding." Landmark Funding, Inc. ex rel. Naples Syndications, LLC v. Chaluts , 213 So. 3d 1078, 1080 (Fla. 2d DCA 2017) (citing Blumberg , 790 So. 2d at 1066 ). This requires "not only a showing

of inconsistent statements, but also the identity of parties (or an exception to that requirement), the successful maintenance of the inconsistent position, and prejudice." Id.

Id. at 631–32.

"In judicial proceedings, a party simply is not estopped from asserting a later inconsistent position (if that it can be called), unless the party's initial position was successfully maintained." Leitman v. Boone, 439 So. 2d 318, 322 (Fla. 3d DCA 1983). In the instant case, Petitioner and Respondent jointly stipulated that no further discovery was needed; however, the federal district judge disagreed on that point, finding that there were in essence too many unanswered factual questions to permit entry of summary judgment in Petitioner's favor. Thus, Petitioner did not successfully maintain her position that all facts had been successfully developed and presented on that issue.

Indeed, Respondent successfully argued against granting summary judgment in federal court by asserting that there were disputed factual issues.

In HFC Collection Center, Inc. v. Alexander , 190 So. 3d 1114, 1117–18 (Fla. 5th DCA 2016), we granted a petition for certiorari because "we conclude[d] that the circuit court applied the wrong law," when it employed judicial estoppel against a party whose initial position in the same lawsuit was revised once that position had been rejected by the lower court's ruling. A party, such as Petitioner, is "not estopped from relying upon that adverse ruling and asserting any position consistent with that ruling." Id. (quoting Leitman , 439 So. 2d at 322 ).

Furthermore, in applying judicial estoppel, the circuit court treated the federal court's denial of Petitioner's motion for summary judgment as though it was a binding, substantive ruling. In so doing, the circuit court ignored the fact that the district court ultimately determined that it lacked subject matter jurisdiction. It is well-settled law that a court lacking subject matter jurisdiction cannot make binding, substantive rulings beyond a determination that it lacks jurisdiction. Strommen v. Strommen , 927 So. 2d 176, 179 (Fla. 2d DCA 2006) ; Fla. Exp. Tobacco Co. v. Dep't. of Revenue , 510 So. 2d 936, 943 (Fla. 1st DCA 1987). Indeed, the federal district court specifically vacated its prior denial of Petitioner's summary judgment motion.

Respondent cannot demonstrate that he was prejudiced by a stipulation that he and Petitioner made. The trial court made no mention of that essential element of judicial estoppel when it completely banned all discovery related to Petitioner's settlement defense. Nor can Respondent establish that Petitioner somehow gained an advantage by entering into the joint stipulation in federal court, another essential prerequisite to employing judicial estoppel.

Under these circumstances, judicial estoppel had no application, and the trial court's reliance upon that doctrine constitutes a departure from the essential requirements of law, because it applied the wrong law.

Attorney-Client Privilege Waiver

The trial court also relied upon Respondent's argument that depositions of Respondent, his attorney, and the attorney's case manager/assistant regarding settlement would be impermissible because of the attorney-client privilege. However, in reaching that conclusion, the trial court failed to apply the concept of waiver of that privilege to the extent Respondent and his attorney had already testified in affidavits to Attorney Panagakis’ lack of settlement authority. See Lender Processing Svcs., Inc. v. Arch Ins. Co. , 183 So. 3d 1052, 1062–64 (Fla. 1st DCA 2015) (explaining that attorney-client privilege is waived when one party challenges settlement by asserting that counsel had no authority to settle); Jenney v. Airdata Wiman, Inc. , 846 So. 2d 664, 668 (Fla. 2d DCA 2003) (holding that plaintiff could not refute settlement by relying on communications that were protected by attorney-client privilege while simultaneously asserting privilege to oppose discovery by defendant as to those same matters). Any waiver of the attorney-client privilege would typically be limited to conversations about the specific subject of authorization to settle. See Lender Processing , 183 So. 3d at 1062–64 ; Coates v. Akerman, Senterfitt & Eidson, P.A. , 940 So. 2d 504, 511 (Fla. 2d DCA 2006) (discussing selective disclosure doctrine and waiver of privilege via testimony about subject by attorney or client).

If during the depositions of Respondent, Attorney Panagakis, and Ms. Ulloa, counsel has a good faith basis to conclude that the inquiry has strayed beyond the extent to which the attorney-client privilege was waived, a contemporaneous objection may be lodged, and appropriate instructions may be given to the witness.

Because the trial court's prohibition of discovery regarding the settlement defense was absolute, it prohibited depositions of other witnesses who may have information regarding the global settlement gained by conversations or correspondence with Respondent, his counsel, or Ms. Ulloa. Petitioner correctly points out that conversations with third parties are not protected by the attorney-client privilege. See , e.g. , OIL, LLC v. Stamax Corp. , 220 So. 3d 1198 (Fla. 4th DCA 2017).

Thus, the trial court departed from the essential requirements of law by applying the attorney-client privilege without consideration of its waiver, as one basis for completely banning discovery into Petitioner's settlement defense.

Conclusion

Accordingly, we find that the trial court departed from the essential requirements of law both as to judicial estoppel and as to waiver of the attorney-client privilege. Further, we find that by banning all discovery related to settlement, the trial court essentially eviscerated Petitioner's settlement defense, resulting in irreparable harm. We grant the petition and issue the writ of certiorari. We hereby quash the orders prohibiting discovery into the issue of settlement and prohibiting depositions of Respondent, Attorney Panagakis, and Ms. Ulloa.

WRIT OF CERTIORARI GRANTED, ORDERS PROHIBITING DISCOVERY QUASHED.

LAMBERT and HARRIS, JJ., concur.

Marrero v. Rea

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Marrero v. Rea

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