Court widens borrower-record discovery in hurricane insurance case

A federal magistrate judge has ordered Scotiabank and Oriental Bank, its successor for the former Scotiabank de Puerto Rico operation, to produce records for a 50 percent sample of Virgin Islands residential mortgage borrowers charged for force-placed insurance between August 1, 2017 and September 30, 2018.

The September 12 order in Belardo et al. v. The Bank of Nova Scotia et al. covers borrowers whether or not they submitted hurricane-damage claims. The court rejected an effort to limit production to the narrower group that made claims after Hurricanes Irma and Maria, because the proposed class also alleges harm from premiums charged for disputed coverage.

Required records may include mortgage and servicing documents, escrow analyses, insurance notices and policies, claim files and borrower communications. The court also allowed discovery concerning the disputed Integrand Assurance coverage and required initial contact with unnamed borrowers to be made by mail under an existing protective order.

The ruling addresses pre-certification discovery only. It does not certify a class, award damages or decide whether the banks failed to secure valid coverage. The defendants dispute the plaintiffs' allegations and maintain that force-placed coverage existed.